NEW YORK, April 30, 2024 (GLOBE NEWSWIRE) -- Ponce Financial Group, Inc., (the "Company") (NASDAQ:PDLB), the holding company for Ponce Bank (the "Bank"), today announced results for the first quarter of 2024.

First Quarter 2024 Highlights (Compared to Prior Periods):

Net income of $2.4 million, or $0.11 per diluted share for the three months ended March 31, 2024, as compared to net income of $0.5 million, or $0.02 per diluted share for the three months ended December 31, 2023 and net income of $0.3 million, or $0.01 per diluted share for the three months ended March 31, 2023.
Included in the $2.4 million of net income for the first quarter of 2024 results is $39.7 million in interest and dividend income, $1.7 million in non-interest income and $0.2 million in benefit for credit losses, offset by $20.8 million in interest expense and $17.0 million in non-interest expense.
Net interest income of $18.8 million for the first quarter of 2024 increased $1.6 million, or 9.46%, from the prior quarter and increased $3.6 million, or 23.47%, from the same quarter last year.
Net interest margin was 2.71% for the first quarter of 2024, increased from 2.66% for the prior quarter and decreased from 2.75% for the same quarter last year.
Non-interest income for the three months ended March 31, 2024 was $1.7 million, increased $0.4 million, or 32.84%, from $1.3 million for the three months ended December 31, 2023 and decreased $0.1 million, or 6.16%, from $1.8 million for the three months ended March 31, 2023.
Non-interest expense for the three months ended March 31, 2024 was $17.0 million, decreased $0.9 million, or 5.29%, compared to $17.9 million for the three months ended December 31, 2023 and increased $0.6 million, or 3.60% compared to $16.4 million for the three months ended March 31, 2023.
Cash and equivalents were $134.7 million as of March 31, 2024, decreased $4.5 million, or 3.21%, from December 31, 2023.
Securities totaled $569.0 million as of March 31, 2024, decreased $12.7 million, or 2.18%, from December 31, 2023 primarily due to regular principal payments.
Net loans receivable were $1.98 billion as of March 31, 2024, increased $85.5 million, or 4.51%, from December 31, 2023.
Deposits were $1.59 billion as of March 31, 2024, increased $78.2 million, or 5.18%, from December 31, 2023.

President and Chief Executive Officer's Comments

Carlos P. Naudon, Ponce Financial Group's President and CEO, stated "Despite the challenging operating environment, we continue to make progress: net interest income grew for the fourth quarter in a row, and net interest margin grew for the second quarter in a row. Book value per share is now $11.29 (up $0.39 vs last year) and total equity per share stands at $20.75. We're also making progress on the expense side and have reduced headcount by 7% year over year. We continue to show strong levels of capital and liquidity. On the capital front, our total capital ratio at Ponce Bank stands at 23.33%, well in excess of regulatory requirements. In terms of liquidity, our liquid assets plus borrowing capacity at the Federal Home Loan Bank of New York ("FHLBNY") stands at $724.1 million, approximately 1.7 times of our uninsured deposits of $416.9 million. We remain committed to the communities we serve, our Minority Depository Institution ("MDI")/Community Development Financial Institutions ("CDFI") status and continuing to invest in our people and in technology to improve our efficiency."

Executive Chairman's Comment

Steven A. Tsavaris, Ponce Financial Group's Executive Chairman added "We continue to grow both loans and deposits while maintaining credit quality. While we see resiliency in our client base, our prudent approach might result in lower growth in the coming quarters as we prioritize sound underwriting practices and balance sheet management over loan growth."

Selected performance metrics are as follows (refer to "Key Metrics" for additional information):

	At or for the Three Months Ended
	March 31,			December 31,			September 30,			June 30,			March 31,
Performance Ratios (Annualized):	2024			2023			2023			2023			2023
Return on average assets (1)		0.33	%		0.08	%		0.39	%		(0.01	%)		0.06	%
Return on average equity (1)		1.97	%		0.42	%		2.11	%		(0.07	%)		0.27	%
Net interest rate spread (1) (2)		1.82	%		1.74	%		1.68	%		1.75	%		1.88	%
Net interest margin (1) (3)		2.71	%		2.66	%		2.58	%		2.65	%		2.75	%
Non-interest expense to average assets (1)		2.35	%		2.66	%		2.58	%		2.65	%		2.79	%
Efficiency ratio (4)		82.56	%		96.83	%		78.11	%		96.15	%		95.88	%
Average interest-earning assets to average interest- bearing liabilities		129.69	%		133.50	%		134.49	%		137.67	%		143.62	%
Average equity to average assets		17.00	%		18.25	%		18.32	%		19.21	%		20.91	%

	At or for the Three Months Ended
	March 31,			December 31,			September 30,			June 30,			March 31,
Capital Ratios (Annualized):	2024			2023			2023			2023			2023
Total capital to risk-weighted assets (Bank only)		22.79	%		23.30	%		25.10	%		26.30	%		27.54	%
Tier 1 capital to risk-weighted assets (Bank only)		21.54	%		22.05	%		23.85	%		25.05	%		26.28	%
Common equity Tier 1 capital to risk-weighted assets (Bank only)		21.54	%		22.05	%		23.85	%		25.05	%		26.28	%
Tier 1 capital to average assets (Bank only)		16.26	%		17.49	%		17.51	%		17.95	%		19.51	%

	At or for the Three Months Ended
	March 31,			December 31,			September 30,			June 30,			March 31,
Asset Quality Ratios (Annualized):	2024			2023			2023			2023			2023
Allowance for loan losses as a percentage of total loans		1.23	%		1.36	%		1.51	%		1.64	%		1.77	%
Allowance for loan losses as a percentage of nonperforming loans		140.90	%		152.99	%		169.49	%		167.06	%		149.73	%
Net (charge-offs) recoveries to average outstanding loans (1)		(0.25	%)		(0.24	%)		(0.34	%)		(0.41	%)		(0.57	%)
Non-performing loans as a percentage of total gross loans		0.87	%		0.89	%		0.89	%		0.98	%		1.18	%
Non-performing loans as a percentage of total assets		0.62	%		0.62	%		0.62	%		0.63	%		0.76	%
Total non-performing assets as a percentage of total assets		0.62	%		0.62	%		0.62	%		0.63	%		0.76	%
Total non-performing assets and accruing modifications to borrowers experiencing financial difficulty as a percentage of total assets (5)		0.79	%		0.81	%		0.82	%		0.83	%		0.93	%

^{(1) Annualized where appropriate.}

^{(2) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate of interest-bearing liabilities.}

^{(3) Net interest margin represents net interest income divided by average total interest-earning assets.}

^{(4) Efficiency ratio represents noninterest expense divided by the sum of net interest income and noninterest income.}

^{(5) Balances include both modifications to borrowers experiencing financial difficulty, in accordance with ASU 2022-02 adopted on January 1, 2023, and previously existing troubled debt restructurings.}

Summary of Results of Operations

Net income for the three months ended March 31, 2024 was $2.4 million compared to net income of $0.5 million for the three months ended December 31, 2023 and net income of $0.3 million for the three months ended March 31, 2023.

The increase of net income for the three months ended March 31, 2024 compared to the three months ended December 31, 2023 was attributed mainly to an increase in net interest income, a decrease in non-interest expense and an increase in non-interest income, partially offset by an increase in provision for income taxes and a decrease in benefit for credit losses.

The increase of net income for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 was largely due to increases in net interest income, partially offset by increases in provision for income taxes and non-interest expense and a decrease in non-interest income.

Net Interest Income and Net Margin

Net interest income for the three months ended March 31, 2024, increased $1.6 million, or 9.46%, to $18.8 million compared to $17.2 million for the three months ended December 31, 2023 and increased $3.6 million, or 23.47%, compared to $15.2 million for the three months ended March 31, 2023. Included in this increase was a recovery of $1.0 million in interest income from a construction loan that was previously nonperforming.

For the three months ended March 31, 2024, benefit for credit losses amounted to $0.2 million consists of a benefit for credit losses on loans in the amount of $0.3 million and a provision on credit losses on held-to-maturity securities in the amount of $0.1 million. The $0.3 million benefit for credit losses on loans for the three months ended March 31, 2024 resulted from a benefit of $0.8 million related to micro loans originated by Grain and a provision of $0.5 million related to non-micro loans.

Net interest margin was 2.71% for the three months ended March 31, 2024 compared to 2.66% for the prior quarter, an increase of 5bps and 2.75% for the same period last year, a decrease of 4bps. The decrease in net interest margin for the three months ended March 31, 2024 when compared to the same period last year was a result of an increase in the cost of funds driven by higher interest rates.

Non-interest Income

Non-interest income for the three months ended March 31, 2024, was $1.7 million, an increase of $0.4 million, or 32.84%, compared to the three months ended December 31, 2023 and a decrease of $0.1 million, or 6.16%, compared to the three months ended March 31, 2023.

The $0.4 million increase in non-interest income for the three months ended March 31, 2024 compared to the three months ended December 31, 2023 was largely attributable to an increase of $0.8 million in other non-interest income partially offset by a grant of $0.4 million received in the fourth quarter of 2023 from the U.S. Treasury. No grants were received in the first quarter of 2024.

The $0.1 million decrease in non-interest income for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 was largely attributable to a decrease of $0.4 million in late and prepayment charges, partially offset by increases of $0.2 million in income on sale of mortgage loans and $0.1 million in other non-interest income.

Non-interest Expense

Non-interest expense for the three months ended March 31, 2024, was $17.0 million, a decrease of $0.9 million, or 5.29%, compared to $17.9 million for the three months ended December 31, 2023 and an increase of $0.6 million, or 3.60%, compared to $16.4 million for the three months ended March 31, 2023.

The $0.9 million decrease from the three months ended December 31, 2023 was mainly attributable to decreases of $0.4 million in compensation and benefits, $0.3 million in provision for contingencies, $0.3 million in professional fees and $0.2 million in other operating expense, partially offset by an increase of $0.3 million in direct loan expense.

The $0.6 million increase from the three months ended March 31, 2023 was mainly attributable to a decrease of $0.9 million in Grain recoveries, increases of $0.4 million in compensation and benefits, $0.3 million in direct loan expenses and $0.3 million in professional fees, partially offset by decreases of $0.8 million in provision for contingencies, $0.3 million in other operating expense and $0.2 million in office supplies, telephone and postage.

Balance Sheet Summary

Total assets increased $68.0 million, or 2.47%, to $2.82 billion as of March 31, 2024 from $2.75 billion as of December 31, 2023. The increase in total assets is largely attributable to increases of $85.5 million in net loans receivable, $4.5 million in Federal Home Loan Bank of New York stock and $1.3 million in premises and equipment, partially offset by decreases of $8.8 million in held-to-maturity securities, $4.5 million in cash and cash equivalents, $3.9 million in available-for-sale securities. $3.6 million in other assets and $2.1 million in mortgage loans held for sale.

Total liabilities increased $65.7 million, or 2.91%, to $2.33 billion as of March 31, 2024 from $2.26 billion as of December 31, 2023. The increase in total liabilities was largely attributable to increases of $78.2 million in deposits and $2.5 million in advance payments by borrowers for taxes and insurance, partially offset by decreases of $7.7 million in accrued interest payable, $4.0 million in borrowings and $3.0 million in other liabilities.

Total stockholders' equity increased $2.3 million, or 0.47%, to $493.7 million as of March 31, 2024, from $491.4 million as of December 31, 2023. This increase in stockholders' equity was largely attributable to $2.4 million in net income, $0.5 million impact to additional paid in capital as a result of share-based compensation and $0.3 million from release of ESOP shares, offset by $0.9 million in other comprehensive loss.

About Ponce Financial Group, Inc.

Ponce Financial Group, Inc. is the holding company for Ponce Bank. Ponce Bank is a Minority Depository Institution, a Community Development Financial Institution, and a certified Small Business Administration lender. Ponce Bank's business primarily consists of taking deposits from the general public and to a lesser extent alternative funding sources and investing those funds, together with funds generated from operations and borrowings, in mortgage loans, consisting of 1-4 family residences (investor-owned and owner-occupied), multifamily residences, nonresidential properties, construction and land, and, to a lesser extent, in business and consumer loans. Ponce Bank also invests in securities, which consist of U.S. Government and federal agency securities and securities issued by government-sponsored or government-owned enterprises, as well as, mortgage-backed securities, corporate bonds and obligations, and Federal Home Loan Bank stock.

Forward Looking Statements

Certain statements herein constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act and are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements may be identified by words such as "believes," "will," "would," "expects," "project," "may," "could," "developments," "strategic," "launching," "opportunities," "anticipates," "estimates," "intends," "plans," "targets" and similar expressions. These statements are based upon the current beliefs and expectations of management and are subject to significant risks and uncertainties. Actual results may differ materially from those set forth in the forward-looking statements as a result of numerous factors. Factors that could cause such differences to exist include, but are not limited to, adverse conditions in the capital and debt markets and the impact of such conditions on business activities; changes in interest rates; competitive pressures from other financial institutions; the effects of general economic conditions on a national basis or in the local markets in which Ponce Bank operates, including changes that adversely affect borrowers' ability to service and repay Ponce Bank's loans; anticipated losses with respect to the Company's investment in Grain; changes in the value of securities in the investment portfolio; changes in loan default and charge-off rates; fluctuations in real estate values; the adequacy of loan loss reserves; decreases in deposit levels necessitating increased borrowing to fund loans and investments; operational risks including, but not limited to, cybersecurity, fraud and natural disasters; changes in government regulation; changes in accounting standards and practices; the risk that intangibles recorded in the financial statements will become impaired; demand for loans in Ponce Bank's market area; Ponce Bank's ability to attract and maintain deposits; risks related to the implementation of acquisitions, dispositions, and restructurings; the risk that Ponce Financial Group, Inc. may not be successful in the implementation of its business strategy; changes in assumptions used in making such forward-looking statements and the risk factors described in Ponce Financial Group, Inc.'s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q as filed with the Securities and Exchange Commission (the "SEC"), which are available at the SEC's website, www.sec.gov. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. Ponce Financial Group, Inc. disclaims any obligation to publicly update or revise any forward-looking statements to reflect changes in underlying assumptions or factors, new information, future events or other changes, except as may be required by applicable law or regulation.

Ponce Financial Group, Inc. and Subsidiaries

Consolidated Statements of Financial Condition

(Dollars in thousands, except for share data)


	As of
	March 31,			December 31,			September 30,			June 30,			March 31,
	2024			2023			2023			2023			2023
ASSETS
Cash and due from banks:
Cash	$	29,972		$	28,930		$	26,046		$	31,162		$	26,951
Interest-bearing deposits		104,752			110,260			90,966			212,627			157,736
Total cash and cash equivalents		134,724			139,190			117,012			243,789			184,687
Available-for-sale securities, at fair value		116,044			119,902			116,753			123,720			128,320
Held-to-maturity securities, at amortized cost		452,955			461,748			471,065			481,952			491,649
Placement with banks		249			249			996			996			1,245
Mortgage loans held for sale, at fair value		7,860			9,980			14,103			10,070			2,987
Loans receivable, net		1,981,428			1,895,886			1,787,607			1,695,047			1,614,428
Accrued interest receivable		18,063			18,010			16,624			16,054			15,435
Premises and equipment, net		17,396			16,053			16,453			16,856			17,215
Right of use assets		31,021			31,272			32,110			32,435			33,147
Federal Home Loan Bank of New York stock (FHLBNY), at cost		23,892			19,377			18,870			19,195			19,209
Deferred tax assets		13,919			14,332			15,984			15,924			15,413
Other assets		21,151			24,723			16,286			15,919			15,799
Total assets	$	2,818,702		$	2,750,722		$	2,623,863		$	2,671,957		$	2,539,534
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits	$	1,585,784		$	1,507,620		$	1,401,132		$	1,442,013		$	1,336,877
Operating lease liabilities		32,486			32,684			33,459			33,716			34,308
Accrued interest payable		4,218			11,965			8,385			4,704			1,767
Advance payments by borrowers for taxes and insurance		13,245			10,778			13,743			12,402			14,902
Borrowings		680,421			684,421			675,100			682,100			648,375
Other liabilities		8,866			11,859			6,986			6,540			7,264
Total liabilities		2,325,020			2,259,327			2,138,805			2,181,475			2,043,493
Commitments and contingencies
Stockholders' Equity:
Preferred stock, $0.01 par value; 100,000,000 shares authorized		225,000			225,000			225,000			225,000			225,000
Common stock, $0.01 par value; 200,000,000 shares authorized		249			249			249			249			249
Treasury stock, at cost		(9,702	)		(9,747	)		(10,975	)		(5,202	)		(2	)
Additional paid-in-capital		207,584			207,106			207,626			207,287			206,883
Retained earnings		99,834			97,420			96,902			94,312			94,399
Accumulated other comprehensive loss		(16,590	)		(15,649	)		(20,468	)		(17,597	)		(16,629	)
Unearned compensation ─ ESOP		(12,693	)		(12,984	)		(13,276	)		(13,567	)		(13,859	)
Total stockholders' equity		493,682			491,395			485,058			490,482			496,041
Total liabilities and stockholders' equity	$	2,818,702		$	2,750,722		$	2,623,863		$	2,671,957		$	2,539,534

Ponce Financial Group, Inc. and Subsidiaries

Consolidated Statements of Operations

(Dollars in thousands, except per share data)


	Three Months Ended
	March 31,			December 31,			September 30,			June 30,			March 31,
	2024			2023			2023			2023			2023
Interest and dividend income:
Interest on loans receivable	$	30,664		$	27,814		$	25,276		$	23,015		$	19,700
Interest on deposits due from banks		2,911			990			1,969			1,817			197
Interest and dividend on securities and FHLBNY stock		6,091			6,146			6,261			6,223			6,459
Total interest and dividend income		39,666			34,950			33,506			31,055			26,356
Interest expense:
Interest on certificates of deposit		6,380			5,103			4,362			3,881			3,225
Interest on other deposits		6,540			5,706			5,639			4,413			2,812
Interest on borrowings		7,923			6,944			6,963			6,479			5,074
Total interest expense		20,843			17,753			16,964			14,773			11,111
Net interest income		18,823			17,197			16,542			16,282			15,245
(Benefit) provision for credit losses		(180	)		(375	)		535			987			(174	)
Net interest income after (benefit) provision for credit losses		19,003			17,572			16,007			15,295			15,419
Non-interest income:
Service charges and fees		473			498			516			481			491
Brokerage commissions		8			13			17			35			15
Late and prepayment charges		359			365			899			372			729
Income on sale of mortgage loans		302			244			173			82			99
Grant income		—			438			3,718			—			—
Other		565			(273	)		304			522			485
Total non-interest income		1,707			1,285			5,627			1,492			1,819
Non-interest expense:
Compensation and benefits		7,844			8,262			7,566			7,425			7,446
Occupancy and equipment		3,667			3,686			3,588			3,724			3,570
Data processing expenses		1,127			1,101			1,582			1,208			1,192
Direct loan expenses		732			497			369			345			412
Provision for contingencies		164			418			391			517			985
Insurance and surety bond premiums		253			250			255			248			265
Office supplies, telephone and postage		249			294			301			489			399
Professional fees		1,723			2,040			1,693			1,904			1,455
Grain recoveries		(53	)		(152	)		(69	)		(346	)		(914	)
Marketing and promotional expenses		100			146			248			303			128
Directors fees and regulatory assessment		179			173			169			160			155
Other operating expenses		965			1,182			1,223			1,112			1,268
Total non-interest expense		16,950			17,897			17,316			17,089			16,361
Income (loss) before income taxes		3,760			960			4,318			(302	)		877
Provision (benefit) for income taxes		1,346			442			1,728			(215	)		546
Net income (loss)	$	2,414		$	518		$	2,590		$	(87	)	$	331
Earnings per common share:
Basic	$	0.11		$	0.02		$	0.12		$	(0.00	)	$	0.01
Diluted	$	0.11		$	0.02		$	0.12		$	(0.00	)	$	0.01
Weighted average common shares outstanding:
Basic		22,353,492			22,224,945			22,272,076			23,208,168			23,293,013
Diluted		22,366,728			22,406,102			22,349,217			23,208,168			23,324,532

Ponce Financial Group, Inc. and Subsidiaries

Consolidated Statements of Operations

(Dollars in thousands, except per share data)


	For the Three Months Ended March 31,
	2024			2023			Variance $			Variance %
Interest and dividend income:
Interest on loans receivable	$	30,664		$	19,700		$	10,964			55.65	%
Interest on deposits due from banks		2,911			197			2,714			1,377.66	%
Interest and dividend on securities and FHLBNY stock		6,091			6,459			(368	)		(5.70	%)
Total interest and dividend income		39,666			26,356			13,310			50.50	%
Interest expense:
Interest on certificates of deposit		6,380			3,225			3,155			97.83	%
Interest on other deposits		6,540			2,812			3,728			132.57	%
Interest on borrowings		7,923			5,074			2,849			56.15	%
Total interest expense		20,843			11,111			9,732			87.59	%
Net interest income		18,823			15,245			3,578			23.47	%
Benefit for credit losses		(180	)		(174	)		(6	)		3.45	%
Net interest income after benefit for credit losses		19,003			15,419			3,584			23.24	%
Non-interest income:
Service charges and fees		473			491			(18	)		(3.67	%)
Brokerage commissions		8			15			(7	)		(46.67	%)
Late and prepayment charges		359			729			(370	)		(50.75	%)
Income on sale of mortgage loans		302			99			203			205.05	%
Other		565			485			80			16.49	%
Total non-interest income		1,707			1,819			(112	)		(6.16	%)
Non-interest expense:
Compensation and benefits		7,844			7,446			398			5.35	%
Occupancy and equipment		3,667			3,570			97			2.72	%
Data processing expenses		1,127			1,192			(65	)		(5.45	%)
Direct loan expenses		732			412			320			77.67	%
Provision for contingencies		164			985			(821	)		(83.35	%)
Insurance and surety bond premiums		253			265			(12	)		(4.53	%)
Office supplies, telephone and postage		249			399			(150	)		(37.59	%)
Professional fees		1,723			1,455			268			18.42	%
Grain recoveries		(53	)		(914	)		861			(94.20	%)
Marketing and promotional expenses		100			128			(28	)		(21.88	%)
Directors fees and regulatory assessment		179			155			24			15.48	%
Other operating expenses		965			1,268			(303	)		(23.90	%)
Total non-interest expense		16,950			16,361			589			3.60	%
Income before income taxes		3,760			877			2,883			328.73	%
Provision for income taxes		1,346			546			800			146.52	%
Net income	$	2,414		$	331		$	2,083			629.31	%
Earnings per common share:
Basic	$	0.11		$	0.01		$	0.09			659.96	%
Diluted	$	0.11		$	0.01		$	0.09			660.54	%
Weighted average common shares outstanding:
Basic		22,353,492			23,293,013			(939,521	)		(4.03	%)
Diluted		22,366,728			23,324,532			(957,804	)		(4.11	%)

Ponce Financial Group, Inc. and Subsidiaries

Key Metrics


	At or for the Three Months Ended
	March 31,			December 31,			September 30,			June 30,			March 31,
	2024			2023			2023			2023			2023
Performance Ratios:
Return on average assets (1)		0.33	%		0.08	%		0.39	%		(0.01	%)		0.06	%
Return on average equity (1)		1.97	%		0.42	%		2.11	%		(0.07	%)		0.27	%
Net interest rate spread (1) (2)		1.82	%		1.74	%		1.68	%		1.75	%		1.88	%
Net interest margin (1) (3)		2.71	%		2.66	%		2.58	%		2.65	%		2.75	%
Non-interest expense to average assets (1)		2.35	%		2.66	%		2.58	%		2.65	%		2.79	%
Efficiency ratio (4)		82.56	%		96.83	%		78.11	%		96.15	%		95.88	%
Average interest-earning assets to average interest- bearing liabilities		129.69	%		133.50	%		134.49	%		137.67	%		143.62	%
Average equity to average assets		17.00	%		18.25	%		18.32	%		19.21	%		20.91	%
Capital Ratios:
Total capital to risk-weighted assets (Bank only)		22.79	%		23.30	%		25.10	%		26.30	%		27.54	%
Tier 1 capital to risk-weighted assets (Bank only)		21.54	%		22.05	%		23.85	%		25.05	%		26.28	%
Common equity Tier 1 capital to risk-weighted assets (Bank only)		21.54	%		22.05	%		23.85	%		25.05	%		26.28	%
Tier 1 capital to average assets (Bank only)		16.26	%		17.49	%		17.51	%		17.95	%		19.51	%
Asset Quality Ratios:
Allowance for credit losses on loans as a percentage of total loans		1.23	%		1.36	%		1.51	%		1.64	%		1.77	%
Allowance for credit losses on loans as a percentage of nonperforming loans		140.90	%		152.99	%		169.49	%		167.06	%		149.73	%
Net (charge-offs) recoveries to average outstanding loans (1)		(0.25	%)		(0.24	%)		(0.34	%)		(0.41	%)		(0.57	%)
Non-performing loans as a percentage of total gross loans		0.87	%		0.89	%		0.89	%		0.98	%		1.18	%
Non-performing loans as a percentage of total assets		0.62	%		0.62	%		0.62	%		0.63	%		0.76	%
Total non-performing assets as a percentage of total assets		0.62	%		0.62	%		0.62	%		0.63	%		0.76	%
Total non-performing assets and accruing modifications to borrowers experiencing financial difficulty as a percentage of total assets (5)		0.79	%		0.81	%		0.82	%		0.83	%		0.93	%
Other:
Number of offices		18			18			19			19			19
Number of full-time equivalent employees		233			237			243			244			251

Ponce Financial Group, Inc. and Subsidiaries

Securities Portfolio

	March 31, 2024										December 31, 2023
				Gross		Gross								Gross		Gross
	Amortized			Unrealized		Unrealized					Amortized			Unrealized		Unrealized
	Cost			Gains		Losses			Fair Value		Cost			Gains		Losses			Fair Value
	(in thousands)										(in thousands)
Available-for-Sale Securities:
U.S. Government Bonds	$	2,991		$	—	$	(211	)	$	2,780	$	2,990		$	—	$	(206	)	$	2,784
Corporate Bonds		25,782			—		(2,262	)		23,520		25,790			—		(2,122	)		23,668
Mortgage-Backed Securities:
Collateralized Mortgage Obligations ⁽¹⁾		38,183			—		(6,229	)		31,954		39,375			—		(6,227	)		33,148
FHLMC Certificates		9,903			—		(1,424	)		8,479		10,163			—		(1,482	)		8,681
FNMA Certificates		60,158			—		(10,948	)		49,210		61,359			—		(9,842	)		51,517
GNMA Certificates		102			—		(1	)		101		104			—		—			104
Total available-for-sale securities	$	137,119		$	—	$	(21,075	)	$	116,044	$	139,781		$	—	$	(19,879	)	$	119,902

Held-to-Maturity Securities:
U.S. Agency Bonds	$	25,000		$	—	$	(289	)	$	24,711	$	25,000		$	—	$	(181	)	$	24,819
Corporate Bonds		82,500			—		(2,211	)		80,289		82,500			—		(2,691	)		79,809
Mortgage-Backed Securities:
Collateralized Mortgage Obligations ⁽¹⁾		207,079			—		(7,468	)		199,611		212,093			104		(5,170	)		207,027
FHLMC Certificates		3,819			—		(253	)		3,566		3,897			—		(244	)		3,653
FNMA Certificates		116,085			—		(5,263	)		110,822		118,944			—		(4,088	)		114,856
SBA Certificates		18,945			169		—			19,114		19,712			166		—			19,878
Allowance for Credit Losses		(473	)		—		—			—		(398	)		—		—			—
Total held-to-maturity securities	$	452,955		$	169	$	(15,484	)	$	438,113	$	461,748		$	270	$	(12,374	)	$	450,042

^{(1) Comprised of Federal Home Loan Mortgage Corporation ("FHLMC"), Federal National Mortgage Association ("FNMA") and Ginnie Mae ("GNMA") issued securities.}

The following table presents the activity in the allowance for credit losses for held-to-maturity securities.

	For the Three		For the
	Months Ended		Year Ended
	March 31, 2024		December 31, 2023
Allowance for credit losses on securities at beginning of the period	$	398	$	—
CECL adoption		—		662
Provision for credit losses		75		(264	)
Allowance for credit losses on securities at end of the period	$	473	$	398

Ponce Financial Group, Inc. and Subsidiaries

Loan Portfolio

	As of
	March 31,						December 31,						September 30,						June 30,						March 31,
	2024						2023						2023						2023						2023
	Amount			Percent			Amount			Percent			Amount			Percent			Amount			Percent			Amount			Percent
	(Dollars in thousands)
Mortgage loans:
1-4 family residential
Investor Owned	$	339,331			16.92	%	$	343,689			17.89	%	$	347,082			19.13	%	$	351,754			20.43	%	$	354,559			21.60	%
Owner-Occupied		150,842			7.52	%		152,311			7.93	%		151,866			8.37	%		154,116			8.94	%		149,481			9.10	%
Multifamily residential		545,825			27.22	%		550,559			28.65	%		553,694			30.52	%		550,033			31.94	%		553,430			33.71	%
Nonresidential properties		327,350			16.32	%		342,343			17.81	%		321,472			17.71	%		317,416			18.43	%		314,560			19.17	%
Construction and land		608,665			30.35	%		503,925			26.22	%		411,383			22.67	%		315,843			18.34	%		235,157			14.33	%
Total mortgage loans		1,972,013			98.33	%		1,892,827			98.50	%		1,785,497			98.40	%		1,689,162			98.08	%		1,607,187			97.91	%
Non-mortgage loans:
Business loans		26,664			1.33	%		19,779			1.03	%		18,416			1.02	%		21,041			1.22	%		19,890			1.21	%
Consumer loans (1)		6,741			0.34	%		8,966			0.47	%		10,416			0.58	%		11,958			0.70	%		14,227			0.88	%
Total non-mortgage loans		33,405			1.67	%		28,745			1.50	%		28,832			1.60	%		32,999			1.92	%		34,117			2.09	%
Total loans, gross		2,005,418			100.00	%		1,921,572			100.00	%		1,814,329			100.00	%		1,722,161			100.00	%		1,641,304			100.00	%
Net deferred loan origination costs		674						468						692						1,059						2,099
Allowance for credit losses on loans		(24,664	)					(26,154	)					(27,414	)					(28,173	)					(28,975	)
Loans, net	$	1,981,428					$	1,895,886					$	1,787,607					$	1,695,047					$	1,614,428

^{(1) As of March 31, 2024, December 31, 2023, September 30, 2023, June 30, 2023 and March 31, 2023, consumer loans include $5.7 million, $8.0 million, $9.3 million, $11.2 million and $13.4 million, respectively, of loans originated by the Bank pursuant to its arrangement with Grain.}

Ponce Financial Group, Inc. and Subsidiaries

Grain Loan Exposure

Grain Technologies, Inc. ("Grain") Total Exposure as of March 31, 2024
(in thousands)
Receivable from Grain
Microloans originated - put back to Grain (inception-to-March 31, 2024)	$	24,051
Write-downs, net of recoveries (inception-to-date as of March 31, 2024)		(15,406	)
Cash receipts from Grain (inception-to-March 31, 2024)		(6,819	)
Grant/reserve		(1,826	)
Net receivable as of March 31, 2024	$	—
Microloan receivables from Grain Borrowers
Grain originated loans receivable as of March 31, 2024	$	5,731
Allowance for credit losses on loans as of March 31, 2024 ⁽¹⁾		(4,868	)
Microloans, net of allowance for credit losses on loans as of March 31, 2024	$	863
Investments
Investment in Grain	$	1,000
Investment in Grain write-off in Q3 2022		(1,000	)
Investment in Grain as of March 31, 2024		—
Total exposure related to Grain as of March 31, 2024 ⁽²⁾	$	863

^{(1) Excludes $1.6 million of security deposits by Grain originated borrowers reported in deposits in the accompanying Consolidated Statements of Financial Conditions.}

^{(2) Total remaining exposure to Grain borrowers. These loans are now serviced by the Bank.}

On November 1, 2023, Ponce Financial Group, Inc. and Grain signed a Perpetual Software License Agreement in order for the Bank to assume the servicing of the remaining Grain loans. In order to facilitate the transfer of the servicing responsibilities to the Bank, Grain granted the Bank a perpetual right and license to use the Grain software, including the source code to service the remaining loans.

Ponce Financial Group, Inc. and Subsidiaries

Allowance for Credit Losses on Loans

	For the Three Months Ended
	March 31,			December 31,			September 30,			June 30,			March 31,
	2024			2023			2023			2023			2023
	(Dollars in thousands)
Allowance for credit losses on loans at beginning of the period	$	26,154		$	27,414		$	28,173		$	28,975		$	34,592
(Benefit) provision for credit losses on loans		(255	)		(126	)		750			934			(321	)
Adoption of CECL		—			—			—			—			(3,090	)
Charge-offs:
Mortgage loans:
1-4 family residences
Investor owned		—			—			—			—			—
Owner occupied		—			—			—			—			—
Multifamily residences		—			—			—			—			—
Nonresidential properties		—			—			—			—			—
Construction and land		—			—			—			—			—
Non-mortgage loans:
Business		(52	)		(63	)		—			—			—
Consumer		(1,302	)		(1,135	)		(1,592	)		(1,931	)		(2,569	)
Total charge-offs		(1,354	)		(1,198	)		(1,592	)		(1,931	)		(2,569	)
Recoveries:
Mortgage loans:
1-4 family residences
Investor owned		—			—			—			—			—
Owner occupied		—			—			—			—			—
Multifamily residences		—			—			—			—			—
Nonresidential properties		—			—			—			—			—
Construction and land		—			—			—			—			—
Non-mortgage loans:
Business		1			—			3			—			—
Consumer		118			64			80			195			363
Total recoveries		119			64			83			195			363
Net (charge-offs) recoveries		(1,235	)		(1,134	)		(1,509	)		(1,736	)		(2,206	)
Allowance for credit losses on loans at end of the period	$	24,664		$	26,154		$	27,414		$	28,173		$	28,975

Ponce Financial Group, Inc. and Subsidiaries

Deposits

	As of
	March 31,					December 31,					September 30,					June 30,					March 31,
	2024					2023					2023					2023					2023
	Amount		Percent			Amount		Percent			Amount		Percent			Amount		Percent			Amount		Percent
	(Dollars in thousands)
Demand ⁽¹⁾	$	191,541		12.07	%	$	185,151		12.28	%	$	214,326		15.30	%	$	225,106		15.61	%	$	236,120		17.67	%
Interest-bearing deposits:
NOW/IOLA accounts ⁽¹⁾		73,202		4.62	%		77,909		5.17	%		74,055		5.29	%		64,193		4.45	%		68,356		5.11	%
Money market accounts ⁽²⁾		482,344		30.42	%		432,735		28.70	%		370,500		26.44	%		387,970		26.91	%		293,140		21.93	%
Reciprocal deposits		97,718		6.16	%		96,860		6.42	%		82,670		5.90	%		100,919		7.00	%		109,649		8.20	%
Savings accounts		112,713		7.11	%		114,139		7.57	%		117,870		8.41	%		119,635		8.30	%		127,731		9.55	%
Total NOW, money market, reciprocal and savings accounts		765,977		48.31	%		721,643		47.86	%		645,095		46.04	%		672,717		46.66	%		598,876		44.79	%
Certificates of deposit of $250K or more ⁽²⁾		146,296		9.23	%		132,153		8.77	%		122,353		8.73	%		120,043		8.32	%		113,955		8.52	%
Brokered certificates of deposit ⁽³⁾		94,689		5.97	%		98,729		6.55	%		98,729		7.05	%		98,729		6.85	%		98,754		7.39	%
Listing service deposits ⁽³⁾		12,688		0.80	%		14,433		0.96	%		15,180		1.08	%		20,258		1.40	%		28,417		2.13	%
All other certificates of deposit less than $250K ⁽²⁾		374,593		23.62	%		355,511		23.58	%		305,449		21.80	%		305,160		21.16	%		260,755		19.50	%
Total certificates of deposit		628,266		39.62	%		600,826		39.86	%		541,711		38.66	%		544,190		37.73	%		501,881		37.54	%
Total interest-bearing deposits		1,394,243		87.93	%		1,322,469		87.72	%		1,186,806		84.70	%		1,216,907		84.39	%		1,100,757		82.33	%
Total deposits	$	1,585,784		100.00	%	$	1,507,620		100.00	%	$	1,401,132		100.00	%	$	1,442,013		100.00	%	$	1,336,877		100.00	%

^{(1) As of December 31, 2023, September 30, 2023, June 30, 2023 and March 31, 2023, $58.2 million, $51.5 million, $41.4 million and $46.6 million, respectively, were reclassified from demand to NOW/IOLA accounts.}

^{(2) As of June 30, 2023 and March 31, 2023, $150.6 million and $115.3 million, respectively, of SaveBetter deposits were reclassified from money market accounts to certificates of deposits. $36.4 million and $37.1 million, respectively, were reclassified to Certificates of deposits of $250K or more and $114.2 million and $78.2 million, respectively, were reclassified to certificates of deposit less than $250K.}

^{(3) As of March 31, 2024, December 31, 2023, September 30, 2023, June 30, 2023 and March 31, 2023, there were $1.5 million, $0.3 million, $0.3 million, $3.3 million and $9.5 million, respectively, in individual listing service deposits amounting to $250,000 or more. All brokered certificates of deposit individually amounted to less than $250,000.}

Ponce Financial Group, Inc. and Subsidiaries

Borrowings

	March 31,							December 31,
	2024							2023
	Scheduled Maturity		Redeemable at Call Date		Weighted Average Rate			Scheduled Maturity		Redeemable at Call Date		Weighted Average Rate
	(Dollars in thousands)
Term advances ending:
2024	$	109,321	$	109,321		5.15	%	$	363,321	$	363,321		4.55	%
2025		250,000		250,000		4.69			50,000		50,000		4.41
2026		50,000		50,000		4.83			—		—		—
2027		212,000		212,000		3.44			212,000		212,000		3.44
2028		9,100		9,100		3.84			9,100		9,100		3.84
Thereafter		50,000		50,000		3.35			50,000		50,000		3.35
	$	680,421	$	680,421		4.28	%	$	684,421	$	684,421		4.10	%

Ponce Financial Group, Inc. and Subsidiaries

Nonperforming Assets

	As of Three Months Ended
	March 31,			December 31,			September 30,			June 30,			March 31,
	2024			2023			2023			2023			2023
	(Dollars in thousands)
Non-accrual loans:
Mortgage loans:
1-4 family residential
Investor owned	$	399		$	793		$	396		$	296		$	2,836
Owner occupied		1,426			1,682			1,685			2,363			2,245
Multifamily residential		4,098			2,979			1,444			1,435			—
Nonresidential properties		441			—			—			—			—
Construction and land		10,277			10,759			11,721			11,721			11,906
Non-mortgage loans:
Business		146			165			209			—			40
Consumer		—			—			—			—			—
Total non-accrual loans (not including non-accruing modifications to borrowers experiencing financial difficulty) ⁽¹⁾	$	16,787		$	16,378		$	15,455		$	15,815		$	17,027

Non-accruing modifications to borrowers experiencing financial difficulty ⁽¹⁾:
Mortgage loans:
1-4 family residential
Investor owned	$	270		$	270		$	270		$	209		$	213
Owner occupied		447			447			449			840			2,020
Multifamily residential		—			—			—			—			—
Nonresidential properties		—			—			—			—			91
Construction and land		—			—			—			—			—
Non-mortgage loans:
Business		—			—			—			—			—
Consumer		—			—			—			—			—
Total non-accruing modifications to borrowers experiencing financial difficulty ⁽¹⁾		717			717			719			1,049			2,324
Total non-accrual loans ⁽²⁾	$	17,504		$	17,095		$	16,174		$	16,864		$	19,351

Accruing modifications to borrowers experiencing financial difficulty (1):
Mortgage loans:
1-4 family residential
Investor owned	$	1,850		$	2,112		$	2,131		$	2,161		$	2,185
Owner occupied		2,288			2,313			2,335			2,353			1,310
Multifamily residential		—			—			—			—			—
Nonresidential properties		748			757			765			783			701
Construction and land		—			—			—			—			—
Non-mortgage loans:
Business		—			—			—			—			—
Consumer		—			—			—			—			—
Total accruing modifications to borrowers experiencing financial difficulty ⁽¹⁾	$	4,886		$	5,182		$	5,231		$	5,297		$	4,196
Total non-performing assets and accruing modifications to borrowers experiencing financial difficulty ⁽¹⁾	$	22,390		$	22,277		$	21,405		$	22,161		$	23,547
Total non-performing loans to total gross loans		0.87	%		0.89	%		0.89	%		0.98	%		1.18	%
Total non-performing assets to total assets		0.62	%		0.62	%		0.62	%		0.63	%		0.76	%
Total non-performing assets and accruing modifications to borrowers experiencing financial difficulty as a percentage of total assets ⁽¹⁾		0.79	%		0.81	%		0.82	%		0.83	%		0.93	%

^{(1) Balances include both modifications to borrowers experiencing financial difficulty, in accordance with ASU 2022-02 adopted on January 1, 2023, and previously existing troubled debt restructurings.}

^{(2) Includes nonperforming mortgage loans held for sale.}

Ponce Financial Group, Inc. and Subsidiaries

Average Balance Sheets

	For the Three Months Ended March 31,
	2024						2023
	Average						Average
	Outstanding				Average		Outstanding				Average
	Balance		Interest		Yield/Rate ⁽¹⁾		Balance		Interest		Yield/Rate ⁽¹⁾
	(Dollars in thousands)
Interest-earning assets:
Loans ⁽²⁾	$	1,979,263	$	30,664	6.23	%	$	1,572,148	$	19,700	5.08	%
Securities ⁽³⁾		576,235		5,619	3.92	%		631,138		6,075	3.90	%
Other ⁽⁴⁾ ⁽⁵⁾		238,432		3,383	5.71	%		48,473		581	4.86	%
Total interest-earning assets		2,793,930		39,666	5.71	%		2,251,759		26,356	4.75	%
Non-interest-earning assets ⁽⁵⁾		106,566						123,007
Total assets	$	2,900,496					$	2,374,766
Interest-bearing liabilities:
NOW/IOLA^{(6) (7)}	$	82,849	$	218	1.06	%	$	71,765	$	688	3.89	%
Money market ^{(7) (8)}		544,563		6,292	4.65	%		314,241		2,091	2.70	%
Savings		113,501		28	0.10	%		128,876		30	0.09	%
Certificates of deposit ⁽⁸⁾		629,528		6,380	4.08	%		516,327		3,225	2.53	%
Total deposits		1,370,441		12,918	3.79	%		1,031,209		6,034	2.37	%
Advance payments by borrowers		12,886		2	0.06	%		12,919		3	0.09	%
Borrowings		771,070		7,923	4.13	%		523,705		5,074	3.93	%
Total interest-bearing liabilities		2,154,397		20,843	3.89	%		1,567,833		11,111	2.87	%
Non-interest-bearing liabilities:
Non-interest-bearing demand ⁽⁶⁾		198,862		—				268,372		—
Other non-interest-bearing liabilities		54,061		—				42,038		—
Total non-interest-bearing liabilities		252,923		—				310,410		—
Total liabilities		2,407,320		20,843				1,878,243		11,111
Total equity		493,176						496,523
Total liabilities and total equity	$	2,900,496			3.89	%	$	2,374,766			2.87	%
Net interest income			$	18,823					$	15,245
Net interest rate spread ⁽⁹⁾					1.82	%					1.88	%
Net interest-earning assets ⁽¹⁰⁾	$	639,533					$	683,926
Net interest margin⁽¹¹⁾					2.71	%					2.75	%
Average interest-earning assets to interest-bearing liabilities					129.69	%					143.62	%

^{(1) Annualized where appropriate.}

^{(2) Loans include loans and mortgage loans held for sale, at fair value.}

^{(3) Securities include available-for-sale securities and held-to-maturity securities.}

^{(4) Includes FHLBNY demand account, FHLBNY stock dividends and FRB demand deposits.}

^{(5) FRB demand deposits for prior period have been reclassified for consistency.}

^{(6) Includes reclassification of $48.4 million average outstanding balances from non-interest bearing demand to NOW/IOLA for the three months ended March 31, 2023.}

^{(7) Include $0.7 million of interest expense reclassified from money market to NOW/IOLA for the three months ended March 31, 2023.}

^{(8) Includes reclassification of $135.0 million average outstanding balances and $1.4 million of interest expenses from money market to certificates of deposit for the three months ended March 31, 2023.}

^{(9) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate of interest-bearing liabilities.}

^{(10) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.}

^{(11) Net interest margin represents net interest income divided by average total interest-earning assets.}

Ponce Financial Group, Inc. and Subsidiaries

Other Data

	As of
	March 31,		December 31,		September 30,		June 30,		March 31,
	2024		2023		2023		2023		2023
Other Data
Common shares issued		24,886,711		24,886,711		24,886,711		24,886,711		24,865,476
Less treasury shares		1,096,214		1,101,191		1,233,111		617,924		1,976
Common shares outstanding at end of period		23,790,497		23,785,520		23,653,600		24,268,787		24,863,500

Book value per common share	$	11.29	$	11.20	$	10.99	$	10.94	$	10.90
Tangible book value per common share	$	11.29	$	11.20	$	10.99	$	10.94	$	10.90

Contact:

Frank Perez

frank.perez@poncebank.net

718-931-9000

Ponce Financial Group, Inc. Reports First Quarter 2024 Results