Ponce Financial (US:PDLB)2023-03-21 21:27Employee and Talent Management - As of December 31, 2022, the company had 253 full-time equivalent employees and aims to attract and retain talent through competitive salaries and benefits[22]. - The bank's primary deposit base consists of locally employed blue-collar workers, with a growing segment of recently immigrated, younger, lower-skilled laborers[27]. - The company is enhancing its inclusion and diversity initiatives to reflect the communities it serves, which is believed to strengthen its business[24]. Loan Portfolio Composition - The loan portfolio composition as of December 31, 2022, includes $343.968 million in investor-owned 1-4 family residential loans, representing 22.54% of the total portfolio[37]. - The total mortgage loans amount to $1.525 billion, with multifamily residential loans making up 32.42% of the portfolio at $494.667 million[37]. - As of December 31, 2022, one-to-four family investor-owned loans totaled $344.0 million, representing 22.6% of the Bank's total loans[41]. - Multifamily loans amounted to $494.7 million, accounting for 32.4% of the Bank's total loan portfolio[47]. - Nonresidential loans reached $308.0 million, making up 20.2% of the Bank's total loan portfolio[48]. - Construction and land loans totaled $185.0 million, or 12.1% of the Bank's total loan portfolio, with $148.7 million allocated to multifamily residential projects[52]. Loan Growth and Originations - Total loans at the beginning of 2022 were $1,322.1 million, increasing to $1,525.7 million by the end of the year, representing a growth of 15.4%[65]. - The bank originated a total of $624.5 million in loans during 2022, up from $487.9 million in 2021, marking a 28.0% increase[65]. - Total mortgage loans originated in 2022 amounted to $614.3 million, significantly higher than the $305.9 million originated in 2021[65]. - The bank's total nonmortgage loans originated in 2022 were $10.2 million, a decrease from $182.0 million in 2021[65]. Loan Performance and Delinquencies - Total delinquent loans reached $15.7 million as of December 31, 2022, compared to $12.5 million in 2021, indicating an increase of approximately 25.6%[83]. - The Bank's collection efforts for delinquent loans commence the day after the grace period, typically on the 17th of each month[78]. - The Bank's non-performing assets, excluding mortgage loans held for sale, primarily consist of non-accrual loans and troubled debt restructured loans[84]. - Total nonaccrual loans increased to $13.7 million at December 31, 2022, up from $11.4 million in 2021, representing a 11.1% increase[88]. - Substandard loans rose by $4.2 million, or 24.1%, to $21.5 million at December 31, 2022, compared to $17.3 million at the end of 2021[88]. Allowance for Loan Losses - The allowance for loan and lease losses (ALLL) methodology is systematically applied to estimate inherent losses in the loan portfolio[94]. - The allowance for loan losses increased to $34.592 million in 2022 from $16.352 million in 2021, reflecting a significant rise in provisions for loan losses of $24.046 million[115]. - The allowance for loan losses as a percentage of nonperforming loans was 252.33% in 2022, up from 142.90% in 2021, indicating a stronger reserve against potential losses[115]. - The provision for loan losses in 2022 was significantly higher at $24.046 million compared to $2.717 million in 2021, indicating a proactive approach to risk management[115]. Investment Portfolio - The investment portfolio included $24.7 million of FHLBNY stock as of December 31, 2022, compared to $6.0 million in 2021[122]. - The total available-for-sale securities amounted to $151.943 million with a fair value of $129.505 million as of December 31, 2022[124]. - The total held-to-maturity securities amounted to $510.820 million with a fair value of $495.851 million as of December 31, 2022[124]. - The Bank's investment portfolio includes U.S. Government Bonds with a weighted average yield of 0.90% and Corporate Bonds with a weighted average yield of 3.67%[129]. Deposits and Funding - Total deposits increased to $1,252.4 million in 2022, up from $1,204.7 million in 2021, reflecting a net increase of $47.7 million[138]. - The average balance of interest-bearing deposits was $943.9 million in 2022, with a weighted average rate of 1.05%[135]. - The Bank's net deposits before interest credited were $37.7 million in 2022, compared to $169.5 million in 2021, indicating a decrease in deposit growth[137]. - The aggregate amount of certificates of deposit greater than or equal to $100,000 was $212.7 million, with $48.7 million maturing on or before December 31, 2023[142]. Regulatory Compliance and Capital Requirements - As of December 31, 2022, the Bank's total risk-based capital ratio exceeded 10.0%, Tier 1 risk-based ratio exceeded 8.0%, common equity Tier 1 ratio exceeded 6.5%, and leverage ratio exceeded 5.0%[167]. - The Bank was in compliance with the loans-to-one borrower limitations, which generally restrict loans to a single borrower to 15.0% of unimpaired capital and surplus[164]. - The Bank satisfied the Qualified Thrift Lender test, maintaining at least 65% of its portfolio assets in qualified thrift investments[170]. - The FDIC insures deposits at the Bank up to a maximum of $250,000 per separately insured depositor[179].