Table of Contents FORM 10-Q or UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-40589 NorthEast Community Bancorp, Inc. (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2024 (Exact name of registrant as specified in its charter) Maryland 86-31 ...

While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these ...

[Financial Performance Overview](index=1&type=section&id=Financial%20Performance%20Overview) [Earnings Summary](index=1&type=section&id=Earnings%20Summary) Net income for Q1 2024 rose to **$11.4 million**, with diluted EPS of **$0.86**, reflecting strong loan portfolio performance Q1 2024 vs Q1 2023 Earnings Comparison | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | **Net Income** | $11.4 million | $11.2 million | | **Basic EPS** | $0.87 | $0.77 | | **Diluted EPS** | $0.86 | $0.77 | - The company attributes its **strong earnings** to the **robust performance of its loan portfolio**, with continued **high demand for construction lending** in specific high-demand areas[3](index=3&type=chunk) [Key Performance Highlights](index=1&type=section&id=Key%20Performance%20Highlights) Strong profitability and efficiency maintained in Q1 2024, with **9.4%** net interest income growth and **$731.3 million** in loan commitments Key Performance Metrics for Q1 2024 | Metric | Value | | :--- | :--- | | **Return on Average Assets** | 2.50% | | **Return on Average Equity** | 15.88% | | **Efficiency Ratio** | 37.91% | - Net interest income increased by **$2.1 million**, or **9.4%**, to **$25.0 million** for the three months ended March 31, 2024, compared to the same period in 2023[10](index=10&type=chunk) - Commitments, loans-in-process, and standby letters of credit outstanding grew to **$731.3 million** at March 31, 2024, from **$719.6 million** at the end of 2023[10](index=10&type=chunk) [Financial Condition Analysis (Balance Sheet)](index=1&type=section&id=Financial%20Condition%20Analysis%20(Balance%20Sheet)) [Overall Balance Sheet Changes](index=1&type=section&id=Overall%20Balance%20Changes) Total assets grew **5.8%** to **$1.9 billion** by March 31, 2024, driven by increases in net loans, cash, and total deposits Balance Sheet Summary (QoQ) | Balance Sheet Item | March 31, 2024 | Dec 31, 2023 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | **Total Assets** | $1.9 billion | $1.8 billion | +$102.8 million | +5.8% | | **Net Loans** | $1.6 billion | $1.6 billion | +$67.8 million | +4.3% | | **Cash & Cash Equivalents** | $107.4 million | $68.7 million | +$38.8 million | +56.5% | | **Total Deposits** | $1.5 billion | $1.4 billion | +$112.0 million | +8.0% | [Asset Analysis](index=1&type=section&id=Asset%20Analysis) Asset growth was fueled by **$180.5 million** in new loan originations, primarily construction loans, increasing net loans by **4.3%** - Net loans increased by **$67.8 million**, primarily due to **$180.5 million** in new loan originations during the quarter[8](index=8&type=chunk) - Construction loans were the main driver of loan growth, with **$170.9 million** in new originations[8](index=8&type=chunk) - Cash and cash equivalents increased by **$38.8 million** (**56.5%**) to **$107.4 million**, largely as a result of deposit growth[5](index=5&type=chunk) [Liabilities Analysis](index=2&type=section&id=Liabilities%20Analysis) Total deposits increased **8.0%** to **$1.5 billion** due to competitive rates, while total borrowings decreased by **$17.0 million** - A strategy of offering competitive interest rates led to a **$112.0 million** increase in total deposits[16](index=16&type=chunk) - The deposit mix shifted, with certificates of deposit increasing by **$90.9 million** and NOW/money market accounts by **$60.1 million**, while savings and non-interest-bearing demand deposits decreased[16](index=16&type=chunk) - Federal Home Loan Bank advances and Federal Reserve Bank borrowings decreased by a combined **$17.0 million**[17](index=17&type=chunk) [Stockholders' Equity Analysis](index=2&type=section&id=Stockholders%27%20Equity%20Analysis) Stockholders' equity increased **3.4%** to **$288.9 million**, primarily from **$11.4 million** net income, offsetting repurchases and dividends - The **$9.6 million** increase in stockholders' equity was primarily due to net income of **$11.4 million**[20](index=20&type=chunk) - Growth in equity was partially offset by stock repurchases totaling **$1.2 million** and dividends paid and declared of **$1.3 million**[20](index=20&type=chunk) [Results of Operations (Income Statement)](index=3&type=section&id=Results%20of%20Operations%20(Income%20Statement)) [Net Interest Income](index=3&type=section&id=Net%20Interest%20Income) Net interest income grew **9.4%** to **$25.0 million**, but rising funding costs compressed net interest margin by **88 basis points** to **5.75%** Net Interest Income Analysis (Q1 2024 vs Q1 2023) | Metric | Q1 2024 | Q1 2023 | Change | | :--- | :--- | :--- | :--- | | **Net Interest Income** | $25.0 million | $22.8 million | +9.4% | | **Total Interest & Dividend Income** | $38.1 million | $28.5 million | +33.7% | | **Total Interest Expense** | $13.1 million | $5.7 million | +131.5% | | **Net Interest Margin** | 5.75% | 6.63% | -88 bps | - The decrease in net interest margin was due to the **increase in the cost of interest-bearing liabilities outpacing the increase in the yield on interest-earning assets**[26](index=26&type=chunk) [Credit Loss Expense](index=3&type=section&id=Credit%20Loss%20Expense) A **$165,000** credit loss expense reduction was recorded in Q1 2024 due to favorable economic trends, with minimal net charge-offs - A credit loss expense reduction of **$165,000** was recorded in Q1 2024, compared to an expense of **$1,000** in Q1 2023[27](index=27&type=chunk) - The reduction was primarily attributed to a **$145,000** credit for loans due to favorable economic trends[27](index=27&type=chunk) - Charge-offs were minimal at **$21,000**, consistent with the prior-year period, and related to unpaid overdrafts[28](index=28&type=chunk) [Non-Interest Income](index=3&type=section&id=Non-Interest%20Income) Non-interest income declined **50.3%** to **$554,000**, impacted by unrealized losses, lower loan fees, and wealth management disposition Non-Interest Income Breakdown (Q1 2024 vs Q1 2023) | Component | Q1 2024 | Q1 2023 | Change | | :--- | :--- | :--- | :--- | | **Total Non-Interest Income** | $554,000 | $1,115,000 | -50.3% | | **Unrealized (Loss)/Gain on Equity Securities** | ($82,000) | $225,000 | -$307,000 | | **Other Loan Fees & Service Charges** | $462,000 | $607,000 | -$145,000 | | **Investment Advisory Fees** | $0 | $117,000 | -$117,000 | [Non-Interest Expense](index=4&type=section&id=Non-Interest%20Expense) Non-interest expense increased **18.2%** to **$9.7 million**, mainly due to higher salaries, employee benefits, and other operating costs - Total non-interest expense increased by **$1.5 million**, or **18.2%**, from **$8.2 million** in Q1 2023[33](index=33&type=chunk) - The primary drivers of the increase were salaries and employee benefits (**+$809,000**) and other operating expenses (**+$543,000**)[33](index=33&type=chunk) [Income Taxes](index=4&type=section&id=Income%20Taxes) Income tax expense was **$4.7 million** for the quarter, with an effective tax rate of **29.0%** Income Tax Summary (Q1 2024 vs Q1 2023) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | **Income Tax Expense** | $4.7 million | $4.5 million | | **Effective Tax Rate** | 29.0% | 28.7% | [Key Metrics and Risk Management](index=4&type=section&id=Key%20Metrics%20and%20Risk%20Management) [Asset Quality](index=4&type=section&id=Asset%20Quality) Asset quality remained strong with non-performing assets stable at **$5.8 million**, and the allowance for credit losses at **0.30%** of total loans - Non-performing assets were stable at **$5.8 million** at both March 31, 2024, and December 31, 2023[35](index=35&type=chunk) Asset Quality Ratios | Ratio | March 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | **Non-performing assets to total assets** | 0.31% | 0.33% | | **Allowance for credit losses to total loans** | 0.30% | 0.32% | [Capital](index=4&type=section&id=Capital) The company maintains a robust capital position, with a tier 1 leverage ratio of **14.65%**, and continues its stock repurchase program - The Bank's capital position is strong, with a tier 1 leverage capital ratio of **14.65%** and a total risk-based capital ratio of **13.78%** as of March 31, 2024[39](index=39&type=chunk) - The company is executing its second stock repurchase program, having bought back **1,015,980 shares** for **$16.0 million** under this plan as of March 31, 2024[41](index=41&type=chunk) [Consolidated Financial Statements](index=6&type=section&id=Consolidated%20Financial%20Statements) [Consolidated Statements of Financial Condition](index=6&type=section&id=Consolidated%20Statements%20of%20Financial%20Condition) This section provides the unaudited consolidated balance sheet as of March 31, 2024, detailing assets, liabilities, and stockholders' equity Consolidated Statements of Financial Condition (In thousands) | ASSETS | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Total cash and cash equivalents | $107,448 | $68,671 | | Net loans | $1,649,647 | $1,581,804 | | **Total assets** | **$1,866,908** | **$1,764,135** | | **LIABILITIES AND STOCKHOLDERS' EQUITY** | | | | Total deposits | $1,512,002 | $1,400,036 | | Borrowings | $47,000 | $64,000 | | **Total liabilities** | **$1,577,984** | **$1,484,810** | | **Total stockholders' equity** | **$288,924** | **$279,325** | | **Total liabilities and stockholders' equity** | **$1,866,908** | **$1,764,135** | [Consolidated Statements of Income](index=7&type=section&id=Consolidated%20Statements%20of%20Income) This section presents the unaudited consolidated income statement for Q1 2024 and Q1 2023, detailing revenues, expenses, and net income Consolidated Statements of Income (In thousands) | | Quarter Ended March 31, 2024 | Quarter Ended March 31, 2023 | | :--- | :--- | :--- | | Total Interest Income | $38,121 | $28,511 | | Total Interest Expense | $13,135 | $5,673 | | **Net Interest Income** | **$24,986** | **$22,838** | | Provision for credit loss | ($165) | $1 | | Total Non-Interest Income | $554 | $1,115 | | Total Non-Interest Expenses | $9,681 | $8,191 | | INCOME BEFORE PROVISION FOR INCOME TAXES | $16,024 | $15,761 | | PROVISION FOR INCOME TAXES | $4,650 | $4,517 | | **NET INCOME** | **$11,374** | **$11,244** | [Selected Consolidated Financial Data](index=8&type=section&id=Selected%20Consolidated%20Financial%20Data) This section summarizes key financial data, performance ratios, loan portfolio composition, asset quality, and regulatory capital ratios Selected Performance Ratios | Ratio | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Earnings per share - diluted | $0.86 | $0.77 | | Return on average total assets | 2.50% | 3.10% | | Return on average shareholders' equity | 15.88% | 16.98% | | Net interest margin | 5.75% | 6.63% | | Efficiency ratio | 37.91% | 34.20% | Selected Asset Quality and Capital Ratios (as of March 31, 2024) | Ratio | Value | | :--- | :--- | | Non-performing assets to total assets | 0.31% | | Tier 1 leverage ratio | 14.65% | | Total capital to risk-weighted assets | 13.78% | [Net Interest Margin Analysis](index=9&type=section&id=Net%20Interest%20Margin%20Analysis) This section details average balances, interest income/expense, and yields/costs for assets and liabilities, illustrating net interest margin Net Interest Margin Analysis Summary (Q1 2024 vs Q1 2023) | | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | **Average Yield on Interest-Earning Assets** | 8.77% | 8.28% | | **Average Cost of Interest-Bearing Liabilities** | 4.29% | 2.74% | | **Net Interest Spread** | 4.48% | 5.54% | | **Net Interest Margin** | 5.75% | 6.63% | [Company Information and Disclosures](index=5&type=section&id=Company%20Information%20and%20Disclosures) [About NorthEast Community Bancorp](index=5&type=section&id=About%20NorthEast%20Community%20Bancorp) NorthEast Community Bancorp is the holding company for **NorthEast Community Bank**, headquartered in **White Plains, New York**, operating eleven branches and three loan production offices - The company is the holding company for **NorthEast Community Bank** and is headquartered in **White Plains, New York**[42](index=42&type=chunk) [Forward Looking Statement](index=5&type=section&id=Forward%20Looking%20Statement) This section cautions that forward-looking statements are subject to **risks and uncertainties**, including **market interest rates**, **economic conditions**, and **regulatory policies** - The press release includes forward-looking statements subject to **risks and uncertainties**, including changes in **market interest rates**, **economic conditions**, and **regulatory policies**[43](index=43&type=chunk)

WHITE PLAINS, N.Y., April 25, 2024 (GLOBE NEWSWIRE) -- NorthEast Community Bancorp, Inc. (NASDAQ:NECB) (the "Company"), the parent holding company of NorthEast Community Bank (the "Bank"), reported net income of $11.4 million, or $0.87 per basic share and $0.86 per diluted share, for the three months ended March 31, 2024 compared to net income of $11.2 million, or $0.77 per basic and diluted share, for the three months ended March 31, 2023. Kenneth A. Martinek, NorthEast Community Bancorp's Chairman of the ...

Loan Portfolio - As of December 31, 2023, the construction loan portfolio consisted of 322 loans totaling $1.7 billion in committed amount, with outstanding disbursed balances of $1.2 billion and undisbursed loans in process of $486.3 million[39]. - At December 31, 2023, 88.1% of the loan portfolio, amounting to $1.4 billion, was secured by loans in the New York State/New York Metropolitan Area[29]. - The average committed amount for construction loans was $5.4 million, with outstanding disbursed balances of $3.8 million and undisbursed loans in process of $1.5 million at December 31, 2023[41]. - The largest outstanding construction loan at December 31, 2023, had a committed amount of $28.0 million and was performing according to its terms[42]. - As of December 31, 2023, the average balance of loans in the commercial and industrial loan portfolio was $639,000[48]. - The largest outstanding commercial and industrial loan was an unsecured line of credit with an outstanding balance of $10.0 million[49]. - Multifamily and mixed-use real estate loans to borrowers in the New York State/New York Metropolitan Area totaled $71.3 million as of December 31, 2023[53]. - Multifamily and mixed-use real estate loans to borrowers in the Massachusetts/Boston Metropolitan Area totaled $151.2 million as of December 31, 2023[54]. - The average debt-service coverage ratio for multifamily loans is 2.91x, and the average loan-to-value ratio is 31.2%[58]. - The average balance of loans in the non-residential loan portfolio was $621,000 as of December 31, 2023[71]. - The largest outstanding non-residential real estate loan had an outstanding balance of $2.2 million[71]. - The portfolio of consumer loans was $1.2 million, or 0.08% of total loans, primarily from checking accounts with overdrawn balances[73]. - At December 31, 2023, the company held $14.1 million in participation interests in construction loans originated by the bank[79]. - The bank's loans-to-one-borrower limit was approximately $38.3 million as of December 31, 2023[82]. - As of December 31, 2023, the company had approximately $14.0 million in Federal Home Loan Bank advances outstanding and the ability to borrow an additional $29.7 million[92]. - The company had $50.0 million in borrowings from the Federal Reserve Bank of New York with an available borrowing limit of $865.1 million as of December 31, 2023[93]. - At December 31, 2023, the construction loan portfolio has increased to $1.2 billion, representing 76.9% of total loans, up from $251.0 million or 39.8% in 2016[172]. - At December 31, 2023, multifamily, mixed-use, and non-residential real estate loans accounted for $249.7 million, or 15.8% of the loan portfolio[174]. - Construction loans represented 478% of the Bank's total risk-based capital at December 31, 2023, while multifamily, mixed-use, and non-residential real estate loans represented 98%[179]. - The company requires borrowers to fund an interest reserve account in advance for construction loans originated[173]. Revenue and Income Sources - The Bank's revenues are primarily derived from interest on loans, with additional income from deposit fees, service charges, and investment advisory fees[17]. - The Bank completed the sale of its investment advisory and financial planning services in January 2024, ceasing to generate investment advisory fees[18]. Competition and Market Conditions - The Bank faces significant competition from various financial institutions and non-depository financial service companies in attracting deposits and originating loans[27]. - Competition for loans in the New York and Massachusetts markets is intense, affecting the company's growth and profitability[189]. - The geographic concentration of the loan portfolio makes the company vulnerable to downturns in the New York Metropolitan Area and Boston Metropolitan Area[186]. - Recent bank failures, including Silicon Valley Bank and Signature Bank, have raised concerns about depositor confidence, which could lead to destabilizing deposit outflows across the banking industry[202]. Capital and Regulatory Compliance - The company exceeded the fully phased-in regulatory requirement for the capital conservation buffer as of December 31, 2023[108]. - The company’s capital requirements include a common equity Tier 1 capital to risk-based assets ratio of 4.5% and a total capital to risk-based assets ratio of 8%[105]. - The Bank is classified as "well capitalized" under FDIC regulations as of December 31, 2023, with a total risk-based capital ratio of 10.0% or greater[119]. - The FDIC's risk-based assessment system assigns insured institutions to risk categories, with assessment rates for banks with less than $10 billion in assets ranging from 1.5 to 30 basis points of total assets less tangible capital[128]. - The Dodd-Frank Act increased the minimum target Deposit Insurance Fund ratio from 1.15% to 1.35% of estimated insured deposits, which was exceeded by the FDIC in November 2018[129]. - The Bank's latest FDIC CRA rating was "Satisfactory," indicating compliance with the Community Reinvestment Act[135]. - The Bank's latest NYCRA rating was "Outstanding," reflecting strong performance in serving local credit needs[137]. - The FDIC requires institutions classified as undercapitalized to submit a capital restoration plan, which must be guaranteed by the controlling company[120]. - The Company is subject to capital adequacy guidelines similar to those of the FDIC, with a threshold for the "small bank holding company" exception raised to $3.0 billion[152]. Operational Risks and Management - The company faces significant operational risks due to the high volume of transactions processed, which includes potential fraud and compliance failures[196]. - The company relies heavily on its management team for strategy implementation, and the loss of key personnel could adversely affect operations and competitive positioning[205]. - The company must keep pace with technological advancements to remain competitive in the increasingly technology-driven financial services market[213]. - Cybersecurity threats pose significant risks to the company, as breaches could compromise sensitive data and adversely affect operations and reputation[211]. Liquidity Management - Effective liquidity management is critical for the company to meet customer loan requests and deposit withdrawals, with potential adverse effects if liquidity is not maintained[199]. - The company reported uninsured deposits totaling $344.8 million and available liquidity of $102.7 million, including $68.7 million in cash, as of December 31, 2023, which is sufficient to cover uninsured deposits[202]. - The company has a borrowing capacity of $865.1 million at the FRBNY, which could be utilized to manage liquidity needs[202]. Branch Operations and Expansion - The Bank operates through eleven branch offices and three loan production offices across New York and Massachusetts, focusing on community-oriented financial services[16]. - The company plans to expand its branch network from ten existing branches to capture growth opportunities in primary and adjacent markets, although this may negatively impact earnings due to initial costs and time required to generate revenue from new branches[197]. Investment Portfolio - The investment portfolio primarily consists of mutual funds, residential mortgage-backed securities, and municipal securities, with stated final maturities of 10 years or more for mortgage-backed securities[86]. - The company’s investment management policy aims to provide adequate liquidity to meet deposit outflows and anticipated increases in the loan portfolio[88]. - The company’s investment portfolio is designed to generate stable income and provide collateral for advances and repurchase agreements[88]. - The Bank's investment in the Federal Home Loan Bank of New York was $859,000 as of December 31, 2023, meeting compliance requirements[144]. Regulatory Changes and Compliance - The final rule amending CRA regulations will become effective on January 1, 2026, and includes a metrics-based approach to evaluating bank retail lending[136]. - The Bank is subject to federal consumer protection regulations that impose sanctions for non-compliance, including administrative fines and civil actions[138]. - The Federal Reserve Board has the authority to prohibit dividends if actions are deemed unsafe or unsound, emphasizing the need for sufficient net income to cover dividends[154]. - The Company is classified as an emerging growth company and may take advantage of exemptions from various reporting requirements until it exceeds $1.1 billion in annual gross revenues or other specified thresholds[161][162]. - The Company has terminated its license in Connecticut as of February 22, 2024, following the sale of all assets related to Harbor West Wealth Management Group[166]. - The Company is prohibited from acquiring more than 5% of voting stock in another savings association without prior approval from the Federal Reserve Board[147]. - The Company must submit a notice to the Federal Reserve Board for any acquisition of direct or indirect control of a savings and loan holding company[155].

PART I — FINANCIAL INFORMATION This section encompasses the company's unaudited consolidated financial statements and related notes, along with management's discussion and analysis of financial condition and results of operations [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements, including the statements of financial condition, income, comprehensive income, changes in stockholders' equity, and cash flows, along with detailed notes explaining significant accounting policies, regulatory capital, and specific financial instrument details [Consolidated Statements of Financial Condition](index=4&type=page&id=Consolidated%20Statements%20of%20Financial%20Condition) This section presents the company's financial position, detailing assets, liabilities, and equity at specific reporting dates Total Assets: | Date | Amount (in thousands) | | :--- | :--- | | Sep 30, 2023 | $1,719,945 | | Dec 31, 2022 | $1,424,963 | Net Loans: | Date | Amount (in thousands) | | :--- | :--- | | Sep 30, 2023 | $1,503,403 | | Dec 31, 2022 | $1,212,219 | Total Deposits: | Date | Amount (in thousands) | | :--- | :--- | | Sep 30, 2023 | $1,365,634 | | Dec 31, 2022 | $1,121,955 | Total Stockholders' Equity: | Date | Amount (in thousands) | | :--- | :--- | | Sep 30, 2023 | $272,413 | | Dec 31, 2022 | $261,989 | [Consolidated Statements of Income](index=6&type=page&id=Consolidated%20Statements%20of%20Income) This section outlines the company's financial performance over specific periods, reporting revenues, expenses, and net income Net Income: | Period | 2023 (in thousands) | 2022 (in thousands) | Change (YoY) | | :--- | :--- | :--- | :--- | | Three Months Ended Sep 30 | $11,843 | $7,542 | +57.0% | | Nine Months Ended Sep 30 | $34,175 | $16,580 | +106.1% | Net Interest Income: | Period | 2023 (in thousands) | 2022 (in thousands) | Change (YoY) | | :--- | :--- | :--- | :--- | | Three Months Ended Sep 30 | $25,129 | $17,460 | +43.9% | | Nine Months Ended Sep 30 | $71,985 | $42,928 | +67.7% | Earnings Per Common Share – Basic: | Period | 2023 | 2022 | | :--- | :--- | :--- | | Three Months Ended Sep 30 | $0.80 | $0.49 | | Nine Months Ended Sep 30 | $2.42 | $1.07 | [Consolidated Statements of Comprehensive Income](index=8&type=page&id=Consolidated%20Statements%20of%20Comprehensive%20Income) This section reports the company's total comprehensive income, including net income and other comprehensive income items Total Comprehensive Income: | Period | 2023 (in thousands) | 2022 (in thousands) | | :--- | :--- | :--- | | Three Months Ended Sep 30 | $11,850 | $7,565 | | Nine Months Ended Sep 30 | $34,197 | $16,644 | [Consolidated Statements of Changes in Stockholders' Equity](index=9&type=page&id=Consolidated%20Statements%20of%20Changes%20in%20Stockholders%27%20Equity) This section details the changes in the company's equity accounts over specific periods, reflecting net income, dividends, and stock transactions - Total stockholders' equity increased to **$272,413 thousand** at September 30, 2023, from **$261,989 thousand** at December 31, 2022[18](index=18&type=chunk) - Net income for the nine months ended September 30, 2023, contributed **$34,175 thousand** to stockholders' equity[18](index=18&type=chunk) - Stock repurchases totaled **$(23,388) thousand** and cash dividends declared were **$(2,544) thousand** for the nine months ended September 30, 2023[18](index=18&type=chunk) [Consolidated Statements of Cash Flows](index=10&type=page&id=Consolidated%20Statements%20of%20Cash%20Flows) This section categorizes the company's cash inflows and outflows from operating, investing, and financing activities over specific periods Net Cash Provided by Operating Activities: | Period | 2023 (in thousands) | 2022 (in thousands) | | :--- | :--- | :--- | | Nine Months Ended Sep 30 | $30,866 | $14,447 | Net Cash Used in Investing Activities: | Period | 2023 (in thousands) | 2022 (in thousands) | | :--- | :--- | :--- | | Nine Months Ended Sep 30 | $(280,099) | $(156,566) | Net Cash Provided by Financing Activities: | Period | 2023 (in thousands) | 2022 (in thousands) | | :--- | :--- | :--- | | Nine Months Ended Sep 30 | $260,648 | $44,782 | Net Increase (Decrease) in Cash and Cash Equivalents: | Period | 2023 (in thousands) | 2022 (in thousands) | | :--- | :--- | :--- | | Nine Months Ended Sep 30 | $11,415 | $(97,337) | [Notes to Condensed Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements [Note 1 — Summary of Significant Accounting Policies](index=13&type=page&id=Note%201%20%E2%80%94%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the key accounting principles and methods used in preparing the financial statements - Northeast Community Bancorp, Inc. operates NorthEast Community Bank, a New York State-chartered savings bank, primarily originating construction, commercial and industrial, and multifamily/mixed-use real estate loans[22](index=22&type=chunk)[23](index=23&type=chunk)[25](index=25&type=chunk) - Effective January 1, 2023, the company adopted ASC 326 (CECL), resulting in a **$99,000** (net of tax) reduction to retained earnings[36](index=36&type=chunk)[37](index=37&type=chunk)[38](index=38&type=chunk) Impact of ASC 326 Adoption on ACL (January 1, 2023): | Component | Pre-adoption (in thousands) | Adoption Impact (in thousands) | As Reported (in thousands) | | :--- | :--- | :--- | :--- | | ACL on debt securities held-to-maturity | $0 | $132 | $132 | | ACL on loan receivables | $5,474 | $(1,631) | $3,843 | | ACL for off-balance sheet exposure | $0 | $1,586 | $1,586 | | **Total** | **$5,474** | **$134** | **$5,608** | [Note 2 — Regulatory Capital](index=19&type=page&id=Note%202%20%E2%80%94%20Regulatory%20Capital) This note details the company's compliance with regulatory capital requirements and its capital adequacy ratios - The Bank met all capital adequacy requirements as of September 30, 2023, and December 31, 2022, and was categorized as **"well capitalized"** by the FDIC[55](index=55&type=chunk)[57](index=57&type=chunk) Regulatory Capital Ratios (as of September 30, 2023): | Ratio | Actual Ratio | Minimum Capital Adequacy | For Classification as Well-Capitalized | | :--- | :--- | :--- | :--- | | Total capital (to risk weighted assets) | 13.50% | ≥8.00% | ≥10.00% | | Tier 1 capital (to risk weighted assets) | 13.16% | ≥6.00% | ≥8.00% | | Common equity tier 1 capital (to risk-weighted assets) | 13.16% | ≥4.50% | ≥6.50% | | Core (Tier 1) capital (to adjusted total assets) | 14.70% | ≥4.00% | ≥5.00% | [Note 3 — Equity Securities](index=21&type=page&id=Note%203%20%E2%80%94%20Equity%20Securities) This note provides information on the company's equity securities, including fair values and unrealized gains or losses Equity Securities, at Fair Value: | Date | Amount (in thousands) | | :--- | :--- | | Sep 30, 2023 | $17,714 | | Dec 31, 2022 | $18,041 | Unrealized Net Loss Recognized on Equity Securities: | Period | 2023 (in thousands) | 2022 (in thousands) | | :--- | :--- | :--- | | Three Months Ended Sep 30 | $430 | $573 | | Nine Months Ended Sep 30 | $327 | $1,636 | [Note 4 — Securities Available-for-Sale](index=23&type=page&id=Note%204%20%E2%80%94%20Securities%20Available-for-Sale) This note details the company's securities classified as available-for-sale, including their fair values Securities Available-for-Sale, at Fair Value: | Date | Amount (in thousands) | | :--- | :--- | | Sep 30, 2023 | $0 | | Dec 31, 2022 | $1 | [Note 5 — Securities Held-to-Maturity](index=23&type=page&id=Note%205%20%E2%80%94%20Securities%20Held-to-Maturity) This note provides information on the company's debt securities held with the intent and ability to hold to maturity Securities Held-to-Maturity (Amortized Cost): | Date | Amount (in thousands) | | :--- | :--- | | Sep 30, 2023 | $15,655 | | Dec 31, 2022 | $26,395 | - Total unrealized losses on held-to-maturity securities were **$3,746 thousand** at September 30, 2023, primarily due to market interest rate volatility, not credit quality[65](index=65&type=chunk)[69](index=69&type=chunk) - The allowance for credit losses for held-to-maturity debt securities was **$131 thousand** at September 30, 2023[67](index=67&type=chunk) [Note 6 — Loans Receivable and the Allowance for Credit Losses](index=25&type=page&id=Note%206%20%E2%80%94%20Loans%20Receivable%20and%20the%20Allowance%20for%20Credit%20Losses) This note details the composition of loans receivable and the methodology and balances of the allowance for credit losses Total Loans (Gross): | Date | Amount (in thousands) | | :--- | :--- | | Sep 30, 2023 | $1,507,938 | | Dec 31, 2022 | $1,217,321 | Loan Composition (September 30, 2023): | Loan Type | Amount (in thousands) | | :--- | :--- | | Construction | $1,168,909 | | Residential real estate | $209,535 | | Commercial and industrial | $107,963 | | Non-residential real estate | $20,289 | | Consumer | $1,242 | Allowance for Credit Losses (ACL) - Loans: | Date | Amount (in thousands) | | :--- | :--- | | Sep 30, 2023 | $4,767 | | Dec 31, 2022 | $5,474 | - As of September 30, 2023, there were two individually evaluated non-accrual construction loans totaling **$4,381 thousand**, secured by the same multi-family project in the Bronx, New York[79](index=79&type=chunk)[84](index=84&type=chunk) - The allowance for credit losses related to off-balance sheet commitments was **$1,191 thousand** at September 30, 2023[97](index=97&type=chunk) [Note 7 — Real Estate Owned ("REO")](index=34&type=page&id=Note%207%20%E2%80%94%20Real%20Estate%20Owned%20%28%22REO%22%29) This note provides information on properties acquired through foreclosure or deed in lieu of foreclosure - The company owned one foreclosed property, an office building in Pennsylvania, valued at **$1,456 thousand** at both September 30, 2023, and December 31, 2022[98](index=98&type=chunk) REO Expense (in thousands): | Period | 2023 | 2022 | | :--- | :--- | :--- | | Three Months Ended Sep 30 | $11 | $200 | | Nine Months Ended Sep 30 | $52 | $252 | [Note 8 — Federal Home Loan Bank of New York ("FHLB") Advances](index=36&type=page&id=Note%208%20%E2%80%94%20Federal%20Home%20Loan%20Bank%20of%20New%20York%20%28%22FHLB%22%29%20Advances) This note details the company's borrowings from the Federal Home Loan Bank of New York and other secured borrowings FHLB Advances: | Date | Amount (in thousands) | Weighted Average Interest Rate | | :--- | :--- | :--- | | Sep 30, 2023 | $14,000 | 2.24% | | Dec 31, 2022 | $21,000 | 2.43% | - As of September 30, 2023, the company had **$50,000 thousand** in FRBNY borrowings at an interest rate of **5.5%**, maturing December 22, 2023[102](index=102&type=chunk) - Available borrowing limits were **$31.3 million** from FHLB and **$739.4 million** from FRBNY as of September 30, 2023[101](index=101&type=chunk)[102](index=102&type=chunk) [Note 9 — Benefits Plans](index=36&type=page&id=Note%209%20%E2%80%94%20Benefits%20Plans) This note describes the company's employee benefit plans, including ESOP and SERP, and related expenses ESOP Compensation Expense (in thousands): | Period | 2023 | 2022 | | :--- | :--- | :--- | | Three Months Ended Sep 30 | $340 | $271 | | Nine Months Ended Sep 30 | $960 | $775 | - Total ESOP shares held by the Trustee were **1,333,797** at September 30, 2023[115](index=115&type=chunk) - SERP expenses for the nine months ended September 30, 2023, were **$162 thousand**, down from **$361 thousand** in 2022[105](index=105&type=chunk) [Note 10 — Leases](index=40&type=page&id=Note%2010%20%E2%80%94%20Leases) This note provides information on the company's operating leases, including right-of-use assets and lease liabilities Operating Lease Amounts (September 30, 2023, in thousands): | Item | Amount | | :--- | :--- | | ROU assets | $1,935 | | Lease liabilities | $1,991 | | Weighted-average remaining lease term | 5.80 years | Operating Lease Costs (in thousands): | Period | 2023 | 2022 | | :--- | :--- | :--- | | Nine Months Ended Sep 30 | $380 | $423 | [Note 11 — Fair Value Disclosures](index=41&type=page&id=Note%2011%20%E2%80%94%20Fair%20Value%20Disclosures) This note details the fair value measurements of financial instruments, categorized by the fair value hierarchy - The fair value hierarchy categorizes inputs into Level 1 (quoted prices in active markets), Level 2 (observable inputs), and Level 3 (unobservable inputs)[126](index=126&type=chunk) Assets Carried at Fair Value on a Recurring Basis (September 30, 2023, in thousands): | Asset | Total | Level 1 | Level 2 | Level 3 | | :--- | :--- | :--- | :--- | :--- | | Marketable equity securities | $17,714 | $17,714 | $0 | $0 | | Mortgage backed securities | $0 | $0 | $0 | $0 | Assets Carried at Fair Value on a Non-Recurring Basis (September 30, 2023, in thousands): | Asset | Total | Level 1 | Level 2 | Level 3 | | :--- | :--- | :--- | :--- | :--- | | Loans individually evaluated | $4,381 | $0 | $0 | $4,381 | | Real estate owned | $1,456 | $0 | $0 | $1,456 | [Note 12 — Revenue Recognition](index=48&type=page&id=Note%2012%20%E2%80%94%20Revenue%20Recognition) This note explains the company's policies for recognizing revenue, particularly non-interest income - The majority of the company's revenues, primarily interest income from loans and securities, are outside the scope of ASC 606[137](index=137&type=chunk) Non-Interest Income (Nine Months Ended September 30, in thousands): | Category | 2023 | 2022 | | :--- | :--- | :--- | | Deposit-related fees and charges | $42 | $53 | | Loan-related fees and charges | $652 | $861 | | Electronic banking fees and charges | $723 | $648 | | Income from bank owned life insurance | $857 | $450 | | Investment advisory fees | $343 | $364 | | Unrealized loss on equity securities | $(327) | $(1,636) | [Note 13 — Other Non-Interest Expenses](index=51&type=page&id=Note%2013%20%E2%80%94%20Other%20Non-Interest%20Expenses) This note provides a breakdown of various non-interest expenses incurred by the company Total Other Non-Interest Expenses (in thousands): | Period | 2023 | 2022 | | :--- | :--- | :--- | | Three Months Ended Sep 30 | $2,646 | $2,237 | | Nine Months Ended Sep 30 | $7,064 | $6,220 | - Key increases for the nine months ended September 30, 2023, included miscellaneous other non-interest expense (**$682 thousand**), service contracts expense (**$236 thousand**), and directors compensation (**$230 thousand**)[227](index=227&type=chunk)[230](index=230&type=chunk) [Note 14 — Earnings Per Share](index=51&type=page&id=Note%2014%20%E2%80%94%20Earnings%20Per%20Share) This note presents the basic and diluted earnings per share calculations for the company Basic Earnings Per Share: | Period | 2023 | 2022 | | :--- | :--- | :--- | | Three Months Ended Sep 30 | $0.80 | $0.49 | | Nine Months Ended Sep 30 | $2.42 | $1.07 | Diluted Earnings Per Share: | Period | 2023 | 2022 | | :--- | :--- | :--- | | Three Months Ended Sep 30 | $0.80 | $0.49 | | Nine Months Ended Sep 30 | $2.41 | $1.07 | [Note 15 — Stock Compensation Plans](index=53&type=page&id=Note%2015%20%E2%80%94%20Stock%20Compensation%20Plans) This note describes the company's stock-based compensation arrangements, including restricted stock and stock options - The 2022 Equity Incentive Plan, approved on September 29, 2022, reserved **1,369,771 shares** for grants of incentive stock options, nonqualified stock options, restricted stock, and other awards[149](index=149&type=chunk) - Unrecognized compensation cost for non-vested restricted stock awards was **$4.0 million** and for stock option awards was **$3.2 million** at September 30, 2023, both expected to be recognized over the next 5 years[151](index=151&type=chunk)[153](index=153&type=chunk) - Compensation expense for restricted stock was **$723 thousand** and for stock options was **$576 thousand** for the nine months ended September 30, 2023[151](index=151&type=chunk)[153](index=153&type=chunk) [Note 16 — Recent Accounting Pronouncements](index=54&type=page&id=Note%2016%20%E2%80%94%20Recent%20Accounting%20Pronouncements) This note discusses the impact of recently adopted or issued accounting standards on the company's financial statements - The company adopted ASU 2023-03 in July 2023, which amends various SEC paragraphs but did not have a significant impact on its financial statements[154](index=154&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=55&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial performance and condition, including an analysis of balance sheet changes, results of operations for the three and nine months ended September 30, 2023, asset quality, liquidity, and capital resources. It also includes forward-looking statements and critical accounting policies [Forward-Looking Statements](index=55&type=page&id=Forward-Looking%20Statements) This section discusses statements that are not historical facts and may constitute forward-looking statements, subject to various risks and uncertainties - Statements in the report that are not historical facts may constitute forward-looking statements, covered by safe harbor provisions[156](index=156&type=chunk) - Actual results may differ materially from predictions due to factors such as general economic conditions, changes in interest rates, increased competition, and regulatory changes[157](index=157&type=chunk) [Critical Accounting Policies](index=55&type=page&id=Critical%20Accounting%20Policies) This section identifies the company's critical accounting policies, which involve significant judgments and assumptions - The Allowance for Credit Losses (ACL) is considered a critical accounting policy, involving significant judgments and assumptions[159](index=159&type=chunk) - The adoption of Topic 326 (CECL) on January 1, 2023, impacted the ACL for loans, held-to-maturity securities, and off-balance sheet credit exposures[159](index=159&type=chunk) [Balance Sheet Analysis](index=57&type=page&id=Balance%20Sheet%20Analysis) This section analyzes significant changes in the company's balance sheet items, including assets, liabilities, and stockholders' equity - Total assets increased by **$295.0 million** (**+20.7%**) to **$1.7 billion** at September 30, 2023, from **$1.4 billion** at December 31, 2022[160](index=160&type=chunk) - Net loans increased by **$291.2 million** (**+24.0%**) to **$1.5 billion**, primarily driven by **$575.8 million** in construction loan originations[165](index=165&type=chunk)[166](index=166&type=chunk) - Total deposits increased by **$243.7 million** (**+21.7%**) to **$1.4 billion**, mainly due to a **$364.3 million** increase in certificates of deposit[173](index=173&type=chunk) - Stockholders' equity increased by **$10.4 million** (**+4.0%**) to **$272.4 million**, influenced by net income, equity plan amortization, and ESOP shares, partially offset by stock repurchases and dividends[178](index=178&type=chunk) [Results of Operations for the Three Months Ended September 30, 2023 and 2022](index=59&type=page&id=Results%20of%20Operations%20for%20the%20Three%20Months%20Ended%20September%2030%2C%202023%20and%202022) This section analyzes the company's financial performance for the three months ended September 30, 2023, compared to the prior year, focusing on key income and expense drivers - Net income increased by **$4.3 million** (**+57.0%**) to **$11.8 million** for the three months ended September 30, 2023, compared to **$7.5 million** in the prior year[179](index=179&type=chunk) - Net interest income rose by **$7.7 million** (**+43.9%**) to **$25.1 million**, driven by an **81.3%** increase in interest income from loans and interest-bearing deposits, and a rising interest rate environment[181](index=181&type=chunk)[182](index=182&type=chunk)[184](index=184&type=chunk) - Interest expense increased by **$8.1 million** (**+420.2%**) to **$10.0 million**, due to a **263 basis point** increase in the cost of interest-bearing liabilities[185](index=185&type=chunk) - Provision for credit losses was **$156 thousand** in Q3 2023, compared to none in Q3 2022[187](index=187&type=chunk) - Non-interest expense increased by **$1.1 million** (**+14.0%**) to **$8.9 million**, primarily due to higher salaries and employee benefits and other operating expenses[195](index=195&type=chunk) [Results of Operations for the Nine Months Ended September 30, 2023 and 2022](index=65&type=page&id=Results%20of%20Operations%20for%20the%20Nine%20Months%20Ended%20September%2030%2C%202023%20and%202022) This section analyzes the company's financial performance for the nine months ended September 30, 2023, compared to the prior year, highlighting key trends in income, expenses, and profitability - Net income increased by **$17.6 million** (**+106.1%**) to **$34.2 million** for the nine months ended September 30, 2023, compared to **$16.6 million** in the prior year[208](index=208&type=chunk) - Net interest income increased by **$29.1 million** (**+67.7%**) to **$72.0 million**, driven by a **100.8%** increase in interest income and a **329 basis point** increase in the yield on interest-earning assets to **8.66%**[209](index=209&type=chunk)[211](index=211&type=chunk)[213](index=213&type=chunk) - Interest expense increased by **$18.8 million** (**+411.8%**) to **$23.4 million**, with the cost of interest-bearing liabilities rising by **237 basis points** to **3.35%**[214](index=214&type=chunk) - Net interest margin increased by **169 basis points** (**+34.8%**) to **6.54%** for the nine months ended September 30, 2023[215](index=215&type=chunk) - Non-interest income increased by **$1.5 million** (**+160.6%**) to **$2.4 million**, primarily due to a decrease in unrealized loss on equity securities and an increase in BOLI income[222](index=222&type=chunk) - Non-interest expense increased by **$3.9 million** (**+17.8%**) to **$26.0 million**, mainly due to higher salaries and employee benefits and other operating expenses[225](index=225&type=chunk) [Asset Quality](index=76&type=page&id=Asset%20Quality) This section assesses the quality of the company's assets, including non-performing assets, allowance for credit losses, and net charge-offs Total Non-Performing Assets: | Date | Amount (in thousands) | | :--- | :--- | | Sep 30, 2023 | $5,837 | | Dec 31, 2022 | $1,456 | - Non-performing assets at September 30, 2023, included **$4,381 thousand** in non-accrual construction loans[244](index=244&type=chunk) - The ratio of allowance to total loans decreased to **0.32%** at September 30, 2023, from **0.45%** at December 31, 2022[249](index=249&type=chunk) - Net charge-offs for the nine months ended September 30, 2023, totaled **$286 thousand**, including **$159 thousand** from construction loans sold at a loss[217](index=217&type=chunk)[251](index=251&type=chunk) [Liquidity and Capital Resources](index=77&type=page&id=Liquidity%20and%20Capital%20Resources) This section evaluates the company's liquidity position and capital adequacy, including borrowing capacity and unfunded commitments Average Liquidity Ratios (Nine Months Ended Sep 30, 2023 vs Year Ended Dec 31, 2022): | Ratio | 2023 Average | 2022 Average | | :--- | :--- | :--- | | Cash Liquidity | 7.1% | 11.2% | | On Balance Sheet Liquidity | 10.2% | 15.5% | | On Balance Sheet Liquidity & Borrowing Capacity | 19.4% | 19.0% | - Loan originations totaled **$653.0 million** for the nine months ended September 30, 2023, compared to **$499.2 million** in the prior year[260](index=260&type=chunk) - Available borrowing limits were **$31.3 million** from FHLB and **$739.4 million** from FRBNY as of September 30, 2023[261](index=261&type=chunk)[262](index=262&type=chunk) - Unfunded commitments at September 30, 2023, included **$464.1 million** for construction and multi-family mortgage loans, and **$123.9 million** for outstanding commitments to originate loans[265](index=265&type=chunk) [Off-Balance Sheet Arrangements](index=81&type=page&id=Off-Balance%20Sheet%20Arrangements) This section discloses any off-balance sheet transactions that could materially affect the company's financial condition or results of operations - The company did not engage in any off-balance sheet transactions reasonably likely to have a material adverse effect on its financial condition, results of operations, or cash flows during the nine months ended September 30, 2023[267](index=267&type=chunk) [Impact of Inflation and Changing Prices](index=81&type=page&id=Impact%20of%20Inflation%20and%20Changing%20Prices) This section discusses the effects of inflation and changing prices on the company's financial performance - Changes in market interest rates have a greater impact on the company's performance than the effects of inflation, as its assets and liabilities are primarily monetary in nature[268](index=268&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=81&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section details the company's approach to managing interest rate risk through income and economic value simulation analyses. It assesses the impact of hypothetical interest rate changes on net interest income and net portfolio value, concluding that risk levels are within policy guidelines - Interest rate risk is managed using both income simulation (short-term net interest income) and economic value simulation (long-term market value of portfolio equity)[272](index=272&type=chunk)[275](index=275&type=chunk) Twelve-Month Net Interest Income Sensitivity (September 30, 2023): | Change in Interest Rates (Basis Points) | Percent of Change | | :--- | :--- | | +200 | 14.72% | | +100 | 7.40% | | -100 | (8.81)% | | -200 | (17.86)% | Net Portfolio Value Sensitivity (September 30, 2023, in thousands): | Change in Interest Rates (Basis Points) | Estimated NPV | Percent of Change | | :--- | :--- | :--- | | +200 | $307,428 | 3.80% | | +100 | $302,827 | 2.25% | | 0 | $296,164 | 0% | | -100 | $286,634 | (3.22)% | | -200 | $274,942 | (7.17)% | - The company's interest rate risk results are within established policy guidelines as of September 30, 2023[283](index=283&type=chunk) [Item 4. Controls and Procedures](index=85&type=section&id=Item%204.%20Controls%20and%20Procedures) The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of September 30, 2023, ensuring timely and accurate reporting of material information - Disclosure controls and procedures were evaluated and deemed effective as of September 30, 2023[284](index=284&type=chunk) - The controls ensure that information required for SEC reports is recorded, processed, summarized, and reported within specified time periods[284](index=284&type=chunk) PART II — OTHER INFORMATION This section includes legal proceedings, risk factors, equity security sales, and other miscellaneous disclosures [Item 1. Legal Proceedings](index=85&type=page&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal actions and claims arising in the normal course of business, which management does not expect to have a material adverse impact on its financial condition - Legal actions and claims are not expected to materially adversely impact the company's financial condition[286](index=286&type=chunk) [Item 1A. Risk Factors](index=85&type=page&id=Item%201A.%20Risk%20Factors) The company refers to previously disclosed risk factors in its Annual Report on Form 10-K and Quarterly Report on Form 10-Q, stating that no material changes have occurred as of September 30, 2023 - No material changes to the company's risk factors have occurred since the Annual Report on Form 10-K for 2022 and the Quarterly Report on Form 10-Q for Q1 2023[287](index=287&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=86&type=page&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's stock repurchase program, authorized in May 2023, to acquire up to 10% of its outstanding common stock. It provides information on shares repurchased during the third quarter of 2023 - A stock repurchase program was authorized on May 30, 2023, to acquire up to **1,509,218 shares** (**10%**) of the company's common stock[288](index=288&type=chunk) Common Stock Repurchases (Three Months Ended September 30, 2023): | Period | Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | July 1 - 31, 2023 | 0 | $0 | | August 1 - 31, 2023 | 331,064 | $16.23 | | September 1 - 30, 2023 | 224,260 | $15.47 | | **Total** | **555,324** | | - As of September 30, 2023, **898,653 shares** remained available for purchase under the program[289](index=289&type=chunk) [Item 3. Defaults Upon Senior Securities](index=86&type=page&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item is not applicable to the company for the reporting period - Not applicable[290](index=290&type=chunk) [Item 4. Mine Safety Disclosures](index=86&type=page&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company for the reporting period - Not applicable[291](index=291&type=chunk) [Item 5. Other Information](index=86&type=page&id=Item%205.%20Other%20Information) There is no other information to report under this item - None[292](index=292&type=chunk) [Item 6. Exhibits](index=86&type=page&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including certifications from the CEO and CFO, and XBRL formatted financial statements and taxonomy documents - The exhibits include Rule 13a-14(a)/15d-14(a) Certifications of the Chief Executive Officer and Chief Financial Officer[298](index=298&type=chunk) - Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350 is also included[298](index=298&type=chunk) - XBRL formatted financial statements (Consolidated Financial Condition, Income, Comprehensive Income, Changes in Stockholder's Equity, Cash Flows) and related taxonomy documents are filed[298](index=298&type=chunk) [Signatures](index=88&type=page&id=Signatures) This section contains the official certifications and signatures of the company's executive officers - The report was signed by Kenneth A. Martinek, Chairman and Chief Executive Officer, and Donald S. Hom, Executive Vice President and Chief Financial Officer, on November 13, 2023[301](index=301&type=chunk)

Financial Performance - Net income for the three months ended June 30, 2023, was $11.1 million, a 105.6% increase from $5.4 million for the same period in 2022 [171]. - Net income for the six months ended June 30, 2023, was $22.3 million, a 147.1% increase from $9.0 million for the same period in 2022 [197]. - Non-interest income rose by $484,000, or 90.3%, to $1.0 million for the three months ended June 30, 2023, driven by an increase in BOLI income and a decrease in unrealized loss on equity securities [183]. - Non-interest income for the six months ended June 30, 2023, was $2.1 million, a 259.4% increase from $594,000 in the same period of 2022, primarily due to an unrealized gain on equity securities of $102,000 compared to an unrealized loss of $1.1 million in 2022 [211]. Asset and Liability Management - 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 [151]. - Stockholders' equity increased by $7.6 million, or 2.9%, to $269.6 million at June 30, 2023 [170]. - Total loans outstanding increased to $1.39 billion as of June 30, 2023, compared to $1.22 billion as of December 31, 2022 [236]. - The average balance of loans receivable increased to $1.306 billion for the six months ended June 30, 2023, with interest income of $58.069 million and a yield of 8.89% [227]. Income and Expense Analysis - Net interest income totaled $24.0 million for the three months ended June 30, 2023, up 77.4% from $13.5 million for the same period in 2022 [172]. - Interest expense increased by $6.4 million, or 493.8%, to $7.7 million for the three months ended June 30, 2023 [176]. - Non-interest expense increased by $1.9 million, or 26.7%, to $8.9 million for the three months ended June 30, 2023, primarily due to higher salaries and employee benefits [186]. - Non-interest expense increased by $2.8 million, or 20.0%, to $17.1 million for the six months ended June 30, 2023, driven by a $1.9 million increase in salaries and employee benefits [215]. Credit Quality and Losses - 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 [158]. - Provision for credit losses totaled $611,000 for the six months ended June 30, 2023, compared to no credit loss expense for the same period in 2022 [206]. - Charge-offs increased to $215,000 for the six months ended June 30, 2023, compared to $17,000 for the same period in 2022 [207]. - Total non-performing assets increased to $5.8 million as of June 30, 2023, from $1.5 million at December 31, 2022, representing a significant rise [231]. Interest Rate and Liquidity Management - The average balance of interest-earning assets increased by $273.6 million, or 23.2%, to $1.5 billion for the three months ended June 30, 2023 [175]. - Net interest margin increased by 202 basis points, or 44.1%, to 6.60% for the three months ended June 30, 2023, compared to 4.58% for the same period in 2022 [177]. - The liquidity ratios averaged 7.2% for Cash Liquidity, 10.6% for On Balance Sheet Liquidity, and 13.8% for On Balance Sheet Liquidity & Borrowing Capacity for the six months ended June 30, 2023, compared to 11.2%, 15.5%, and 19.0% for the year ended December 31, 2022, respectively [241]. - The company had an available borrowing limit of $32.6 million from the Federal Home Loan Bank of New York as of June 30, 2023 [246]. Market and Economic Conditions - The primary impact of inflation is reflected in increased operational costs, with market interest rates having a greater effect on performance than inflation [253]. - Interest rate risk management strategies are executed to maintain risk within established limits, with simulation reports produced quarterly [261]. - The company has established an interest rate floor of zero percent for measuring interest rate risk [266]. - The results as of June 30, 2023, indicate that the company is adequately positioned with acceptable net interest income and economic value at risk [267].

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-40589 NorthEast Community Bancorp, Inc. (Exact name of registrant as specified in its charter) Maryland 86-31 ...

Part I [Business](index=6&type=section&id=Item%201.%20Business) The company, a New York-chartered savings bank holding company, primarily originates construction loans, operates through eleven branches, and is subject to extensive regulation General Overview - Northeast Community Bancorp, Inc. is the Maryland-incorporated successor holding company for NorthEast Community Bank, following a second-step conversion completed on July 12, 2021[15](index=15&type=chunk) - The Bank's principal business involves originating construction loans, commercial and industrial loans, and various real estate loans. It funds these activities through retail deposits and borrowings, with revenues primarily from loan interest[18](index=18&type=chunk) - The Bank operates eleven branch offices across New York (Bronx, Orange, Rockland, Sullivan counties) and Massachusetts (Essex, Middlesex, Norfolk counties), along with three loan production offices[17](index=17&type=chunk) Lending Activities - The largest segment of the loan portfolio is construction loans, followed by multi-family real estate loans. As of December 31, 2022, **89.4%** of the loan portfolio was secured by properties in the New York State/Metropolitan Area[30](index=30&type=chunk)[32](index=32&type=chunk) Construction Loan Portfolio (as of Dec 31, 2022) | Metric | Value (in millions) | | :--- | :--- | | **Total Committed Amount** | $1,600 | | **Outstanding Disbursed Balance** | $930.6 | | **Undisbursed Loans in Process** | $637.4 | | **Number of Loans (by project)** | 350 | | **Average Loan Size (by project)** | $4.6 (committed) / $2.7 (disbursed) | - The bank has de-emphasized multifamily, mixed-use, and non-residential real estate lending in recent years to focus more on construction lending, particularly in high-absorption, homogeneous communities in New York[52](index=52&type=chunk)[64](index=64&type=chunk) - The bank's loans-to-one-borrower limit was approximately **$33.4 million** as of December 31, 2022, with no borrowers exceeding this limit[80](index=80&type=chunk) Investment Activities - The investment portfolio is primarily viewed as a source of liquidity and consists mainly of mutual funds, residential mortgage-backed securities (from Fannie Mae, Freddie Mac, Ginnie Mae), and municipal securities[85](index=85&type=chunk)[86](index=86&type=chunk) - The investment policy is designed to provide liquidity, ensure safety of principal, generate stable income, and serve as a counter-cyclical balance to loan demand[86](index=86&type=chunk) Deposit Activities and Other Sources of Funds - Major sources of funds include deposits, borrowings, and loan repayments. The bank offers a broad selection of deposit instruments, including checking, money market, and savings accounts[87](index=87&type=chunk)[90](index=90&type=chunk) - The bank utilizes brokered, listing service, and military deposits as a cost-effective strategy to match the maturity of deposits with the term of its construction loans[91](index=91&type=chunk) - The bank uses advances from the Federal Home Loan Bank of New York as a supplemental source of funds. As of December 31, 2022, it had **$21.0 million** in FHLB advances outstanding and the ability to borrow an additional **$31.5 million**[92](index=92&type=chunk) Regulation and Supervision - The Bank is a New York-chartered savings bank regulated by the New York State Department of Financial Services and the FDIC. The Company, as a savings and loan holding company, is regulated by the Federal Reserve Board[94](index=94&type=chunk)[97](index=97&type=chunk) - The Bank must adhere to federal minimum capital standards, including ratios for common equity Tier 1, Tier 1, and total capital. As of December 31, 2022, the Bank was classified as a "well capitalized" institution[103](index=103&type=chunk)[117](index=117&type=chunk) - The Bank is subject to the Community Reinvestment Act (CRA), with its latest FDIC rating being "Satisfactory" and its latest New York State CRA rating being "Outstanding"[132](index=132&type=chunk)[133](index=133&type=chunk) - The Company is subject to Federal Reserve Board capital adequacy guidelines. However, due to the "small bank holding company" exception (threshold increased to **$3.0 billion**), the Company is not subject to these capital requirements until its consolidated assets exceed this amount[145](index=145&type=chunk) Emerging Growth Company Status - The Company is classified as an "emerging growth company," which allows it to take advantage of certain exemptions from reporting requirements, such as reduced executive compensation disclosure and an exemption from the auditor attestation requirement for internal controls over financial reporting (Sarbanes-Oxley Act Section 404(b))[155](index=155&type=chunk) - The Company has elected to use the extended transition period for adopting new or revised accounting standards, which may result in its financial statements not being comparable to other public companies[155](index=155&type=chunk) [Risk Factors](index=42&type=page&id=Item%201A.%20Risk%20Factors) The company faces significant risks from its high concentration in construction loans, geographic concentration, brokered deposit reliance, and interest rate fluctuations - **Lending Risks:** The company's primary risk stems from its high concentration in construction loans, which increased to **$930.6 million** (**76.4%** of total loans) at Dec 31, 2022. These loans are considered riskier than residential mortgages due to uncertainties in project completion and value[168](index=168&type=chunk)[169](index=169&type=chunk) - **Concentration Risk:** The loan portfolio is heavily concentrated in the New York and Boston metropolitan areas, making the company vulnerable to local economic downturns. At Dec 31, 2022, **70.1%** of the total loan portfolio was in high-absorption areas of five New York counties[183](index=183&type=chunk)[184](index=184&type=chunk) - **Regulatory Scrutiny:** The bank's construction loans represented **417%** of its total risk-based capital at Dec 31, 2022, exceeding the **300%** threshold in regulatory guidance that could trigger increased supervisory scrutiny[175](index=175&type=chunk) - **Funding and Liquidity Risk:** The company relies on brokered deposits, military deposits, and listing service deposits, which totaled **$150.0 million** (**13.4%** of total deposits) at Dec 31, 2022. These funding sources may be less stable than traditional retail deposits[189](index=189&type=chunk) - **Accounting Standard Change:** The upcoming adoption of the Current Expected Credit Loss (CECL) model on January 1, 2023, is expected to require earlier recognition of credit losses and may increase the allowance for credit losses, potentially affecting financial condition and results[195](index=195&type=chunk) [Unresolved Staff Comments](index=58&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the Securities and Exchange Commission - None[219](index=219&type=chunk) [Properties](index=58&type=section&id=Item%202.%20Properties) As of December 31, 2022, the company conducts business from its administrative headquarters in White Plains, NY, eleven branch offices in New York and Massachusetts, three loan production offices, and a wealth management office in Connecticut. Six of these offices are leased, and the total net book value of all properties and equipment was $26.1 million - The company operates from its headquarters in White Plains, NY, eleven branch offices, three loan production offices, and one wealth management office[220](index=220&type=chunk) - At December 31, 2022, the net book value of land, buildings, furniture, fixtures, and equipment was **$26.1 million**[220](index=220&type=chunk) [Legal Proceedings](index=58&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in routine legal proceedings in the ordinary course of business, which management believes are immaterial to its financial condition, results of operations, and cash flows as of December 31, 2022 - Routine legal proceedings are considered immaterial in aggregate to the company's financial condition[221](index=221&type=chunk) [Mine Safety Disclosures](index=58&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Not applicable. The company has no mine safety disclosures - None[222](index=222&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=59&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on the Nasdaq Capital Market under the symbol "NECB". During 2022, the company paid regular quarterly cash dividends of $0.06 per share and a special cash dividend of $0.18 per share. A stock repurchase program was authorized in July 2022 to acquire up to 10% of outstanding shares, with 430,231 shares repurchased in the fourth quarter of 2022 - The company's common stock is traded on the Nasdaq Capital Market under the ticker symbol "NECB"[225](index=225&type=chunk) - In 2022, the company paid quarterly dividends of **$0.06 per share** and a one-time special dividend of **$0.18 per share**[226](index=226&type=chunk) Q4 2022 Share Repurchases | Period | Total Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | Oct 2022 | 63,004 | $12.80 | | Nov 2022 | 116,300 | $14.01 | | Dec 2022 | 250,927 | $14.64 | | **Total Q4** | **430,231** | - | [Reserved](index=60&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=60&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) 2022 financial performance saw significant growth in net interest income and net income, driven by loan expansion and rising rates Business Strategy - Continue focusing on originating construction loans in high-demand, high-absorption areas of the New York Metropolitan Area[233](index=233&type=chunk) - Maintain strong asset quality through a conservative credit culture and active credit risk management[234](index=234&type=chunk) - Expand the franchise through de novo branching or branch acquisitions in growing communities[238](index=238&type=chunk) - Implement a stockholder-focused capital management strategy, including dividends and stock repurchases, supported by a strong capital position[240](index=240&type=chunk) Balance Sheet Analysis - Total assets increased by **$200.0 million** (**16.3%**) to **$1.4 billion** at Dec 31, 2022, from **$1.2 billion** at Dec 31, 2021[252](index=252&type=chunk) - Net loans grew by **$244.1 million** (**25.2%**) to **$1.2 billion**, driven by **$700.1 million** in loan originations, primarily construction loans[257](index=257&type=chunk) - Total deposits increased by **$194.8 million** (**21.0%**) to **$1.1 billion**, led by growth in certificates of deposit, savings accounts, and non-interest bearing demand deposits[265](index=265&type=chunk) - Stockholders' equity increased by **$10.6 million** (**4.2%**) to **$262.0 million**, reflecting net income of **$24.8 million**, partially offset by **$9.3 million** in stock repurchases and **$6.5 million** in dividends[269](index=269&type=chunk) Loan Portfolio Composition (Dec 31, 2022 vs 2021) | Loan Type | 2022 Amount ($M) | 2022 Percent | 2021 Amount ($M) | 2021 Percent | | :--- | :--- | :--- | :--- | :--- | | Construction loans | $930.6 | 76.45% | $683.8 | 70.29% | | Commercial and industrial | $110.1 | 9.04% | $118.4 | 12.17% | | Multifamily | $123.4 | 10.14% | $84.4 | 8.68% | | Mixed-use | $21.9 | 1.80% | $28.7 | 2.95% | | Non-residential real estate | $25.3 | 2.08% | $50.0 | 5.14% | | Other | $6.0 | 0.49% | $7.5 | 0.77% | | **Total Loans** | **$1,217.3** | **100.00%** | **$972.9** | **100.00%** | Results of Operations Financial Highlights (Year Ended Dec 31) | Metric | 2022 | 2021 | | :--- | :--- | :--- | | **Net Income** | $24.8 million | $11.9 million | | **Net Interest Income** | $63.9 million | $43.3 million | | **Provision for Loan Losses** | $0.4 million | $3.6 million | | **Return on Average Assets** | 1.95% | 1.13% | | **Return on Average Equity** | 9.60% | 6.03% | - Net interest income increased by **$20.6 million** (**47.5%**) in 2022, driven by a **107 basis point** increase in the yield on interest-earning assets, which outpaced the **36 basis point** increase in the cost of interest-bearing liabilities[289](index=289&type=chunk)[291](index=291&type=chunk)[293](index=293&type=chunk) - The provision for loan losses decreased significantly to **$439,000** in 2022 from **$3.6 million** in 2021. The 2021 provision was primarily due to a single **$3.6 million** charge-off on a non-residential bridge loan[297](index=297&type=chunk)[298](index=298&type=chunk) - Non-interest income decreased to **$1.7 million** from **$2.4 million**, mainly due to a **$1.6 million** net unrealized loss on equity securities in 2022[304](index=304&type=chunk) - Non-interest expense increased by **$4.2 million** (**15.9%**) to **$30.7 million**, driven by higher operating expenses, salaries, real estate owned expenses, and a **$451,000** goodwill impairment charge[307](index=307&type=chunk) Risk Management - The company's most prominent risks are credit risk, interest rate risk, and market risk. Credit risk management focuses on conservatism, knowledge of local communities, and active monitoring[319](index=319&type=chunk)[320](index=320&type=chunk) Non-Performing Assets (as of Dec 31) | Metric | 2022 | 2021 | | :--- | :--- | :--- | | **Non-performing loans** | $0 | $0 | | **Real estate owned** | $1.5 million | $2.0 million | | **Total non-performing assets** | $1.5 million | $2.0 million | | **NPA / Total Assets** | 0.10% | 0.16% | - The allowance for loan losses increased slightly to **$5.5 million** at Dec 31, 2022, from **$5.2 million** at Dec 31, 2021. The allowance as a percentage of total loans decreased to **0.45%** from **0.54%**[344](index=344&type=chunk)[345](index=345&type=chunk) Interest Rate Sensitivity Analysis (as of Dec 31, 2022) | Change in Interest Rates | Change in Net Interest Income (12-month) | Change in Net Portfolio Value | | :--- | :--- | :--- | | +200 bps | +19.92% | +5.00% | | +100 bps | +9.98% | +3.00% | | -100 bps | -10.75% | -3.91% | [Quantitative and Qualitative Disclosures About Market Risk](index=100&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section incorporates by reference the information provided under "Item 7: Management's Discussion and Analysis of Results of Operations and Financial Condition" - Information required by this item is incorporated by reference from Item 7[380](index=380&type=chunk) [Financial Statements and Supplementary Data](index=102&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section contains the company's audited consolidated financial statements and supplementary data, which begin on page F-1 of the report - The required financial statements are included beginning on page F-1 of the report[381](index=381&type=chunk) [Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=103&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[383](index=383&type=chunk) [Controls and Procedures](index=103&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of December 31, 2022. Management also assessed internal control over financial reporting using the COSO framework and concluded it was effective. There were no material changes to internal controls during the fourth quarter of 2022 - Management concluded that disclosure controls and procedures were effective as of the end of the period[384](index=384&type=chunk) - Based on an assessment using the COSO framework, management believes the company's internal control over financial reporting was effective as of December 31, 2022[387](index=387&type=chunk) [Other Information](index=103&type=section&id=Item%209B.%20Other%20Information) The company reports no other information - None[389](index=389&type=chunk) [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=103&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) Not applicable. The company has no disclosures regarding foreign jurisdictions that prevent inspections - None[390](index=390&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=105&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) The information required for this item, including details on directors, executive officers, and corporate governance, is incorporated by reference from the company's definitive proxy statement for its 2023 annual meeting of stockholders - Information is incorporated by reference from the Proxy Statement[393](index=393&type=chunk) [Executive Compensation](index=105&type=section&id=Item%2011.%20Executive%20Compensation) The information required for this item regarding executive compensation is incorporated by reference from the company's definitive proxy statement for its 2023 annual meeting of stockholders - Information is incorporated by reference from the Proxy Statement[396](index=396&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=105&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) The information required for this item regarding security ownership is incorporated by reference from the company's definitive proxy statement for its 2023 annual meeting of stockholders - Information is incorporated by reference from the Proxy Statement[397](index=397&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=105&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) The information required for this item regarding related party transactions and director independence is incorporated by reference from the company's definitive proxy statement for its 2023 annual meeting of stockholders - Information is incorporated by reference from the Proxy Statement[398](index=398&type=chunk) [Principal Accountant Fees and Services](index=105&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) The information required for this item regarding principal accountant fees and services is incorporated by reference from the company's definitive proxy statement for its 2023 annual meeting of stockholders - Information is incorporated by reference from the Proxy Statement[399](index=399&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=107&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists the exhibits filed as part of the Form 10-K, including articles of incorporation, bylaws, employment agreements, benefit plans, and various certifications. It notes that financial statements are incorporated by reference from Item 8 and all financial statement schedules are omitted as they are not required or applicable - This item lists all exhibits filed with the Form 10-K, including corporate documents, material contracts, and certifications[402](index=402&type=chunk)[403](index=403&type=chunk) [Form 10-K Summary](index=109&type=section&id=Item%2016.%20Form%2010-K%20Summary) This item is not applicable - Not applicable[404](index=404&type=chunk) Financial Statements and Notes [Consolidated Statements of Financial Condition](index=112&type=section&id=Consolidated%20Statements%20of%20Financial%20Condition) Total assets grew to **$1.42 billion** in 2022, driven by increased net loans, with liabilities and equity also rising Consolidated Balance Sheet Highlights (as of Dec 31) | Account | 2022 ($M) | 2021 ($M) | | :--- | :--- | :--- | | **Total Assets** | **$1,425.0** | **$1,225.1** | | Cash and cash equivalents | $95.3 | $152.3 | | Net loans | $1,212.2 | $968.1 | | **Total Liabilities** | **$1,163.0** | **$973.7** | | Total deposits | $1,122.0 | $927.2 | | Federal Home Loan Bank advances | $21.0 | $28.0 | | **Total Stockholders' Equity** | **$262.0** | **$251.4** | [Consolidated Statements of Income](index=114&type=section&id=Consolidated%20Statements%20of%20Income) Net income significantly increased to **$24.8 million** in 2022, driven by higher net interest income and lower loan loss provisions Consolidated Income Statement Highlights (Year Ended Dec 31) | Account | 2022 ($M) | 2021 ($M) | | :--- | :--- | :--- | | Net Interest Income | $63.9 | $43.3 | | Provision for loan loss | $0.4 | $3.6 | | Non-Interest Income | $1.7 | $2.4 | | Non-Interest Expenses | $30.7 | $26.5 | | **Net Income** | **$24.8** | **$11.9** | | **EPS - Basic** | **$1.61** | **$0.75** | [Notes to Consolidated Financial Statements](index=119&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail accounting policies, allowance for loan losses, regulatory capital, CECL adoption, well-capitalized status, and off-balance-sheet commitments - **Allowance for Loan Losses:** The allowance is based on past experience, portfolio risks, collateral values, and economic conditions. The methodology uses a general reserve, and if an impairment is identified, the impaired portion is charged off immediately[450](index=450&type=chunk)[451](index=451&type=chunk)[456](index=456&type=chunk) - **Regulatory Capital:** As of December 31, 2022, the Bank was categorized as well-capitalized, with a Total capital to risk-weighted assets ratio of **13.66%** (minimum required is **8.00%**) and a Tier 1 leverage ratio of **16.50%** (minimum required is **4.00%**)[504](index=504&type=chunk)[507](index=507&type=chunk) - **Off-Balance Sheet Risk:** The company had significant off-balance-sheet commitments at December 31, 2022, including **$637.4 million** in undisbursed construction loans and **$133.8 million** in unfunded commercial and industrial lines of credit[510](index=510&type=chunk) - **Recent Accounting Pronouncements:** The company adopted the Current Expected Credit Losses (CECL) model effective January 1, 2023, which replaces the incurred loss model with an expected loss model[603](index=603&type=chunk)[604](index=604&type=chunk)

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-40589 NorthEast Community Bancorp, Inc. (Exact name of registrant as specified in its charter) Maryland 86-317 ...