Pioneer Bancorp(PBFS) - 2022 Q1 - Quarterly Report

PART I - FINANCIAL INFORMATION This section provides unaudited consolidated financial statements, management's discussion, and disclosures on market risk and controls Consolidated Financial Statements (Unaudited) This section presents Pioneer Bancorp, Inc.'s unaudited consolidated financial statements and accompanying notes for the period ended September 30, 2021 Consolidated Statements of Condition Consolidated Balance Sheet Highlights | Account | September 30, 2021 (in thousands) | June 30, 2021 (in thousands) | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $478,579 | $324,963 | | Net loans receivable | $1,049,332 | $1,081,799 | | Securities available for sale | $310,699 | $264,602 | | Total assets | $1,967,659 | $1,796,252 | | Liabilities & Equity | | | | Total deposits | $1,704,367 | $1,530,896 | | Total liabilities | $1,728,513 | $1,558,430 | | Total shareholders' equity | $239,146 | $237,822 | | Total liabilities and shareholders' equity | $1,967,659 | $1,796,252 | Consolidated Statements of Operations Quarterly Operating Results | Metric | Three Months Ended Sep 30, 2021 (in thousands, except per share data) | Three Months Ended Sep 30, 2020 (in thousands, except per share data) | | :--- | :--- | :--- | | Net interest income | $10,235 | $10,350 | | Provision for loan losses | $250 | $750 | | Noninterest income | $3,200 | $3,528 | | Noninterest expense | $11,414 | $11,431 | | Net income | $1,357 | $1,394 | | Basic EPS | $0.05 | $0.06 | | Diluted EPS | $0.05 | $0.06 | Consolidated Statements of Comprehensive Income - Comprehensive income was $1,170 thousand for the three months ended September 30, 2021, compared to $1,320 thousand for the same period in 2020. The decrease was driven by a higher other comprehensive loss, primarily from unrealized losses on securities[8] Consolidated Statements of Changes in Shareholders' Equity - Total shareholders' equity increased from $237,800 thousand on July 1, 2021, to $239,100 thousand on September 30, 2021. The increase was primarily due to net income of $1,360 thousand, partially offset by an other comprehensive loss of $187 thousand[10] Consolidated Statements of Cash Flows Cash Flow Summary | Cash Flow Activity | Three Months Ended Sep 30, 2021 (in thousands) | Three Months Ended Sep 30, 2020 (in thousands) | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $5,901 | $(2,020) | | Net cash used in investing activities | $(22,296) | $(356) | | Net cash provided by financing activities | $170,011 | $107,631 | | Net increase in cash and cash equivalents | $153,616 | $105,255 | Notes to Unaudited Consolidated Financial Statements - The Company provides diversified financial services through Pioneer Bank and its subsidiaries, with 22 offices in the Capital Region of New York State[15] - As of September 30, 2021, the Company had COVID-19 related financial hardship payment deferrals for commercial borrowers on six loans totaling $25,800 thousand and for consumer borrowers on two loans totaling $849 thousand[50] - The Company is involved in numerous legal proceedings related to fraudulent activity by a former customer, the "Mann Entities." The estimated range of possible loss is $0 to $52,500 thousand in excess of any accrued liability as of September 30, 2021. The NYSDFS has also indicated potential monetary penalties of up to $30,000 thousand related to this matter[84][87][107] Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) Management discusses financial condition and operations, highlighting asset growth, net income changes, asset quality, and capital status - Net income for the quarter ended September 30, 2021, was $1,400 thousand, a decrease of 2.7% from the prior year's quarter. The decrease was mainly due to lower non-interest income and net interest income, partially offset by a lower provision for loan losses[196] - Total assets increased by $171,400 thousand (9.5%) to $2,000,000 thousand at September 30, 2021, from June 30, 2021, primarily driven by a $153,600 thousand increase in cash and cash equivalents from seasonal municipal deposit growth and PPP loan forgiveness[187][188] - The allowance for loan losses was $23,100 thousand, or 2.15% of total loans, at September 30, 2021. The provision for loan losses decreased to $250 thousand for the quarter, down from $750 thousand in the prior-year quarter, due to improving economic conditions[205][227] - As of September 30, 2021, the Bank had 237 PPP loans totaling $32,100 thousand remaining on its books[153] Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, Pioneer Bancorp, Inc. is not required to provide this information - The company is a smaller reporting company and is not required to provide information for this item[252] Controls and Procedures Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of September 30, 2021 - Management concluded that the company's disclosure controls and procedures were effective as of September 30, 2021[254] - No changes in internal control over financial reporting occurred during the first quarter of fiscal year 2022 that materially affected, or are reasonably likely to materially affect, the company's internal controls[257] PART II – OTHER INFORMATION This section covers legal proceedings, risk factors, equity sales, defaults, mine safety, other information, and exhibits Legal Proceedings This section refers to Note 9 for details on legal proceedings, primarily concerning the "Mann Entities" fraud and its potential financial impact - Details regarding legal proceedings are discussed in "Note 9 – Commitments and Contingent Liabilities" in the financial statements[258] Risk Factors There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended June 30, 2021 - No material changes to the risk factors from the Form 10-K for the year ended June 30, 2021, were reported[259] Unregistered Sales of Equity Securities and Use of Proceeds None reported for the period - None[260] Defaults Upon Senior Securities None reported for the period - None[260] Mine Safety Disclosures Not applicable - Not applicable[260] Other Information None reported for the period - None[260] Exhibits This section lists the exhibits filed with the report, including CEO and CFO certifications (Rule 13a-14(a) and Section 1350) and financial data formatted in Inline XBRL - Exhibits filed include certifications by the CEO and CFO, and financial statements formatted in Inline XBRL[261]