Ponce Financial (US:PDLB)2025-11-05 22:07Financial Performance - Net income available to common stockholders increased to $6.2 million for the three months ended September 30, 2025, compared to $2.2 million for the same period in 2024, representing a growth of 189.4% [176]. - Earnings per share rose to $0.27 for the three months ended September 30, 2025, up from $0.10 in the same period of 2024, marking a 170.0% increase [175]. - Net income available to common stockholders increased to $17.7 million for the nine months ended September 30, 2025, compared to $7.7 million for the same period in 2024, representing a 130.7% increase [198]. - Earnings per basic share rose to $0.78 for the nine months ended September 30, 2025, up from $0.34 in 2024, reflecting a 129.4% increase [200]. - Net interest income increased by $16.1 million, or 28.9%, to $71.9 million for the nine months ended September 30, 2025, compared to $55.8 million in 2024 [204]. Asset and Liability Management - Total consolidated assets increased by $117.1 million, or 3.9%, to $3.16 billion as of September 30, 2025, compared to $3.04 billion at December 31, 2024 [160]. - Total liabilities increased to $2,627.2 million from $2,534.4 million, representing a rise of approximately 3.7% [240]. - The asset/liability gap was $445.8 million, with a gap/assets ratio of 117.25% as of September 30, 2025 [238]. - The company met all regulatory capital requirements, maintaining a well-capitalized status [246]. Loan and Deposit Growth - Net loans receivable rose by $203.4 million, contributing to a total of $2.49 billion in loans as of September 30, 2025, net of an allowance for credit losses of $24.8 million [160]. - Total deposits increased by $167.9 million, or 8.9%, reaching $2.06 billion at September 30, 2025, compared to $1.89 billion at December 31, 2024 [170]. - Non-maturity deposits totaled $1,361.4 million, showing a significant increase from $1,114.9 million, which is a growth of around 22.1% [240]. - The composition of gross loans receivable showed an increase of $206.4 million, or 8.9%, totaling $2.51 billion as of September 30, 2025 [163]. Interest Income and Expense - Net interest income increased by $6.2 million, or 32.7%, to $25.2 million for the three months ended September 30, 2025, compared to $19.0 million for the same period in 2024 [182]. - Total interest and dividend income rose by $5.6 million, or 13.5%, to $46.8 million for the three months ended September 30, 2025, from $41.3 million in 2024 [178]. - Total interest expense for the nine months ended September 30, 2025, was $64.8 million, an increase of $0.8 million or 1.3% compared to $64.0 million for the same period in 2024 [204]. Credit Losses and Provisions - The allowance for credit losses is identified as the most critical accounting policy due to its significant impact on the Company's financial condition and results of operations [153]. - Provision for credit losses increased significantly by 154.0% to $1.4 million for the three months ended September 30, 2025, compared to $0.5 million in 2024 [177]. - A credit loss provision of $2.7 million on loans was recorded for the nine months ended September 30, 2025, compared to a credit loss benefit of $0.2 million for the same period in 2024 [213]. Capital and Dividends - The Company reported a total of $225 million in cash from the issuance of 225,000 shares of Preferred Stock under the Emergency Capital Investment Program (ECIP) [134]. - The Company began paying dividends on its Preferred Stock in June 2024, totaling $0.8 million for the nine months ended September 30, 2025, compared to $0.6 million for the year ended December 31, 2024 [136]. - The Company is required to pay a quarterly dividend on its Preferred Stock at a floor rate of 0.50%, with dividends totaling $0.8 million for the nine months ended September 30, 2025, and $0.6 million for the year ended December 31, 2024 [250]. Branch and Community Development - The Company opened a new branch in Inwood, New York, on September 16, 2025, aimed at creating opportunities for local residents and small business owners [150]. - The transformation of the Westchester Avenue Branch included state-of-the-art banking technologies and community-centric features to attract new depositors [146]. - The Company is establishing loan origination partnerships with non-profit and community-based organizations to penetrate underserved markets [156]. Economic and Interest Rate Environment - The Federal Reserve's actions in 2024 and 2025 included a series of rate cuts, resulting in a federal funds rate of 4.00% to 4.25%, which may positively impact net interest income through increased loan demand [235]. - As of September 30, 2025, a 400 basis point increase in interest rates would result in a decrease in net interest income by approximately $9,706 thousand, representing a 9.84% decline [223]. - The Economic Value of Equity (EVE) model indicated that a 400 basis point increase in rates would decrease EVE by $109,577 thousand, or 20.91% [227].