NorthEast Community Bancorp, Inc. Reports Results for the Three and Six Months Ended June 30, 2023

NorthEast Community Bancorp, Inc.

WHITE PLAINS, N.Y., July 26, 2023 (GLOBE NEWSWIRE) -- NorthEast Community Bancorp, Inc. (Nasdaq: NECB) (the “Company”), the parent holding company of NorthEast Community Bank (the “Bank”), reported net income of $11.1 million and $22.3 million, or $0.75 and $1.56 per basic and diluted common share, for the three months and six months ended June 30, 2023 compared to 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.

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 continued increases in interest rates during 2023, loan demand remained strong with originations and outstanding commitments remaining robust. 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, 2023 are as follows:

• Net income increased by $5.7 million and $13.3 million, or 105.6% and 147.1%, for the three months and six months ended June 30, 2023 compared to the same periods in the prior year.

• Net interest income increased by $10.5 million and $21.4 million, or 77.4% and 84.0%, for the three months and six months ended June 30, 2023 compared to the same periods in 2022.

• Our commitments, loans-in-process, and standby letters of credit outstanding totaled $815.8 million at June 30, 2023 compared to $948.7 million at December 31, 2022.
  

Balance Sheet Summary

Total assets increased by $190.7 million, or 13.4%, to $1.6 billion at June 30, 2023, from $1.4 billion at December 31, 2022. The increase in assets was primarily due to an increase in net loans of $175.2 million and an increase in cash and cash equivalents of $24.6 million, partially offset by a decrease in Federal Home Loan Bank advances of $7.0 million and a decrease in bank owned life insurance of $1.1 million.

Cash and cash equivalents increased by $24.6 million, or 25.8%, to $119.9 million at June 30, 2023 from $95.3 million at December 31, 2022. The increase in cash and cash equivalents was a result of increases in deposits of $193.9 million, partially offset by a reduction in FHLB advances of $7.0 million, and stock repurchases of $14.3 million.

Equity securities increased by $102,000, or 0.6%, to $18.1 million at June 30, 2023 from $18.0 million at December 31, 2022. The increase in equity securities was attributable to market appreciation of $102,000 due to market interest rate volatility during the six months ended June 30, 2023.

Securities held-to-maturity decreased by $10.6 million, or 40.2%, to $15.8 million at June 30, 2023 from $26.4 million at December 31, 2022 due to the maturity of $10.0 million in U.S. Treasury holdings, the establishment of $135,000 in an allowance for credit losses for held-to-maturity securities, and to maturities and pay-downs of various investment securities.

The allowance for credit losses for held-to-maturity securities totaling $135,000 was established pursuant to the adoption of the current expected credit losses model (“CECL”) on held-to-maturity investment securities loss exposures. In this regard, we recognized a one-time credit of $132,000 due to the adoption of CECL at January 1, 2023 and credit loss expense totaling $3,000 during the six months ended June 30, 2023.

Loans, net of the allowance for credit losses, increased by $175.2 million, or 14.5%, to $1.4 billion at June 30, 2023 from $1.2 billion at December 31, 2022.   The increase in loans, net of the allowance for credit losses, was primarily due to loan originations of $448.0 million during the six months ended June 30, 2023, consisting primarily of $405.6 million in construction loans with respect to which approximately 42.5% of the funds were disbursed at loan closings, with the remaining funds to be disbursed over the terms of the construction loans. In addition, we originated $20.9 million in commercial and industrial loans, $13.3 million in multi-family loans, and $8.2 million in mixed-use loans.

Loan originations resulted in a net increase of $168.1 million in construction loans, $7.0 million in mixed-use loans, $4.0 million in commercial and industrial loans, and $184,000 in consumer loans. The increase in our loan portfolio was partially offset by decreases in non-residential loans of $4.5 million, $409,000 in multi-family loans, and $116,000 in residential loans, coupled with normal pay-downs and principal reductions.

The allowance for credit losses related to loans decreased to $4.4 million as of June 30, 2023 from $5.5 million as of December 31, 2022. The decrease in the allowance for credit losses related to loans was due to a one-time decrease of $1.6 million due to the adoption of CECL at January 1, 2023 and charge-offs of $214,000, partially offset by provision for credit losses totaling $725,000.

Premises and equipment decreased by $417,000, or 1.6%, to $25.6 million at June 30, 2023 from $26.1 million at December 31, 2022 primarily due to depreciation of fixed assets.

Investments in Federal Home Loan Bank stock decreased by $309,000, or 25.0%, to $929,000 at June 30, 2023 from $1.2 million at December 31, 2022 due primarily to a reduction in mandatory Federal Home Loan Bank stock in connection with the maturity of $7.0 million in advances during the six months ended June 30, 2023.

Bank owned life insurance (“BOLI”) decreased by $1.1 million, or 4.3%, to $24.8 million at June 30, 2023 from $25.9 million at December 31, 2022 due to two death claims totaling $1.8 million on BOLI policies, partially offset by increases in the BOLI cash value.

Accrued interest receivable increased by $1.9 million, or 22.5%, to $10.5 million at June 30, 2023 from $8.6 million at December 31, 2022 due to an increase in the loan portfolio and three interest rate increases in 2023 that resulted in an increase in the interest rates on loans in our construction loan portfolio.

Foreclosed real estate was $1.5 million at June 30, 2023 and December 31, 2022.

Right of use assets — operating decreased by $257,000, or 11.1%, to $2.1 million at June 30, 2023 from $2.3 million at December 31, 2022, primarily due to amortization.

Other assets increased by $1.7 million, or 31.2%, to $7.0 million at June 30, 2023 from $5.3 million at December 31, 2022 due to an increase in tax assets of $2.0 million, partially offset by a decrease in suspense accounts of $320,000 and a decrease in prepaid expense of $6,000.

Total deposits increased by $193.9 million, or 17.3%, to $1.3 billion at June 30, 2023 from $1.1 billion at December 31, 2022. The increase was primarily due to an increase in certificates of deposit of $282.6 million, or 73.7%, partially offset by decreases in non-interest bearing demand deposits of $47.1 million, or 12.5 %, savings account balances of $32.0 million, or 11.7%, and NOW/money market accounts of $9.8 million, or 11.1%.

Federal Home Loan Bank advances decreased by $7.0 million, or 33.3%, to $14.0 million at June 30, 2023 from $21.0 million at December 31, 2022 due to maturity of borrowings.

Advance payments by borrowers for taxes and insurance decreased by $216,000, or 9.1%, to $2.2 million at June 30, 2023 from $2.4 million at December 31, 2022 due primarily to real estate tax payments remitted by the Bank on behalf of borrowers.

Lease liability – operating decreased by $254,000, or 10.7%, to $2.1 million at June 30, 2023 from $2.4 million at December 31, 2022, primarily due to repayments.

Accounts payable and accrued expenses decreased by $3.3 million, or 22.3%, to $11.5 million at June 30, 2023 from $14.8 million at December 31, 2022 due primarily to a decrease in suspense account for loan closings of $2.7 million and a decrease in accrued bonus expense of $2.2 million for employees, partially offset by an increase in the allowance for credit losses for off-balance sheet commitments totaling $1.5 million.

The allowance for credit losses for off-balance sheet commitments was $1.5 million at June 30, 2023 due to a one-time credit of $1.6 million resulting from the adoption of CECL at January 1, 2023, partially offset by a credit loss expense reduction totaling $117,000 during the six months ended June 30, 2023.

Stockholders’ equity increased by $7.6 million, or 2.9% to $269.6 million at June 30, 2023, from $262.0 million at December 31, 2022. The increase in stockholders’ equity was due to net income of $22.3 million for the six months ended June 30, 2023, $865,000 in the amortization of restricted stock and stock options granted in connection with the 2022 Equity Incentive Plan, a reduction of $435,000 in unearned employee stock ownership plan shares coupled with an increase of $185,000 in earned employee stock ownership plan shares, and $15,000 in other comprehensive income, partially offset by stock repurchases totaling $14.3 million, dividends paid and declared of $1.7 million, and a one-time adjustment to retained earnings of $99,000 due to the adoption of CECL.

Net Interest Income

Net interest income totaled $24.0 million for the three months ended June 30, 2023, as compared to $13.5 million for the three months ended June 30, 2022. The increase in net interest income of $10.5 million, or 77.4%, was primarily due to an increase in interest income offset by an increase in interest expense.

The increase in interest income is attributable to increases in loans and interest-bearing deposits, partially offset by a decrease in investment securities. The increase in interest income is also attributable to a rising interest rate environment due to the Federal Reserve’s interest rate increases in the past year.

The increase in market interest rates in the past year also caused an increase in our interest expense. As a result, the increase in interest expense for the three months ended June 30, 2023 was due to an increase in the cost of funds on our deposits, partially offset by a decrease in the cost of our borrowed money. The increase in interest expense was also due to an increase in the balances on our certificates of deposits and an increase in the balances on our savings and club deposits, offset by a decrease in the balances on our interest-bearing demand deposits and a decrease in the balances of our borrowed money.

Total interest and dividend income increased by $16.9 million, or 113.7%, to $31.7 million for the three months ended June 30, 2023 from $14.8 million for the three months ended June 30, 2022. The increase in interest and dividend income was due to an increase in the average balance of interest earning assets of $273.6 million, or 23.2%, to $1.5 billion for the three months ended June 30, 2023 from $1.2 billion for the three months ended June 30, 2022 and an increase in the yield on interest earning assets by 370 basis points from 5.02% for the three months ended June 30, 2022 to 8.72% for the three months ended June 30, 2023.

Interest expense increased by $6.4 million, or 493.8%, to $7.7 million for the three months ended June 30, 2023 from $1.3 million for the three months ended June 30, 2022. The increase in interest expense was due to an increase in the cost of interest bearing liabilities by 248 basis points from 0.84% for the three months ended June 30, 2022 to 3.32% for the three months ended June 30, 2023 and an increase in average interest bearing liabilities of $314.3 million, or 51.2%, to $928.0 million for the three months ended June 30, 2023 from $613.6 million for the three months ended June 30, 2022.

Net interest margin increased by 202 basis points, or 44.1%, during the three months ended June 30, 2023 to 6.60% compared to 4.58% during the three months ended June 30, 2022.

Net interest income totaled $46.9 million for the six months ended June 30, 2023 as compared to $25.5 million for the six months ended June 30, 2022. The increase in net interest income of $21.4 million, or 84.0%, was primarily due to an increase in interest income offset by an increase in interest expense.

The increase in interest income is attributable to increases in loans and investment securities, partially offset by a decrease in interest-bearing deposits. The increase in interest income is also attributable to a rising interest rate environment as a result of the Federal Reserve’s interest rate increases during 2023.

The increase in market interest rates in 2023 also caused an increase in our interest expense. As a result, the increase in interest expense for the six months ended June 30, 2023 was due to an increase in the cost of funds on our deposits, partially offset by a decrease in the cost of our borrowed money. The increase in interest expense was also due to an increase in the balances on our certificates of deposits and an increase in the balances of our savings and club deposits, offset by a decrease in the balances on our interest-bearing demand deposits, and a decrease in the balances of our borrowed money.

Total interest and dividend income increased by $32.1 million, or 114.2%, to $60.2 million for the six months ended June 30, 2023 from $28.1 million for the six months ended June 30, 2022. The increase in interest and dividend income was due to an increase in the average balance of interest earning assets of $240.5 million, or 20.5%, to $1.4 billion for the six months ended June 30, 2023 from $1.2 billion for the six months ended June 30, 2022 and an increase in the yield on interest earning assets by 372 basis points from 4.78% for the six months ended June 30, 2022 to 8.50% for the six months ended June 30, 2023.

Interest expense increased by $10.7 million, or 405.7%, to $13.4 million for the six months ended June 30, 2023 from $2.6 million for the six months ended June 30, 2022. The increase in interest expense was due to an increase in the cost of interest bearing liabilities by 220 basis points from 0.85% for the six months ended June 30, 2022 to 3.05% for the six months ended June 30, 2023, and an increase in average interest bearing liabilities of $253.4 million, or 40.6%, to $877.8 million for the six months ended June 30, 2023 from $624.4 million for the six months ended June 30, 2022.

Net interest margin increased by 229 basis points, or 52.9%, during the six months ended June 30, 2023 to 6.62% compared to 4.33% during the six months ended June 30, 2022.

Credit Loss Expense

The Company recorded credit loss expenses totaling $610,000 for the three months ended June 30, 2023 compared to no credit loss expense for the three months ended June 30, 2023. The credit loss expense of $610,000 for the three months ended June 30, 2023 was comprised of credit loss expense for loans of $528,000 and credit loss expense for off-balance sheet commitments of $83,000, partially offset by credit loss expense reduction for held-to-maturity investment securities of $1,000.

We charged-off $194,000 during the three months ended June 30, 2023 as compared to charge-offs of $7,000 during the three months ended June 30, 2022. The charge-offs of $194,000 during the three months ended June 30, 2023 comprised of a charge-off of $159,000 related to three performing construction loans on the same project whereby we sold the loans to a third-party subsequent to June 30, 2023 at a loss of $159,000. The remaining charge-offs of $35,000 were against various unpaid overdrafts in our demand deposit accounts. The charge-offs of $7,000 during the three months ended June 30, 2022 were against various unpaid overdrafts in our demand deposit accounts.

We recorded no recoveries from previously charged-off loans during the three months ended June 30, 2023 compared to recoveries of $146,000 during the three months ended June 30, 2022 from a previously charged-off loan secured by a multi-family property.

The Company recorded credit loss expenses totaling $611,000 for the six months ended June 30, 2023 compared to no credit loss expense for the six months ended June 30, 2022. The credit loss expense of $611,000 for the six months ended June 30, 2023 was comprised of credit loss expense for loans of $725,000 and credit loss expense for held-to-maturity investment securities of $3,000, partially offset by a credit loss expense reduction for off-balance sheet commitments of $117,000.

We charged-off $214,000 during the six months ended June 30, 2023 as compared to charge-offs of $17,000 during the six months ended June 30, 2022. The charge-offs of $214,000 during the six months ended June 30, 2023 comprised of a charge-off of $159,000 related to three performing construction loans on the same project whereby we sold the loans to a third-party subsequent to June 30, 2023 at a loss of $159,000. The remaining charge-offs of $55,000 were against various unpaid overdrafts in our demand deposit accounts. The charge-offs of $17,000 during the six months ended June 30, 2022 were against various unpaid overdrafts in our demand deposit accounts.

We recorded no recoveries from previously charged-off loans during the six months ended June 30, 2023 compared to recoveries of $242,000 during the six months ended June 30, 2022, which was comprised of $146,000 from a previously charged-off loan secured by a multi-family property, $53,000 from a previously charged-off loan secured by a non-residential property, and $43,000 regarding a previously charged-off loan secured by a mixed-use property.

Non-Interest Income

Non-interest income for the three months ended June 30, 2023 was $1.0 million compared to non-interest income of $536,000 for the three months ended June 30, 2022. The increase of $484,000, or 90.3%, in total non-interest income was primarily due to an increase of $403,000 in BOLI income, a decrease of $307,000 in unrealized loss on equity securities, and an increase of $7,000 in other non-interest income, partially offset by a decrease of $180,000 in other loan fees and service charges, a decrease of $46,000 in gain on sale of fixed assets, and a decrease of $7,000 in investment advisory fees.

The increase in BOLI income was primarily due to two death claims totaling $1.8 million on BOLI policies that resulted in additional BOLI income of $404,000 in the three months ended June 30, 2023. The decrease in unrealized loss on equity was due to an unrealized loss of $123,000 on equity securities during the three months ended June 30, 2023 compared to an unrealized loss of $430,000 on equity securities during the three months ended June 30, 2022. The unrealized loss of $123,000 on equity securities during the three months ended June 30, 2023 was due to market interest rate volatility during the quarter ended June 30, 2023.

Non-interest income for the six months ended June 30, 2023 was $2.1 million compared to non-interest income of $594,000 for the six months ended June 30, 2022. The increase of $1.5 million, or 259.4%, in total non-interest income was primarily due to an increase of $1.2 million in unrealized gain (loss) on equity securities, an increase of $407,000 in BOLI income, an increase of $36,000 in other loan fees and service charges, and an increase of $6,000 in other non-interest income. These were partially offset by a decrease of $46,000 in gain on sale of fixed assets and a decrease of $28,000 in investment advisory fees.

The increase in BOLI income was primarily due to two death claims totaling $1.8 million on BOLI policies that resulted in additional BOLI income of $404,000 during the six months ended June 30, 2023.   The increase in unrealized gain (loss) on equity was due to an unrealized gain of $102,000 on equity securities during the six months ended June 30, 2023 compared to an unrealized loss of $1.1 million on equity securities during the six months ended June 30, 2022. The unrealized gain of $102,000 on equity securities during the 2023 period was due to market interest rate volatility during the six months ended June 30, 2023.

Non-Interest Expense

Non-interest expense increased by $1.9 million, or 26.7%, to $8.9 million for the three months ended June 30, 2023 from $7.0 million for the three months ended June 30, 2022. The increase resulted primarily from increases of $1.2 million in salaries and employee benefits, $321,000 in other operating expense, $187,000 in advertising expense, $75,000 in outside data processing expense, $43,000 in occupancy expense, and $24,000 in equipment expense.

Non-interest expense increased by $2.8 million, or 20.0%, to $17.1 million for the six months ended June 30, 2023 from $14.2 million for the six months ended June 30, 2022. The increase resulted primarily from increases of $1.9 million in salaries and employee benefits, $435,000 in other operating expense, $183,000 in advertising expense, $154,000 in outside data processing expense, $108,000 in occupancy expense, and $38,000 in equipment expense, partially offset by a decrease of $11,000 in real estate owned expense.

Income Taxes

We recorded income tax expense of $4.5 million and $1.7 million for the three months ended June 30, 2023 and 2022, respectively. For the three months ended June 30, 2023, we had approximately $587,000 in tax exempt income, compared to approximately $185,000 in tax exempt income for the three months ended June 30, 2022. Our effective income tax rates were 28.7% and 23.7% for the three months ended June 30, 2023 and 2022, respectively.

We recorded income tax expense of $9.0 million and $2.8 million for the six months ended June 30, 2023 and 2022, respectively. For the six months ended June 30, 2023 and 2022, we had approximately $770,000 and $370,000, respectively, in tax exempt income. Our effective income tax rates were 28.7% and 23.6% for the six months ended June 30, 2023 and 2022, respectively.

Asset Quality

Non-performing assets totaled $5.8 million at June 30, 2023 compared to $1.5 million at December 31, 2022. At June 30, 2023, we had two non-performing construction loans totaling $4.4 million secured by the same project located in the Bronx, New York. We had no non-performing loans at December 31, 2022. The other non-performing assets consisted of one foreclosed property at June 30, 2023 and December 31, 2022. Our ratio of non-performing assets to total assets remained low at 0.36% at June 30, 2023 and at 0.10% at December 31, 2022.

The Company’s allowance for credit losses related to loans totaled $4.4 million, or 0.32% of total loans as of June 30, 2023, compared to $5.5 million, or 0.45% of total loans as of December 31, 2022. Based on a review of the loans that were in the loan portfolio at June 30, 2023, management believes that the allowance for credit losses related to loans is maintained at a level that represents its best estimate of inherent losses in the loan portfolio that were both probable and reasonably estimable.

In addition, the Company’s allowance for credit losses related to off-balance sheet commitments totaled $1.5 million and the allowance for credit losses related to held-to-maturity debt securities totaled $135,000 at June 30, 2023.

Capital

The Company’s total stockholders’ equity to assets ratio was 16.68% as of June 30, 2023. At June 30, 2023, the Company had the ability to borrow $32.6 million from the Federal Home Loan Bank of New York and $8.0 million from Atlantic Community Bankers Bank.

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, 2023, the Bank had a tier 1 leverage capital ratio of 15.75% and a total risk-based capital ratio of 13.99%.

The Company completed its first stock repurchase program on April 14, 2023 whereby the Company repurchased 1,637,794 shares, or 10%, of the Company’s issued and outstanding common stock. The cost of the stock repurchase program totaled $23.0 million, including commission cost and Federal excise taxes. Of the total shares repurchased, the Company repurchased 957,275 shares at a total cost of $13.7 million, including commission cost and Federal excise tax, during 2023.

The Company commenced its second stock repurchase program on May 30, 2023 whereby the Company will repurchase 1,509,218, or 10%, of the Company’s issued and outstanding common stock. The Company has repurchased 55,241 shares of the common stock at a cost of $755,000, including commission cost and Federal excise tax, at June 30, 2023.

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, Rockland, and Sullivan 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.” These statements are based upon the current beliefs and expectations of the Company’s 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 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), 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, decreases in deposit levels necessitating increased borrowing to fund loans and securities, 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,
		2023				2022
		(In thousands, except share
		and per share amounts)
ASSETS
Cash and amounts due from depository institutions		$	14,345			$	13,210
Interest-bearing deposits			105,530				82,098
Total cash and cash equivalents			119,875				95,308
Certificates of deposit			100				100
Equity securities			18,143				18,041
Securities available-for-sale, at fair value			-				1
Securities held-to-maturity ( net of allowance for credit losses of $135 )			15,777				26,395
Loans receivable			1,391,543				1,217,321
Deferred loan costs, net			243				372
Allowance for credit losses			(4,400	)			(5,474	)
Net loans			1,387,386				1,212,219
Premises and equipment, net			25,646				26,063
Investments in restricted stock, at cost			929				1,238
Bank owned life insurance			24,772				25,896
Accrued interest receivable			10,532				8,597
Goodwill			200				200
Real estate owned			1,456				1,456
Property held for investment			1,426				1,444
Right of Use Assets – Operating			2,055				2,312
Right of Use Assets – Financing			353				355
Other assets			7,002				5,338
Total assets		$	1,615,652			$	1,424,963
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Deposits:
Non-interest bearing		$	329,236			$	376,302
Interest bearing			986,580				745,653
Total deposits			1,315,816				1,121,955
Advance payments by borrowers for taxes and insurance			2,153				2,369
Federal Home Loan Bank advances			14,000				21,000
Lease Liability – Operating			2,109				2,363
Lease Liability – Financing			552				533
Accounts payable and accrued expenses			11,462				14,754
Total liabilities			1,346,092				1,162,974
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; 15,036,938 shares and 16,049,454 shares outstanding, respectively			150				161
Additional paid-in capital			123,054				136,434
Unearned Employee Stock Ownership Plan (“ESOP”) shares			(6,997	)			(7,432	)
Retained earnings			153,182				132,670
Accumulated other comprehensive gain			171				156
Total stockholders’ equity			269,560				261,989
Total liabilities and stockholders’ equity		$	1,615,652			$	1,424,963

NORTHEAST COMMUNITY BANCORP, INC. CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
		Three Months Ended June 30,								Six Months Ended June 30,
		2023				2022				2023				2022
		(In thousands, except per share amounts)
INTEREST INCOME:
Loans		$	30,494			$	14,412			$	58,069			$	27,473
Interest-earning deposits			219				249				452				304
Securities			1,001				177				1,705				335
Total Interest Income			31,714				14,838				60,226				28,112
INTEREST EXPENSE:
Deposits			7,609				1,160				13,161				2,337
Borrowings			78				127				190				288
Financing lease			9				9				19				19
Total Interest Expense			7,696				1,296				13,370				2,644
Net Interest Income			24,018				13,542				46,856				25,468
Credit loss expenses			610				—				611				—
Net Interest Income after Credit Loss Expense			23,408				13,542				46,245				25,468
NON-INTEREST INCOME:
Other loan fees and service charges			447				627				1,054				1,018
Gain on disposition of equipment			-				46				-				46
Earnings on bank owned life insurance			553				150				704				297
Investment advisory fees			113				120				229				257
Realized and unrealized gain (loss) on equity securities			(123	)			(430	)			102				(1,064	)
Other			30				23				46				40
Total Non-Interest Income			1,020				536				2,135				594
NON-INTEREST EXPENSES:
Salaries and employee benefits			4,837				3,613				9,378				7,441
Occupancy expense			605				562				1,274				1,166
Equipment			300				276				604				566
Outside data processing			554				479				1,069				915
Advertising			238				51				288				105
Real estate owned expense			21				21				41				52
Other			2,326				2,005				4,417				3,982
Total Non-Interest Expenses			8,881				7,007				17,071				14,227
INCOME BEFORE PROVISION FOR INCOME TAXES			15,547				7,071				31,309				11,835
PROVISION FOR INCOME TAXES			4,460				1,678				8,978				2,797
NET INCOME		$	11,087			$	5,393			$	22,331			$	9,038

NORTHEAST COMMUNITY BANCORP, INC. SELECTED CONSOLIDATED FINANCIAL DATA (Unaudited)
		Three Months Ended June 30,								Six Months Ended June 30,
		2023				2022				2023				2022
		(In thousands, except per share amounts)
Per share data:
Earnings per share - basic		$	0.75			$	0.35			$	1.56			$	0.58
Earnings per share - diluted			0.75				0.35				1.56				0.58
Weighted average shares outstanding - basic			14,700				15,544				14,322				15,534
Weighted average shares outstanding - diluted			14,731				15,544				14,361				15,534
Performance ratios/data:
Return on average total assets			2.89	%			1.72	%			2.91	%			1.45	%
Return on average shareholders' equity			16.61	%			8.42	%			16.73	%			7.09	%
Net interest income		$	24,018			$	13,542			$	46,856			$	25,468
Net interest margin			6.60	%			4.58	%			6.62	%			4.33	%
Efficiency ratio			35.47	%			49.77	%			34.85	%			54.59	%
Net charge-off ratio			0.06	%			(0.01	)%			0.03	%			(0.02	)%
Loan portfolio composition:										June 30, 2023				December 31, 2022
One-to-four family										$	5,351			$	5,467
Multi-family											122,976				123,385
Mixed-use											28,890				21,902
Total residential real estate											157,217				150,754
Non-residential real estate											20,805				25,324
Construction											1,098,756				930,628
Commercial and industrial											114,035				110,069
Consumer											730				546
Gross loans											1,391,543				1,217,321
Deferred loan costs, net											243				372
Total loans										$	1,391,786			$	1,217,693
Asset quality data:
Loans past due over 90 days and still accruing										$	-			$	-
Non-accrual loans											4,353				-
OREO property											1,456				1,456
Total non-performing assets										$	5,809			$	1,456
Allowance for credit losses to total loans											0.32	%			0.45	%
Allowance for credit losses to non-performing loans											101.08	%			NA
Non-performing loans to total loans											0.31	%			0.00	%
Non-performing assets to total assets											0.36	%			0.10	%
Bank's Regulatory Capital ratios:
Total capital to risk-weighted assets											13.99	%			13.66	%
Common equity tier 1 capital to risk-weighted assets											13.64	%			13.33	%
Tier 1 capital to risk-weighted assets											13.64	%			13.33	%
Tier 1 leverage ratio											15.75	%			16.50	%

NORTHEAST COMMUNITY BANCORP, INC. NET INTEREST MARGIN ANALYSIS (Unaudited)
		Three Months Ended June 30, 2023											Three Months Ended June 30, 2022
		Average				Interest			Average				Average				Interest			Average
		Balance				and dividend			Yield				Balance				and dividend			Yield
		(In thousands, except yield/cost information)
Loan receivable gross		$	1,341,597			$	30,494			9.09	%		$	997,983			$	14,412			5.78	%
Securities			39,967				198			1.98	%			42,641				160			1.50	%
Federal Home Loan Bank stock			928				21			9.05	%			1,239				17			5.49	%
Other interest-earning assets			72,991				1,001			5.49	%			139,978				249			0.71	%
Total interest-earning assets			1,455,483				31,714			8.72	%			1,181,841				14,838			5.02	%
Allowance for loan losses			(4,070	)										(5,333	)
Non-interest-earning assets			83,521											77,693
Total assets		$	1,534,934										$	1,254,201
Interest-bearing demand deposit		$	85,919			$	483			2.25	%		$	115,097			$	190			0.66	%
Savings and club accounts			267,368				1,836			2.75	%			214,840				354			0.66	%
Certificates of deposit			560,702				5,290			3.77	%			262,703				616			0.94	%
Total interest-bearing deposits			913,989				7,609			3.33	%			592,640				1,160			0.78	%
Borrowed money			14,000				87			2.49	%			21,000				136			2.59	%
Total interest-bearing liabilities			927,989				7,696			3.32	%			613,640				1,296			0.84	%
Non-interest-bearing demand deposit			322,722											368,359
Other non-interest-bearing liabilities			17,224											16,108
Total liabilities			1,267,935											998,107
Equity			266,999											256,094
Total liabilities and equity		$	1,534,934										$	1,254,201
Net interest income / interest spread						$	24,018			5.40	%						$	13,542			4.18	%
Net interest rate margin										6.60	%										4.58	%
Net interest earning assets		$	527,494										$	568,201
Average interest-earning assets
to interest-bearing liabilities			156.84	%										192.60	%

NORTHEAST COMMUNITY BANCORP, INC. NET INTEREST MARGIN ANALYSIS (Unaudited)
		Six Months Ended June 30, 2023											Six Months Ended June 30, 2022
		Average				Interest			Average				Average				Interest			Average
		Balance				and dividend			Yield				Balance				and dividend			Yield
		(In thousands, except yield/cost information)
Loan receivable gross		$	1,305,922			$	58,069			8.89	%		$	993,879			$	27,473			5.53	%
Securities			42,232				409			1.94	%			40,128				301			1.50	%
Federal Home Loan Bank stock			1,039				43			8.28	%			1,361				34			5.00	%
Other interest-earning assets			67,269				1,705			5.07	%			140,582				304			0.43	%
Total interest-earning assets			1,416,462				60,226			8.50	%			1,175,950				28,112			4.78	%
Allowance for loan losses			(4,760	)										(5,308	)
Non-interest-earning assets			82,217											76,927
Total assets		$	1,493,919										$	1,247,569
Interest-bearing demand deposit		$	88,047			$	911			2.07	%		$	116,228			$	359			0.62	%
Savings and club accounts			276,886				3,749			2.71	%			209,080				681			0.65	%
Certificates of deposit			496,338				8,501			3.43	%			275,612				1,297			0.94	%
Total interest-bearing deposits			861,271				13,161			3.06	%			600,920				2,337			0.78	%
Borrowed money			16,514				209			2.53	%			23,514				307			2.61	%
Total interest-bearing liabilities			877,785				13,370			3.05	%			624,434				2,644			0.85	%
Non-interest-bearing demand deposit			333,948											352,689
Other non-interest-bearing liabilities			16,208											15,352
Total liabilities			1,227,941											992,475
Equity			265,978											255,094
Total liabilities and equity		$	1,493,919										$	1,247,569
Net interest income / interest spread						$	46,856			5.46	%						$	25,468			3.93	%
Net interest rate margin										6.62	%										4.33	%
Net interest earning assets		$	538,677										$	551,516
Average interest-earning assets
to interest-bearing liabilities			161.37	%										188.32	%