NorthEast munity Bancorp(US:NECB)2023-08-10 17:57Financial Performance - Net income for the three months ended June 30, 2023, was $11.1 million, a 105.6% increase from $5.4 million for the same period in 2022 [171]. - Net income for the six months ended June 30, 2023, was $22.3 million, a 147.1% increase from $9.0 million for the same period in 2022 [197]. - Non-interest income rose by $484,000, or 90.3%, to $1.0 million for the three months ended June 30, 2023, driven by an increase in BOLI income and a decrease in unrealized loss on equity securities [183]. - Non-interest income for the six months ended June 30, 2023, was $2.1 million, a 259.4% increase from $594,000 in the same period of 2022, primarily due to an unrealized gain on equity securities of $102,000 compared to an unrealized loss of $1.1 million in 2022 [211]. Asset and Liability Management - Total assets increased by $190.7 million, or 13.4%, to $1.6 billion at June 30, 2023, from $1.4 billion at December 31, 2022 [151]. - Stockholders' equity increased by $7.6 million, or 2.9%, to $269.6 million at June 30, 2023 [170]. - Total loans outstanding increased to $1.39 billion as of June 30, 2023, compared to $1.22 billion as of December 31, 2022 [236]. - The average balance of loans receivable increased to $1.306 billion for the six months ended June 30, 2023, with interest income of $58.069 million and a yield of 8.89% [227]. Income and Expense Analysis - Net interest income totaled $24.0 million for the three months ended June 30, 2023, up 77.4% from $13.5 million for the same period in 2022 [172]. - Interest expense increased by $6.4 million, or 493.8%, to $7.7 million for the three months ended June 30, 2023 [176]. - Non-interest expense increased by $1.9 million, or 26.7%, to $8.9 million for the three months ended June 30, 2023, primarily due to higher salaries and employee benefits [186]. - Non-interest expense increased by $2.8 million, or 20.0%, to $17.1 million for the six months ended June 30, 2023, driven by a $1.9 million increase in salaries and employee benefits [215]. Credit Quality and Losses - The allowance for credit losses related to loans decreased to $4.4 million as of June 30, 2023, from $5.5 million as of December 31, 2022 [158]. - Provision for credit losses totaled $611,000 for the six months ended June 30, 2023, compared to no credit loss expense for the same period in 2022 [206]. - Charge-offs increased to $215,000 for the six months ended June 30, 2023, compared to $17,000 for the same period in 2022 [207]. - Total non-performing assets increased to $5.8 million as of June 30, 2023, from $1.5 million at December 31, 2022, representing a significant rise [231]. Interest Rate and Liquidity Management - The average balance of interest-earning assets increased by $273.6 million, or 23.2%, to $1.5 billion for the three months ended June 30, 2023 [175]. - Net interest margin increased by 202 basis points, or 44.1%, to 6.60% for the three months ended June 30, 2023, compared to 4.58% for the same period in 2022 [177]. - The liquidity ratios averaged 7.2% for Cash Liquidity, 10.6% for On Balance Sheet Liquidity, and 13.8% for On Balance Sheet Liquidity & Borrowing Capacity for the six months ended June 30, 2023, compared to 11.2%, 15.5%, and 19.0% for the year ended December 31, 2022, respectively [241]. - The company had an available borrowing limit of $32.6 million from the Federal Home Loan Bank of New York as of June 30, 2023 [246]. Market and Economic Conditions - The primary impact of inflation is reflected in increased operational costs, with market interest rates having a greater effect on performance than inflation [253]. - Interest rate risk management strategies are executed to maintain risk within established limits, with simulation reports produced quarterly [261]. - The company has established an interest rate floor of zero percent for measuring interest rate risk [266]. - The results as of June 30, 2023, indicate that the company is adequately positioned with acceptable net interest income and economic value at risk [267].