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

First Quarter 2025 Highlights (Compared to Prior Periods):

Net income available to common stockholders was $5.7 million, or $0.25 per diluted share for the three months ended March 31, 2025, as compared to net income available to common stockholders of $2.7 million, or $0.12 per diluted share for the three months ended December 31, 2024 and net income available to common stockholders of $2.4 million, or $0.11 per diluted share for the three months ended March 31, 2024. Total net income for the three months ended March 31, 2025 was $6.0 million. The Company paid dividends of $0.3 million on its preferred stock during the three months ended March 31, 2025.
Included in the $5.7 million of net income available to common stockholders for the first quarter of 2025 results is $44.0 million in interest and dividend income, $2.4 million in non-interest income and $0.3 million in benefit for credit losses, offset by $21.8 million in interest expense, $16.9 million in non-interest expense, $2.0 million in provision for income taxes and $0.3 million in dividends on preferred shares.
Net interest income of $22.2 million for the first quarter of 2025 increased $1.5 million, or 7.11%, from the prior quarter and increased $3.4 million, or 17.96%, from the same quarter last year.
Net interest margin was 2.98% for the first quarter of 2025, versus 2.80% for the prior quarter and 2.71% for the same quarter last year.
Non-interest income for the three months ended March 31, 2025 was $2.4 million, an increase of $0.3 million, or 13.54%, from $2.1 million for the three months ended December 31, 2024, and an increase of $0.7 million, or 39.48%, from $1.7 million for the three months ended March 31, 2024.
Non-interest expense for the three months ended March 31, 2025 was $16.9 million, a decrease of $0.6 million, or 3.30%, from $17.5 million for the three months ended December 31, 2024, and an increase of $0.1 million, or 0.61%, compared to $16.8 million for the three months ended March 31, 2024.
Cash and equivalents were $129.9 million as of March 31, 2025, a decrease of $9.9 million, or 7.11%, from $139.8 million as of December 31, 2024.
Securities totaled $461.6 million as of March 31, 2025, a decrease of $11.3 million, or 2.39%, from $472.9 million as of December 31, 2024 primarily due to regular principal payments and the call of one available-for-sale security in the amount of $1.0 million.
Net loans receivable were $2.37 billion as of March 31, 2025, an increase of $84.3 million, or 3.69%, from $2.29 billion as of December 31, 2024.
Deposits were $2.00 billion as of March 31, 2025, an increase of $120.1 million, or 6.37%, from $1.88 billion as of December 31, 2024.

President and Chief Executive Officer's Comments

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

Executive Chairman's Comment

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

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

	At or for the Three Months Ended
	March 31,			December 31,			September 30,			June 30,			March 31,
	2025			2024			2024			2024			2024
Performance Ratios:
Return on average assets⁽¹⁾		0.77	%		0.38	%		0.33	%		0.45	%		0.33	%
Return on common equity⁽¹⁾		7.97	%		3.76	%		3.06	%		4.60	%		3.61	%
Net interest margin^{(1) (2)}		2.98	%		2.80	%		2.65	%		2.62	%		2.71	%
Non-interest expense to average assets⁽¹⁾		2.19	%		2.25	%		2.19	%		2.28	%		2.35	%
Efficiency ratio⁽³⁾		68.70	%		75.63	%		80.87	%		80.09	%		82.56	%
Capital Ratios:
Total capital to risk-weighted assets (Ponce Financial Group)		22.84	%		22.98	%		22.87	%		23.86	%		24.47	%
Common equity Tier 1 capital to risk-weighted assets (Ponce Financial Group)		12.51	%		12.44	%		12.28	%		12.71	%		12.98	%
Tier 1 capital to total assets (Ponce Financial Group)		16.84	%		17.70	%		17.81	%		17.88	%		17.59	%
Total capital to risk-weighted assets (Bank only)		21.38	%		21.47	%		21.61	%		22.47	%		22.79	%
Common equity Tier 1 capital to risk-weighted assets (Bank only)		20.35	%		20.40	%		20.45	%		21.24	%		21.54	%
Tier 1 capital to total assets (Bank only)		15.61	%		15.81	%		16.19	%		16.70	%		16.26	%
Asset Quality Ratios:
Allowance for credit losses on loans as a percentage of total loans		0.96	%		0.97	%		1.09	%		1.18	%		1.23	%
Allowance for credit losses on loans as a percentage of nonperforming loans		84.15	%		82.29	%		139.52	%		130.28	%		140.90	%
Net (charge-offs) recoveries to average outstanding loans⁽¹⁾		(0.04	%)		(0.45	%)		(0.17	%)		(0.10	%)		(0.25	%)
Non-performing loans as a percentage of total assets		0.88	%		0.90	%		0.57	%		0.65	%		0.62	%
Other:
Number of offices		18			19			19			18			18
Number of full-time equivalent employees		211			218			228			227			233

(1) Annualized where appropriate.

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

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

Summary of Results of Operations

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

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

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

Net Interest Income and Net Margin

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

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

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

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

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

Non-interest Income

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

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

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

Non-interest Expense

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

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

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

Credit Quality:

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

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

Balance Sheet Summary

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

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

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

About Ponce Financial Group, Inc.

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

Forward Looking Statements

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

Ponce Financial Group, Inc. and Subsidiaries

Consolidated Statements of Financial Condition

(Dollars in thousands, except for share data)

	As of
	March 31,			December 31,			September 30,			June 30,			March 31,
	2025			2024			2024			2024			2024
ASSETS
Cash and due from banks:
Cash	$	32,113		$	35,478		$	32,061		$	23,128		$	29,972
Interest-bearing deposits		97,780			104,361			123,751			80,038			104,752
Total cash and cash equivalents		129,893			139,839			155,812			103,166			134,724
Available-for-sale securities, at fair value		103,570			104,970			111,005			113,125			116,044
Held-to-maturity securities, at amortized cost		358,024			367,938			403,736			442,113			452,955
Placement with banks		249			249			249			249			249
Mortgage loans held for sale, at fair value		8,567			10,736			9,566			37,764			7,860
Loans receivable, net		2,370,931			2,286,599			2,180,331			2,022,173			1,981,428
Accrued interest receivable		19,008			17,771			16,890			17,441			18,063
Premises and equipment, net		16,417			16,794			16,843			16,976			17,396
Right of use assets		29,496			29,093			29,785			30,349			31,021
Federal Home Loan Bank of New York stock (FHLBNY), at cost		25,807			29,182			28,515			23,972			23,892
Deferred tax assets		11,629			12,074			11,845			13,172			13,919
Other assets		16,245			24,693			51,392			21,507			21,151
Total assets	$	3,089,836		$	3,039,938		$	3,015,969		$	2,842,007		$	2,818,702
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits	$	2,004,947		$	1,884,864		$	1,870,323		$	1,606,097		$	1,585,784
Operating lease liabilities		31,126			30,696			31,343			31,861			32,486
Accrued interest payable		4,628			3,712			2,918			6,820			4,218
Advance payments by borrowers for taxes and insurance		12,901			10,349			13,733			10,838			13,245
Borrowings		521,100			596,100			580,421			680,421			680,421
Other liabilities		1,248			8,717			12,642			8,313			8,866
Total liabilities		2,575,950			2,534,438			2,511,380			2,344,350			2,325,020
Commitments and contingencies
Stockholders' Equity:
Preferred stock, $0.01 par value; 100,000,000 shares authorized		225,000			225,000			225,000			225,000			225,000
Common stock, $0.01 par value; 200,000,000 shares authorized		249			249			249			249			249
Treasury stock, at cost		(7,641	)		(7,707	)		(9,445	)		(9,519	)		(9,702	)
Additional paid-in-capital		207,888			207,319			208,478			207,934			207,584
Retained earnings		113,432			107,754			105,103			102,951			99,834
Accumulated other comprehensive loss		(13,515	)		(15,297	)		(12,686	)		(16,557	)		(16,590	)
Unearned compensation ─ ESOP		(11,527	)		(11,818	)		(12,110	)		(12,401	)		(12,693	)
Total stockholders' equity		513,886			505,500			504,589			497,657			493,682
Total liabilities and stockholders' equity	$	3,089,836		$	3,039,938		$	3,015,969		$	2,842,007		$	2,818,702

Ponce Financial Group, Inc. and Subsidiaries

Consolidated Statements of Operations

(Dollars in thousands, except per share data)

	Three Months Ended
	March 31,			December 31,			September 30,			June 30,			March 31,
	2025			2024			2024			2024			2024
Interest and dividend income:
Interest on loans receivable	$	37,136		$	35,622		$	32,945		$	31,281		$	30,664
Interest on deposits due from banks		1,668			1,783			2,430			1,542			2,911
Interest and dividend on securities and FHLBNY stock		5,193			5,481			5,918			5,969			6,091
Total interest and dividend income		43,997			42,886			41,293			38,792			39,666
Interest expense:
Interest on certificates of deposit		7,754			8,104			6,926			6,358			6,380
Interest on other deposits		8,554			8,476			8,519			7,389			6,540
Interest on borrowings		5,486			5,576			6,825			7,141			7,923
Total interest expense		21,794			22,156			22,270			20,888			20,843
Net interest income		22,203			20,730			19,023			17,904			18,823
(Benefit) provision for credit losses⁽¹⁾		(285	)		897			537			(867	)		(16	)
Net interest income after (benefit) provision for credit losses		22,488			19,833			18,486			18,771			18,839
Non-interest income:
Service charges and fees		525			500			508			492			473
Brokerage commissions		4			44			—			9			8
Late and prepayment charges		697			318			77			426			359
Income on sale of mortgage loans		148			254			218			274			302
Income on sale of SBA loans		404			148			—			—			—
Other		603			833			348			1,057			565
Total non-interest income		2,381			2,097			1,151			2,258			1,707
Non-interest expense:
Compensation and benefits		7,780			7,668			7,674			7,724			7,844
Occupancy and equipment		3,913			3,863			3,786			3,564			3,667
Data processing expenses		1,152			1,143			1,099			1,013			1,127
Direct loan expenses		388			617			573			633			732
Insurance and surety bond premiums		315			293			292			263			253
Office supplies, telephone and postage		170			294			222			233			249
Professional fees		1,364			1,703			1,351			1,369			1,723
Microloans recoveries		—			(29	)		(54	)		(65	)		(53	)
Marketing and promotional expenses		83			289			180			145			100
Federal deposit insurance and regulatory assessment⁽²⁾		461			418			392			428			389
Other operating expenses⁽²⁾		1,262			1,206			1,051			1,333			755
Total non-interest expense⁽¹⁾		16,888			17,465			16,566			16,640			16,786
Income before income taxes		7,981			4,465			3,071			4,389			3,760
Provision for income taxes		2,022			1,532			638			1,197			1,346
Net income	$	5,959		$	2,933		$	2,433		$	3,192		$	2,414
Dividends on preferred shares		281			282			281			75			—
Net income available to common stockholders	$	5,678		$	2,651		$	2,152		$	3,117		$	2,414
Earnings per common share:
Basic	$	0.25		$	0.12		$	0.10		$	0.14		$	0.11
Diluted	$	0.25		$	0.12		$	0.10		$	0.14		$	0.11
Weighted average common shares outstanding:
Basic		22,662,916			22,528,160			22,446,009			22,409,803			22,353,492
Diluted		22,876,740			22,807,644			22,612,028			22,419,309			22,366,728

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

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

Ponce Financial Group, Inc. and Subsidiaries

Consolidated Statements of Operations

(Dollars in thousands, except per share data)

	For the Three Months Ended March 31,
	2025			2024			Variance $			Variance %
Interest and dividend income:
Interest on loans receivable	$	37,136		$	30,664		$	6,472			21.11	%
Interest on deposits due from banks		1,668			2,911			(1,243	)		(42.70	%)
Interest and dividend on securities and FHLBNY stock		5,193			6,091			(898	)		(14.74	%)
Total interest and dividend income		43,997			39,666			4,331			10.92	%
Interest expense:
Interest on certificates of deposit		7,754			6,380			1,374			21.54	%
Interest on other deposits		8,554			6,540			2,014			30.80	%
Interest on borrowings		5,486			7,923			(2,437	)		(30.76	%)
Total interest expense		21,794			20,843			951			4.56	%
Net interest income		22,203			18,823			3,380			17.96	%
Benefit for credit losses ⁽¹⁾		(285	)		(16	)		(269	)		1,681.25	%
Net interest income after benefit for credit losses		22,488			18,839			3,649			19.37	%
Non-interest income:
Service charges and fees		525			473			52			10.99	%
Brokerage commissions		4			8			(4	)		(50.00	%)
Late and prepayment charges		697			359			338			94.15	%
Income on sale of mortgage loans		148			302			(154	)		(50.99	%)
Income on sale of SBA loans		404			—			404			—	%
Other		603			565			38			6.73	%
Total non-interest income		2,381			1,707			674			39.48	%
Non-interest expense:
Compensation and benefits		7,780			7,844			(64	)		(0.82	%)
Occupancy and equipment		3,913			3,667			246			6.71	%
Data processing expenses		1,152			1,127			25			2.22	%
Direct loan expenses		388			732			(344	)		(46.99	%)
Insurance and surety bond premiums		315			253			62			24.51	%
Office supplies, telephone and postage		170			249			(79	)		(31.73	%)
Professional fees		1,364			1,723			(359	)		(20.84	%)
Microloans recoveries		—			(53	)		53			(100.00	%)
Marketing and promotional expenses		83			100			(17	)		(17.00	%)
Federal deposit insurance and regulatory assessments ⁽²⁾		461			389			72			18.51	%
Other operating expenses ⁽²⁾		1,262			755			507			67.15	%
Total non-interest expense ⁽¹⁾		16,888			16,786			102			0.61	%
Income before income taxes		7,981			3,760			4,221			112.26	%
Provision for income taxes		2,022			1,346			676			50.22	%
Net income	$	5,959		$	2,414		$	3,545			146.85	%
Dividends on preferred shares		281			—			281			—	%
Net income available to common stockholders	$	5,678		$	2,414		$	3,264			135.21	%
Earnings per common share:
Basic	$	0.25		$	0.11		$	0.14			127.27	%
Diluted	$	0.25		$	0.11		$	0.14			127.27	%
Weighted average common shares outstanding:
Basic		22,662,916			22,353,492			309,424			1.38	%
Diluted		22,876,740			22,366,728			510,012			2.28	%

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

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

Ponce Financial Group, Inc. and Subsidiaries

Loans Receivable excluding Mortgage Loans Held for Sale

	As of
	March 31,						December 31,						September 30,						June 30,						March 31,
	2025						2024						2024						2024						2024
	Amount			Percent			Amount			Percent			Amount			Percent			Amount			Percent			Amount			Percent

	(Dollars in thousands)
Mortgage loans:
1-4 family residential
Investor Owned	$	325,866			13.62	%	$	330,053			14.30	%	$	332,380			15.09	%	$	337,292			16.49	%	$	339,331			16.92	%
Owner-Occupied		137,676			5.75	%		142,363			6.17	%		145,065			6.59	%		147,485			7.21	%		150,842			7.52	%
Multifamily residential		675,541			28.24	%		670,159			29.04	%		678,029			30.78	%		545,323			26.66	%		545,825			27.22	%
Nonresidential properties		390,681			16.33	%		389,898			16.89	%		383,277			17.40	%		337,583			16.51	%		327,350			16.32	%
Construction and land		815,425			34.08	%		733,660			31.79	%		631,461			28.67	%		641,879			31.39	%		608,665			30.35	%
Total mortgage loans		2,345,189			98.02	%		2,266,133			98.19	%		2,170,212			98.53	%		2,009,562			98.26	%		1,972,013			98.33	%
Non-mortgage loans:
Business loans		46,329			1.94	%		40,849			1.77	%		28,499			1.29	%		30,222			1.48	%		26,664			1.33	%
Consumer loans⁽¹⁾		997			0.04	%		1,038			0.04	%		4,021			0.18	%		5,305			0.26	%		6,741			0.34	%
Total non-mortgage loans		47,326			1.98	%		41,887			1.81	%		32,520			1.47	%		35,527			1.74	%		33,405			1.67	%
Total loans, gross		2,392,515			100.00	%		2,308,020			100.00	%		2,202,732			100.00	%		2,045,089			100.00	%		2,005,418			100.00	%
Net deferred loan origination costs		1,390						1,081						1,565						1,145						674
Allowance for credit losses on loans		(22,974	)					(22,502	)					(23,966	)					(24,061	)					(24,664	)
Loans, net	$	2,370,931					$	2,286,599					$	2,180,331					$	2,022,173					$	1,981,428

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

Ponce Financial Group, Inc. and Subsidiaries

Allowance for Credit Losses on Loans

	For the Three Months Ended
	March 31,			December 31,			September 30,			June 30,			March 31,
	2024			2024			2024			2024			2024

	(Dollars in thousands)
Allowance for credit losses on loans at beginning of the period	$	22,502		$	23,966		$	24,061		$	24,664		$	26,154
Provision (benefit) for credit losses on loans		731			1,090			801			(120	)		(255	)
Charge-offs:
Mortgage loans:
1-4 family residences
Investor owned		(38	)		—			—			—			—
Owner occupied		—			—			—			—			—
Multifamily residences		—			—			—			—			—
Nonresidential properties		—			—			(7	)		—			—
Construction and land		—			—			—			—			—
Non-mortgage loans:
Business		(222	)		(232	)		(450	)		—			(52	)
Consumer		(3	)		(2,465	)		(634	)		(747	)		(1,302	)
Total charge-offs		(263	)		(2,697	)		(1,091	)		(747	)		(1,354	)
Recoveries:
Non-mortgage loans:
Business		4			—			1			7			1
Consumer		—			143			194			257			118
Total recoveries		4			143			195			264			119
Net (charge-offs) recoveries		(259	)		(2,554	)		(896	)		(483	)		(1,235	)
Allowance for credit losses on loans at end of the period	$	22,974		$	22,502		$	23,966		$	24,061		$	24,664

Ponce Financial Group, Inc. and Subsidiaries

Deposits

	As of
	March 31,					December 31,					September 30,					June 30,					March 31,
	2025					2024					2024					2024					2024
	Amount		Percent			Amount		Percent			Amount		Percent			Amount		Percent			Amount		Percent

	(Dollars in thousands)
Demand	$	212,139		10.58	%	$	169,178		8.98	%	$	182,737		9.78	%	$	178,125		11.09	%	$	191,541		12.07	%
Interest-bearing deposits:
NOW/IOLA accounts		74,430		3.71	%		62,616		3.32	%		71,445		3.82	%		81,178		5.05	%		73,202		4.62	%
Money market accounts		692,753		34.55	%		636,219		33.75	%		660,168		35.30	%		502,255		31.27	%		482,344		30.42	%
Reciprocal deposits		141,838		7.07	%		130,677		6.93	%		94,145		5.03	%		109,945		6.85	%		97,718		6.16	%
Savings accounts		106,122		5.29	%		105,870		5.62	%		108,941		5.82	%		109,694		6.83	%		112,713		7.11	%
Total NOW, money market, reciprocal and savings accounts		1,015,143		50.62	%		935,382		49.62	%		934,699		49.97	%		803,072		50.00	%		765,977		48.31	%
Certificates of deposit of $250K or more⁽¹⁾		219,721		10.96	%		204,293		10.84	%		210,262		11.25	%		189,683		11.82	%		183,478		11.57	%
Brokered certificates of deposit⁽²⁾		84,531		4.22	%		94,531		5.02	%		94,531		5.05	%		94,614		5.89	%		94,689		5.97	%
Listing service deposits⁽²⁾		6,140		0.31	%		7,376		0.39	%		7,376		0.39	%		9,361		0.58	%		12,688		0.80	%
All other certificates of deposit less than $250K⁽¹⁾		467,273		23.31	%		474,104		25.15	%		440,718		23.56	%		331,242		20.62	%		337,411		21.28	%
Total certificates of deposit		777,665		38.80	%		780,304		41.40	%		752,887		40.25	%		624,900		38.91	%		628,266		39.62	%
Total interest-bearing deposits		1,792,808		89.42	%		1,715,686		91.02	%		1,687,586		90.22	%		1,427,972		88.91	%		1,394,243		87.93	%
Total deposits	$	2,004,947		100.00	%	$	1,884,864		100.00	%	$	1,870,323		100.00	%	$	1,606,097		100.00	%	$	1,585,784		100.00	%

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

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

Ponce Financial Group, Inc. and Subsidiaries

Nonperforming Assets

	As of Three Months Ended
	March 31,			December 31,			September 30,			June 30,			March 31,
	2025			2024			2024			2024			2024

	(Dollars in thousands)
Non-accrual loans:
Mortgage loans:
1-4 family residential
Investor owned	$	1,052		$	436		$	436		$	436		$	399
Owner occupied		1,423			1,423			1,423			1,423			1,426
Multifamily residential		9,788			10,271			4,685			5,754			4,098
Nonresidential properties		—			—			824			828			441
Construction and land		14,159			14,158			8,907			8,907			10,277
Non-mortgage loans:
Business		170			343			180			396			146
Consumer		—			—			—			—			—
Total non-accrual loans (not including non-accruing modifications to borrowers experiencing financial difficulty)⁽¹⁾	$	26,592		$	26,631		$	16,455		$	17,744		$	16,787

Non-accruing modifications to borrowers experiencing financial difficulty⁽¹⁾:
Mortgage loans:
1-4 family residential
Investor owned	$	279		$	279		$	278		$	277		$	270
Owner occupied		431			435			444			448			447
Multifamily residential		—			—			—			—			—
Nonresidential properties		—			—			—			—			—
Construction and land		—			—			—			—			—
Non-mortgage loans:
Business		—			—			—			—			—
Consumer		—			—			—			—			—
Total non-accruing modifications to borrowers experiencing financial difficulty⁽¹⁾		710			714			722			725			717
Total non-accrual loans⁽²⁾	$	27,302		$	27,345		$	17,177		$	18,469		$	17,504

Accruing modifications to borrowers experiencing financial difficulty (1):
Mortgage loans:
1-4 family residential
Investor owned	$	1,792		$	1,807		$	1,821		$	1,830		$	1,850
Owner occupied		2,038			2,062			2,116			2,171			2,288
Multifamily residential		—			—			—			—			—
Nonresidential properties		644			652			672			707			748
Construction and land		—			—			—			—			—
Non-mortgage loans:
Business		209			215			222			—			—
Consumer		—			—			—			—			—
Total accruing modifications to borrowers experiencing financial difficulty⁽¹⁾	$	4,683		$	4,736		$	4,831		$	4,708		$	4,886
Total non-performing assets and accruing modifications to borrowers experiencing financial difficulty⁽¹⁾	$	31,985		$	32,081		$	22,008		$	23,177		$	22,390
Total non-performing assets to total assets		0.88	%		0.90	%		0.57	%		0.65	%		0.62	%

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

(2) Includes nonperforming mortgage loans held for sale.

Ponce Financial Group, Inc. and Subsidiaries

Average Balance Sheets

	For the Three Months Ended March 31,
	2025						2024
	Average						Average
	Outstanding				Average		Outstanding				Average
	Balance		Interest		Yield/Rate⁽¹⁾		Balance		Interest		Yield/Rate⁽¹⁾

	(Dollars in thousands)
Interest-earning assets:
Loans⁽²⁾	$	2,369,433	$	37,136	6.36	%	$	1,979,263	$	30,664	6.23	%
Securities⁽³⁾		467,560		4,521	3.92	%		576,235		5,619	3.92	%
Other⁽⁴⁾		186,021		2,340	5.10	%		238,432		3,383	5.71	%
Total interest-earning assets		3,023,014		43,997	5.90	%		2,793,930		39,666	5.71	%
Non-interest-earning assets		109,166						106,566
Total assets	$	3,132,180					$	2,900,496
Interest-bearing liabilities:
NOW/IOLA	$	72,354	$	115	0.64	%	$	82,849	$	218	1.06	%
Money market		827,948		8,411	4.12	%		544,563		6,292	4.65	%
Savings		105,171		26	0.10	%		113,501		28	0.10	%
Certificates of deposit		794,270		7,754	3.96	%		629,528		6,380	4.08	%
Total deposits		1,799,743		16,306	3.67	%		1,370,441		12,918	3.79	%
Advance payments by borrowers		12,445		2	0.07	%		12,886		2	0.06	%
Borrowings		568,601		5,486	3.91	%		771,070		7,923	4.13	%
Total interest-bearing liabilities		2,380,789		21,794	3.71	%		2,154,397		20,843	3.89	%
Non-interest-bearing liabilities:
Non-interest-bearing demand		196,627		—				198,862		—
Other non-interest-bearing liabilities		43,915		—				54,061		—
Total non-interest-bearing liabilities		240,542		—				252,923		—
Total liabilities		2,621,331		21,794				2,407,320		20,843
Total equity		510,849						493,176
Total liabilities and total equity	$	3,132,180			3.71	%	$	2,900,496			3.89	%
Net interest income			$	22,203					$	18,823
Net interest rate spread⁽⁵⁾					2.19	%					1.82	%
Net interest-earning assets⁽⁶⁾	$	642,225					$	639,533
Net interest margin⁽⁷⁾					2.98	%					2.71	%
Average interest-earning assets to interest-bearing liabilities					126.98	%					129.69	%

(1) Annualized where appropriate.

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

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

(4) Includes FHLBNY demand account, FHLBNY stock dividends and FRBNY demand deposits.

(5) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate of interest-bearing liabilities.

(6) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.

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

Ponce Financial Group, Inc. and Subsidiaries

Other Data

	As of
	March 31,		December 31,		September 30,		June 30,		March 31,
	2025		2024		2024		2024		2024
Other Data
Common shares issued		24,886,711		24,886,711		24,886,711		24,886,711		24,886,711
Less treasury shares		920,520		925,497		1,067,248		1,074,979		1,096,214
Common shares outstanding at end of period		23,966,191		23,961,214		23,819,463		23,811,732		23,790,497

Book value per common share	$	12.05	$	11.71	$	11.74	$	11.45	$	11.29
Tangible book value per common share	$	12.05	$	11.71	$	11.74	$	11.45	$	11.29

Contact:

Sergio J. Vaccaro

sergio.vaccaro@poncebank.net

718-931-9000

Ponce Financial Group, Inc. Reports First Quarter 2025 Results