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PDL Community Bancorp Announces 2019 First Quarter Results

PDL Community Bancorp Announces 2019 First Quarter Results

NEW YORK, May 07, 2019 (GLOBE NEWSWIRE) -- PDL Community Bancorp (the “Company”) (PDLB), the holding company for Ponce Bank (the “Bank”), reported net income of $668,000 for the quarter ended March 31, 2019 compared to a net income of $941,000 for the quarter ended March 31, 2018. The decrease in quarterly net income amounted to $273,000 and was attributable to an increase in noninterest expenses of $832,000, increases in provisions for loan losses of $55,000 and income taxes of $39,000, and a reduction in noninterest income of $132,000, offset by an increase in net interest income of $785,000. Basic and fully diluted earnings per share were both $0.04 for the quarter ended March 31, 2019 compared to $0.05 for the quarter ended March 31, 2018.  

Carlos P. Naudon, President and CEO, noted that “our slower growth this quarter reflected our commitment to maintain asset quality and manage cost of funds. We are pleased to note that our branches have now largely deployed their new equipment, such as ATMs and TCRs.” Executive Chairman Steven A. Tsavaris remarked that “we were pleased to have held our second annual shareholders meeting on May 1, 2019 where our shareholders elected Maria A. Alvarez to her first full term on our board of directors.”

Net Interest Income

Net interest income was $9.5 million for the quarter ended March 31, 2019, up $785,000, or 9.1%, from $8.7 million for the quarter ended March 31, 2018. The increase in net interest income for the quarter ended March 31, 2019 compared to the quarter ended March 31, 2018 reflects a $1.7 million, or 15.6%, increase in total interest and dividend income, offset by an increase of $887,000, or 43.6%, in total interest expense. The increase in interest and dividend income was primarily due to growth in one-to-four family residential, multifamily, and nonresidential loans that provided an increase in average outstanding loans of $119.4 million, or 14.6%, for the quarter ended March 31, 2019 compared to the same period in 2018. The net interest rate spread and net interest margin were 3.46% and 3.86%, respectively, for the quarter ended March 31, 2019 compared to 3.61% and 3.95%, respectively, for the same period in 2018. The average yield on loans increased to 5.24% for the quarter ended March 31, 2019 from 5.16% for the same period in 2018. The increase in interest expense was due to an increase in average interest-bearing liabilities of $85.0 million, or 12.9%, for the quarter ended March 31, 2019 compared to the same period in 2018. Additionally, the cost of funding interest-bearing liabilities increased to 1.60% for the quarter ended March 31, 2019 from 1.26% for the same period in 2018.

Noninterest Income

Noninterest income was $753,000 for the quarter ended March 31, 2019, down $132,000, or 14.9%, from $885,000 for the same period in 2018. The decrease is mainly attributed to a reduction in late fees and prepayment charges related to mortgage loans and other fees totaling $152,000.

Noninterest Expense

Noninterest expense was $9.1 million for the quarter ended March 31, 2019, up $832,000, or 10.1%, from $8.3 million for the same period in 2018. This quarterly variance was largely due to increases in compensation and benefits expense of $556,000 primarily due to expenses from restricted stock units and stock options totaling $326,000, and occupancy expense of $420,000. The increase in noninterest expense was partially offset by decreases in professional fees of $113,000, data processing expenses of $55,000 and marketing and promotional expenses of $26,000.

Asset Quality

Nonperforming assets increased to $8.0 million, or 0.77% of total assets at March 31, 2019, from $6.8 million, or 0.64% of total assets at December 31, 2018. The increase is mainly attributable to an increase in nonaccrual, investor-owned one-to-four family residence loans of $1.1 million.

Provision for loan losses was $149,000 for the quarter ended March 31, 2019, compared to $94,000 for the same period in 2018. The allowance for loan losses was $12.4 million, or 1.33% of total loans at March 31, 2019, compared to $12.7 million, or 1.36% of total loans at December 31, 2018. Net charge-offs totaled $360,000 for the quarter ended March 31, 2019, or 0.16% of average loans outstanding, compared to net recoveries of $244,000 for the quarter ended March 31, 2018, or 0.12% of average loans outstanding, when annualized.

Balance Sheet

Total assets decreased $26.3 million, or 2.5%, to $1,033.6 million at March 31, 2019 from $1,059.9 million at December 31, 2018. Net loans increased $6.6 million, or 0.7%, to $925.1 million at March 31, 2019 from $918.5 million at December 31, 2018. The increase in loans was primarily due to aggregate increases of $9.3 million in mortgage loans in the investor-owned and owner-occupied one-to-four family residential, multifamily and nonresidential categories, offset by decreases of $2.7 million in construction and land loans and $609,000 in business loans.

Federal Home Loan Bank advances and other decreased $25.0 million or 36.0%, to $44.4 million at March 31, 2019 from $69.4 million at December 31, 2018.

Total deposits decreased $3.0 million, or 0.4%, to $806.8 million at March 31, 2019 from $809.8 million at December 31, 2018. The quarterly variance was due to decreases in certificates of deposits of $22.9 million, NOW and savings accounts of $5.8 million, and demand deposits of $2.4 million, offset by an increase in money market accounts of $28.2 million.

Total stockholders’ equity was $170.3 million at March 31, 2019 compared to $169.2 million at December 31, 2018. The Company and the Bank exceeded all regulatory capital requirements to be deemed well-capitalized at March 31, 2019. The Bank’s total capital to risk-weighted assets ratio was 19.32%, the tier 1 capital to risk-weighted assets ratio and the common equity tier 1 capital ratio were both 18.06%, and the tier 1 capital to total assets ratio was 13.56% at March 31, 2019, compared to 19.39%, 18.14%, and 13.66% at December 31, 2018, respectively.

On March 22, the Company announced that the Board of Directors had adopted a share repurchase program. As of May 6, 2019, the Company has repurchased 234,823 shares of stock at a weighted average price $14.22 per share.

About PDL Community Bancorp

PDL Community Bancorp is the holding company for Ponce Bank. The Bank’s business primarily consists of taking deposits from the general public and investing those deposits, together with funds generated from operations and borrowings, in mortgage loans, consisting of one-to-four family residences (investor-owned and owner-occupied), multifamily residences, nonresidential properties and construction and land, and, to a lesser extent, in business and consumer loans. The Bank also invests in securities, which have historically consisted of U.S. Government and federal agency securities and securities issued by government-sponsored or -owned enterprises, as well as, mortgage-backed securities and Federal Home Loan Bank stock. The Bank offers a variety of deposit accounts, including demand, savings, money market and certificates of deposit. 

Forward Looking Statements

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



PDL Community Bancorp and Subsidiaries
Consolidated Balance Sheets
(Dollars in thousands, except for share data)

                                       
  As of  
  March 31,     December 31,     September 30,     June 30,     March 31,  
  2019     2018     2018     2018     2018  
ASSETS                                      
Cash and due from banks:                                      
Cash $ 5,690     $ 45,225     $ 5,494     $ 7,088     $ 6,570  
Interest-bearing deposits in banks   35,877       24,553       16,895       42,094       52,409  
Total cash and cash equivalents   41,567       69,778       22,389       49,182       58,979  
Available-for-sale securities, at fair value   22,166       27,144       24,177       28,144       28,422  
Loans receivable, net   925,099       918,509       893,884       850,426       823,014  
Accrued interest receivable   3,735       3,795       3,609       3,350       3,202  
Premises and equipment, net   31,777       31,135       29,293       28,366       27,684  
Federal Home Loan Bank Stock (FHLB), at cost   2,915       2,915       2,621       2,617       1,673  
Deferred tax assets   3,852       3,811       4,118       3,805       3,801  
Other assets   2,485       2,814       2,620       2,923       2,848  
Total assets $ 1,033,596     $ 1,059,901     $ 982,711     $ 968,813     $ 949,623  
LIABILITIES AND STOCKHOLDERS' EQUITY                                      
Liabilities:                                      
Deposits $ 806,781     $ 809,758     $ 764,792     $ 753,255     $ 752,267  
Accrued interest payable   75       63       75       141       61  
Advance payments by borrowers for taxes and insurance   8,099       6,037       7,219       5,491       6,999  
Advances from the Federal Home Loan Bank and others   44,404       69,404       37,775       37,775       20,000  
Other liabilities   3,975       5,467       5,706       5,573       4,582  
Total liabilities   863,334       890,729       815,567       802,235       783,909  
Commitments and contingencies                                      
Stockholders' Equity:                                      
Preferred stock, $0.01 par value; 10,000,000 shares authorized, none issued                            
Common stock, $0.01 par value; 50,000,000  shares authorized; 18,463,028 shares issued and 18,449,162 shares outstanding as of  March 31, 2019 and 18,463,028 shares issued and outstanding as of December 31,2018   185       185       185       185       185  
Treasury stock, at cost; 13,866 shares at March 31, 2019 and no shares as of December 31, 2018   (193 )                        
Additional paid-in-capital   84,976       84,581       84,557       84,488       84,419  
Retained earnings   99,481       98,813       96,896       96,495       95,796  
Accumulated other comprehensive loss   (8,035 )     (8,135 )     (8,101 )     (8,076 )     (8,052 )
Unearned compensation - ESOP; 615,188 shares and 627,251 shares as of March 31, 2019 and December 31, 2018   (6,152 )     (6,272 )     (6,393 )     (6,514 )     (6,634 )
Total stockholders' equity   170,262       169,172       167,144       166,578       165,714  
Total liabilities and stockholders' equity $ 1,033,596     $ 1,059,901     $ 982,711     $ 968,813     $ 949,623  




PDL Community Bancorp and Subsidiaries
Consolidated Statements of Income
(Dollars in thousands, except per share data)

    For the Quarters Ended  
    March 31,     December 31,     September 30,     June 30,     March 31,  
    2019     2018     2018     2018     2018  
Interest and dividend income:                                        
Interest on loans receivable   $ 12,095     $ 12,026     $ 11,483     $ 11,053     $ 10,386  
Interest and dividends on investment securities and FHLB stock     287       300       254       330       324  
Total interest and dividend income     12,382       12,326       11,737       11,383       10,710  
Interest expense:                                        
Interest on certificates of deposit     1,956       2,078       1,942       1,847       1,750  
Interest on other deposits     631       320       272       199       185  
Interest on borrowings     333       321       276       204       98  
Total interest expense     2,920       2,719       2,490       2,250       2,033  
Net interest income     9,462       9,607       9,247       9,133       8,677  
Provision for loan losses     149       215       602       337       94  
Net interest income after provision for loan losses     9,313       9,392       8,645       8,796       8,583  
Noninterest income:                                        
Service charges and fees     230       217       191       214       223  
Brokerage commissions     109       108       286       42       96  
Late and prepayment charges     139       278       65       52       211  
Other     275       212       172       216       355  
Total noninterest income     753       815       714       524       885  
Noninterest expense:                                        
Compensation and benefits     5,014       4,371       4,547       4,563       4,458  
Occupancy expense     1,911       1,879       1,585       1,717       1,491  
Data processing expenses     353       357       342       300       408  
Direct loan expenses     156       217       265       152       155  
Insurance and surety bond premiums     83       94       87       99       89  
Office supplies, telephone and postage     317       349       308       352       300  
FDIC deposit insurance assessment     68       70       68       66       68  
Professional fees     510       1,025       978       529       623  
Marketing and promotional expenses     26       68       40       55       52  
Directors fees     83       69       69       70       69  
Regulatory dues     56       60       63       58       56  
Other operating expenses     514       515       417       494       490  
Total noninterest expense     9,091       9,074       8,769       8,455       8,259  
Income before income taxes     975       1,133       590       865       1,209  
Provision for income taxes     307       498       188       166       268  
                                         
Net income   $ 668     $ 635     $ 402     $ 699     $ 941  
Earnings per share:                                        
Basic   $ 0.04     $ 0.04     $ 0.02     $ 0.04     $ 0.05  
Diluted   $ 0.04     $ 0.04     $ 0.02     $ 0.04     $ 0.05  
                                         
                                         



PDL Community Bancorp and Subsidiaries
Consolidated Statements of Income
(Dollars in thousands, except per share data)

    Quarter Ended March 31,  
    2019     2018     Variance $     Variance %  
Interest and dividend income:                                
Interest on loans receivable   $ 12,095     $ 10,386     $ 1,709       16.45 %
Interest and dividends on investment securities and FHLB stock     287       324       (37 )     (11.42 %)
Total interest and dividend income     12,382       10,710       1,672       15.61 %
Interest expense:                                
Interest on certificates of deposit     1,956       1,750       206       11.77 %
Interest on other deposits     631       185       446       241.08 %
Interest on borrowings     333       98       235       239.80 %
Total interest expense     2,920       2,033       887       43.63 %
Net interest income     9,462       8,677       785       9.05 %
Provision for loan losses     149       94       55       58.51 %
Net interest income after provision for loan losses     9,313       8,583       730       8.51 %
Noninterest income:                                
Service charges and fees     230       223       7       3.14 %
Brokerage commissions     109       96       13       13.54 %
Late and prepayment charges     139       211       (72 )     (34.12 %)
Other     275       355       (80 )     (22.54 %)
Total noninterest income     753       885       (132 )     (14.92 %)
Noninterest expense:                                
Compensation and benefits     5,014       4,458       556       12.47 %
Occupancy expense     1,911       1,491       420       28.17 %
Data processing expenses     353       408       (55 )     (13.48 %)
Direct loan expenses     156       155       1       0.65 %
Insurance and surety bond premiums     83       89       (6 )     (6.74 %)
Office supplies, telephone and postage     317       300       17       5.67 %
FDIC deposit insurance assessment     68       68             0.00 %
Professional fees     510       623       (113 )     (18.14 %)
Marketing and promotional expenses     26       52       (26 )     (50.00 %)
Directors fees     83       69       14       20.29 %
Regulatory dues     56       56             0.00 %
Other operating expenses     514       490       24       4.90 %
Total noninterest expense     9,091       8,259       832       10.07 %
Income before income taxes     975       1,209       (234 )     (19.35 %)
Provision for income taxes     307       268       39       14.55 %
Net income   $ 668     $ 941     $ (273 )     (29.01 %)
Earnings per share:                                
Basic   $ 0.04     $ 0.05     N/A     N/A  
Diluted   $ 0.04     $ 0.05     N/A     N/A  
                                 
                                 



PDL Community Bancorp and Subsidiaries
Key Metrics

    At or for the Quarters Ended  
    March 31,     December 31,     September 30,     June 30,     March 31,  
    2019     2018     2018     2018     2018  
Performance Ratios:                                        
Return on average assets     0.26 %     0.25 %     0.16 %     0.29 %     0.41 %
Return on average equity     1.59 %     1.49 %     0.95 %     1.68 %     2.30 %
Net interest rate spread (1)     3.46 %     3.52 %     3.49 %     3.64 %     3.61 %
Net interest margin (2)     3.86 %     3.90 %     3.86 %     3.96 %     3.95 %
Noninterest expense to average assets     3.59 %     3.57 %     3.54 %     3.54 %     3.61 %
Efficiency ratio (3)     89.00 %     87.07 %     88.03 %     87.55 %     86.37 %
Average interest-earning assets to average interest- bearing liabilities     133.93 %     134.30 %     135.09 %     132.89 %     135.79 %
Average equity to average assets     16.58 %     16.69 %     17.06 %     17.45 %     17.91 %
Capital Ratios:                                        
Total capital to risk weighted assets (bank only)     19.32 %     19.39 %     19.60 %     20.07 %     20.52 %
Tier 1 capital to risk weighted assets (bank only)     18.06 %     18.14 %     18.35 %     18.81 %     19.26 %
Common equity Tier 1 capital to risk-weighted assets (bank only)     18.06 %     18.14 %     18.35 %     18.81 %     19.26 %
Tier 1 capital to average assets (bank only)     13.56 %     13.66 %     13.78 %     14.03 %     14.25 %
Asset Quality Ratios:                                        
Allowance for loan losses as a percentage of total loans     1.33 %     1.36 %     1.37 %     1.36 %     1.37 %
Allowance for loan losses as a percentage of nonperforming loans     155.87 %     186.77 %     (186.74 %)     176.63 %     122.81 %
Net (charge-offs) recoveries to average outstanding loans during the year     (0.16 %)     0.03 %     0.00 %     0.00 %     0.12 %
Non-performing loans as a percentage of total loans     0.86 %     0.73 %     0.73 %     0.77 %     1.11 %
Non-performing loans as a percentage of total assets     0.77 %     0.64 %     0.67 %     0.69 %     0.98 %
Total non-performing assets as a percentage of total assets     0.77 %     0.64 %     0.67 %     0.69 %     0.98 %
Total non-performing assets, accruing loans past due 90 days or more,  and accruing troubled debt restructured loans as a percentage of total assets     1.74 %     1.63 %     1.79 %     1.87 %     2.25 %
Other:                                        
Number of offices   14     14     14     14     14  
Number of full-time equivalent employees   185     181     175     194     192  

(1)  Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate of interest-bearing liabilities.
(2)  Net interest margin represents net interest income divided by average total interest-earning assets.
(3)  Efficiency ratio represents noninterest expense divided by the sum of net interest income and noninterest income.

Key metrics calculated on income statement items were annualized where appropriate.




PDL Community Bancorp and Subsidiaries
Loan Portfolio

null
    For the Quarters Ended  
    March 31,     December 31,     September 30,     June 30,     March 31,  
    2019