NorthEast Community Bancorp, Inc. Reports Results for the Three and Six Months Ended June 30, 2024

Core Viewpoint - NorthEast Community Bancorp, Inc. reported strong financial performance for the three and six months ended June 30, 2024, with significant increases in net income and total assets despite a challenging interest rate environment. Financial Performance - Net income for the three months ended June 30, 2024, was $12.8 million, or $0.98 per basic share, compared to $11.1 million, or $0.75 per basic share, for the same period in 2023 [2] - For the six months ended June 30, 2024, net income was $24.2 million, or $1.84 per basic share, compared to $22.3 million, or $1.56 per basic share, for the same period in 2023 [2] Asset Growth - Total assets increased by $166.1 million, or 9.4%, to $1.9 billion at June 30, 2024, from $1.8 billion at December 31, 2023, primarily due to a $121.5 million increase in net loans and a $45.2 million increase in cash and cash equivalents [3] - Cash and cash equivalents rose by $45.2 million, or 65.8%, to $113.9 million at June 30, 2024, driven by an increase in deposits of $163.8 million [29] Loan Portfolio - Loans, net of the allowance for credit losses, increased by $121.5 million, or 7.7%, to $1.7 billion at June 30, 2024, with loan originations totaling $364.7 million during the six months ended June 30, 2024 [30] - The increase in the loan portfolio included $323.8 million in construction loans, with approximately 34.0% of the funds disbursed at loan closings [30] Interest Income and Expense - Total interest and dividend income increased by $8.5 million, or 26.9%, to $40.2 million for the three months ended June 30, 2024, compared to $31.7 million for the same period in 2023 [14] - Interest expense rose by $13.8 million, or 103.1%, to $27.2 million for the six months ended June 30, 2024, due to an increase in the cost of interest-bearing liabilities [23] Credit Losses - The allowance for credit losses related to loans decreased to $4.9 million as of June 30, 2024, from $5.1 million as of December 31, 2023, representing 0.29% of total loans [31][78] - The company recorded a credit loss expense reduction of $226,000 for the three months ended June 30, 2024, compared to a credit loss expense of $610,000 for the same period in 2023 [16] Non-Interest Income and Expenses - Non-interest income for the three months ended June 30, 2024, was $731,000, down from $1.0 million for the same period in 2023, primarily due to decreases in BOLI income and investment advisory fees [18] - Non-interest expense increased by $617,000, or 6.9%, to $9.5 million for the three months ended June 30, 2024, driven by higher salaries and employee benefits [46] Capital Position - Stockholders' equity increased by $20.7 million, or 7.4%, to $300.0 million at June 30, 2024, from $279.3 million at December 31, 2023 [12] - The company's total stockholders' equity to assets ratio was 15.54% as of June 30, 2024, indicating a strong capital position relative to regulatory requirements [56][79]