U.S. markets closed
  • S&P 500

    4,662.85
    +3.82 (+0.08%)
     
  • Dow 30

    35,911.81
    -201.79 (-0.56%)
     
  • Nasdaq

    14,893.75
    +86.95 (+0.59%)
     
  • Russell 2000

    2,162.46
    +3.02 (+0.14%)
     
  • Crude Oil

    84.39
    +0.57 (+0.68%)
     
  • Gold

    1,815.30
    -1.20 (-0.07%)
     
  • Silver

    22.93
    +0.01 (+0.05%)
     
  • EUR/USD

    1.1410
    -0.0005 (-0.05%)
     
  • 10-Yr Bond

    1.7720
    +0.0610 (+3.57%)
     
  • GBP/USD

    1.3673
    -0.0007 (-0.05%)
     
  • USD/JPY

    114.3620
    +0.1620 (+0.14%)
     
  • BTC-USD

    43,051.71
    -48.00 (-0.11%)
     
  • CMC Crypto 200

    1,037.86
    +12.13 (+1.18%)
     
  • FTSE 100

    7,542.95
    -20.90 (-0.28%)
     
  • Nikkei 225

    28,372.62
    +248.34 (+0.88%)
     

NorthEast Community Bancorp, Inc. Reports Results for the Quarter Ended September 30, 2021

  • Oops!
    Something went wrong.
    Please try again later.
·28 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.

WHITE PLAINS, N.Y., Oct. 29, 2021 (GLOBE NEWSWIRE) -- NorthEast Community Bancorp, Inc. (Nasdaq: NECB) (the “Company”), the parent holding company of NorthEast Community Bank (the “Bank”), reported net income of $730,000 and $7.7 million, or $0.05 and $0.48 per basic and diluted common share, for the three months and nine months ended September 30, 2021, respectively, compared to net income of $3.1 million and $8.9 million, or $0.26 and $0.74 per basic and diluted common share, for the three months and nine months ended September 30, 2020, respectively.

Kenneth A. Martinek, NorthEast Community Bancorp’s Chairman of the Board and Chief Executive Officer, stated “Although we generated net income of $730,000 for the quarter, we are pleased to report that the performance of our loan portfolio remains strong with no loans past due and in foreclosure at September 30, 2021. Throughout the COVID-19 pandemic, 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 $779.1 million as of September 30, 2021. At this time, we have two loans on deferral as a result of the COVID-19 pandemic, both with conservative loan to value ratios. As has been in the past, construction lending for affordable housing units in homogeneous high demand high absorption areas continues to be our focus.”

Highlights for the three and nine months ended and at September 30, 2021 are as follows:

  • During the nine months ended September 30, 2021, the Company recorded net income of $7.7 million, or $0.48 per basic and diluted share.

  • Net interest income increased by $1.1 million, or 11.3%, for the three months ended September 30, 2021 compared to the same period in the prior year.

  • Asset quality metrics continued to remain strong with non-performing assets to total assets of 0.18% as of September 30, 2021 compared to 0.58% as of December 31, 2020. Our allowance for loan losses totaled $5.2 million, or 0.58% of total loans as of September 30, 2021 compared to $5.1 million, or 0.62% of total loans as of September 30, 2020.

  • In accordance with the provisions of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) since March 2020, we have granted pandemic-related loan payment deferrals to 196 loans totaling $190.9 million at the time payment deferral was requested. As of September 30, 2021, we had two loans totaling $8.9 million still in deferral status.

Balance Sheet
Total assets increased by $139.8 million, or 14.4%, to $1.1 billion at September 30, 2021, from $968.2 million at December 31, 2020. The increase in assets was primarily due to increases in net loans of $84.8 million, cash and cash equivalents of $38.8 million, investment securities held-to-maturity of $6.0 million, premises and equipment of $4.9 million, and investment in equity securities of $4.8 million.

Cash and cash equivalents increased by $38.8 million, or 56.1%, to $108.0 million at September 30, 2021 from $69.2 million at December 31, 2020. The increase in cash can primarily be attributed to an increase in deposits of $45.1 million and an increase in stockholders’ equity primarily due to the completion of the second-step conversion offering that increased stockholders’ equity by $88.4 million, net of conversion costs, partially offset by an increase in loans of $84.8 million, an increase in investment securities held-to-maturity of $6.0 million, an increase in equity securities of $4.8 million, an increase in property and equipment of $4.9 million due primarily to the purchase of property for a new branch office, and cash dividends of $1.3 million.

Equity securities increased by $4.8 million, or 46.3%, to $15.1 million at September 30, 2021 from $10.3 million at December 31, 2020. The increase in equity securities was primarily attributed to the purchase of equity securities totaling $5.0 million, partially offset by market depreciation of $215,000.

Securities held-to-maturity increased by $6.0 million, or 81.8%, to $13.4 million at September 30, 2021 from $7.4 million at December 31, 2020. The increase was primarily due to the purchase of investment securities totaling $10.3 million, partially offset by maturities and pay-downs of $4.3 million.

Loans, net of the allowance for loan losses, increased by $84.8 million, or 10.3%, to $904.6 million at September 30, 2021 from $819.7 million at December 31, 2020. The increase in loans, net of the allowance for loan losses, was primarily due to a net increase in construction loans of $87.5 million, commercial and industrial loans of $13.2 million, and multi-family loans of $612,000. The increases were partially offset by decreases in non-residential loans of $8.6 million, mixed-use loans of $6.1 million, and one- to four-family loans of $1.4 million, coupled with normal pay-downs and principal reductions.

Premises and equipment increased by $4.9 million, or 26.1%, to $23.5 million at September 30, 2021 from $18.7 million at December 31, 2020 due to the acquisition of property for a new branch site located in Monsey, New York.

Foreclosed real estate was $2.0 million at both September 30, 2021 and December 31, 2020.

Right of use assets — operating, recognized in accordance with Accounting Standards Codification 842 “Leases”, decreased by $397,000, or 12.8%, to $2.7 million at September 30, 2021 from $3.1 million at December 31, 2020, primarily due to amortization.

Other assets increased by $286,000, or 5.7%, to $5.3 million at September 30, 2021 from $5.1 million at December 31, 2020 due to an increase in tax assets of $347,000 and an increase in prepaid expense of $233,000, partially offset by a decrease in suspense accounts of $351,000.

Total deposits increased by $45.1 million, or 5.8%, to $816.8 million at September 30, 2021, from $771.7 million at December 31, 2020. The increase was primarily due to an increase in non-interest bearing demand deposits of $85.3 million, or 38.5%, and an increase in NOW/money market accounts of $17.1 million, or 17.0%, from December 31, 2020 to September 30, 2021. These increases were partially offset by a decrease in certificates of deposit of $53.2 million, or 15.3%, and a decrease in savings account balances of $4.1 million, or 4.0%, from December 31, 2020 to September 30, 2021.

Federal Home Loan Bank advances were $28.0 million at both September 30, 2021 and December 31, 2020.

Accounts payable and accrued expenses increased by $232,000, or 2.6%, to $9.1 million at September 30, 2021 from $8.8 million at December 31, 2020 due primarily to an increase in deferred compensation of $439,000, partially offset by a decrease in accrued expenses of $177,000.

Stockholders’ equity increased by $94.9 million, or 61.7% to $248.7 million at September 30, 2021, from $153.8 million at December 31, 2020. The increase in stockholders’ equity was primarily a result of the completion of the second-step conversion offering that increased stockholders’ equity by $88.4 million, net of conversion costs. The second-step conversion also reduced stockholders’ equity by the addition of new unearned employee stock ownership plan shares totaling $7.8 million and increased stockholders’ equity by the retirement of treasury shares totaling $7.0 million.

The increase in stockholders’ equity was also due to net income of $7.7 million for the nine months ended September 30, 2021 and a reduction of $693,000 in unearned employee stock ownership plan shares, partially offset by dividends paid of $1.3 million and $8,000 in other comprehensive loss.

Net Interest Income
Net interest income totaled $10.9 million for the three months ended September 30, 2021, as compared to $9.8 million for the three months ended September 30, 2020. The increase in net interest income of $1.1 million, or 11.3%, was primarily due to an increase in interest income combined with a decrease in interest expense.

The increase in interest income is attributed to increases in loans, investment securities, equity securities, and interest-bearing deposits as we continued to deploy the proceeds raised in the second-step conversion. The decrease in interest expense is consistent with the decrease in interest rates in response to the COVID-19 pandemic and its impact on the economy and interest rate environment.

In this regard, interest and dividend income increased by $93,000, or 0.8%, to $12.1 million for the three months ended September 30, 2021 from $12.0 million for the three months ended September 30, 2020 due to an increase in the average balance of interest earning assets of $136.1 million, or 15.3%, to $1.0 billion for the three months ended September 30, 2021 from $888.6 million for the three months ended September 30, 2020, partially offset by a decrease in the yield on interest earning assets by 68 basis points from 5.40% for the three months ended September 30, 2020 to 4.72% for the three months ended September 30, 2021.

Interest expense decreased by $1.0 million, or 46.1%, to $1.2 million for the three months ended September 30, 2021 from $2.2 million for the three months ended September 30, 2020 due to a decrease in average interest bearing liabilities of $50.6 million, or 8.5%, to $547.9 million for the three months ended September 30, 2021 from $598.6 million for the three months ended September 30, 2020 and a decrease in the cost of interest bearing liabilities by 61 basis points from 1.47% for the three months ended September 30, 2020 to 0.86% for the three months ended September 30, 2021.

Net interest margin decreased by 15 basis points, or 3.4%, during the three months ended September 30, 2021 to 4.26% compared to 4.41% during the three months ended September 30, 2020.

Net interest income totaled $31.6 million for the nine months ended September 30, 2021, as compared to $28.8 million for the nine months ended September 30, 2020. The increase in net interest income of $2.9 million, or 10.0%, was primarily due to the decrease in interest expense that exceeded a decrease in interest income.

In a manner consistent with the decrease in interest rates in response to the COVID-19 pandemic, our cost of interest bearing liabilities decreased much greater than our yield on interest earning assets as our interest bearing liabilities repriced much faster to lower rates than our yield on interest earning assets. In this regard, our cost of interest bearing liabilities decreased by 85 basis points from 1.78% for the nine months ended September 30, 2020 to 0.93% for the nine months ended September 30, 2021. Our yield on interest earning assets decreased by 65 basis points from 5.64% for the nine months ended September 30, 2020 to 4.99% for the nine months ended September 30, 2021.

Net interest margin increased by 5 basis points, or 1.1%, during the nine months ended September 30, 2021 to 4.44% compared to 4.39% during the nine months ended September 30, 2020.

Provision for Loan Losses
The Company recorded a loan loss provision of $3.6 million for the three months ended September 30, 2021 compared to a loan loss provision of $229,000 for the three months ended September 30, 2020. We charged-off a total of $3.6 million and $7,000 during the three months ended September 30, 2021 and September 30, 2020, respectively.

The provision recorded for the three months ended September 30, 2021 was primarily attributed to the previously disclosed charge-off of $3.6 million during the three months ended September 30, 2021 regarding a non-residential bridge loan secured by real estate with a balance of $3.6 million. The loan is secured by commercial real estate located in Greenwich, Connecticut and guaranteed by the two borrowers. The loan was originated in 2016 as a two-year bridge loan and, upon the borrower’s failure to satisfy the loan at the maturity date, the loan was accelerated and a foreclosure action was instituted. The loan remains in foreclosure but is subject to Connecticut’s continuing foreclosure backlog. The property securing the loan is subject to a parking easement and based on a recently updated appraisal showing the property’s value with the parking easement to be zero, the Company has determined to write off the $3.6 million loan as a non-cash charge against the allowance for loan losses.

The Company intends to aggressively seek recovery of all amounts due from the personal guarantors of the loan. However, the recovery process is uncertain and might take an extended period of time to resolve this matter. In the event the Company is successful against the guarantors, any recovery received would be added back to the allowance for loan losses and an analysis will be performed at that time to determine the appropriateness of the recovery into income.

We also charged-off $3,000 and $7,000 during the three months ended September 30, 2021 and September 30, 2020, respectively, against various unpaid overdrafts in our demand deposit accounts. We recorded recoveries of $151,000 and $1,000 during the three months ended September 30, 2021 and September 30, 2020, respectively.

The Company recorded a loan loss provision of $3.6 million for the nine months ended September 30, 2021 compared to a loan loss provision of $762,000 for the nine months ended September 30, 2020.

The provision recorded for the nine months ended September 30, 2021 was primarily attributed to the charge-off of the aforementioned non-residential bridge loan with a balance of $3.6 million secured by commercial real estate located in Greenwich, Connecticut.

The provision recorded for the nine months ended September 30, 2020 was primarily attributed to the perceived potential credit risk associated with the COVID-19 pandemic, although no specific or probable losses were identified at that time. Although the COVID-19 pandemic and the resulting recession has impacted the local economy, we have not experienced any significant deterioration of our borrowers’ ability to keep current in accordance with the terms of their obligations.

We also charged-off $23,000 and $10,000 during the nine months ended September 30, 2021 and September 30, 2020, respectively, against various unpaid overdrafts in our demand deposit accounts. We recorded recoveries of $160,000 and $25,000 during the nine months ended September 30, 2021 and September 30, 2020, respectively.

Non-Interest Income
Non-interest income for the three months ended September 30, 2021 was $532,000 compared to non-interest income of $527,000 for the three months ended September 30, 2020. The increase in total non-interest income was primarily due to an increase of $130,000 in other loan fees and service charges, an increase of $27,000 in investment advisory fees, and a net loss of $2,000 on the sale of fixed assets that occurred during the three months ended September 30, 2020 compared to none during the three months ended September 30, 2021. These increases were partially offset by unrealized loss on equity securities of $154,000 during the three months ended September 30, 2021 compared to none during the three months ended September 30, 2020.

Non-interest income for the nine months ended September 30, 2021 was $1.8 million compared to non-interest income of $2.0 million for the nine months ended September 30, 2020. The decrease in total non-interest income was primarily due to an unrealized loss of $215,000 in our equity securities in the 2021 period compared to an unrealized gain of $299,000 in the comparable period in 2020, a decrease of $120,000 in other non-interest income, and a decrease of $10,000 in bank owned life insurance income. These were partially offset by an increase of $374,000 in other loan fees and service charges, an increase of $63,000 in investment advisory fees, and a net gain of $7,000 on the sale of fixed assets in the 2021 period compared to a net loss of $2,000 on the sale of fixed assets in the 2020 period.

Non-Interest Expense
Non-interest expense increased by $839,000, or 13.9%, to $6.9 million for the three months ended September 30, 2021 from $6.0 million for the three months ended September 30, 2020. The increase resulted primarily from increases of $889,000 in salaries and employee benefits, $37,000 in equipment expense, $15,000 in other operating expense, $9,000 in advertising expense, and $9,000 in occupancy expense, partially offset by decreases of $54,000 in outside data processing expense, $50,000 in impairment loss on goodwill, and $16,000 in real estate owned expense.

Non-interest expense increased by $1.3 million, or 7.3%, to $19.7 million for the nine months ended September 30, 2021 from $18.4 million for the nine months ended September 30, 2020. The increase resulted primarily from increases of $1.2 million in salaries and employee benefits, $210,000 in other operating expense, $114,000 in equipment expense, and $98,000 in occupancy expense, partially offset by decreases of $90,000 in real estate owned expense, $80,000 in outside data processing expense, $61,000 in advertising expense, and $50,000 in impairment loss on goodwill.

Income Taxes
We recorded income tax expense of $265,000 and $956,000 for the three months ended September 30, 2021 and 2020, respectively. For the three months ended September 30, 2021, we had approximately $185,000 in tax exempt income, compared to approximately $166,000 in tax exempt income for the three months ended September 30, 2020. Our effective income tax rates were 26.6% and 23.4% for the three months ended September 30, 2021 and 2020, respectively.

We recorded income tax expense of $2.4 million and $2.7 million for the nine months ended September 30, 2021 and 2020, respectively. For the nine months ended September 30, 2021, we had approximately $522,000 in tax exempt income, compared to approximately $337,000 in tax exempt income for the nine months ended September 30, 2020. Our effective income tax rates were 23.6% and 23.4% for the nine months ended September 30, 2021 and 2020, respectively.

Asset Quality
During the nine months ended September 30, 2021, non-performing assets decreased by $3.6 million, or 64.2%, to $2.0 million from $5.6 million as of December 31, 2020. The decrease in non-performing assets was primarily due to the previously disclosed charge-off of $3.6 million on a non-accrual, non-residential bridge loan during 2021. We had no non-performing loans at September 30, 2021 compared to one non-performing loan at December 31, 2020. Our ratio of non-performing assets to total assets remained low at 0.18% as of September 30, 2021 compared to 0.58% as of December 31, 2020.

Based on a review of the loans that were in the loan portfolio at September 30, 2021, management believes that the allowance is maintained at a level that represents its best estimate of inherent losses in the loan portfolio that were both probable and reasonably estimable.

Our allowance for loan losses totaled $5.2 million, or 0.58% of total loans as of September 30, 2021, compared to $5.1 million, or 0.62% of total loans as of December 31, 2020.

Capital
The Bank’s capital position remains strong relative to current regulatory requirements and is considered a well-capitalized institution under the Prompt Corrective Action framework. As of September 30, 2021, the Bank had a tier 1 leverage capital ratio of 17.07% and a total risk-based capital ratio of 15.91%. The Company’s total stockholder’s equity to assets was 22.45% as of September 30, 2021. At September 30, 2021, the Company had the ability to borrow $39.0 million from the Federal Home Loan Bank of New York.

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 ten 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, the effect of the COVID-19 pandemic (including its impact on NorthEast Community Bank’s business operations and credit quality, on our customers and their ability to repay their loan obligations and on general economic and financial market conditions), legislative and regulatory changes, monetary and fiscal policies of the United States government, including policies of the United States Treasury and the Federal Reserve Board, the quality and composition of the loan or investment portfolios, demand for loan products, deposit flows, competition, demand for financial services in NorthEast Community Bank’s market area, changes in the real estate market values in NorthEast Community Bank’s market area and changes in relevant accounting principles and guidelines. Additionally, other risks and uncertainties may be described in our annual and quarterly reports filed with the U.S. Securities and Exchange Commission (the “SEC”), which are available through the SEC’s website located at www.sec.gov. These risks and uncertainties should be considered in evaluating any forward-looking statements and undue reliance should not be placed on such statements. Except as required by applicable law or regulation, the Company does not undertake, and specifically disclaims any obligation, to release publicly the result of any revisions that may be made to any forward-looking statements to reflect events or circumstances after the date of the statements or to reflect the occurrence of anticipated or unanticipated events.

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

September 30,

December 31,

2021

2020

(In thousands, except share

and per share amounts)

ASSETS

Cash and amounts due from depository institutions

$

6,728

$

7,613

Interest-bearing deposits

101,285

61,578

Total Cash and cash equivalents

108,013

69,191

Certificates of deposit

100

100

Equity securities

15,117

10,332

Securities available-for-sale, at fair value

2

2

Securities held-to-maturity (fair value of $13,083 and $7,519, respectively)

13,422

7,382

Loans receivable

909,466

824,708

Deferred loan costs, net

326

113

Allowance for loan losses

(5,242

)

(5,088

)

Net loans

904,550

819,733

Premises and equipment, net

23,544

18,675

Investments in restricted stock, at cost

1,569

1,595

Bank owned life insurance

25,138

24,691

Accrued interest receivable

4,034

3,838

Goodwill

651

651

Real estate owned

1,996

1,996

Property held for investment

1,491

1,518

Right of Use Assets – Operating

2,697

3,094

Right of Use Assets – Financing

360

363

Other assets

5,346

5,060

Total assets

$

1,108,030

$

968,221

LIABILITIES AND STOCKHOLDERS’ EQUITY

Liabilities:

Deposits:

Non-interest bearing

$

306,645

$

221,371

Interest bearing

510,190

550,335

Total deposits

816,835

771,706

Advance payments by borrowers for taxes and insurance

2,184

2,258

Federal Home Loan Bank advances

28,000

28,000

Lease Liability – Operating

2,736

3,115

Lease Liability – Financing

487

460

Accounts payable and accrued expenses

9,089

8,857

Total liabilities

859,331

814,396

Stockholders’ equity:

Preferred stock, $0.01 and $0.01 par value; 25,000,000 shares and 1,340,000 shares authorized; none issued or outstanding, respectively

Common stock, $0.01 and $0.01 par value; 75,000,000 shares and 25,460,000 shares authorized; 16,377,936 shares and 17,721,500 shares issued; and 16,377,936 shares and 16,340,779 shares outstanding, respectively¹

$

164

$

132

Additional paid-in capital

145,315

56,901

Unearned Employee Stock Ownership Plan (“ESOP”) shares

(8,518

)

(1,296

)

Treasury stock – at cost, 0 and 1,380,721 shares, respectively¹

-

(7,032

)

Retained earnings

111,932

105,305

Accumulated other comprehensive loss

(194

)

(185

)

Total stockholders’ equity

248,699

153,825

Total liabilities and stockholders’ equity

$

1,108,030

$

968,221

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 1.34 exchange ratio applied in the conversion offering.

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

Three Months Ended September 30,

Nine Months Ended September 30,

2021

2020

2021

2020

(In thousands, except per share amounts)

INTEREST INCOME:

Loans

$

11,935

$

11,882

$

35,237

$

36,323

Interest-earning deposits

53

15

74

346

Securities

104

102

277

325

Total Interest Income

12,092

11,999

35,588

36,994

INTEREST EXPENSE:

Deposits

995

2,007

3,390

7,692

Borrowings

178

178

528

509

Financing lease

9

9

27

27

Total Interest Expense

1,182

2,194

3,945

8,228

Net Interest Income

10,910

9,805

31,643

28,766

Provision for loan loss

3,593

229

3,610

762

Net Interest Income after Provision for Loan Losses

7,317

9,576

28,033

28,004

NON-INTEREST INCOME:

Other loan fees and service charges

381

251

1,095

721

Gain (loss) on disposition of equipment

(2

)

7

(2

)

Earnings on bank owned life insurance

152

152

447

457

Investment advisory fees

139

112

381

318

Unrealized gain (loss) on equity securities

(154

)

-

(215

)

299

Other

14

14

38

157

Total Non-Interest Income

532

527

1,753

1,950

NON-INTEREST EXPENSES:

Salaries and employee benefits

4,054

3,165

11,223

10,031

Occupancy expense

489

480

1,534

1,436

Equipment

229

192

718

604

Outside data processing

395

449

1,218

1,298

Advertising

36

27

83

144

Impairment loss on goodwill

-

50

-

50

Real estate owned expense

18

34

85

175

Other

1,633

1,618

4,857

4,647

Total Non-Interest Expenses

6,854

6,015

19,718

18,385

INCOME BEFORE PROVISION FOR INCOME TAXES

995

4,088

10,068

11,569

PROVISION FOR INCOME TAXES

265

956

2,372

2,703

NET INCOME

$

730

$

3,132

$

7,696

$

8,866

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

Three Months Ended September 30,

Nine Months Ended September 30,

2021

2020

2021

2020

(In thousands, except per share amounts)

(In thousands, except per share amounts)

Per share data:

Earnings per share - basic and diluted¹

$

0.05

$

0.19

$

0.48

$

0.55

Weighted average shares outstanding - basic and diluted¹

15,572

16,154

15,973

16,146

Performance ratios/data:

Return on average total assets

0.27

%

1.32

%

1.01

%

1.26

%

Return on average shareholders' equity

1.31

%

8.37

%

5.72

%

8.05

%

Net interest income

$

10,910

$

9,805

$

31,643

$

28,766

Net interest margin

4.26

%

4.41

%

4.44

%

4.39

%

Efficiency ratio

59.90

%

58.50

%

59.04

%

59.95

%

Net charge-off ratio

1.60

%

0.00

%

0.55

%

0.00

%

Loan portfolio composition:

September 30, 2021

December 31, 2020

One-to-four family

$

4,766

$

6,170

Multi-family

91,118

90,506

Mixed-use

24,440

30,508

Total residential real estate

120,324

127,184

Non-residential real estate

52,020

60,665

Construction

633,263

545,788

Commercial and industrial

103,808

90,577

Overdrafts

14

452

Consumer

37

42

Gross loans

909,466

824,708

Deferred loan (fees) costs, net

326

113

Total loans

$

909,792

$

824,821

Asset quality data:

Loans past due over 90 days and still accruing

$

-

$

-

Non-accrual loans

-

3,572

OREO property

1,996

1,996

Total non-performing assets

$

1,996

$

5,568

Allowance for loan losses to total loans

0.58

%

0.62

%

Allowance for loan losses to non-performing loans

NA

142.44

%

Non-performing loans to total loans

0.00

%

0.43

%

Non-performing assets to total assets

0.18

%

0.58

%

Bank's Regulatory Capital ratios:

Common equity tier 1 capital to risk-weighted assets

15.91

%

13.72

%

Total capital to risk-weighted assets

15.48

%

13.23

%

Tier 1 capital to risk-weighted assets

15.48

%

13.23

%

Tier 1 leverage ratio

17.07

%

14.79

%

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 1.34 exchange ratio applied in the conversion offering.

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

Three Months Ended September 30, 2021

Three Months Ended September 30, 2020

Average

Interest

Average

Average

Average

Balance

and dividend

Yield

Balance

Interest

Yield

(In thousands, except yield/cost information)

(In thousands, except yield/cost information)

Loan receivable Gross

$

862,796

$

11,935

5.53

%

$

807,465

$

11,882

5.89

%

Securities (1)

27,208

104

1.53

%

20,190

102

2.02

%

Other interest-earning assets

134,680

53

0.16

%

60,974

15

0.10

%

Total interest-earning assets

1,024,684

12,092

4.72

%

888,629

11,999

5.40

%

Allowance for loan losses

(5,181

)

(5,167

)

Non-interest-earning assets

73,990

65,773

Total assets

$

1,093,493

$

949,235

Interest-bearing demand deposit

$

117,329

$

183

0.62

%

$

100,287

$

151

0.60

%

Savings and club accounts

97,556

48

0.20

%

102,065

84

0.33

%

Certificates of deposit

305,057

764

1.00

%

368,220

1,772

1.92

%

Total interest-bearing deposits

519,942

995

0.77

%

570,572

2,007

1.41

%

Borrowed money

28,000

187

2.67

%

28,000

187

2.67

%

Total interest-bearing liabilities

547,942

1,182

0.86

%

598,572

2,194

1.47

%

Non-interest-bearing demand deposit

281,499

188,616

Other non-interest-bearing liabilities

41,992

12,336

Total liabilities

871,433

799,524

Equity

222,060

149,711

Total liabilities and equity

$

1,093,493

$

949,235

Net interest income / interest spread

$

10,910

3.86

%

$

9,805

3.93

%

Net interest rate margin

4.26

%

4.41

%

Net interest earning assets

$

476,742

$

290,057

Average interest-earning assets to interest-bearing liabilities

187.01

%

148.46

%

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

Nine Months Ended September 30, 2021

Nine Months Ended September 30, 2020

Average

Interest

Average

Average

Average

Balance

and dividend

Yield

Balance

Interest

Yield

(In thousands, except yield/cost information)

(In thousands, except yield/cost information)

Loan receivable Gross

$

843,850

$

35,237

5.57

%

$

793,002

$

36,323

6.11

%

Securities (1)

22,636

277

1.63

%

20,519

325

2.11

%

Other interest-earning assets

84,465

74

0.12

%

61,044

346

0.76

%

Total interest-earning assets

950,951

35,588

4.99

%

874,565

36,994

5.64

%

Allowance for loan losses

(5,125

)

(4,891

)

Non-interest-earning assets

71,449

67,146

Total assets

$

1,017,275

$

936,820

Interest-bearing demand deposit

$

113,370

$

503

0.59

%

$

106,721

$

615

0.77

%

Savings and club accounts

100,431

174

0.23

%

102,130

542

0.71

%

Certificates of deposit

321,956

2,712

1.12

%

380,777

6,535

2.29

%

Total interest-bearing deposits

535,757

3,389

0.84

%

589,628

7,692

1.74

%

Borrowed money

28,000

556

2.65

%

26,391

536

2.71

%

Total interest-bearing liabilities

563,757

3,945

0.93

%

616,019

8,228

1.78

%

Non-interest-bearing demand deposit

247,258

162,278

Other non-interest-bearing liabilities

26,762

11,595

Total liabilities

837,777

789,892

Equity

179,498

146,928

Total liabilities and equity

$

1,017,275

$

936,820

Net interest income / interest spread

$

31,643

4.06

%

$

28,766

3.86

%

Net interest rate margin

4.44

%

4.39

%

Net interest earning assets

$

387,194

$

258,546

Average interest-earning assets to interest-bearing liabilities

168.68

%

141.97

%

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

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