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NorthEast Community Bancorp, Inc. Reports Results for the Three and Six Months Ended June 30, 2022

WHITE PLAINS, N.Y., July 22, 2022 (GLOBE NEWSWIRE) -- NorthEast Community Bancorp, Inc. (Nasdaq: NECB) (the “Company”), the parent holding company of NorthEast Community Bank (the “Bank”), reported net income of $5.4 million and $9.0 million, or $0.35 and $0.58 per basic and diluted common share, for the three months and six months ended June 30, 2022 compared to net income of $3.7 million and $7.0 million, or $0.23 and $0.43 per basic and diluted common share, for the three months and six months ended June 30, 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 continuing COVID-19 pandemic and the recent increase in interest rates, loan demand remained strong with originations and outstanding commitments increasing quarter over quarter. Our commitments, loans-in-process, and standby letters of credit outstanding totaled $879.0 million at June 30, 2022 compared to $749.0 million at December 31, 2021. The performance of our loan portfolio remains strong with only two non-residential loans secured by the same property to one borrower that are on non-accrual and in foreclosure due to a maturity default at June 30, 2022. At this time, we have no loans on deferral as a result of the COVID-19 pandemic. As has been in the past, construction lending for affordable housing units in high demand high absorption areas continues to be our focus.”

Highlights for the three months and six months ended June 30, 2022 are as follows:

  • Net income increased by $1.7 million and $2.0 million, or 44.9% and 29.7%, for the three months and six months ended June 30, 2022 compared to the same periods in the prior year.
  • Net interest income increased by $3.2 million and $4.7 million, or 30.5% and 22.8%, for the three months and six months ended June 30, 2022 compared to the same periods in 2021.
  • Asset quality metrics continued to remain strong with non-performing assets to total assets of 0.23% and 0.16% at June 30, 2022 and at December 31, 2021. Our allowance for loan losses totaled $5.5 million, or 0.53% of total loans at June 30, 2022 compared to $5.2 million, or 0.54% of total loans at December 31, 2021.
  • In accordance with the provisions of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), since March 2020, we granted pandemic-related loan payment deferrals to 196 loans totaling $190.9 million at the time payment deferral was requested. At June 30, 2022, we had no loans in deferral status.

Balance Sheet Summary
Total assets decreased by $3.5 million, or 0.3%, to $1.2 billion at June 30, 2022, from $1.2 billion at December 31, 2021. The decrease in assets was primarily due to decreases in cash and cash equivalents of $66.0 million and equity securities of $1.1 million, partially offset by increases in net loans of $50.6 million, securities held-to-maturity of $9.3 million, and premises and equipment of $2.3 million.

Cash and cash equivalents decreased by $66.0 million, or 43.4%, to $86.2 million at June 30, 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 $50.6 million, an increase in securities held-to-maturity of $9.3 million, an increase in property and equipment of $2.3 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 $1.1 million, or 5.3%, to $18.9 million at June 30, 2022 from $19.9 million at December 31, 2021. The decrease in equity securities was primarily attributable to market depreciation of $1.1 million as market interest rates increased during the six months ended June 30, 2022.

Securities held-to-maturity increased by $9.3 million, or 52.1%, to $27.2 million at June 30, 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 $50.6 million, or 5.2%, to $1.0 billion at June 30, 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 $307.4 million during the six months ended June 30, 2022, consisting primarily of $266.3 million in construction loans with respect to which approximately 32.1% 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 $97.0 million in construction loans. The increase in our loan portfolio was partially offset by decreases in non-residential loans of $23.4 million, commercial and industrial loans of $15.8 million, mixed-use loans of $5.2 million, residential loans of $1.4 million, and multi-family loans of?$560,000, coupled with normal pay-downs and principal reductions.

Premises and equipment increased by $2.3 million, or 9.7%, to $26.2 million at June 30, 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 restricted stock decreased by $331,000, or 21.1%, to $1.2 million at June 30, 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/pay-off of $7.0 million in advances during the quarter ended June 30, 2022.

Accrued interest receivable increased by $949,000, or 22.2%, to $5.2 million at June 30, 2022 from $4.3 million at December 31, 2021 due to an increase in the loan portfolio.

Foreclosed real estate was $2.0 million at June 30, 2022 and December 31, 2021.

Right of use assets?—?operating decreased by $268,000, or 10.5%, to $2.3 million at June 30, 2022 from $2.6 million at December 31, 2021, primarily due to amortization.

Other assets increased by $793,000, or 16.9%, to $5.5 million at June 30, 2022 from $4.7 million at December 31, 2021 due to increases in suspense accounts of $406,000, tax assets of $326,000, and prepaid expenses of $84,000.

Total deposits increased by $1.4 million, or 0.2%, to $928.6 million at June 30, 2022 from $927.2 million at December 31, 2021. The increase was primarily due to an increase in non-interest bearing demand deposits of $31.6 million, or 9.6% and an increase in savings account balances of $24.5 million, or 13.3%. These increases were partially offset by a decrease in certificates of deposit of $48.7 million, or 16.6% and a decrease in NOW/money market accounts of $6.1 million, or 5.1%, from December 31, 2021 to June 30, 2022.

Federal Home Loan Bank advances decreased by $7.0 million, or 25.0%, to $21.0 million at June 30, 2022 from $28.0 million at December 31, 2021.

Advance payments by borrowers for taxes and insurance decreased by $147,000, or 7.8%, to $1.7 million at June 30, 2022 from $1.9 million at December 31, 2021 due primarily to the payment of taxes for borrowers, partially offset by the accumulation of tax payments from borrowers.

Lease liability – operating decreased by $260,000, or 10.0%, to $2.3 million at June 30, 2022 from $2.6 million at December 31, 2021, primarily due to amortization.

Accounts payable and accrued expenses decreased by $2.5 million, or 18.1%, to $11.1 million at June 30, 2022 from $13.5 million at December 31, 2021 due primarily to a decrease in suspense accounts for loan closings of $1.6 million and a decrease in accrued expenses of $1.2 million.

Stockholders’ equity increased by $4.9 million, or 2.0% to $256.3 million at June 30, 2022, from $251.4 million at December 31, 2021. The increase in stockholders’ equity was due to net income of?$9.0 million for the six months ended June 30, 2022, a reduction of?$504,000 in unearned employee stock ownership plan shares, and $41,000 in other comprehensive income, partially offset by dividends paid and declared of?$4.7 million.

Net Interest Income
Net interest income totaled $13.5 million for the three months ended June 30, 2022, as compared to $10.4 million for the three months ended June 30, 2021. The increase in net interest income of $3.2 million, or 30.5%, was primarily due to an increase in interest income combined with a decrease in interest expense.

The increase in interest income is attributable to increases in loans, investment securities, equity securities, and interest-bearing deposits as we continued to deploy the proceeds raised in our July 2021 second-step conversion. The increase in interest income is also attributable to an increase in interest rates during the three months ended June 30, 2022.

The decrease in interest expense is attributable to a decrease in the balances and cost of funds on our certificates of deposits and on our borrowed money, partially offset by increases in the balances and cost of funds in our interest-bearing demand deposits and our savings and club accounts.

In this regard, total interest income increased by $3.2 million, or 27.1%, to $14.8 million for the three months ended June 30, 2022 from $11.7 million for the three months ended June 30, 2021 due to an increase in the average balance of interest earning assets of $257.0 million, or 27.8%, to $1.2 billion for the three months ended June 30, 2022 from $924.9 million for the three months ended June 30, 2021, partially offset by a decrease in the yield on interest earning assets by 3 basis points from 5.05% for the three months ended June 30, 2021 to 5.02% for the three months ended June 30, 2022.  

Interest expense decreased by $2,000, or 0.2%, to $1.3 million for the three months ended June 30, 2022 from $1.3 million for the three months ended June 30, 2021 due to a decrease in the cost of interest bearing liabilities by 7 basis points from 0.91% for the three months ended June 30, 2021 to 0.84% for the three months ended June 30, 2022, partially offset by an increase in average interest bearing liabilities of? $45.4 million, or 8.0%, to $613.6 million for the three months ended June 30, 2022 from $568.3 million for the three months ended June 30, 2021.

Net interest margin increased by 9 basis points, or 2.1%, during the three months ended June 30, 2022 to 4.58% compared to 4.49% during the three months ended June 30, 2021.

Net interest income totaled $25.5 million for the six months ended June 30, 2022, as compared to $20.7 million for the six months ended June 30, 2021. The increase in net interest income of $4.7 million, or 22.8%, was primarily due to an increase in interest income combined with a decrease in interest expense.

The increase in interest income is attributable to increases in loans, investment securities, equity securities, and interest-bearing deposits as we continued to deploy the proceeds raised in our July 2021 second-step conversion. The increase in interest income is also attributable to an increase in interest rates during the six months ended June 30, 2022.

The decrease in interest expense is attributable to a decrease in the balances and cost of funds on our certificates of deposits and on our borrowed money, partially offset by increases in the balances and cost of funds in our interest-bearing demand deposits and our savings and club accounts.

In this regard, interest income increased by $4.6 million, or 19.6%, to $28.1 million for the six months ended June 30, 2022 from $23.5 million for the six months ended June 30, 2021 due to an increase in the average balance of interest earning assets of $262.5 million, or 28.7%, to $1.2 billion for the six months ended June 30, 2022 from $913.5 million for the six months ended June 30, 2021, partially offset by a decrease in the yield on interest earning assets by 36 basis points from 5.14% for the six months ended June 30, 2021 to 4.78% for the six months ended June 30, 2022.  

Interest expense decreased by $119,000, or 4.3%, to $2.6 million for the six months ended June 30, 2022 from $2.8 million for the six months ended June 30, 2021 due to a decrease in the cost of interest bearing liabilities by 12 basis points from 0.97% for the six months ended June 30, 2021 to 0.85% for the six months ended June 30, 2022, partially offset by an increase in average interest bearing liabilities of? $52.6 million, or 9.2%, to $624.4 million for the six months ended June 30, 2022 from $571.8 million for the six months ended June 30, 2021.

Net interest margin decreased by 21 basis points, or 4.6%, during the six months ended June 30, 2022 to 4.33% compared to 4.54% during the six months ended June 30, 2021.

Provision for Loan Losses
The Company recorded no loan loss provision for the three months ended June 30, 2022 and June 30, 2021. We charged-off $7,000 and $9,000 during the three months ended June 30, 2022 and June 30, 2021, respectively, against various unpaid overdrafts in our demand deposit accounts. We recorded recoveries of?$146,000 and $1,000 during the three months ended June 30, 2022 and June 30, 2021, respectively.

The Company recorded no loan loss provision for the six months ended June 30, 2022 compared to a loan loss provision of $17,000 for the six months ended June 30, 2021. We charged-off $17,000 and $20,000 during the six months ended June 30, 2022 and June 30, 2021, respectively, against various unpaid overdrafts in our demand deposit accounts. We recorded recoveries of?$242,000 and $9,000 during the six months ended June 30, 2022 and June 30, 2021, respectively. The recoveries of $242,000 during the six months ended June 30, 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.

Non-Interest Income
Non-interest income for the three months ended June 30, 2022 was $536,000 compared to non-interest income of $778,000 for the three months ended June 30, 2021. The decrease in total non-interest income was primarily due to an unrealized loss of $430,000 on equity securities during the three months ended June 30, 2022 compared to an unrealized gain of $93,000 on equity securities during the three months ended June 30, 2021. The unrealized loss of $430,000 on equity securities was primarily due to a rising interest rate environment and the Federal Reserve’s interest rate increases during the June 30, 2022 quarter.

The decrease in total non-interest income was partially offset by an increase of $234,000 in other loan fees and service charges, an increase of $39,000 on gain from the sale of fixed assets, an increase of $10,000 in other non-interest income, an increase of $2,000 in bank-owned life insurance income, and a decrease of $4,000 in investment advisory fees.

Non-interest income for the six months ended June 30, 2022 was $594,000 compared to non-interest income of $1.2 million for the six months ended June 30, 2021. The decrease in total non-interest income was primarily due to an unrealized loss of $1.1 million on equity securities during the six months ended June 30, 2022 compared to an unrealized loss of $62,000 on equity securities during the six months ended June 30, 2021. The unrealized loss of $1.1 million on equity securities was primarily due to a rising interest rate environment and the Federal Reserve’s interest rate increases during the six months ended June 30, 2022.

The decrease in total non-interest income was partially offset by an increase of $303,000 in other loan fees and service charges, an increase of $39,000 on gain from the sale of fixed assets, an increase of $15,000 in investment advisory fees, an increase of $16,000 in other non-interest income, and an increase of $2,000 in bank-owned life insurance income.

Non-Interest Expense
Non-interest expense increased by $698,000, or 11.0%, to $7.0 million for the three months ended June 30, 2022 from $6.3 million for the three months ended June 30, 2021. The increase resulted primarily from increases of $305,000 in other operating expense, $142,000 in outside data processing expense, $101,000 in salaries and employee benefits, $90,000 in occupancy expense, $38,000 in equipment expense, and $27,000 in advertising expense, partially offset by a decrease of $5,000 in real estate owned expense.

Non-interest expense increased by $1.4 million, or 10.6%, to $14.2 million for the six months ended June 30, 2022 from $12.9 million for the six months ended June 30, 2021. The increase resulted primarily from increases of $759,000 in other operating expense, $272,000 in salaries and employee benefits, $121,000 in occupancy expense, $91,000 in outside data processing expense, $78,000 in equipment expense, and $58,000 in advertising expense, partially offset by a decrease of $16,000 in real estate owned expense.

Income Taxes
We recorded income tax expense of?$1.7 million and $1.1 million for the three months ended June 30, 2022 and 2021, respectively. For the three months ended June 30, 2022, we had approximately $185,000 in tax exempt income, compared to approximately $174,000 in tax exempt income for the three months ended June 30, 2021. Our effective income tax rates were 23.7% and 23.2% for the three months ended June 30, 2022 and 2021, respectively.

We recorded income tax expense of?$2.8 million and $2.1 million for the six months ended June 30, 2022 and 2021, respectively. For the six months ended June 30, 2022, we had approximately $370,000 in tax exempt income, compared to approximately $336,000 in tax exempt income for the six months ended June 30, 2021. Our effective income tax rates were 23.6% and 23.2% for the six months ended June 30, 2022 and 2021, respectively.

Asset Quality
Non-performing assets totaled $2.8 million at June 30, 2022 compared to $2.0 million at December 31, 2021. We had two non-performing non-residential loans secured by the same property to one borrower that are on non-accrual and in foreclosure due to a maturity default at June 30, 2022 compared to no non-performing loans at December 31, 2021. Our ratio of non-performing assets to total assets remained low at 0.23% at June 30, 2022 and at 0.16% at December 31, 2021.

Based on a review of the loans that were in the loan portfolio at June 30, 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.

The Company’s allowance for loan losses totaled $5.5 million, or 0.53% of total loans as of June 30, 2022, compared to $5.2 million, or 0.54% of total loans as of December 31, 2021.

Capital
The Company’s total stockholder’s equity to assets was 20.98% as of June 30, 2022. At June 30, 2022, the Company had the ability to borrow $24.1 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 June 30, 2022, the Bank had a tier 1 leverage capital ratio of 16.25% and a total risk-based capital ratio of 14.52%.

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, and Rockland 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.

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

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

 June 30, December 31,
  2022  2021
 (In thousands, except share
 and per share amounts)
ASSETS     
Cash and amounts due from depository institutions$14,302  $8,344 
Interest-bearing deposits 71,925   143,925 
Total Cash and cash equivalents 86,227   152,269 
Certificates of deposit 100   100 
Equity securities 18,879   19,943 
Securities available-for-sale, at fair value 1   1 
Securities held-to-maturity (fair value of? $24,385 and $17,620, respectively) 27,189   17,880 
Loans receivable 1,023,622   972,851 
Deferred loan costs, net 527   484 
Allowance for loan losses (5,467)  (5,242)
Net loans 1,018,682   968,093 
Premises and equipment, net 26,215   23,907 
Investments in restricted stock, at cost 1,238   1,569 
Bank owned life insurance 25,588   25,291 
Accrued interest receivable 5,232   4,283 
Goodwill 651   651 
Real estate owned 1,996   1,996 
Property held for investment 1,463   1,481 
Right of Use Assets?–?Operating 2,296   2,564 
Right of Use Assets?–?Financing 357   359 
Other assets 5,476   4,683 
Total assets$1,221,590  $1,225,070 
LIABILITIES AND STOCKHOLDERS’ EQUITY     
Liabilities:     
Deposits:     
Non-interest bearing$362,484  $330,853 
Interest bearing 566,116   596,311 
Total deposits 928,600   927,164 
Advance payments by borrowers for taxes and insurance 1,737   1,884 
Federal Home Loan Bank advances 21,000   28,000 
Lease Liability?–?Operating 2,344   2,604 
Lease Liability?–?Financing 514   496 
Accounts payable and accrued expenses 11,083   13,540 
Total liabilities 965,278   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; 16,377,936 shares issued; and 16,377,936 shares outstanding$164  $164 
Additional paid-in capital 145,404   145,335 
Unearned Employee Stock Ownership Plan (“ESOP”) shares (7,866)  (8,301)
Retained earnings 118,708   114,323 
Accumulated other comprehensive loss (98)  (139)
Total stockholders’ equity 256,312   251,382 
Total liabilities and stockholders’ equity$1,221,590  $1,225,070 

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

            
 Three Months Ended June 30, Six Months Ended June 30,
  2022 2021  2022  2021
 (In thousands, except per share amounts)
INTEREST INCOME:           
Loans$14,412  $11,575 $27,473  $23,302 
Interest-earning deposits 249   11  304   21 
Securities 177   90  335   173 
Total Interest Income 14,838   11,676  28,112   23,496 
INTEREST EXPENSE:           
Deposits 1,160   1,113  2,337   2,395 
Borrowings 127   176  288   350 
Financing lease 9   9  19   18 
Total Interest Expense 1,296   1,298  2,644   2,763 
Net Interest Income 13,542   10,378  25,468   20,733 
Provision for loan loss         17 
Net Interest Income after Provision for Loan Losses 13,542   10,378  25,468   20,716 
NON-INTEREST INCOME:           
Other loan fees and service charges 627   393  1,018   715 
Gain (loss) on disposition of equipment 46   7  46   7 
Earnings on bank owned life insurance 150   148  297   295 
Investment advisory fees 120   124  257   242 
Unrealized loss on equity securities (430)  93  (1,064)  (62)
Other 23   13  40   24 
Total Non-Interest Income 536   778  594   1,221 
NON-INTEREST EXPENSES:           
Salaries and employee benefits 3,613   3,512  7,441   7,169 
Occupancy expense 562   472  1,166   1,045 
Equipment 277   239  566   488 
Outside data processing 479   337  915   824 
Advertising 51   24  105   47 
Real estate owned expense 21   26  52   68 
Other 2,004   1,699  3,982   3,223 
Total Non-Interest Expenses 7,007   6,309  14,227   12,864 
INCOME BEFORE PROVISION FOR INCOME TAXES 7,071   4,847  11,835   9,073 
PROVISION FOR INCOME TAXES 1,678   1,126  2,797   2,107 
NET INCOME$5,393  $3,721 $9,038  $6,966 

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

            
 Three Months Ended June 30, Six Months Ended June 30,
 2022 2021 2022 2021
 (In thousands, except per share amounts) (In thousands, except per share amounts)
Per share data:           
Earnings per share - basic and diluted¹$0.35  $0.23  $0.58  $0.43 
Weighted average shares outstanding - basic and diluted¹ 15,544   16,181   15,534   16,176 
Performance ratios/data:           
Return on average total assets 1.72%  1.50%  1.45%  1.42%
Return on average shareholders' equity 8.42%  9.32%  7.09%  8.83%
Net interest income$13,542  $10,378  $25,468  $20,733 
Net interest margin 4.58%  4.49%  4.33%  4.54%
Efficiency ratio 49.77%  56.56%  54.59%  58.60%
Net charge-off ratio (0.01)%  0.00%  (0.02)%  0.00%
            
Loan portfolio composition:       June 30, 2022
  December 31, 2021
One-to-four family      $5,758  $7,189 
Multi-family       83,866   84,425 
Mixed-use       23,495   28,744 
Total residential real estate       113,119   120,358 
Non-residential real estate       26,633   50,016 
Construction       780,858   683,830 
Commercial and industrial       102,594   118,378 
Consumer       418   269 
Gross loans       1,023,622   972,851 
Deferred loan (fees) costs, net       527   484 
Total loans      $1,024,149  $973,335 
Asset quality data:           
Loans past due over 90 days and still accruing      $-  $- 
Non-accrual loans       769   - 
OREO property       1,996   1,996 
Total non-performing assets      $2,765  $1,996 
            
Allowance for loan losses to total loans       0.53%  0.54%
Allowance for loan losses to non-performing loans       710.92%  NA 
Non-performing loans to total loans       0.08%  0.00%
Non-performing assets to total assets       0.23%  0.16%
            
Bank's Regulatory Capital ratios:           
Common equity tier 1 capital to risk-weighted assets       14.52%  15.28%
Total capital to risk-weighted assets       14.14%  14.87%
Tier 1 capital to risk-weighted assets       14.14%  14.87%
Tier 1 leverage ratio       16.25%  16.79%

¹Shares amounts related to periods prior to the July 12, 2021 closing of the conversion offering have been restated to give retroactive recognition to the 1.3400 exchange ratio applied in the conversion offering.

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

 Three Months Ended June 30, 2022 Three Months Ended June 30, 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$997,983  $14,412  5.78% $833,973  $11,575 5.55%
Securities (1) 43,880   177  1.61%  21,513   90 1.67%
Other interest-earning assets 139,978   249  0.71%  69,368   11 0.06%
Total interest-earning assets 1,181,841   14,838  5.02%  924,854   11,676 5.05%
Allowance for loan losses (5,333)        (5,103)     
Non-interest-earning assets 77,693         72,615      
Total assets$1,254,201        $992,366      
                 
Interest-bearing demand deposit$115,097  $190  0.66% $114,675  $164 0.57%
Savings and club accounts 214,840   354  0.66%  101,162   48 0.19%
Certificates of deposit 262,703   616  0.94%  324,420   901 1.11%
Total interest-bearing deposits 592,640   1,160  0.78%  540,257   1,113 0.82%
Borrowed money 21,000   136  2.59%  28,000   185 2.64%
Total interest-bearing liabilities 613,640   1,296  0.84%  568,257   1,298 0.91%
Non-interest-bearing demand deposit 368,359         239,996      
Other non-interest-bearing liabilities 16,108         24,429      
Total liabilities 998,107         832,682      
Equity 256,094         159,684      
Total liabilities and equity$1,254,201        $992,366      
                 
Net interest income / interest spread   $13,542  4.18%    $10,378 4.14%
Net interest rate margin       4.58%       4.49%
Net interest earning assets$568,201        $356,597      
Average interest-earning assets                
to interest-bearing liabilities 192.60%        162.75%     

______________________

 (1)   Includes Federal Home Loan Bank of New York stock.

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

                 
 Six Months Ended June 30, 2022 Six Months Ended June 30, 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$993,879  $27,473  5.53% $834,219  $23,302 5.59%
Securities (1) 41,489   335  1.61%  20,312   173 1.70%
Other interest-earning assets 140,582   304  0.43%  58,942   21 0.07%
Total interest-earning assets 1,175,950   28,112  4.78%  913,473   23,496 5.14%
Allowance for loan losses (5,308)        (5,096)     
Non-interest-earning assets 76,927         70,157      
Total assets$1,247,569        $978,534      
                 
Interest-bearing demand deposit$116,228  $359  0.62% $111,357  $320 0.57%
Savings and club accounts 209,080   681  0.65%  101,893   127 0.25%
Certificates of deposit 275,612   1,297  0.94%  330,546   1,948 1.18%
Total interest-bearing deposits 600,920   2,337  0.78%  543,796   2,395 0.88%
Borrowed money 23,514   307  2.61%  28,000   368 2.63%
Total interest-bearing liabilities 624,434   2,644  0.85%  571,796   2,763 0.97%
Non-interest-bearing demand deposit 352,689         229,854      
Other non-interest-bearing liabilities 15,352         19,020      
Total liabilities 992,475         820,670      
Equity 255,094         157,864      
Total liabilities and equity$1,247,569        $978,534      
                 
Net interest income / interest spread   $25,468  3.93%    $20,733 4.18%
Net interest rate margin       4.33%       4.54%
Net interest earning assets$551,516        $341,677      
Average interest-earning assets                
to interest-bearing liabilities 188.32%        159.76%     
                 

______________________

 (1)   Includes Federal Home Loan Bank of New York stock.

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