Core Insights - Ponce Financial (PDLB) reported quarterly earnings of $0.25 per share, exceeding the Zacks Consensus Estimate of $0.17 per share, and showing an increase from $0.14 per share a year ago, resulting in an earnings surprise of +47.06% [1] - The company achieved revenues of $26.49 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 4.28% and up from $20.16 million year-over-year [2] - Ponce Financial has consistently outperformed consensus EPS and revenue estimates over the last four quarters [2] Earnings Performance - The earnings surprise of +177.78% in the previous quarter indicates strong performance relative to expectations [1] - The current consensus EPS estimate for the upcoming quarter is $0.19, with projected revenues of $26.5 million, while the estimate for the current fiscal year is $0.79 on revenues of $103.5 million [7] Stock Performance and Outlook - Ponce Financial shares have increased approximately 5.5% year-to-date, compared to an 8.2% gain in the S&P 500 [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it is expected to perform in line with the market in the near future [6] Industry Context - The Financial - Miscellaneous Services industry, to which Ponce Financial belongs, is currently ranked in the top 40% of over 250 Zacks industries, indicating a favorable outlook compared to lower-ranked industries [8] - Empirical research suggests a strong correlation between near-term stock movements and earnings estimate revisions, which could impact Ponce Financial's stock performance [5]

[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]

Core Viewpoint - Ponce Financial Group, Inc. reported strong financial results for the first quarter of 2025, highlighting improvements in net interest margin, operating expenses, and non-interest income, amidst a challenging economic environment [3][6][8]. Financial Performance - Net income for Q1 2025 was $6.0 million, a significant increase from $2.9 million in Q4 2024 and $2.4 million in Q1 2024 [8][10]. - Net income available to common stockholders was $5.7 million, or $0.25 per diluted share, compared to $2.7 million, or $0.12 per diluted share in the previous quarter [6][10]. - Total net interest income increased by $1.5 million, or 7.11%, from the prior quarter and by $3.4 million, or 17.96%, from the same quarter last year [6][10]. Key Financial Ratios - Return on average assets improved to 0.77% in Q1 2025 from 0.38% in Q4 2024 [4]. - Return on common equity rose to 7.97% from 3.76% in the previous quarter [4]. - Net interest margin increased to 2.98%, up from 2.80% in Q4 2024 and 2.71% in Q1 2024 [4][12]. Non-Interest Income and Expenses - Non-interest income for Q1 2025 was $2.4 million, an increase of $0.3 million, or 13.54%, from the previous quarter and $0.7 million, or 39.48%, from the same quarter last year [13][14]. - Non-interest expenses decreased by $0.6 million, or 3.30%, from Q4 2024, totaling $16.9 million [16][17]. Asset Quality - Non-performing loans were $32.0 million as of March 31, 2025, slightly down from $32.1 million at the end of Q4 2024 [19]. - The allowance for credit losses on loans was 0.96% of total loans, a slight decrease from 0.97% in the previous quarter [4][19]. Balance Sheet Highlights - Total assets increased by $49.9 million, or 1.64%, to $3.09 billion as of March 31, 2025 [21]. - Total liabilities rose by $41.5 million, or 1.64%, to $2.58 billion [22]. - Total stockholders' equity increased by $8.4 million, or 1.66%, to $513.9 million [23].

Exhibit 99.1 Ponce Financial Group, Inc. Reports First Quarter 2025 Results NEW YORK, April 25, 2025 - Ponce Financial Group, Inc., (the "Company") (NASDAQ: PDLB), the holding company for Ponce Bank (the "Bank"), today announced results for the first quarter of 2025. First Quarter 2025 Highlights (Compared to Prior Periods): President and Chief Executive Officer's Comments Carlos P. Naudon, Ponce Financial Group, Inc.'s President and CEO, stated "We continued executing well our strategy of focusing on net i ...

Employment and Workforce - As of December 31, 2024, the company had 218 full-time equivalent employees, with no representation by labor unions[23]. - The bank's strategy includes attracting and retaining a high-performing workforce while refining its performance management system[26]. Loan Portfolio and Composition - The loan portfolio composition shows that as of December 31, 2024, mortgage loans accounted for 98.19% of total loans, with multifamily residential loans making up 29.04%[36]. - As of December 31, 2024, the total loan portfolio amounted to $2,308.0 million, with multifamily loans representing 29.0% at $670.2 million[46]. - One-to-four family investor-owned loans totaled $330.1 million, accounting for 14.3% of the total loan portfolio, with 88.4% secured by two-to-four family properties[39]. - Nonresidential loans reached $389.9 million, or 16.9% of the total loan portfolio, with 83.8% of this amount secured by loans exceeding $1.0 million[47]. - Construction and land loans totaled $733.7 million, representing 31.8% of the total loan portfolio, with $663.7 million allocated to multifamily residential projects[52]. Loan Origination and Underwriting - The bank's principal lending activity includes real estate-secured loans, with a focus on multifamily residential and nonresidential property loans[33]. - The bank's underwriting guidelines for loans include a maximum loan-to-value ratio of 70% for purchases and 65% for refinances, with a minimum debt service coverage ratio of 1.20x[40]. - The bank evaluates borrower qualifications based on credit history, profitability, and expertise, as well as the cash flow potential of the property securing the loan[51]. Loan Performance and Delinquency - Total nonaccrual loans reached $22.966 million in 2024, up from $12.726 million in 2023, representing an increase of 80%[78]. - The total non-performing assets to total assets ratio was 0.76% in 2024, compared to 0.46% in 2023, showing a significant rise in asset quality concerns[78]. - Delinquent loans totaled $22.966 million in 2024, which is an 80% increase from $12.726 million in 2023[75]. - The Bank's collection efforts for delinquent loans commence the day after the grace period, typically on the 17th of each month, with legal proceedings initiated after 90 days past due[73]. - The total non-performing loans to total gross loans ratio was 1.00% in 2024, up from 0.66% in 2023, indicating a deterioration in loan performance[78]. Credit Losses and Allowance - The Allowance for Credit Losses (ACL) at the end of 2024 was $22.5 million, down from $26.2 million at the end of 2023[96]. - The provision for loan losses for 2024 was $1.5 million, compared to $1.2 million in 2023[96]. - The ACL as a percentage of total loans decreased to 0.97% at December 31, 2024, from 1.36% at December 31, 2023[96]. - The total classified and special mention loans increased to $47.9 million at December 31, 2024, from $23.6 million at December 31, 2023[84]. Investment Portfolio - The investment portfolio included $29.2 million of FHLBNY stock as of December 31, 2024, an increase from $19.4 million in 2023[103]. - The investment portfolio consists of available-for-sale and held-to-maturity securities, including U.S. government and federal agency obligations[103]. - The company has a strategy focused on expanding its investment in mortgage-backed securities, particularly those backed by one-to-four family residential mortgages[109]. Deposits and Funding - Total deposits increased to $1,884,864 thousand in 2024, up from $1,507,620 thousand in 2023, reflecting a net increase of $377,244 thousand[122]. - The bank's primary source of funds remains deposits, supplemented by borrowings from FHLBNY and FRBNY, as well as other financial instruments[114]. - The bank's money market deposits accounted for 38.33% of total deposits, with an average balance of $654,512 thousand and a weighted average rate of 4.61%[119]. Regulatory Compliance and Capital - The Bank's capital exceeded all applicable regulatory requirements as of December 31, 2024, ensuring compliance with capital standards[144]. - The Bank was classified as "well capitalized" with a total risk-based capital ratio exceeding 10.0%, Tier 1 risk-based ratio exceeding 8.0%, common equity Tier 1 ratio exceeding 6.5%, and leverage ratio exceeding 5.0%[148]. - The Company is subject to capital adequacy standards, including leverage capital and risk-based capital requirements, as mandated by the Dodd-Frank Act[172]. Taxation and Financial Reporting - The Company is subject to federal and state income taxation, including New York State, Connecticut, New Jersey, Florida, and New York City taxes[182]. - The SEC adopted new Climate Rules requiring reporting companies to disclose climate-related risks and metrics in their financial statements[180].