Ponce Financial (US:PDLB)2025-03-13 20:43Employment 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].