Ponce Financial (US:PDLB)2024-03-19 19:59Employee Relations - As of December 31, 2023, the Company had 237 full-time equivalent employees, with no union representation and a good relationship with employees[24]. - The Company is committed to creating an equitable workplace and enhancing diversity at all management levels, reflecting the communities it serves[26]. Loan Portfolio - The Bank's total loans, gross, amounted to $1,921 million as of December 31, 2023, compared to $1,525 million in 2022, reflecting a year-over-year increase[40]. - The composition of the Bank's loan portfolio shows that mortgage loans accounted for 98.50% of total loans, with multifamily residential loans making up 28.65%[39]. - As of December 31, 2023, the total loan portfolio amounted to $1,921.6 million, with multifamily loans representing the largest category at $550.6 million, or 28.7% of the total[52]. - One-to-four family investor-owned loans totaled $343.7 million, accounting for 17.9% of the total loan portfolio, with 88.4% of these loans secured by two-to-four family properties[45]. - The bank's construction and land loans reached $503.9 million, representing 26.2% of the total loan portfolio, with multifamily residential loans making up $448.1 million of this amount[58]. - Nonresidential loans totaled $342.3 million, or 17.8% of the total loan portfolio, with the largest concentration in retail and wholesale properties at $117.0 million, or 34.2%[53][54]. - One-to-four family owner-occupied loans amounted to $152.3 million, or 7.9% of the total loan portfolio, with 23.5% of these loans exceeding $1.0 million[48]. - The bank's overall loan portfolio is diversified, with significant geographical concentrations in Queens County, Kings County, and Nassau County across various loan types[52][58]. Lending Activities - The Bank's lending activities focus on real estate-secured loans, with an emphasis on multifamily residential and nonresidential property loans[35]. - The bank maintains a maximum loan-to-value (LTV) ratio of 90% for one-to-four family loans and 75% for multifamily and nonresidential loans[50][57]. - The bank's underwriting guidelines require a minimum debt service coverage ratio (DSCR) of 1.20x for loans, ensuring borrowers can meet their debt obligations[46][57]. - The bank's construction loans typically have a term of up to 36 months, with a focus on the developer's capacity and project viability[59]. - The bank's loan-to-cost ratio for construction loans is maintained at 70% or less, with a loan-to-value ratio capped at 65%[61]. Financial Performance - Total loans at the end of 2023 reached $1,921.6 million, an increase of 26% from $1,525.7 million in 2022[70]. - Construction and land loans originated in 2023 amounted to $700.9 million, significantly up from $231.3 million in 2022, reflecting a growth of 203%[70]. - The bank's total loan originations for 2023 were $913.2 million, a 46% increase compared to $624.5 million in 2022[70]. - The bank's total mortgage loans originated in 2023 were $898.2 million, up from $614.3 million in 2022, marking a 46% increase[70]. - The bank's principal repayments and other activities totaled $508.7 million in 2023, compared to $411.1 million in 2022[70]. Credit Quality - Total delinquent loans amounted to $12.726 million for 90 days or more past due as of December 31, 2023, compared to $13.220 million in 2022[86]. - The Bank's non-accrual loans were reported at $0.7 million, $2.3 million, $2.5 million, $3.1 million, and $3.6 million for the years ending December 31 from 2019 to 2023, respectively[88]. - Total nonaccrual loans increased to $12,279 thousand in 2023, up from $11,372 thousand in 2022, representing an increase of 7.96%[89]. - Substandard loans decreased by $3.6 million, or 16.97%, to $17.9 million at December 31, 2023, compared to $21.5 million at December 31, 2022[95]. - Special mention loans decreased by $3.9 million, or 40.6%, to $5.8 million at December 31, 2023, compared to $9.7 million at December 31, 2022[96]. - The total nonperforming loans to total gross loans ratio improved to 0.66% in 2023 from 0.90% in 2022[89]. - The allowance for credit losses (ACL) is based on management's estimate of expected credit losses over the expected life of the loans[101]. - The allowance for credit losses (ACL) decreased to $26.2 million at December 31, 2023, from $34.6 million at December 31, 2022, representing a reduction of approximately 24.5%[111]. - The ACL as a percentage of total gross loans was 1.36% at December 31, 2023, down from 2.27% at December 31, 2022[111]. - Net charge-offs for the years ended December 31, 2023, and 2022 were $6.6 million and $5.8 million, respectively, indicating an increase in charge-offs[111]. Investment Portfolio - The investment portfolio included $19.4 million of FHLBNY stock at December 31, 2023, down from $24.7 million in 2022[115]. - As of December 31, 2023, the total available-for-sale securities amounted to $139.8 million, an increase from $119.9 million in 2022, representing a growth of approximately 16.1%[117]. - The total held-to-maturity securities reached $461.7 million at the end of 2023, compared to $450.0 million in 2022, indicating a growth of about 2.4%[119]. - The carrying value of mortgage-backed securities decreased to $465.6 million in 2023 from $516.5 million in 2022, reflecting a decline of approximately 9.8%[120]. - The company’s mortgage-backed securities are primarily backed by one-to-four family residential mortgages, with all securities backed by Freddie Mac, Fannie Mae, or Ginnie Mae[120]. Deposits and Funding - Total deposits increased to $1,507,620,000 in 2023, up from $1,252,412,000 in 2022, reflecting a net increase of $255,208,000[132]. - The average balance of interest-bearing deposits was $1,096,877,000 with a weighted average rate of 3.20% in 2023, compared to $943,860,000 at 1.05% in 2022[130]. - The bank's non-interest bearing demand deposits were $290,335,000, representing 20.93% of total deposits[130]. - The bank's certificates of deposit totaled $600,826,000, with significant reductions in lower interest rate categories compared to previous years[134]. - The Bank had outstanding FHLBNY and FRBNY advances of $684.4 million as of December 31, 2023, compared to $517.4 million in 2022, reflecting a significant increase of 32.3%[138]. Regulatory Compliance - At December 31, 2023, the Bank's capital exceeded all applicable regulatory requirements, ensuring compliance with capital standards[157]. - The Bank's loans-to-one borrower compliance was maintained, with no loans exceeding 15.0% of unimpaired capital and surplus as of December 31, 2023[158]. - The Bank satisfied the Qualified Thrift Lender (QTL) test, maintaining at least 65% of its portfolio assets in qualified thrift investments for at least nine months of the year[162][163]. - The Bank received a "satisfactory" rating under the Community Reinvestment Act in its most recent federal examination, indicating compliance with community credit needs[167]. - The FDIC insures deposits at the Bank up to a maximum of $250,000 per depositor, which includes self-directed retirement accounts[171]. Tax and Financial Reporting - The Company is subject to U.S. federal income tax and various state income taxes, including New York, Connecticut, New Jersey, Florida, and Pennsylvania for the year ended December 31, 2023[196]. - The Company has a federal net operating loss (NOL) carryforward of $7.6 million as of December 31, 2023[200]. - The Company is no longer classified as an emerging growth company effective December 31, 2022, but remains a "smaller reporting company" under SEC regulations[193][194].