Core Viewpoint - Ponce Financial (PDLB) shows a significantly improving earnings outlook, making it a solid investment choice as analysts continue to raise earnings estimates for the company [1][2]. Earnings Estimates - Analysts' optimism regarding Ponce Financial's earnings prospects is driving higher estimates, which is expected to positively impact the stock price [2]. - The consensus earnings estimate for the current quarter is $0.23 per share, reflecting a 130.0% increase from the previous year [5]. - For the full year, the earnings estimate stands at $0.96 per share, indicating a 108.7% increase from the year-ago figure [6]. - Over the past 30 days, the Zacks Consensus Estimate for Ponce Financial has risen by 21.05%, with one estimate moving higher and no negative revisions [5][6]. Zacks Rank - Ponce Financial has achieved a Zacks Rank 1 (Strong Buy) due to favorable estimate revisions, which historically correlate with stock performance [7]. - Stocks with Zacks Rank 1 and 2 significantly outperform the S&P 500, indicating strong potential for Ponce Financial [7]. Stock Performance - The stock has increased by 8.2% over the past four weeks, driven by strong estimate revisions and investor interest [8]. - There may still be further upside potential for the stock, suggesting it could be a good addition to investment portfolios [8].

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents the unaudited consolidated financial statements and management's discussion and analysis [Item 1. Consolidated Financial Statements](index=3&type=section&id=Item%201.%20Consolidated%20Financial%20Statements) This section presents the unaudited consolidated financial statements and detailed notes explaining accounting policies [Consolidated Statements of Financial Condition (Unaudited)](index=3&type=section&id=Consolidated%20Statements%20of%20Financial%20Condition%20(Unaudited)) Total assets increased to **$3.15 billion**, driven by growth in loans receivable and deposits, while borrowings decreased | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (in thousands) | % Change | | :-------------------------------- | :----------------------------- | :------------------------------- | :-------------------- | :------- | | Total assets | $3,153,869 | $3,039,938 | $113,931 | 3.75% | | Loans receivable, net | $2,458,712 | $2,286,599 | $172,113 | 7.53% | | Total liabilities | $2,632,781 | $2,534,438 | $98,343 | 3.88% | | Deposits | $2,042,209 | $1,884,864 | $157,345 | 8.35% | | Borrowings | $536,100 | $596,100 | $(60,000) | -10.07% | | Total stockholders' equity | $521,088 | $505,500 | $15,588 | 3.08% | [Consolidated Statements of Operations (Unaudited)](index=4&type=section&id=Consolidated%20Statements%20of%20Operations%20(Unaudited)) Net income and earnings per common share significantly improved for both periods, primarily due to increased net interest income | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net interest income | $24,426 | $17,904 | $46,629 | $36,727 | | Provision (benefit) for credit losses | $1,626 | $(867) | $1,341 | $(883) | | Non-interest income | $2,060 | $2,258 | $4,441 | $3,965 | | Non-interest expense | $16,869 | $16,640 | $33,757 | $33,426 | | Net income | $6,100 | $3,192 | $12,059 | $5,606 | | Net income available to common stockholders | $5,818 | $3,117 | $11,496 | $5,531 | | Basic EPS | $0.26 | $0.14 | $0.51 | $0.25 | | Diluted EPS | $0.25 | $0.14 | $0.50 | $0.25 | [Consolidated Statements of Comprehensive Income (Unaudited)](index=5&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20(Unaudited)) Total comprehensive income significantly increased, driven by higher net income and positive unrealized gains on securities | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net income | $6,100 | $3,192 | $12,059 | $5,606 | | Net change in unrealized gain (losses) on securities | $595 | $42 | $2,859 | $(1,154) | | Income (tax) benefit effect | $(127) | $(9) | $(609) | $246 | | Total other comprehensive income (loss), net of tax | $468 | $33 | $2,250 | $(908) | | Total comprehensive income | $6,568 | $3,225 | $14,309 | $4,698 | | Total comprehensive income available to common stockholders | $6,286 | $3,150 | $13,746 | $4,623 | [Consolidated Statements of Stockholders' Equity (Unaudited)](index=6&type=section&id=Consolidated%20Statements%20of%20Stockholders%27%20Equity%20(Unaudited)) Stockholders' equity increased to **$521.1 million**, primarily from net income and other comprehensive income, offset by dividends | Metric (in thousands) | Balance, December 31, 2024 | Net Income | Other Comprehensive Income, net of tax | Preferred Stock Dividend | ESOP shares committed to be released | Share-based compensation | Balance, June 30, 2025 | | :-------------------------------- | :------------------------- | :--------- | :------------------------------------- | :----------------------- | :----------------------------------- | :----------------------- | :--------------------- | | Total Stockholders' Equity | $505,500 | $12,059 | $2,250 | $(563) | $901 | $956 | $521,088 | [Consolidated Statements of Cash Flows (Unaudited)](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows%20(Unaudited)) Operating activities generated positive cash flow, investing used cash for loan growth, and financing provided cash from deposits | Cash Flow Activity (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by (used in) operating activities | $19,261 | $(1,092) | | Net cash used in investing activities | $(129,243) | $(129,384) | | Net cash provided by financing activities | $96,782 | $94,452 | | Net decrease in cash and cash equivalents | $(13,200) | $(36,024) | | Cash and cash equivalents at end of period | $126,639 | $103,166 | [Notes to Consolidated Financial Statements (Unaudited)](index=8&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements%20(Unaudited)) Detailed disclosures cover accounting policies, financial instruments, regulatory compliance, and specific financial details [Note 1. Nature of Business](index=8&type=section&id=Note%201.%20Nature%20of%20Business) Ponce Financial Group operates as one segment, with financial statements prepared under GAAP requiring significant management estimates - The Company operates as one operating segment and one reportable segment, with the CEO as the Chief Operating Decision Maker (CODM)[26](index=26&type=chunk) - Material estimates susceptible to significant change include allowance for credit losses, valuation of real estate, loans held for sale, deferred tax assets, investment securities, and share-based awards[25](index=25&type=chunk) [Note 2. Preferred Stock](index=8&type=section&id=Note%202.%20Preferred%20Stock) The Company issued **$225 million** in ECIP Preferred Stock with variable dividends and a repurchase option tied to lending - The Company issued **$225 million** in Preferred Stock to the Treasury under the ECIP to support lending in low-income and underserved communities[28](index=28&type=chunk) - Dividend rates on Preferred Stock vary (**2.0%**, **1.25%**, or **0.5%**) based on qualified and deep impact lending levels, with the Company currently paying at **0.5%**[28](index=28&type=chunk)[35](index=35&type=chunk) - A repurchase option for the Preferred Stock exists, potentially at a substantial discount, if specific 'Threshold Conditions' related to lending are met, with the earliest possible date being June 30, 2026[33](index=33&type=chunk)[34](index=34&type=chunk)[35](index=35&type=chunk) [Note 3. Securities](index=11&type=section&id=Note%203.%20Securities) The securities portfolio decreased, with unrealized losses primarily due to interest rate changes, not credit quality | Security Type | June 30, 2025 (Fair Value, in thousands) | December 31, 2024 (Fair Value, in thousands) | Change (in thousands) | % Change | | :-------------------------------- | :--------------------------------------- | :----------------------------------------- | :-------------------- | :------- | | Available-for-sale securities | $96,562 | $104,970 | $(8,408) | -8.01% | | Held-to-maturity securities | $329,279 | $355,294 | $(26,015) | -7.32% | | Total securities | $425,841 | $460,264 | $(34,423) | -7.48% | | Metric (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Total available-for-sale securities (Gross Unrealized Losses) | $(16,581) | $(19,448) | | Total held-to-maturity securities (Gross Unrealized Losses) | $(7,984) | $(12,964) | | Allowance for credit losses on securities | $199 | $216 | - Gross unrealized losses on securities are primarily due to changes in interest rates, not credit quality, particularly for U.S. government-sponsored entities and agencies[46](index=46&type=chunk) [Note 4. Mortgage Loans Held-for-Sale](index=17&type=section&id=Note%204.%20Mortgage%20Loans%20Held-for-Sale) Mortgage loans held-for-sale decreased significantly to **$5.7 million**, with a notable portion remaining past due | Metric (in thousands) | June 30, 2025 | December 31, 2024 | Change (in thousands) | % Change | | :-------------------------------- | :------------ | :---------------- | :-------------------- | :------- | | Mortgage loans held-for-sale, at fair value | $5,703 | $10,736 | $(5,033) | -46.88% | | Mortgage loans held-for-sale, contractual principal outstanding | $5,675 | $10,674 | $(4,999) | -46.83% | | Loans held-for-sale greater than 90 days past due and non-accrual | $4,400 | $4,400 | $0 | 0.00% | [Note 5. Loans Receivable, Net and Allowance for Credit Losses](index=18&type=section&id=Note%205.%20Loans%20Receivable%2C%20Net%20and%20Allowance%20for%20Credit%20Losses) Net loans receivable increased by **7.5%**, driven by construction loans, while non-performing assets decreased | Loan Type (in thousands) | June 30, 2025 | December 31, 2024 | Change (in thousands) | % Change | | :-------------------------------- | :------------ | :---------------- | :-------------------- | :------- | | Total loans, gross | $2,482,206 | $2,308,020 | $174,186 | 7.55% | | Allowance for Credit Losses | $(24,100) | $(22,502) | $(1,598) | 7.10% | | Loans receivable, net | $2,458,712 | $2,286,599 | $172,113 | 7.53% | | Construction and land loans | $883,462 | $733,660 | $149,802 | 20.42% | | Multifamily residential loans | $693,670 | $670,159 | $23,511 | 3.51% | | Business loans | $47,372 | $40,849 | $6,523 | 15.97% | | Metric (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Allowance for credit losses on loans at beginning of period | $22,502 | $26,154 | | (Benefit) provision charged to expense | $2,079 | $(375) | | Charge-offs | $(485) | $(2,101) | | Recoveries | $4 | $383 | | Allowance for credit losses on loans at end of period | $24,100 | $24,061 | - Total non-performing assets and accruing modifications to borrowers experiencing financial difficulty decreased by **$3.6 million** to **$28.5 million** at June 30, 2025, from **$32.1 million** at December 31, 2024[212](index=212&type=chunk) - The allowance for off-balance sheet credit losses decreased to **$2.1 million** at June 30, 2025, from **$2.8 million** at December 31, 2024, with a **$0.7 million** benefit for credit losses during the six months ended June 30, 2025[74](index=74&type=chunk)[75](index=75&type=chunk) [Note 6. Leases](index=28&type=section&id=Note%206.%20Leases) The Company holds 23 operating leases with stable ROU assets and liabilities, incurring **$2.28 million** in lease costs | Metric (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Operating lease ROU assets | $28,806 | $29,093 | | Operating lease liabilities | $30,501 | $30,696 | | Weighted-average remaining lease term-operating leases | 11.8 years | 12.0 years | | Weighted average discount rate-operating leases | 5.1% | 5.1% | | Total lease cost (Six Months Ended June 30) | $2,280 | $2,155 | [Note 7. Deposits](index=29&type=section&id=Note%207.%20Deposits) Total deposits increased by **8.3%** to **$2.04 billion**, driven by money market and demand accounts, offsetting CD decreases | Deposit Type (in thousands) | June 30, 2025 | December 31, 2024 | Change (in thousands) | % Change | | :-------------------------------- | :------------ | :---------------- | :-------------------- | :------- | | Demand | $197,671 | $169,178 | $28,493 | 16.84% | | Money market accounts | $790,939 | $636,219 | $154,720 | 24.32% | | Total interest-bearing deposits | $1,844,538 | $1,715,686 | $128,852 | 7.51% | | Total certificates of deposit | $750,521 | $780,304 | $(29,783) | -3.82% | | Total deposits | $2,042,209 | $1,884,864 | $157,345 | 8.35% | - Scheduled maturities for certificates of deposit in the remainder of 2025 total **$494.2 million**[81](index=81&type=chunk) [Note 8. Borrowings](index=30&type=section&id=Note%208.%20Borrowings) Total borrowings decreased by **$60 million** to **$536.1 million** due to FHLBNY repayments, reducing interest expense | Metric (in thousands) | June 30, 2025 | December 31, 2024 | Change (in thousands) | % Change | | :-------------------------------- | :------------ | :---------------- | :-------------------- | :------- | | Total borrowings | $536,100 | $596,100 | $(60,000) | -10.07% | | FHLBNY Term advances | $521,100 | $571,100 | $(50,000) | -8.75% | | FHLBNY Overnight line of credit advance | $15,000 | $25,000 | $(10,000) | -40.00% | | Weighted Average Rate | 3.86% | 3.94% | -0.08% | -2.03% | | Interest expense on advances (3 months) | $4,994 | $7,141 | $(2,147) | -30.06% | | Interest expense on advances (6 months) | $10,480 | $15,064 | $(4,584) | -30.43% | [Note 9. Earnings Per Common Share](index=32&type=section&id=Note%209.%20Earnings%20Per%20Common%20Share) Earnings per common share significantly increased for both basic and diluted measures, reflecting improved net income | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net income available to common stockholders (in thousands) | $5,818 | $3,117 | $11,496 | $5,531 | | Basic earnings per common share | $0.26 | $0.14 | $0.51 | $0.25 | | Diluted earnings per common share | $0.25 | $0.14 | $0.50 | $0.25 | [Note 10. Commitments, Contingencies and Credit Risk](index=32&type=section&id=Note%2010.%20Commitments%2C%20Contingencies%20and%20Credit%20Risk) Total off-balance sheet commitments decreased to **$359.8 million**, mainly due to reduced mortgage loan commitments | Commitment Type (in thousands) | June 30, 2025 | December 31, 2024 | Change (in thousands) | % Change | | :-------------------------------- | :------------ | :---------------- | :-------------------- | :------- | | Commitments to grant mortgage loans | $231,946 | $359,170 | $(127,224) | -35.42% | | Unfunded commitments under lines of credit | $127,824 | $52,329 | $75,495 | 144.27% | | Total commitments | $359,770 | $411,499 | $(51,729) | -12.57% | - The Company has unfunded commitments of **$1.7 million** with Oaktree SBIC Fund, L.P. and **$1.4 million** with EJF Silvergate Ventures Fund LP as of June 30, 2025[92](index=92&type=chunk) - The Company is involved in routine legal proceedings, but management believes their resolution will not materially affect financial condition or results of operations[95](index=95&type=chunk) [Note 11. Fair Value](index=33&type=section&id=Note%2011.%20Fair%20Value) Financial instruments are measured using a three-level fair value hierarchy, with most recurring measurements in Level 2 | Asset Type (in thousands) | Total Fair Value (June 30, 2025) | Level 1 | Level 2 | Level 3 | | :-------------------------------- | :------------------------------- | :------ | :------ | :------ | | Available-for-Sale Securities | $96,562 | $3,172 | $93,390 | $— | | Mortgage Loans Held for Sale | $5,703 | $— | $5,703 | $— | | Impaired loans (nonrecurring) | $19,474 | $— | $— | $19,474 | - Fair values for cash, FHLBNY stock, and certain liabilities approximate their carrying amounts due to short-term nature or redeemability at cost[98](index=98&type=chunk)[100](index=100&type=chunk) [Note 12. Regulatory Capital Requirements](index=39&type=section&id=Note%2012.%20Regulatory%20Capital%20Requirements) Both Ponce Financial Group and Ponce Bank met all regulatory capital requirements, maintaining a 'well capitalized' status | Capital Ratio | Ponce Financial Group, Inc. (June 30, 2025) | Regulatory Minimum | Well Capitalized Minimum | | :-------------------------------- | :------------------------------------------ | :----------------- | :----------------------- | | Total Capital to Risk-Weighted Assets | 22.65% | 8.00% | 10.00% | | Tier 1 Capital to Risk-Weighted Assets | 21.59% | 6.00% | 8.00% | | Common Equity Tier 1 Capital Ratio | 12.49% | 4.50% | 6.50% | | Tier 1 Capital to Total Assets | 17.13% | 4.00% | 5.00% | | Capital Ratio | Ponce Bank (June 30, 2025) | Regulatory Minimum | Well Capitalized Minimum | | :-------------------------------- | :------------------------- | :----------------- | :----------------------- | | Total Capital to Risk-Weighted Assets | 21.22% | 8.00% | 10.00% | | Tier 1 Capital to Risk-Weighted Assets | 20.15% | 6.00% | 8.00% | | Common Equity Tier 1 Capital Ratio | 20.15% | 4.50% | 6.50% | | Tier 1 Capital to Total Assets | 15.99% | 4.00% | 5.00% | - The Bank was categorized as 'well capitalized' by the OCC, and no conditions have changed this status[120](index=120&type=chunk) [Note 13. Accumulated Other Comprehensive Loss](index=42&type=section&id=Note%2013.%20Accumulated%20Other%20Comprehensive%20Loss) Accumulated other comprehensive loss improved to **$(13.0) million**, driven by positive changes in AFS unrealized losses | Metric (in thousands) | December 31, 2024 | Change | June 30, 2025 | | :-------------------------------- | :---------------- | :----- | :------------ | | Unrealized losses on available-for-sale securities, net | $(15,297) | $2,250 | $(13,047) | | Total | $(15,297) | $2,250 | $(13,047) | [Note 14. Transactions with Related Parties](index=42&type=section&id=Note%2014.%20Transactions%20with%20Related%20Parties) Aggregate loan balances with related parties increased to **$8.3 million**, while deposits from related parties decreased slightly | Metric (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Beginning loan balance | $7,671 | $8,810 | | Originations | $725 | $1,592 | | Payments | $(140) | $(1,099) | | Ending loan balance | $8,256 | $9,303 | | Deposits from related parties (June 30, 2025) | $7,900 | N/A | | Deposits from related parties (December 31, 2024) | $8,800 | N/A | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=43&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's discussion covers financial performance, condition, key trends, strategies, risk management, and regulatory compliance [General](index=43&type=section&id=General) This section provides insight into Ponce Financial Group's financial condition and results of operations [Cautionary Note Regarding Forward-Looking Statements](index=43&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) Forward-looking statements are subject to significant business, economic, and competitive uncertainties, potentially altering actual results - Forward-looking statements are subject to significant uncertainties, including rising interest rates, changes in U.S. trade policies, consumer habits, general economic conditions, and the Company's ability to manage various risks[126](index=126&type=chunk)[127](index=127&type=chunk) [Federal Economic Relief Funds To Aid Lending](index=45&type=section&id=Federal%20Economic%20Relief%20Funds%20To%20Aid%20Lending) The Company participates in ECIP with **$225 million** Preferred Stock and received a **$1.3 million** CDFI award - The Company issued **$225 million** in Preferred Stock under the ECIP, with dividend rates (currently **0.5%**) dependent on qualified and deep impact lending levels[130](index=130&type=chunk)[132](index=132&type=chunk)[138](index=138&type=chunk) - A repurchase option for the Preferred Stock, potentially at a discount, is contingent on meeting specific 'Threshold Conditions' related to lending, with the earliest exercise date being June 30, 2026[133](index=133&type=chunk)[137](index=137&type=chunk)[138](index=138&type=chunk) - Ponce Bank received a **$1.3 million** CDFI Financial Assistance Award and its Westchester Avenue Branch was approved as a Banking Development District, receiving **$35.0 million** in program deposits[142](index=142&type=chunk)[143](index=143&type=chunk) [Westchester Avenue Branch Re-Design](index=47&type=section&id=Westchester%20Avenue%20Branch%20Re-Design) Ponce Bank transformed its Westchester Avenue Branch into a 'community hub' with advanced technology and community-centric design - Ponce Bank transformed its Westchester Avenue Branch into a 'community hub' with state-of-the-art banking technologies and community-centric design[144](index=144&type=chunk)[145](index=145&type=chunk) [Coral Gables, Florida Office](index=49&type=section&id=Coral%20Gables%2C%20Florida%20Office) Ponce Bank opened its first Florida office in Coral Gables to serve existing customers and the Hispanic community - Ponce Bank opened its first Florida representative office in Coral Gables on June 1, 2024, targeting existing customers and the large Hispanic community[147](index=147&type=chunk) [Ponce Bank Plan of Conversion](index=49&type=section&id=Ponce%20Bank%20Plan%20of%20Conversion) Ponce Bank is converting to a national bank to expand banking powers, including eligibility for municipal deposits - Ponce Bank is converting to a national bank to expand banking powers, including eligibility for municipal deposits in New York[148](index=148&type=chunk)[149](index=149&type=chunk) [Critical Accounting Policies](index=49&type=section&id=Critical%20Accounting%20Policies) The allowance for credit losses is the most critical accounting policy, involving significant judgment and assumptions - The allowance for credit losses is identified as the most critical accounting policy, requiring significant management judgment and assumptions[150](index=150&type=chunk) - A **10 basis point** increase or decrease in the loss rate factor would result in an approximate **$2.5 million** change in the credit loss reserve[151](index=151&type=chunk) [Company's Growth](index=49&type=section&id=Company%27s%20Growth) The Company has significantly grown assets, loans, and deposits since 2018, leveraging technology and MDI/CDFI status | Metric | December 31, 2018 (in billions) | June 30, 2025 (in billions) | Growth (in billions) | % Growth | | :-------------------------------- | :------------------------------ | :-------------------------- | :------------------- | :------- | | Total assets | $1.06 | $3.15 | $2.09 | 197.17% | | Loans, net of ACL | $0.9185 | $2.46 | $1.5415 | 167.83% | | Deposits | $0.8098 | $2.04 | $1.2302 | 151.92% | - The Company uses a mobile application for digitized small business lending, enabling automated underwriting and loan origination without a physical presence[153](index=153&type=chunk) - The Company's partnership with Raisin Solutions US LLC has resulted in **$650.4 million** in core deposits as of June 30, 2025[154](index=154&type=chunk) [Comparison of Financial Condition at June 30, 2025 and December 31, 2024](index=51&type=section&id=Comparison%20of%20Financial%20Condition%20at%20June%2030%2C%202025%20and%20December%2031%2C%202024) Total assets increased by **3.7%** to **$3.15 billion**, driven by loans and deposits, while equity also grew [Total Assets](index=51&type=section&id=Total%20Assets) Total consolidated assets increased by **$113.9 million** (**3.7%**) to **$3.15 billion**, primarily from net loans receivable | Metric | June 30, 2025 (in billions) | December 31, 2024 (in billions) | Change (in millions) | % Change | | :-------------------------------- | :-------------------------- | :---------------------------- | :------------------- | :------- | | Total consolidated assets | $3.15 | $3.04 | $113.9 | 3.7% | | Net loans receivable increase | N/A | N/A | $172.1 | N/A | | Held-to-maturity securities decrease | N/A | N/A | $(31.1) | N/A | | Cash and cash equivalents decrease | N/A | N/A | $(13.2) | N/A | [Cash and Cash Equivalents](index=51&type=section&id=Cash%20and%20Cash%20Equivalents) Cash and cash equivalents decreased by **$13.2 million** to **$126.6 million**, due to loan growth and borrowing repayments | Metric (in millions) | June 30, 2025 | December 31, 2024 | Change | % Change | | :-------------------------------- | :------------ | :---------------- | :----- | :------- | | Cash and cash equivalents | $126.6 | $139.8 | $(13.2) | -9.4% | | Increase in net loans | N/A | N/A | $179.5 | N/A | | Net repayment of borrowings | N/A | N/A | $60.0 | N/A | | Increase in net deposits | N/A | N/A | $157.3 | N/A | [Securities](index=51&type=section&id=Securities) The securities portfolio decreased by **$39.5 million**, primarily due to calls of AFS and maturities of HTM securities | Metric (in millions) | June 30, 2025 | December 31, 2024 | Change | % Change | | :-------------------------------- | :------------ | :---------------- | :----- | :------- | | Available-for-sale securities | N/A | N/A | $(8.4) | N/A | | Held-to-maturity securities | N/A | N/A | $(31.1) | N/A | | Total decrease in securities portfolio | N/A | N/A | $(39.5) | N/A | - The decrease was primarily due to the call of two available-for-sale securities (**$6.0 million**) and the maturity of one held-to-maturity security (**$10.0 million**)[159](index=159&type=chunk) [Gross Loans Receivable](index=51&type=section&id=Gross%20Loans%20Receivable) Gross loans receivable increased by **7.5%** to **$2.48 billion**, driven by construction and multifamily residential loans | Loan Type (in thousands) | June 30, 2025 | December 31, 2024 | Change (in thousands) | % Change | | :-------------------------------- | :------------ | :---------------- | :-------------------- | :------- | | Total gross loans receivable | $2,482,206 | $2,308,020 | $174,186 | 7.5% | | Construction and land | $883,462 | $733,660 | $149,802 | 20.4% | | Multifamily residential | $693,670 | $670,159 | $23,511 | 3.5% | | Business loans | $47,372 | $40,849 | $6,523 | 16.0% | - The Bank's construction and land mortgage loans were **169.4%** of total risk-based capital (vs. **100%** regulatory guideline, **200%** internal policy)[166](index=166&type=chunk) - Investor-owned commercial real estate mortgage loans were **366.0%** of total risk-based capital (vs. **300%** regulatory guideline, **450%** internal policy)[166](index=166&type=chunk) [Loans Held For Sale](index=53&type=section&id=Loans%20Held%20For%20Sale) Loans held for sale decreased by **$5.0 million** (**46.9%**) to **$5.7 million** at June 30, 2025 | Metric (in millions) | June 30, 2025 | December 31, 2024 | Change | % Change | | :-------------------------------- | :------------ | :---------------- | :----- | :------- | | Loans held for sale, at fair value | $5.7 | $10.7 | $(5.0) | -46.9% | [Deposits](index=53&type=section&id=Deposits) Total deposits increased by **$157.3 million** to **$2.04 billion**, driven by money market and demand accounts | Deposit Type (in thousands) | June 30, 2025 | December 31, 2024 | Change (in thousands) | % Change | | :-------------------------------- | :------------ | :---------------- | :-------------------- | :------- | | Total deposits | $2,042,209 | $1,884,864 | $157,345 | 8.3% | | Demand | $197,671 | $169,178 | $28,493 | 16.8% | | Money market accounts | $790,939 | $636,219 | $154,720 | 24.3% | | Brokered certificates of deposit | $69,531 | $94,531 | $(25,000) | -26.4% | - The Company's reliance on wholesale funding and noncore funding remained within policy limitations[168](index=168&type=chunk) [Borrowings](index=53&type=section&id=Borrowings) Outstanding borrowings decreased by **$60 million** to **$536.1 million**, primarily due to FHLBNY advance reductions | Borrowing Type (in millions) | June 30, 2025 | December 31, 2024 | Change | % Change | | :-------------------------------- | :------------ | :---------------- | :----- | :------- | | FHLBNY term advances | $521.1 | $571.1 | $(50.0) | -8.8% | | FHLBNY overnight line of credit advance | $15.0 | $25.0 | $(10.0) | -40.0% | | Total outstanding borrowings | $536.1 | $596.1 | $(60.0) | -10.1% | [Stockholders' Equity](index=55&type=section&id=Stockholders%27%20Equity) Stockholders' equity increased by **$15.6 million** (**3.1%**) to **$521.1 million**, driven by net income and OCI | Metric (in millions) | June 30, 2025 | December 31, 2024 | Change | % Change | | :-------------------------------- | :------------ | :---------------- | :----- | :------- | | Total stockholders' equity | $521.1 | $505.5 | $15.6 | 3.1% | | Net income contribution | N/A | N/A | $12.1 | N/A | | Other comprehensive income contribution | N/A | N/A | $2.3 | N/A | | Dividends on preferred shares | N/A | N/A | $(0.6) | N/A | [Comparison of Results of Operations for the Three Months Ended June 30, 2025 and 2024](index=56&type=section&id=Comparison%20of%20Results%20of%20Operations%20for%20the%20Three%20Months%20Ended%20June%2030%2C%202025%20and%202024) Net income available to common stockholders increased by **86.7%** to **$5.8 million**, driven by net interest income [Overview](index=56&type=section&id=Overview) Net income available to common stockholders increased by **$2.7 million** to **$5.8 million**, driven by net interest income | Metric (in millions) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change | % Change | | :-------------------------------- | :--------------------------- | :--------------------------- | :----- | :------- | | Net income available to common stockholders | $5.8 | $3.1 | $2.7 | 86.7% | | Basic EPS | $0.26 | $0.14 | $0.12 | 85.7% | | Diluted EPS | $0.25 | $0.14 | $0.11 | 78.6% | | Net interest income increase | N/A | N/A | $6.5 | N/A | [Interest and Dividend Income](index=56&type=section&id=Interest%20and%20Dividend%20Income) Total interest and dividend income increased by **$7.1 million** (**18.2%**) to **$45.9 million**, driven by loan income | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change (in thousands) | % Change | | :-------------------------------- | :--------------------------- | :--------------------------- | :-------------------- | :------- | | Total interest and dividend income | $45,860 | $38,792 | $7,068 | 18.2% | | Interest on loans receivable | $40,291 | $31,281 | $9,010 | 28.8% | | Interest on securities | $4,246 | $5,486 | $(1,240) | -22.6% | | Interest on deposits due from banks | $807 | $1,542 | $(735) | -47.7% | [Interest Expense](index=57&type=section&id=Interest%20Expense) Total interest expense increased by **$0.5 million** (**2.6%**) to **$21.4 million**, mainly from higher deposit interest | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change (in thousands) | % Change | | :-------------------------------- | :--------------------------- | :--------------------------- | :-------------------- | :------- | | Total interest expense | $21,434 | $20,888 | $546 | 2.6% | | Interest on certificates of deposit | $7,382 | $6,358 | $1,024 | 16.1% | | Interest on money market | $8,930 | $7,209 | $1,721 | 23.9% | | Interest on borrowings | $4,994 | $7,141 | $(2,147) | -30.1% | [Net Interest Income](index=57&type=section&id=Net%20Interest%20Income) Net interest income increased by **$6.5 million** to **$24.4 million**, driven by loan income and improved margin | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change | % Change | | :-------------------------------- | :--------------------------- | :--------------------------- | :----- | :------- | | Net interest income (in thousands) | $24,426 | $17,904 | $6,522 | 36.4% | | Net interest rate spread | 2.47% | 1.72% | 0.75% | 43.6% | | Net interest margin | 3.27% | 2.62% | 0.65% | 24.8% | [Non-Interest Income](index=59&type=section&id=Non-Interest%20Income) Non-interest income decreased by **$0.2 million** to **$2.1 million**, mainly from lower other non-interest income | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change (in thousands) | % Change | | :-------------------------------- | :--------------------------- | :--------------------------- | :-------------------- | :------- | | Total non-interest income | $2,060 | $2,258 | $(198) | -8.8% | | Grant income | $428 | $— | $428 | N/A | | Other non-interest income | $422 | $1,057 | $(635) | -60.1% | | Income on sale of mortgage loans | $169 | $274 | $(105) | -38.3% | [Non-Interest Expense](index=59&type=section&id=Non-Interest%20Expense) Non-interest expense increased by **$0.2 million** to **$16.9 million**, driven by occupancy, data processing, and marketing | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change (in thousands) | % Change | | :-------------------------------- | :--------------------------- | :--------------------------- | :-------------------- | :------- | | Total non-interest expense | $16,869 | $16,640 | $229 | 1.4% | | Occupancy and equipment | $3,907 | $3,564 | $343 | 9.6% | | Data processing expenses | $1,188 | $1,013 | $175 | 17.3% | | Direct loan expenses | $241 | $633 | $(392) | -61.9% | | Marketing and promotional expenses | $266 | $145 | $121 | 83.4% | [Income Tax Provision](index=59&type=section&id=Income%20Tax%20Provision) The provision for income taxes increased by **$0.7 million** (**58.0%**) to **$1.9 million** for the three months | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change (in thousands) | % Change | | :-------------------------------- | :--------------------------- | :--------------------------- | :-------------------- | :------- | | Provision for income taxes | $1,891 | $1,197 | $694 | 58.0% | [Average Balance Sheets (Three Months)](index=60&type=section&id=Average%20Balance%20Sheets%20(Three%20Months)) Average interest-earning assets increased to **$3.00 billion**, with improved yield and lower liability rates | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change | | :-------------------------------- | :--------------------------- | :--------------------------- | :----- | | Average interest-earning assets (in thousands) | $2,999,823 | $2,744,077 | $255,746 | | Average Yield on Interest-earning assets | 6.13% | 5.69% | 0.44% | | Average Rate on Interest-bearing liabilities | 3.66% | 3.97% | -0.31% | | Net interest rate spread | 2.47% | 1.72% | 0.75% | | Net interest margin | 3.27% | 2.62% | 0.65% | [Rate/Volume Analysis (Three Months)](index=62&type=section&id=Rate%2FVolume%20Analysis%20(Three%20Months)) Net interest income increase was primarily driven by interest rate changes, and to a lesser extent, volume changes | Change in Net Interest Income (in thousands) | Due to Volume | Due to Rate | Total Increase (Decrease) | | :------------------------------------------- | :------------ | :---------- | :------------------------ | | Total interest-earning assets | $4,709 | $2,359 | $7,068 | | Total interest-bearing liabilities | $2,941 | $(2,395) | $546 | | Change in net interest income | $1,768 | $4,754 | $6,522 | [Comparison of Results of Operations for the Six Months Ended June 30, 2025 and 2024](index=62&type=section&id=Comparison%20of%20Results%20of%20Operations%20for%20the%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) Net income available to common stockholders more than doubled to **$11.5 million**, driven by net interest income [Overview](index=62&type=section&id=Overview) Net income available to common stockholders increased by **$6.0 million** to **$11.5 million**, driven by net interest income | Metric (in millions) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change | % Change | | :-------------------------------- | :--------------------------- | :--------------------------- | :----- | :------- | | Net income available to common stockholders | $11.5 | $5.5 | $6.0 | 107.8% | | Basic EPS | $0.51 | $0.25 | $0.26 | 104.0% | | Diluted EPS | $0.50 | $0.25 | $0.25 | 100.0% | | Net interest income increase | N/A | N/A | $9.9 | N/A | [Interest and Dividend Income](index=63&type=section&id=Interest%20and%20Dividend%20Income) Total interest and dividend income increased by **$11.4 million** (**14.5%**) to **$89.9 million**, driven by loan income | Metric (in thousands) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change (in thousands) | % Change | | :-------------------------------- | :--------------------------- | :--------------------------- | :-------------------- | :------- | | Total interest and dividend income | $89,857 | $78,458 | $11,399 | 14.5% | | Interest on loans receivable | $77,427 | $61,945 | $15,482 | 25.0% | | Interest on securities | $8,767 | $11,105 | $(2,338) | -21.1% | | Interest on deposits due from banks | $2,475 | $4,453 | $(1,978) | -44.4% | [Interest Expense](index=65&type=section&id=Interest%20Expense) Total interest expense increased by **$1.5 million** (**3.6%**) to **$43.2 million**, mainly from higher deposit interest | Metric (in thousands) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change (in thousands) | % Change | | :-------------------------------- | :--------------------------- | :--------------------------- | :-------------------- | :------- | | Total interest expense | $43,228 | $41,731 | $1,497 | 3.6% | | Interest on certificates of deposit | $15,136 | $12,738 | $2,398 | 18.8% | | Interest on money market | $17,341 | $13,501 | $3,840 | 28.4% | | Interest on borrowings | $10,480 | $15,064 | $(4,584) | -30.4% | [Net Interest Income](index=65&type=section&id=Net%20Interest%20Income) Net interest income increased by **$9.9 million** to **$46.6 million**, driven by loan income and improved margin | Metric | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change | % Change | | :-------------------------------- | :--------------------------- | :--------------------------- | :----- | :------- | | Net interest income (in thousands) | $46,629 | $36,727 | $9,902 | 27.0% | | Net interest rate spread | 2.33% | 1.77% | 0.56% | 31.6% | | Net interest margin | 3.12% | 2.67% | 0.45% | 16.9% | - The Federal Reserve reduced the federal funds rate target range by **50 basis points** in September 2024, followed by two **25 basis point** cuts in November and December 2024, signaling a shift to bolster the economy[206](index=206&type=chunk) [Non-Interest Income](index=65&type=section&id=Non-Interest%20Income) Non-interest income increased by **$0.5 million** to **$4.4 million**, driven by SBA loan sales and grant income | Metric (in thousands) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change (in thousands) | % Change | | :-------------------------------- | :--------------------------- | :--------------------------- | :-------------------- | :------- | | Total non-interest income | $4,441 | $3,965 | $476 | 12.0% | | Income on sale of SBA loans | $404 | $— | $404 | N/A | | Grant income | $428 | $— | $428 | N/A | | Late and prepayment charges | $1,227 | $785 | $442 | 56.3% | | Other non-interest income | $1,025 | $1,622 | $(597) | -36.8% | | Income on sale of mortgage loans | $317 | $576 | $(259) | -45.0% | [Non-Interest Expense](index=67&type=section&id=Non-Interest%20Expense) Non-interest expense increased by **$0.3 million** to **$33.8 million**, driven by occupancy, operating, and data processing | Metric (in thousands) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change (in thousands) | % Change | | :-------------------------------- | :--------------------------- | :--------------------------- | :-------------------- | :------- | | Total non-interest expense | $33,757 | $33,426 | $331 | 1.0% | | Occupancy and equipment | $7,820 | $7,231 | $589 | 8.1% | | Other operating expenses | $2,518 | $2,088 | $430 | 20.6% | | Direct loan expenses | $629 | $1,365 | $(736) | -53.9% | | Professional fees | $2,731 | $3,092 | $(361) | -11.7% | [Income Tax Provision](index=67&type=section&id=Income%20Tax%20Provision) The provision for income taxes increased by **$1.4 million** (**53.9%**) to **$3.9 million** for the six months | Metric (in thousands) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change (in thousands) | % Change | | :-------------------------------- | :--------------------------- | :--------------------------- | :-------------------- | :------- | | Provision for income taxes | $3,913 | $2,543 | $1,370 | 53.9% | [Credit Quality](index=67&type=section&id=Credit%20Quality) Non-performing assets decreased by **$3.6 million** to **$28.5 million**, with a **$1.3 million** credit loss provision | Metric (in millions) | June 30, 2025 | December 31, 2024 | Change | | :-------------------------------- | :------------ | :---------------- | :----- | | Total non-performing assets and accruing modifications | $28.5 | $32.1 | $(3.6) | | Credit loss provision on loans (6 months) | $1.3 | $(0.7) | $2.0 | | Funded portion provision (6 months) | $2.1 | $(0.4) | $2.5 | | Unfunded portion benefit (6 months) | $(0.7) | $(0.3) | $(0.4) | [Average Balance Sheets (Six Months)](index=68&type=section&id=Average%20Balance%20Sheets%20(Six%20Months)) Average interest-earning assets increased to **$3.01 billion**, with improved yield and lower liability rates | Metric | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change | | :-------------------------------- | :--------------------------- | :--------------------------- | :----- | | Average interest-earning assets (in thousands) | $3,011,353 | $2,769,002 | $242,351 | | Average Yield on Interest-earning assets | 6.02% | 5.70% | 0.32% | | Average Rate on Interest-bearing liabilities | 3.69% | 3.93% | -0.24% | | Net interest rate spread | 2.33% | 1.77% | 0.56% | | Net interest margin | 3.12% | 2.67% | 0.45% | [Rate/Volume Analysis (Six Months)](index=70&type=section&id=Rate%2FVolume%20Analysis%20(Six%20Months)) Net interest income increase was primarily driven by interest rate changes, and to a lesser extent, volume changes | Change in Net Interest Income (in thousands) | Due to Volume | Due to Rate | Total Increase (Decrease) | | :------------------------------------------- | :------------ | :---------- | :------------------------ | | Total interest-earning assets | $8,590 | $2,809 | $11,399 | | Total interest-bearing liabilities | $5,587 | $(4,090) | $1,497 | | Change in net interest income | $3,003 | $6,899 | $9,902 | [Management of Market Risk](index=70&type=section&id=Management%20of%20Market%20Risk) The Company manages interest rate risk through ALCO, using NII simulation and EVE models, indicating policy compliance - The ALCO is responsible for evaluating and managing interest rate risk, using a third-party modeling solution quarterly[222](index=222&type=chunk) | Rate Shift | Year 1 Forecast (in thousands) | Year 1 Change from Level | | :-------------------------------- | :----------------------------- | :----------------------- | | +400 bps | $96,600 | (7.66%) | | +100 bps | $103,260 | (1.30%) | | Level | $104,618 | — % | | -100 bps | $105,536 | 0.88% | | -400 bps | $105,020 | 0.38% | | Change in Interest Rates (basis points) | Estimated EVE (in thousands) | Estimated Increase (Decrease) in EVE Amount (in thousands) | Percent Change | | :-------------------------------------- | :--------------------------- | :------------------------------------------------------- | :------------- | | +400 | $432,100 | $(108,819) | (20.12%) | | +100 | $518,452 | $(22,467) | (4.15%) | | Level | $540,919 | — | — % | | -100 | $560,066 | $19,147 | 3.54% | | -400 | $610,908 | $69,989 | 12.94% | - Both Net Interest Income Simulation and Economic Value of Equity (EVE) models indicated compliance with Board-approved Interest Rate Risk Policy at June 30, 2025[227](index=227&type=chunk)[232](index=232&type=chunk) [Liquidity and Capital Resources](index=77&type=section&id=Liquidity%20and%20Capital%20Resources) The Company maintains strong liquidity and capital, is 'well capitalized,' and generated positive operating cash flow - The Company and Bank met all regulatory capital requirements and were categorized as 'well capitalized' at June 30, 2025, and December 31, 2024[248](index=248&type=chunk) | Cash Flow Activity (in millions) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by (used in) operating activities | $19.3 | $(1.1) | | Net cash used in investing activities | $(129.2) | $(129.4) | | Net cash provided by financing activities | $96.8 | $94.5 | - Outstanding commitments to originate loans and extend credit totaled **$359.8 million** at June 30, 2025, and certificates of deposit maturing in 2025 totaled **$494.2 million**[249](index=249&type=chunk)[250](index=250&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=79&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This item refers to market risk disclosures in Part I, Item 2, detailing strategies and models for interest rate risk [Item 4. Controls and Procedures](index=79&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were effective, with no material changes to internal controls over financial reporting - The Company's disclosure controls and procedures were deemed effective as of June 30, 2025[256](index=256&type=chunk) - No material changes occurred in the Company's internal controls over financial reporting during the six months ended June 30, 2025[257](index=257&type=chunk) [PART II. OTHER INFORMATION](index=80&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, equity sales, defaults, safety disclosures, other information, and exhibits [Item 1. Legal Proceedings](index=80&type=section&id=Item%201.%20Legal%20Proceedings) The Company is not involved in any material legal proceedings that would significantly affect its financial condition - The Company is not involved in any material legal proceedings[260](index=260&type=chunk) [Item 1A. Risk Factors](index=80&type=section&id=Item%201A.%20Risk%20Factors) This section refers to risk factors in the 2024 Form 10-K and other SEC filings, with no material changes - No material changes have occurred in the Company's Risk Factors from those disclosed in its 2024 Form 10-K[261](index=261&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=80&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities or use of proceeds were reported for the period [Item 3. Defaults Upon Senior Securities](index=80&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities were reported for the period [Item 4. Mine Safety Disclosures](index=80&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) No mine safety disclosures were reported for the period [Item 5. Other Information](index=80&type=section&id=Item%205.%20Other%20Information) No other information was reported for the period [Item 6. Exhibits](index=81&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including corporate documents and certifications [Signatures](index=82&type=section&id=Signatures) The report is duly signed by the President, CEO, Executive Vice President, and CFO on August 5, 2025

Core Insights - Ponce Financial Group reported strong Q2 2025 results, with GAAP EPS of $0.25, surpassing analyst estimates of $0.17, and reflecting a 78.6% year-over-year increase [1][2] - Net income for common stockholders rose to $5.8 million from $3.1 million in the same period last year, indicating robust financial performance [1][5] - The bank's net interest income reached $24.4 million, a 36.3% increase from $17.9 million in Q2 2024, driven by strong loan and deposit growth [2][5] Financial Metrics - The net interest margin improved to 3.27%, up from 2.62% in the prior-year quarter, reflecting better profitability on lending [2][6] - Non-interest expense was reported at $16.9 million, a slight increase of 1.8% year-over-year, while the efficiency ratio improved significantly to 63.7% from 80.1% in the prior-year quarter [2][8] - Return on common equity increased to 7.88%, up 3.28 percentage points from 4.60% in Q2 2024 [2] Business Overview and Strategy - Ponce Financial Group focuses on serving minority and immigrant communities, holding designations as a Minority Depository Institution and Community Development Financial Institution [3] - The bank's strategy emphasizes increasing core lending, expanding stable deposit relationships, and maintaining strong capital [4] - The lending portfolio is heavily concentrated in mortgage loans, particularly in construction and multifamily properties [3][7] Recent Developments - Total net loans receivable increased by 7.5% since year-end 2024, with deposits also rising significantly, up 8.4% since December 2024 [6][7] - Non-interest income was reported at $2.1 million, experiencing some volatility, with grant income providing partial offset [7] - The provision for credit losses rose to $1.6 million, indicating a cautious approach to potential credit risks [8] Capital and Regulatory Position - Capital levels remain strong, with total capital to risk-weighted assets at 22.65% as of Q2 2025, well above required minimums [9] - Management highlighted ongoing progress on regulatory commitments, which may provide access to favorable preferred stock dividends [10] Future Outlook - No formal forward-looking financial guidance was provided, but management emphasized resilience amid a turbulent banking environment [10] - Key areas to monitor include expense management, deposit and lending momentum, and asset quality metrics [11]

Ponce Financial (PDLB) came out with quarterly earnings of $0.25 per share, beating the Zacks Consensus Estimate of $0.17 per share. This compares to earnings of $0.14 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of +47.06%. A quarter ago, it was expected that this holding company of Ponce Bank would post earnings of $0.09 per share when it actually produced earnings of $0.25, delivering a surprise of +177.78%.Over the last fo ...

[Executive Summary & Business Overview](index=1&type=section&id=Executive%20Summary%20%26%20Business%20Overview) Ponce Financial Group, Inc. reported strong financial results for Q2 and H1 2025, driven by increased net income, improved net interest margin, and strategic growth initiatives - Ponce Financial Group, Inc. (NASDAQ: PDLB) reported its second quarter 2025 results on July 25, 2025[1](index=1&type=chunk) [Earnings Announcement & Highlights](index=1&type=section&id=Earnings%20Announcement%20%26%20Highlights) The company announced robust Q2 and H1 2025 financial performance, characterized by significant increases in net income and diluted EPS, alongside improved net interest income and margin [Second Quarter 2025 Highlights](index=1&type=section&id=Second%20Quarter%202025%20Highlights) Q2 2025 net income available to common stockholders reached $5.8 million, or $0.25 per diluted share, with net interest income growing by 36.43% year-over-year and net interest margin improving to 3.27% Second Quarter 2025 Key Financial Highlights | Metric | Q2 2025 (Millions) | Q1 2025 (Millions) | Q2 2024 (Millions) | QoQ Change (%) | YoY Change (%) | | :--------------------------------------- | :----------------- | :----------------- | :----------------- | :------------- | :------------- | | Net Income Available to Common Stockholders | $5.8 | $5.7 | $3.1 | 1.75% | 87.10% | | Diluted EPS | $0.25 | $0.25 | $0.14 | 0.00% | 78.57% | | Net Interest Income | $24.4 | $22.2 | $17.9 | 10.01% | 36.43% | | Net Interest Margin | 3.27% | 2.98% | 2.62% | +29 bps | +65 bps | - Key components of Q2 2025 net income included **$45.9 million** in interest and dividend income and **$2.1 million** in non-interest income, offset by **$21.4 million** in interest expense, **$16.9 million** in non-interest expense, **$1.9 million** in provision for income taxes, **$1.6 million** in provision for credit losses, and **$0.3 million** in preferred dividends[5](index=5&type=chunk) [Six Months 2025 Highlights](index=1&type=section&id=Six%20Months%202025%20Highlights) For H1 2025, net income available to common stockholders more than doubled to $11.5 million, or $0.50 per diluted share, supported by a 26.96% increase in net interest income and a 12.01% rise in non-interest income Six Months 2025 Key Financial Highlights | Metric | H1 2025 (Millions) | H1 2024 (Millions) | YoY Change ($M) | YoY Change (%) | | :--------------------------------------- | :----------------- | :----------------- | :-------------- | :------------- | | Net Income Available to Common Stockholders | $11.5 | $5.5 | $6.0 | 109.09% | | Diluted EPS | $0.50 | $0.25 | $0.25 | 100.00% | | Net Interest Income | $46.6 | $36.7 | $9.9 | 26.96% | | Non-interest Income | $4.4 | $4.0 | $0.5 | 12.01% | | Non-interest Expense | $33.8 | $33.4 | $0.3 | 0.99% | - Balance sheet growth included a **7.53% increase** in net loans receivable to **$2.46 billion** and an **8.35% increase** in deposits to **$2.04 billion** as of June 30, 2025, compared to December 31, 2024[5](index=5&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Commentary) Management emphasized strategic execution for prudent growth and profitability, highlighting improved net interest margin, reduced borrowing costs, and progress on ECIP commitments [President and CEO's Comments](index=1&type=section&id=President%20and%20CEO's%20Comments) The President and CEO highlighted the doubling of diluted EPS for H1 2025, driven by increased net interest and non-interest income, stable non-interest expenses, and a 29 basis point increase in net interest margin - Diluted earnings per share for the six months ended June 30, 2025, **doubled to $0.50** from the same period last year[4](index=4&type=chunk) - Net interest margin increased by **29 basis points** compared to the prior quarter, attributed to high-yielding construction loans and decreasing borrowing costs[4](index=4&type=chunk) - Non-performing loans decreased during the quarter[4](index=4&type=chunk) [Executive Chairman's Comment](index=3&type=section&id=Executive%20Chairman's%20Comment) The Executive Chairman reported securing the lowest preferred stock dividend rate under ECIP for another year and exceeding deep impact lending targets for preferred stock buyback conditions - Secured another year of the **lowest possible preferred stock dividend of 0.50%** under the U.S. Treasury's Emergency Capital Investment Program (ECIP)[6](index=6&type=chunk) - Achieved **69% of the goal** to qualify for the **0.50% rate** for the next dividend period, with three quarters remaining[6](index=6&type=chunk) - Maintained **80% deep impact lending** after 12 quarters, surpassing the **60% cumulative target** required over 16 quarters to buy back preferred stock[6](index=6&type=chunk) [About Ponce Financial Group, Inc.](index=7&type=section&id=About%20Ponce%20Financial%20Group%2C%20Inc.) Ponce Financial Group, Inc. is the holding company for Ponce Bank, a Minority Depository Institution and Community Development Financial Institution, primarily engaged in deposit-taking and investing in diverse loan and securities portfolios - Ponce Bank operates as a **Minority Depository Institution**, a **Community Development Financial Institution**, and a certified **Small Business Administration lender**[30](index=30&type=chunk) - The Bank's primary business involves taking deposits and investing in a diverse portfolio of mortgage loans (1-4 family, multifamily, nonresidential, construction, and land), as well as business and consumer loans[30](index=30&type=chunk) - Ponce Bank also invests in U.S. Government and federal agency securities, government-sponsored enterprise securities, mortgage-backed securities, corporate bonds, and Federal Home Loan Bank stock[30](index=30&type=chunk) [Financial Performance Analysis](index=4&type=section&id=Financial%20Performance%20Analysis) This section analyzes the Company's operational results, focusing on net income, net interest income, non-interest income, non-interest expense, and credit quality for the reported periods [Summary of Results of Operations](index=4&type=section&id=Summary%20of%20Results%20of%20Operations) The Company's operational results for Q2 and H1 2025 showed increased net income, primarily driven by higher net interest income, despite fluctuations in provisions for credit losses and income taxes [Net Income](index=4&type=section&id=Net%20Income) Net income for Q2 2025 slightly increased QoQ and significantly rose YoY, while H1 2025 net income more than doubled compared to the prior year Net Income Overview (in millions) | Period | Net Income | | :----------------- | :--------- | | Q2 2025 | $6.1 | | Q1 2025 | $6.0 | | Q2 2024 | $3.2 | | H1 2025 | $12.1 | | H1 2024 | $5.6 | - The **$0.1 million QoQ increase** in net income was mainly due to a **$2.2 million increase** in net interest income and a **$0.1 million decrease** in provision for income taxes, partially offset by a **$1.9 million increase** in provision for credit losses and a **$0.3 million decrease** in non-interest income[10](index=10&type=chunk) - The **$6.5 million YoY increase** in H1 2025 net income was primarily driven by a **$9.9 million increase** in net interest income and a **$0.5 million increase** in non-interest income, partially offset by higher provisions for credit losses (**$2.2 million**), income taxes (**$1.4 million**), and non-interest expense (**$0.3 million**)[12](index=12&type=chunk) [Net Interest Income and Net Interest Margin](index=4&type=section&id=Net%20Interest%20Income%20and%20Net%20Interest%20Margin) Net interest income demonstrated robust growth, increasing by 10.01% QoQ and 36.43% YoY in Q2 2025, with net interest margin expanding significantly to 3.27% Net Interest Income and Margin (in millions, except margin) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | H1 2025 | H1 2024 | | :---------------------- | :------ | :------ | :------ | :------ | :------ | | Net Interest Income | $24.4 | $22.2 | $17.9 | $46.6 | $36.7 | | Net Interest Margin | 3.27% | 2.98% | 2.62% | 3.12% | 2.67% | - The QoQ increase in net interest income was due to a **$1.9 million increase** in total interest and dividend income and a **$0.3 million decrease** in total interest expense[14](index=14&type=chunk) - The YoY increase in Q2 net interest income was driven by a **$7.0 million increase** in total interest and dividend income, partially offset by a **$0.5 million increase** in total interest expense[14](index=14&type=chunk) [Non-interest Income](index=4&type=section&id=Non-interest%20Income) Non-interest income decreased QoQ and YoY in Q2 2025 due to lower SBA loan sales, but increased YoY for H1 2025, largely from higher grant income and SBA loan sales Non-interest Income (in millions) | Period | Non-interest Income | | :----------------- | :------------------ | | Q2 2025 | $2.1 | | Q1 2025 | $2.4 | | Q2 2024 | $2.3 | | H1 2025 | $4.4 | | H1 2024 | $4.0 | - The QoQ decrease in non-interest income was mainly due to decreases in income on sale of SBA loans (**$0.4 million**), late and prepayment charges (**$0.2 million**), and other non-interest income (**$0.2 million**), partially offset by an increase in grant income (**$0.4 million**)[18](index=18&type=chunk) - The YoY increase for the six months was largely attributable to increases in grant income (**$0.4 million**), income on sale of SBA loans (**$0.4 million**), and late and prepayment charges (**$0.4 million**), offset by decreases in other non-interest income (**$0.6 million**) and income on the sale of mortgage loans (**$0.3 million**)[20](index=20&type=chunk) [Non-interest Expense](index=5&type=section&id=Non-interest%20Expense) Non-interest expense remained flat QoQ in Q2 2025 but slightly increased YoY, with the H1 2025 increase driven by higher occupancy, equipment, and data processing costs, partially offset by reduced direct loan expenses Non-interest Expense (in millions) | Period | Non-interest Expense | | :----------------- | :------------------- | | Q2 2025 | $16.9 | | Q1 2025 | $16.9 | | Q2 2024 | $16.6 | | H1 2025 | $33.8 | | H1 2024 | $33.4 | - The **$0.2 million YoY increase** in Q2 non-interest expense was mainly due to increases in occupancy and equipment (**$0.3 million**), data processing expenses (**$0.2 million**), marketing and promotional expenses (**$0.1 million**), and federal deposit insurance and regulatory assessment (**$0.1 million**), partially offset by a decrease in direct loan expenses (**$0.4 million**)[22](index=22&type=chunk) - The **$0.3 million YoY increase** for the six months was mainly attributable to increases in occupancy and equipment (**$0.6 million**), other operating expense (**$0.4 million**), and data processing expenses (**$0.2 million**), partially offset by decreases in direct loan expenses (**$0.7 million**) and professional fees (**$0.4 million**)[23](index=23&type=chunk) [Credit Quality](index=5&type=section&id=Credit%20Quality) Total non-performing assets and accruing modifications decreased QoQ but increased YoY, with the Company recording a provision for credit losses in Q2 and H1 2025 Credit Quality Metrics (in millions) | Metric | Jun 30, 2025 | Mar 31, 2025 | Jun 30, 2024 | | :------------------------------------------------------------------ | :----------- | :----------- | :----------- | | Total non-performing assets and accruing modifications | $28.5 | $32.0 | $23.2 | | Provision (benefit) for credit losses on loans (Q2) | $1.6 | ($0.3) | ($0.6) | | Provision (benefit) for credit losses on loans (H1) | $1.3 | N/A | ($0.7) | - The **$1.6 million credit loss provision** in Q2 2025 consisted of **$1.3 million** charged on the funded portion and **$0.3 million** on the unfunded portion of loans[25](index=25&type=chunk) - For the six months ended June 30, 2025, a credit loss provision of **$1.3 million** was recorded, comprising **$2.1 million** on the funded portion and a **$0.8 million benefit** on the unfunded portion of loans[26](index=26&type=chunk) [Financial Position Analysis](index=5&type=section&id=Financial%20Position%20Analysis) This section analyzes the Company's balance sheet, including assets, liabilities, and stockholders' equity, as well as key financial metrics and ratios [Balance Sheet Summary](index=5&type=section&id=Balance%20Sheet%20Summary) As of June 30, 2025, total assets, liabilities, and stockholders' equity increased, reflecting growth in net loans receivable and deposits, alongside a reduction in borrowings [Assets](index=5&type=section&id=Assets) Total assets increased by 3.75% to $3.15 billion as of June 30, 2025, primarily driven by a significant increase in net loans receivable, partially offset by decreases in securities and cash Asset Changes (in millions) | Asset Category | Jun 30, 2025 | Dec 31, 2024 | Change ($M) | Change (%) | | :------------------------- | :----------- | :----------- | :---------- | :--------- | | Total Assets | $3,153.9 | $3,039.9 | $114.0 | 3.75% | | Net Loans Receivable | $2,458.7 | $2,286.6 | $172.1 | 7.53% | | Held-to-maturity securities | $336.9 | $367.9 | ($31.0) | -8.43% | | Cash and cash equivalents | $126.6 | $139.8 | ($13.2) | -9.44% | - The increase in total assets was largely attributable to increases of **$172.1 million** in net loans receivable, **$1.7 million** in other assets, and **$1.4 million** in accrued interest receivable[27](index=27&type=chunk) - These increases were partially offset by decreases of **$31.1 million** in held-to-maturity securities, **$13.2 million** in cash and cash equivalents, **$8.4 million** in available-for-sale securities, **$5.0 million** in mortgage loans held for sale, and **$2.6 million** in Federal Home Loan Bank of New York stock[27](index=27&type=chunk) [Liabilities](index=5&type=section&id=Liabilities) Total liabilities grew by 3.88% to $2.63 billion as of June 30, 2025, primarily driven by a significant increase in deposits, while borrowings decreased Liability Changes (in millions) | Liability Category | Jun 30, 2025 | Dec 31, 2024 | Change ($M) | Change (%) | | :------------------------- | :----------- | :----------- | :---------- | :--------- | | Total Liabilities | $2,632.8 | $2,534.4 | $98.4 | 3.88% | | Deposits | $2,042.2 | $1,884.9 | $157.3 | 8.35% | | Borrowings | $536.1 | $596.1 | ($60.0) | -10.07% | - The increase in total liabilities was largely attributable to an increase of **$157.3 million** in deposits, **$0.6 million** in advance payments by borrowers for taxes and insurance, and **$0.4 million** in accrued interest payable[28](index=28&type=chunk) - These increases were partially offset by decreases of **$60.0 million** in borrowings and **$0.2 million** in operating lease liabilities[28](index=28&type=chunk) [Stockholders' Equity](index=5&type=section&id=Stockholders'%20Equity) Total stockholders' equity increased by 3.08% to $521.1 million as of June 30, 2025, primarily due to net income and other comprehensive income, partially offset by preferred share dividends Stockholders' Equity Changes (in millions) | Equity Category | Jun 30, 2025 | Dec 31, 2024 | Change ($M) | Change (%) | | :------------------------- | :----------- | :----------- | :---------- | :--------- | | Total Stockholders' Equity | $521.1 | $505.5 | $15.6 | 3.08% | - The **$15.6 million increase** in stockholders' equity was largely attributable to **$12.1 million** in net income, **$2.3 million** in other comprehensive income, **$1.0 million** impact to additional paid-in capital as a result of share-based compensation, and **$0.9 million** from release of ESOP shares[29](index=29&type=chunk) - These positive contributions were offset by **$0.6 million** in dividends on preferred shares[29](index=29&type=chunk) [Key Financial Metrics & Ratios](index=3&type=section&id=Key%20Financial%20Metrics%20%26%20Ratios) This section presents key performance, capital, and asset quality ratios, along with other operational data, reflecting the Company's financial health and efficiency [Performance Ratios](index=3&type=section&id=Performance%20Ratios) Performance ratios for Q2 2025 indicated improved profitability and efficiency, with increases in Return on Average Assets and Net Interest Margin, and a decrease in the Efficiency Ratio Performance Ratios (Three Months Ended) | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :----------------------------------- | :------------ | :------------- | :------------ | | Return on average assets | 0.79% | 0.77% | 0.45% | | Return on common equity | 7.88% | 7.97% | 4.60% | | Net interest margin | 3.27% | 2.98% | 2.62% | | Non-interest expense to average assets | 2.18% | 2.19% | 2.28% | | Efficiency ratio | 63.69% | 68.70% | 80.09% | [Capital Ratios](index=3&type=section&id=Capital%20Ratios) Capital ratios for Ponce Financial Group and Ponce Bank remained strong as of June 30, 2025, demonstrating a well-capitalized position with minor period-over-period fluctuations Capital Ratios (Three Months Ended) | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :--------------------------------------------- | :------------ | :------------- | :------------ | | Total capital to risk-weighted assets (Ponce Financial Group) | 22.65% | 22.84% | 23.86% | | Common equity Tier 1 capital to risk-weighted assets (Ponce Financial Group) | 12.49% | 12.51% | 12.71% | | Tier 1 capital to total assets (Ponce Financial Group) | 17.13% | 16.84% | 17.88% | | Total capital to risk-weighted assets (Bank only) | 21.22% | 21.38% | 22.47% | | Common equity Tier 1 capital to risk-weighted assets (Bank only) | 20.15% | 20.35% | 21.24% | | Tier 1 capital to total assets (Bank only) | 15.99% | 15.61% | 16.70% | [Asset Quality Ratios](index=3&type=section&id=Asset%20Quality%20Ratios) Asset quality ratios showed a slight increase in the allowance for credit losses on loans as a percentage of nonperforming loans, while non-performing loans as a percentage of total assets decreased QoQ Asset Quality Ratios (Three Months Ended) | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :--------------------------------------------- | :------------ | :------------- | :------------ | | Allowance for credit losses on loans as a percentage of total loans | 0.97% | 0.96% | 1.18% | | Allowance for credit losses on loans as a percentage of nonperforming loans | 101.01% | 84.15% | 130.28% | | Net (charge-offs) recoveries to average outstanding loans | (0.04%) | (0.04%) | (0.10%) | | Non-performing loans as a percentage of total assets | 0.76% | 0.88% | 0.65% | [Other Operational Data](index=3&type=section&id=Other%20Operational%20Data) The Company reported a decrease in the number of offices and full-time equivalent employees over the past year Other Operational Data (Three Months Ended) | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :----------------------------------- | :------------ | :------------- | :------------ | | Number of offices | 17 | 18 | 18 | | Number of full-time equivalent employees | 206 | 211 | 227 | [Consolidated Financial Statements](index=8&type=section&id=Consolidated%20Financial%20Statements) This section presents the Company's consolidated financial statements, including balance sheets, statements of operations, and detailed breakdowns of loans, allowance for credit losses, deposits, and nonperforming assets [Consolidated Statements of Financial Condition](index=8&type=section&id=Consolidated%20Statements%20of%20Financial%20Condition) The consolidated balance sheet as of June 30, 2025, shows increases in total assets, liabilities, and stockholders' equity, driven by growth in loans and deposits Consolidated Statements of Financial Condition (Dollars in thousands) | ASSETS | June 30, 2025 | March 31, 2025 | December 31, 2024 | June 30, 2024 | | :--------------------------------------- | :------------ | :------------- | :---------------- | :------------ | | Total cash and cash equivalents | $126,639 | $129,893 | $139,839 | $103,166 | | Available-for-sale securities, at fair value | $96,562 | $103,570 | $104,970 | $113,125 | | Held-to-maturity securities, at amortized cost | $336,879 | $358,024 | $367,938 | $442,113 | | Loans receivable, net | $2,458,712 | $2,370,931 | $2,286,599 | $2,022,173 | | Total assets | $3,153,869 | $3,089,836 | $3,039,938 | $2,842,007 | | LIABILITIES | | | | | | Deposits | $2,042,209 | $2,004,947 | $1,884,864 | $1,606,097 | | Borrowings | $536,100 | $521,100 | $596,100 | $680,421 | | Total liabilities | $2,632,781 | $2,575,950 | $2,534,438 | $2,344,350 | | STOCKHOLDERS' EQUITY | | | | | | Total stockholders' equity | $521,088 | $513,886 | $505,500 | $497,657 | [Consolidated Statements of Operations (Three Months Ended)](index=9&type=section&id=Consolidated%20Statements%20of%20Operations%20(Three%20Months%20Ended)) The consolidated statements of operations for Q2 2025 reveal significant year-over-year growth in net interest income and net income available to common stockholders, despite increased provision for credit losses Consolidated Statements of Operations (Three Months Ended, Dollars in thousands) | Metric | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | | :--------------------------------------- | :------------ | :------------- | :---------------- | :----------------- | :------------ | | Total interest and dividend income | $45,860 | $43,997 | $42,886 | $41,293 | $38,792 | | Total interest expense | $21,434 | $21,794 | $22,156 | $22,270 | $20,888 | | Net interest income | $24,426 | $22,203 | $20,730 | $19,023 | $17,904 | | Provision (benefit) for credit losses | $1,626 | ($285) | $897 | $537 | ($867) | | Total non-interest income | $2,060 | $2,381 | $2,097 | $1,151 | $2,258 | | Total non-interest expense | $16,869 | $16,888 | $17,465 | $16,566 | $16,640 | | Net income | $6,100 | $5,959 | $2,933 | $2,433 | $3,192 | | Net income available to common stockholders | $5,818 | $5,678 | $2,651 | $2,152 | $3,117 | | Diluted EPS | $0.25 | $0.25 | $0.12 | $0.10 | $0.14 | [Consolidated Statements of Operations (Six Months Ended)](index=10&type=section&id=Consolidated%20Statements%20of%20Operations%20(Six%20Months%20Ended)) For H1 2025, the consolidated statements of operations demonstrate substantial year-over-year growth in net income and diluted EPS, attributed to increased interest and dividend income and effective expense management Consolidated Statements of Operations (Six Months Ended, Dollars in thousands) | Metric | H1 2025 | H1 2024 | Variance ($) | Variance (%) | | :--------------------------------------- | :----------- | :----------- | :----------- | :----------- | | Total interest and dividend income | $89,857 | $78,458 | $11,399 | 14.53% | | Total interest expense | $43,228 | $41,731 | $1,497 | 3.59% | | Net interest income | $46,629 | $36,727 | $9,902 | 26.96% | | Provision (benefit) for credit losses | $1,341 | ($883) | $2,224 | (251.87%) |\ | Total non-interest income | $4,441 | $3,965 | $476 | 12.01% | | Total non-interest expense | $33,757 | $33,426 | $331 | 0.99% | | Net income | $12,059 | $5,606 | $6,453 | 115.11% | | Net income available to common stockholders | $11,496 | $5,531 | $5,965 | 107.85% | | Diluted EPS | $0.50 | $0.25 | $0.25 | 100.00% | [Loans Receivable excluding Mortgage Loans Held for Sale](index=12&type=section&id=Loans%20Receivable%20excluding%20Mortgage%20Loans%20Held%20for%20Sale) The loan portfolio shows continued growth, with total gross loans increasing to $2.48 billion as of June 30, 2025, and construction and land loans representing the largest and fastest-growing segment Loans Receivable (Dollars in thousands) | Loan Type | June 30, 2025 Amount | June 30, 2025 Percent | December 31, 2024 Amount | December 31, 2024 Percent | June 30, 2024 Amount | June 30, 2024 Percent | | :------------------------- | :------------------- | :-------------------- | :----------------------- | :------------------------ | :------------------- | :-------------------- | | 1-4 family residential Investor Owned | $317,488 | 12.78% | $330,053 | 14.30% | $337,292 | 16.49% | | Multifamily residential | $693,670 | 27.96% | $670,159 | 29.04% | $545,323 | 26.66% | | Nonresidential properties | $404,512 | 16.30% | $389,898 | 16.89% | $337,583 | 16.51% | | Construction and land | $883,462 | 35.59% | $733,660 | 31.79% | $641,879 | 31.39% | | Business loans | $47,372 | 1.91% | $40,849 | 1.77% | $30,222 | 1.48% | | Total loans, gross | $2,482,206 | 100.00% | $2,308,020 | 100.00% | $2,045,089 | 100.00% | - Construction and land loans increased from **$733.7 million** (31.79% of total) at December 31, 2024, to **$883.5 million** (35.59% of total) at June 30, 2025[38](index=38&type=chunk) [Allowance for Credit Losses on Loans](index=13&type=section&id=Allowance%20for%20Credit%20Losses%20on%20Loans) The allowance for credit losses on loans increased to $24.1 million at June 30, 2025, reflecting provisions made during the period, with net charge-offs primarily from non-mortgage loans Allowance for Credit Losses on Loans (Dollars in thousands) | Metric | June 30, 2025 | March 31, 2025 | December 31, 2024 | June 30, 2024 | | :--------------------------------------------- | :------------ | :------------- | :---------------- | :------------ | | Allowance for credit losses on loans at beginning of the period | $22,974 | $22,502 | $23,966 | $24,664 | | Provision (benefit) for credit losses on loans | $1,348 | $731 | $1,090 | ($120) | | Total charge-offs | ($222) | ($263) | ($2,697) | ($747) | | Total recoveries | $0 | $4 | $143 | $264 | | Net (charge-offs) recoveries | ($222) | ($259) | ($2,554) | ($483) | | Allowance for credit losses on loans at end of the period | $24,100 | $22,974 | $22,502 | $24,061 | - Net charge-offs for Q2 2025 were **$222 thousand**, primarily from business loans[40](index=40&type=chunk) [Deposits](index=14&type=section&id=Deposits) Total deposits increased to $2.04 billion as of June 30, 2025, with interest-bearing deposits forming the majority, and money market accounts and certificates of deposit being the largest components Deposits (Dollars in thousands) | Deposit Type | June 30, 2025 Amount | June 30, 2025 Percent | December 31, 2024 Amount | December 31, 2024 Percent | June 30, 2024 Amount | June 30, 2024 Percent | | :------------------------------- | :------------------- | :-------------------- | :----------------------- | :------------------------ | :------------------- | :-------------------- | | Demand | $197,671 | 9.68% | $169,178 | 8.98% | $178,125 | 11.09% | | NOW/IOLA accounts | $63,626 | 3.12% | $62,616 | 3.32% | $81,178 | 5.05% | | Money market accounts | $790,939 | 38.73% | $636,219 | 33.75% | $502,255 | 31.27% | | Reciprocal deposits | $136,693 | 6.69% | $130,677 | 6.93% | $109,945 | 6.85% | | Savings accounts | $102,759 | 5.03% | $105,870 | 5.62% | $109,694 | 6.83% | | Certificates of deposit of $250K or more | $220,671 | 10.81% | $204,293 | 10.84% | $189,683 | 11.82% | | All other certificates of deposit less than $250K | $454,179 | 22.24% | $474,104 | 25.15% | $331,242 | 20.62% | | Total deposits | $2,042,209 | 100.00% | $1,884,864 | 100.00% | $1,606,097 | 100.00% | [Nonperforming Assets](index=15&type=section&id=Nonperforming%20Assets) Total non-performing assets decreased QoQ to $23.86 million but increased compared to June 30, 2024. Non-accrual loans, particularly in multifamily residential and construction and land categories, constitute the largest portion Nonperforming Assets (Dollars in thousands) | Metric | June 30, 2025 | March 31, 2025 | December 31, 2024 | June 30, 2024 | | :--------------------------------------------- | :------------ | :------------- | :---------------- | :------------ | | Total non-accrual loans | $23,150 | $26,592 | $26,631 | $17,744 | | Total non-accruing modifications to borrowers experiencing financial difficulty | $708 | $710 | $714 | $725 | | Total non-performing assets | $23,858 | $27,302 | $27,345 | $18,469 | | Total accruing modifications to borrowers experiencing financial difficulty | $4,649 | $4,683 | $4,736 | $4,708 | | Total non-performing assets and accruing modifications to borrowers experiencing financial difficulty | $28,507 | $31,985 | $32,081 | $23,177 | | Total non-performing assets to total assets | 0.76% | 0.88% | 0.90% | 0.65% | - Non-accrual loans in the construction and land category decreased from **$14.16 million** at March 31, 2025, to **$8.91 million** at June 30, 2025[43](index=43&type=chunk) [Average Balance Sheets (Three Months Ended)](index=16&type=section&id=Average%20Balance%20Sheets%20(Three%20Months%20Ended)) The average balance sheet for Q2 2025 shows increased average interest-earning assets and net interest income compared to Q2 2024, accompanied by an improved net interest margin and spread Average Balance Sheets (Three Months Ended June 30, Dollars in thousands) | Metric | 2025 Average Outstanding Balance | 2025 Interest | 2025 Average Yield/Rate | 2024 Average Outstanding Balance | 2024 Interest | 2024 Average Yield/Rate | | :--------------------------------------------- | :------------------------------- | :------------ | :---------------------- | :------------------------------- | :------------ | :---------------------- | | Total interest-earning assets | $2,999,823 | $45,860 | 6.13% | $2,744,077 | $38,792 | 5.69% | | Total interest-bearing liabilities | $2,345,758 | $21,434 | 3.66% | $2,115,219 | $20,888 | 3.97% | | Net interest income | N/A | $24,426 | N/A | N/A | $17,904 | N/A | | Net interest rate spread | N/A | N/A | 2.47% | N/A | N/A | 1.72% | | Net interest margin | N/A | N/A | 3.27% | N/A | N/A | 2.62% | [Average Balance Sheets (Six Months Ended)](index=17&type=section&id=Average%20Balance%20Sheets%20(Six%20Months%20Ended)) The average balance sheet for H1 2025 indicates increased average interest-earning assets and net interest income compared to H1 2024, with an improved net interest margin and spread Average Balance Sheets (Six Months Ended June 30, Dollars in thousands) | Metric | 2025 Average Outstanding Balance | 2025 Interest | 2025 Average Yield/Rate | 2024 Average Outstanding Balance | 2024 Interest | 2024 Average Yield/Rate | | :--------------------------------------------- | :------------------------------- | :------------ | :---------------------- | :------------------------------- | :------------ | :---------------------- | | Total interest-earning assets | $3,011,353 | $89,857 | 6.02% | $2,769,002 | $78,458 | 5.70% | | Total interest-bearing liabilities | $2,363,176 | $43,228 | 3.69% | $2,134,808 | $41,731 | 3.93% | | Net interest income | N/A | $46,629 | N/A | N/A | $36,727 | N/A | | Net interest rate spread | N/A | N/A | 2.33% | N/A | N/A | 1.77% | | Net interest margin | N/A | N/A | 3.12% | N/A | N/A | 2.67% | [Other Data](index=18&type=section&id=Other%20Data) Other key data points indicate a stable number of common shares issued, with slight variations in outstanding shares and consistent growth in book value and tangible book value per common share Other Data (As of) | Metric | June 30, 2025 | March 31, 2025 | December 31, 2024 | June 30, 2024 | | :----------------------------------- | :------------ | :------------- | :---------------- | :------------ | | Common shares issued | 24,886,711 | 24,886,711 | 24,886,711 | 24,886,711 | | Common shares outstanding at end of period | 23,984,800 | 23,966,191 | 23,961,214 | 23,811,732 | | Book value per common share | $12.34 | $12.05 | $11.71 | $11.45 | | Tangible book value per common share | $12.34 | $12.05 | $11.71 | $11.45 | [Forward-Looking Statements](index=7&type=section&id=Forward-Looking%20Statements) This section contains standard forward-looking statements, cautioning readers that actual results may differ materially from projections due to various risks and uncertainties, and the Company disclaims any obligation to update these statements - Statements identified by words such as 'believes,' 'expects,' 'anticipates,' and similar expressions are forward-looking and subject to significant risks and uncertainties[31](index=31&type=chunk) - Factors that could cause actual results to differ include adverse capital and debt market conditions, changes in interest rates, competitive pressures, general economic conditions, changes in U.S. trade policies, fluctuations in real estate values, and changes in government regulation[31](index=31&type=chunk) - Readers are cautioned not to place undue reliance on these statements, and the Company disclaims any obligation to publicly update or revise them, except as required by law[31](index=31&type=chunk)

Core Viewpoint - Ponce Financial Group, Inc. reported strong financial results for the second quarter of 2025, highlighting significant growth in net interest income and profitability, while maintaining a focus on prudent growth strategies and credit quality improvements [4][6]. Financial Performance Highlights - For the second quarter of 2025, net income available to common stockholders was $5.8 million, or $0.25 per diluted share, compared to $5.7 million, or $0.25 per diluted share for the prior quarter, and $3.1 million, or $0.14 per diluted share for the same quarter last year [6][9]. - Total net income for the second quarter of 2025 was $6.1 million, reflecting a slight increase from $6.0 million in the previous quarter and a significant rise from $3.2 million in the same quarter of 2024 [9][12]. - Net interest income for the second quarter of 2025 increased by $2.2 million, or 10.01%, to $24.4 million compared to the prior quarter, and increased by $6.5 million, or 36.43%, compared to the same quarter last year [13][15]. - The net interest margin improved to 3.27% for the second quarter of 2025, up from 2.98% in the prior quarter and 2.62% in the same quarter last year [16]. Non-Interest Income and Expenses - Non-interest income for the second quarter of 2025 was $2.1 million, a decrease of $0.3 million, or 13.48%, from the previous quarter and a decrease of $0.2 million, or 8.77%, from the same quarter last year [17][19]. - Non-interest expense remained flat at $16.9 million compared to the previous quarter and increased by $0.2 million, or 1.38%, compared to the same quarter last year [21][23]. Credit Quality and Capital Ratios - Total non-performing assets decreased to $28.5 million at June 30, 2025, from $32.0 million at March 31, 2025, and $23.2 million at June 30, 2024 [24]. - The allowance for credit losses on loans as a percentage of total loans was 0.97% as of June 30, 2025, consistent with the previous quarter [7]. - Total capital to risk-weighted assets was 22.65% as of June 30, 2025, slightly down from 22.84% in the prior quarter [7]. Balance Sheet Summary - Total assets increased by $113.9 million, or 3.75%, to $3.15 billion as of June 30, 2025, primarily due to an increase in net loans receivable [27]. - Total liabilities increased by $98.3 million, or 3.88%, to $2.63 billion as of June 30, 2025, largely driven by an increase in deposits [28]. - Total stockholders' equity rose by $15.6 million, or 3.08%, to $521.1 million as of June 30, 2025, supported by net income and other comprehensive income [29].

Ponce Financial (PDLB) could be a solid addition to your portfolio given its recent upgrade to a Zacks Rank #1 (Strong Buy). An upward trend in earnings estimates -- one of the most powerful forces impacting stock prices -- has triggered this rating change.The sole determinant of the Zacks rating is a company's changing earnings picture. The Zacks Consensus Estimate -- the consensus of EPS estimates from the sell-side analysts covering the stock -- for the current and following years is tracked by the syste ...

PART I. FINANCIAL INFORMATION [Item 1. Consolidated Financial Statements](index=3&type=section&id=Item%201.%20Consolidated%20Financial%20Statements) This section presents the unaudited consolidated financial statements for Q1 2025, covering financial condition, operations, comprehensive income, equity, and cash flows, with detailed notes [Consolidated Statements of Financial Condition (Unaudited)](index=3&type=section&id=Consolidated%20Statements%20of%20Financial%20Condition%20%28Unaudited%29) This section provides the unaudited consolidated statements of financial condition as of March 31, 2025, and December 31, 2024 Consolidated Statements of Financial Condition (Unaudited) | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------- | :------------------------------ | :------------------------------- | | Total assets | $3,089,836 | $3,039,938 | | Total liabilities | $2,575,950 | $2,534,438 | | Total stockholders' equity | $513,886 | $505,500 | - Total assets increased by **$49.9 million**, or **1.6%**, from December 31, 2024, to March 31, 2025, primarily driven by an increase in loans receivable[10](index=10&type=chunk)[151](index=151&type=chunk) - Total liabilities increased by **$41.5 million**, or **1.6%**, mainly due to an increase in deposits[10](index=10&type=chunk) - Total stockholders' equity increased by **$8.4 million**, or **1.7%**, during the quarter[10](index=10&type=chunk)[165](index=165&type=chunk) [Consolidated Statements of Operations (Unaudited)](index=4&type=section&id=Consolidated%20Statements%20of%20Operations%20%28Unaudited%29) This section presents the unaudited consolidated statements of operations for the three months ended March 31, 2025, and 2024 Consolidated Statements of Operations (Unaudited) | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | Change (YoY) | | :------------------------------------ | :----------------------------------------------- | :----------------------------------------------- | :------------- | | Total interest and dividend income | $43,997 | $39,666 | +10.9% | | Total interest expense | $21,794 | $20,843 | +4.6% | | Net interest income | $22,203 | $18,823 | +18.0% | | Benefit for credit losses | $(285) | $(16) | +1681.3% | | Total non-interest income | $2,381 | $1,707 | +39.5% | | Total non-interest expense | $16,888 | $16,786 | +0.6% | | Net income | $5,959 | $2,414 | +146.9% | | Net income available to common stockholders | $5,678 | $2,414 | +135.2% | | Basic earnings per common share | $0.25 | $0.11 | +127.3% | | Diluted earnings per common share | $0.25 | $0.11 | +127.3% | - Net income available to common stockholders increased by **$3.3 million**, or **135.2%**, year-over-year, primarily driven by higher net interest income and non-interest income, and a benefit for credit losses[167](index=167&type=chunk) [Consolidated Statements of Comprehensive Income (Unaudited)](index=6&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20%28Unaudited%29) This section presents the unaudited consolidated statements of comprehensive income for the three months ended March 31, 2025, and 2024 Consolidated Statements of Comprehensive Income (Unaudited) | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :------------------------------------------ | :----------------------------------------------- | :----------------------------------------------- | | Net income | $5,959 | $2,414 | | Total other comprehensive income (loss), net of tax | $1,782 | $(941) | | Total comprehensive income | $7,741 | $1,473 | | Total comprehensive income available to common stockholders | $7,460 | $1,473 | - Total comprehensive income significantly increased to **$7.7 million** in Q1 2025 from **$1.5 million** in Q1 2024, largely due to a positive net change in unrealized gains on securities[16](index=16&type=chunk) [Consolidated Statements of Stockholders' Equity (Unaudited)](index=7&type=section&id=Consolidated%20Statements%20of%20Stockholders%27%20Equity%20%28Unaudited%29) This section presents the unaudited consolidated statements of stockholders' equity for the three months ended March 31, 2025 Consolidated Statements of Stockholders' Equity (Unaudited) | Metric | Balance, December 31, 2024 (in thousands) | Net income (in thousands) | Other comprehensive income, net of tax (in thousands) | Preferred Stock Dividend (in thousands) | Balance, March 31, 2025 (in thousands) | | :-------------------------------- | :-------------------------------------- | :------------------------ | :------------------------------------------ | :------------------------------------ | :------------------------------------- | | Total Stockholders' Equity | $505,500 | $5,959 | $1,782 | $(281) | $513,886 | - Stockholders' equity increased by **$8.4 million** from December 31, 2024, to March 31, 2025, driven by net income and other comprehensive income, partially offset by preferred stock dividends[19](index=19&type=chunk)[165](index=165&type=chunk) [Consolidated Statements of Cash Flows (Unaudited)](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows%20%28Unaudited%29) This section presents the unaudited consolidated statements of cash flows for the three months ended March 31, 2025, and 2024 Consolidated Statements of Cash Flows (Unaudited) | Cash Flow Activity | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :-------------------------------- | :----------------------------------------------- | :----------------------------------------------- | | Net cash provided by operating activities | $13,087 | $1,461 | | Net cash used in investing activities | $(67,835) | $(80,091) | | Net cash provided by financing activities | $44,802 | $74,164 | | Net decrease in cash and cash equivalents | $(9,946) | $(4,466) | | Cash and cash equivalents at end of period | $129,893 | $134,724 | - Net cash provided by operating activities significantly increased to **$13.1 million** in Q1 2025 from **$1.5 million** in Q1 2024[22](index=22&type=chunk)[213](index=213&type=chunk) - Net cash used in investing activities decreased to **$67.8 million** in Q1 2025 from **$80.1 million** in Q1 2024, primarily due to changes in loans and FHLBNY stock[22](index=22&type=chunk)[213](index=213&type=chunk) - Net cash provided by financing activities decreased to **$44.8 million** in Q1 2025 from **$74.2 million** in Q1 2024, mainly due to net repayments from borrowings[22](index=22&type=chunk)[213](index=213&type=chunk) [Notes to Consolidated Financial Statements (Unaudited)](index=9&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements%20%28Unaudited%29) This section provides detailed notes explaining the accounting policies, significant estimates, and specific financial instrument details for the unaudited consolidated financial statements [Note 1. Nature of Business](index=9&type=section&id=Note%201.%20Nature%20of%20Business) Ponce Financial Group, Inc. is the holding company for Ponce Bank, operating as one reportable segment, with financial statements prepared in accordance with GAAP - Ponce Financial Group, Inc. operates as a single operating and reportable segment, with its CEO acting as the Chief Operating Decision Maker[27](index=27&type=chunk) - The Company is evaluating the impact of ASU 2024-03, 'Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosure (Subtopic 220-40),' effective for annual periods beginning after December 15, 2026[29](index=29&type=chunk) [Note 2. Preferred Stock](index=9&type=section&id=Note%202.%20Preferred%20Stock) The Company issued $225 million in Preferred Stock to the Treasury under the ECIP in June 2022, with dividends commencing in June 2024 at a 0.5% annual rate - Ponce Financial Group, Inc. issued **$225 million** in Preferred Stock to the Treasury under the ECIP on June 7, 2022, to provide investment capital for lending in low-income and underserved communities[30](index=30&type=chunk) - Dividends on Preferred Stock began in June 2024, with **$0.3 million** paid for the three months ended March 31, 2025, at an

Core Viewpoint - Ponce Financial (PDLB) has been upgraded to a Zacks Rank 1 (Strong Buy), indicating a positive outlook on its earnings estimates, which significantly influence stock prices [1][3]. Earnings Estimates and Stock Price Impact - The Zacks rating system is based on changes in earnings estimates, which are closely correlated with stock price movements, particularly due to institutional investors adjusting their valuations based on these estimates [4][6]. - For Ponce Financial, the recent upgrade reflects an improvement in the company's underlying business, suggesting that investor sentiment may drive the stock price higher [5]. Earnings Estimate Revisions - Ponce Financial is projected to earn $0.79 per share for the fiscal year ending December 2025, representing a year-over-year increase of 71.7% [8]. - Over the past three months, the Zacks Consensus Estimate for Ponce Financial has risen by 113.5%, indicating a strong upward trend in earnings estimates [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [7]. - The upgrade of Ponce Financial to Zacks Rank 1 places it in the top 5% of Zacks-covered stocks, suggesting a strong potential for market-beating returns in the near term [10].

Group 1 - Ponce Financial reported quarterly earnings of $0.25 per share, exceeding the Zacks Consensus Estimate of $0.09 per share, representing an earnings surprise of 177.78% [1] - The company achieved revenues of $24.58 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 5.06%, compared to $20.53 million in the same quarter last year [2] - Ponce Financial has consistently surpassed consensus EPS and revenue estimates over the last four quarters [2] Group 2 - The stock has underperformed, losing about 10.2% since the beginning of the year, while the S&P 500 declined by 6.8% [3] - The company's earnings outlook is mixed, with a current Zacks Rank of 3 (Hold), indicating expected performance in line with the market [6] - Current consensus EPS estimate for the upcoming quarter is $0.12 on revenues of $24.4 million, and for the current fiscal year, it is $0.39 on revenues of $98.5 million [7] Group 3 - The Financial - Miscellaneous Services industry is currently in the top 36% of Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]