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WHITE PLAINS, N.Y., Feb. 03, 2021 (GLOBE NEWSWIRE) -- NorthEast Community Bancorp, Inc. (OTC: NECB) (the “Company”), a majority owned subsidiary of NorthEast Community Bancorp, MHC (the “MHC”), and the parent holding company of NorthEast Community Bank (the “Bank”), reported net income of $3.46 million for the quarter ended December 31, 2020 compared to net income of $2.95 million for the quarter ended December 31, 2019.
Results of Operations for the Years Ended December 31, 2020 and December 31, 2019:
Net interest income for the year ended December 31, 2020 increased by $576,000, or 1.45%, to $40.22 million from $39.65 million for the year ended December 31, 2019. The increase in net interest income was due to the decrease in interest rates during the third and fourth quarters of 2019 coupled with an additional 150 basis point cut in interest rates in March 2020 in response to the COVID-19 pandemic, resulting in a decrease in interest expense that exceeded a decrease in interest income.
Net income before taxes for the year ended December 31, 2020 was $15.61 million compared to $16.93 million for the year ended December 31, 2019, a decrease of 7.79%. The decrease in net income before taxes was the result of increases in operating expenses of $1.50 million and provision for loan losses of $87,000 and a decrease in other income of $306,000, partially offset by an increase in net interest income of $576,000.
Financial Condition for December 31, 2020 Compared to December 31, 2019
Total consolidated assets increased by $12.60 million, or 1.32%, to $967.77 million at December 31, 2020 from $955.17 million at December 31, 2019. Loans receivable (net) increased by $71.40 million or 9.55% to $819.28 million at December 31, 2020 from $747.88 million at December 31, 2019, funded primarily by a decrease of $58.48 million, or 45.81%, in cash and cash equivalents to $69.19 million at December 31, 2020 from $127.67 million at December 31, 2019, and a decrease of $1.77 million, or 19.32%, in investment securities to $7.38 million at December 31, 2020 from $9.15 million at December 31, 2019.
In addition, right of use assets – operating, recognized in connection with the adoption of Accounting Standards Update 2016-02 – Leases (ASU 2016-02), increased by $1.94 million to $3.09 million at December 31, 2020 from $1.15 million at December 31, 2019. The increase in right of use assets – operating was due to the leasing of additional office spaces to facilitate the expansion of the company. Other assets decreased by $1.26 million to $5.06 million at December 31, 2020 from $6.32 million at December 31, 2019 due to the accounting treatment of payroll at year end.
Commitments, loans-in-process and standby letters of credit outstanding increased to $565.35 million as of December 31, 2020 compared to $434.96 million at December 31, 2019.
The balance of the allowance for loan losses increased by $477,000 to $5.09 million at December 31, 2020 from $4.61 million at December 31, 2019 due primarily to provision for loan losses of $814,000 offset by net charge-offs of $337,000 during the year ended December 31, 2020. The increase in provision for loan losses and the allowance for loan losses was primarily due to the growth of the loan portfolio.
Total liabilities at December 31, 2020 were $813.94 million compared to $813.06 million at December 31, 2019, an increase of $886,000, or 0.11%. The increase in total liabilities was due to an increase of $7.00 million, or 33.33%, in Federal Home Loan Bank advances from $21.00 million at December 31, 2019 to $28.00 million December 31, 2020, offset partially by a $7.90 million decrease in deposits from $779.16 million at December 31, 2019 to $771.26 million at December 31, 2020. In addition, lease liability recognized in connection with the adoption of ASU 2016-02 increased by $1.94 million from $1.15 million at December 31, 2019 to $3.12 million at December 31, 2020 and other liabilities increased $365,000 from $8.49 million at December 31, 2019 to $8.86 million at December 31, 2020.
Total stockholder’s equity increased by $11.71 million, or 8.24%, to $153.82 million at December 31, 2020 from $142.11 million at December 31, 2019. The increase was the result of net income of $12.33 million for the year ended December 31, 2020, partially offset by dividends declared and paid in 2020.
NorthEast Community Bancorp, Inc.’s total stockholders’ equity at December 31, 2020 is a strong 15.89% compared to 14.88% at December 31, 2019.
This release contains “forward-looking statements” that are based on assumptions and may describe future plans, strategies and expectations of the Company. These forward-looking statements are generally identified by the use of the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project” or similar expressions. The Company’s ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors that could have a material adverse effect on the operations of the Company and its subsidiaries include, but are not limited to, changes in market interest rates, regional and national economic conditions, the effect of the COVID-19 pandemic (including its impact on our 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 the Company’s market area, changes in the real estate market values in the Company’s market area and changes in relevant accounting principles and guidelines. 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.
Kenneth A. Martinek
Chief Executive Officer