8-K
NorthEast Community Bancorp, Inc./MD/ (NECB)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 30, 2021
NORTHEAST COMMUNITY BANCORP, INC.
(Exact Name of Registrant as Specified in Its Charter)
| Maryland | 001-40589 | 86-3173858 |
|---|---|---|
| (State or other jurisdiction of | (Commission | (IRS Employer |
| incorporation or organization) | File Number) | Identification No.) |
325 Hamilton Avenue, White Plains, New York 10601
(Address of principal executive offices) (Zip Code)
(914) 684-2500
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities<br>Act (17 CFR 230.425) |
|---|---|
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange<br>Act (17 CFR 240.14a-12) |
| --- | --- |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b)<br>under the Exchange Act (17 CFR 240.14d-2(b)) |
| --- | --- |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c)<br>under the Exchange Act (17 CFR 240.13e-4(c)) |
| --- | --- |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock, par value $0.01 per share | NECB | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company x
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
| Item 2.02 | Results of Operations and Financial Condition. |
|---|
On July 30, 2021, NorthEast Community Bancorp, Inc. (the “Company”) issued a press release announcing its financial results for the three and six months ended June 30, 2021. A copy of the Company’s press release is attached as Exhibit 99.1 and is furnished herewith.
The information contained in this Item 2.02 and in Exhibit 99.1 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific references in such a filing.
| Item 9.01 | Financial Statements and Other Exhibits. |
|---|
| (d) | Exhibits |
|---|---|
| Number | Description |
| --- | --- |
| 99.1 | Press<br>Release dated July 30, 2021 |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.
| NORTHEAST COMMUNITY BANCORP, INC. | ||
|---|---|---|
| Date: August 2, 2021 | By: | /s/ Kenneth A. Martinek |
| Kenneth A. Martinek | ||
| Chairman and Chief Executive Officer |
Exhibit 99.1
FOR IMMEDIATE RELEASE
| DATE: | July 30, 2021 |
|---|---|
| CONTACT: | Kenneth A. Martinek |
| --- | --- |
Chairman and Chief Executive Officer
| PHONE: | (914) 684-2500 |
|---|
NORTHEASTCOMMUNITY BANCORP, INC. REPORTS RESULTS
FOR THE QUARTER ENDED JUNE 30, 2021
White Plains, New York, July 30, 2021 – NorthEast Community Bancorp, Inc. (NasdaqCM: NECB) (the “Company”), the parent holding company of NorthEast Community Bank (the “Bank”) reported net income of $3.7 million and $7.0 million, or $0.31 and $0.58 per basic and diluted common share, for the three months and six months ended June 30, 2021, respectively, compared to net income of $2.5 million and $5.7 million, or $0.21 and $0.48 per basic and diluted common share, for the three months and six months ended June 30, 2020, respectively.
Kenneth A. Martinek, NorthEast Community Bancorp’s Chairman of the Board and Chief Executive Officer, stated “We are pleased to report another quarter of strong earnings. Throughout the COVID-19 pandemic, loan demand remained strong with originations and outstanding commitments increasing quarter over quarter. Our commitments, loans-in-process, and standby letters of credit outstanding totaled $785.7 million as of June 30, 2021. The performance of our loan portfolios remains strong with one loan past due and in foreclosure at June 30, 2021. At this time, we have two loans on deferral as a result of the COVID-19 pandemic, both with conservative loan to value ratios. As has been in the past, construction lending for affordable housing units in homogeneous high demand high absorption areas continues to be our focus.”
Highlights for the three and six months ended and at June 30, 2021 are as follows:
| · | During the three months ended June 30, 2021, the Company recorded net income of $3.7 million, or $0.31 per basic and diluted<br>share. |
|---|---|
| · | Net interest income increased by $869,000, or 9.1%, for the three months ended June 30, 2021 compared to the same period<br>in the prior year. |
| --- | --- |
| · | The Company maintained strong credit reserves amidst the uncertain economic environment and recorded a $17,000 provision for loan<br>losses during the six months ended June 30, 2021. |
| --- | --- |
| · | Asset quality metrics continued to remain strong with non-performing assets to total assets of 0.52% as of June 30, 2021. Our<br>allowance for loan losses totaled $5.1 million, or 0.61% of total loans as of June 30, 2021 compared to $5.2 million, or 0.64% of<br>total loans as of June 30, 2020. |
| --- | --- |
| · | In accordance with the provisions of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) since March<br>2020, we have granted pandemic-related loan payment deferrals to 195 loans totaling $190.8 million at the time payment deferral was requested.<br>As of June 30, 2021, we had two loans totaling $9.5 million still in deferral status. |
| --- | --- |
Balance Sheet
Total assets increased by $108.3 million, or 11.2%, to $1.1 billion at June 30, 2021, from $968.2 million at December 31, 2020. The increase in assets was primarily due to increases in cash and cash equivalents of $94.6 million, premises and equipment of $4.5 million, net loans of $5.5 million, and investment securities held-to-maturity of $3.5 million.
Cash and cash equivalents increased by $94.6 million, or 136.8%, to $163.8 million at June 30, 2021 from $69.2 million at December 31, 2020. The increase in cash can primarily be attributed to an increase in deposits of $27.1 million and an increase in stock subscriptions funds of $74.9 million related to our recently completed second-step conversion offering, partially offset by an increase in loans of $5.5 million, an increase in investment securities held-to-maturity of $3.5 million, an increase in premises and equipment of $4.5 million due to the purchase of a branch building, a decrease in advance payments by borrowers for taxes and insurance of $246,000 and cash dividends of $295,000.
Securities held-to-maturity increased by $3.5 million, or 46.9%, to $10.8 million at June 30, 2021 from $7.4 million at December 31, 2020. The increase was primarily due to the purchase of investment securities totaling $4.3 million, partially offset by maturities and pay-downs of $793,000.
Loans, net of the allowance for loan losses, increased by $5.5 million, or 0.7%, to $825.2 million at June 30, 2021 from $819.7 million at December 31, 2020. The increase in loans, net of the allowance for loan losses, was primarily due to a net increase in construction loans of $26.2 million. The increases were partially offset by decreases in non-residential loans of $5.5 million, mixed-use loans of $2.3 million, commercial and industrial loans of $10.6 million, one- to four-family loans of $1.4 million, and multi-family loans of $992,000, coupled with normal pay-downs and principal reductions.
Premises and equipment increased by $4.5 million, or 24.2%, to $23.2 million at June 30, 2021 from $18.7 million at December 31, 2020 due to the acquisition of property for a new branch site located in Monsey, New York.
Foreclosed real estate was $2.0 million at June 30, 2021 and December 31, 2020.
Right of use assets — operating, recognized in accordance with Accounting Standards Codification 842 “Leases”, decreased by $264,000, or 8.5%, to $2.8 million at June 30, 2021 from $3.1 million at December 31, 2020, primarily due to amortization.
Other assets increased by $510,000, or 10.1%, to $5.6 million at June 30, 2021 from $5.1 million at December 31, 2020 due to an increase in suspense accounts of $1.0 million and an increase in prepaid expense of $240,000, partially offset by a decrease in tax assets of $728,000.
Total deposits increased by $27.1 million, or 3.5%, to $798.8 million at June 30, 2021, from $771.7 million at December 31, 2020. The increase was primarily due to an increase in non-interest bearing demand deposits of $36.4 million, or 16.5%, and an increase in NOW/money market accounts of $18.0 million, or 17.9%, from December 31, 2020 to June 30, 2021. The increase was partially offset by a decrease in certificates of deposit of $25.3 million, or 7.3%, and a decrease in savings account balances of $2.0 million, or 2.0%, from December 31, 2020 to June 30, 2021.
Federal Home Loan Bank advances were $28.0 million at both June 30, 2021 and December 31, 2020.
Stock subscription was $74.9 million at June 30, 2021 due to stock subscription orders received in connection with our recently completed second-step conversion offering.
Stockholders’ equity increased by $7.0 million, or 4.6% to $160.8 million at June 30, 2021, from $153.8 million at December 31, 2020. The increase in stockholders’ equity was primarily a result of net income of $7.0 million for the six months ended June 30, 2021, a reduction of $202,000 in unearned employee stock ownership plan shares, partially offset by dividends declared of $144,000 and $3,000 in other comprehensive loss.
Net Interest Income
Net interest income totaled $10.4 million for the three months ended June 30, 2021, as compared to $9.5 million for the three months ended June 30, 2020. The increase in net interest income of $870,000, or 9.1%, was primarily due to the decrease in interest expense that exceeded a decrease in interest income.
The decrease in interest expense and interest income is consistent with the decrease in interest rates in response to the COVID-19 pandemic and its impact on the economy and interest rate environment. However, our cost of interest bearing liabilities decreased much greater than our yield on interest earning assets as our interest bearing liabilities repriced much faster to lower rates than our yield on interest earning assets. In this regard, our cost of interest bearing liabilities decreased by 89 basis points from 1.80% for the three months ended June 30, 2020 to 0.91% for the three months ended June 30, 2021. Our yield on interest earning assets decreased by 53 basis points from 5.58% for the three months ended June 30, 2020 to 5.05% for the three months ended June 30, 2021.
Net interest margin increased by 18 basis points, or 4.2%, during the three months ended June 30, 2021 to 4.49% compared to 4.31% during the three months ended June 30, 2020.
Net interest income totaled $20.7 million for the six months ended June 30, 2021, as compared to $19.0 million for the six months ended June 30, 2020. The increase in net interest income of $1.8 million, or 9.4%, was primarily due to the decrease in interest expense that exceeded a decrease in interest income.
In a manner consistent with the decrease in interest rates in response to the COVID-19 pandemic, our cost of interest bearing liabilities decreased much greater than our yield on interest earning assets as our interest bearing liabilities repriced much faster to lower rates than our yield on interest earning assets. In this regard, our cost of interest bearing liabilities decreased by 96 basis points from 1.93% for the six months ended June 30, 2020 to 0.97% for the six months ended June 30, 2021. Our yield on interest earning assets decreased by 62 basis points from 5.76% for the six months ended June 30, 2020 to 5.14% for the six months ended June 30, 2021.
Net interest margin increased by 17 basis points, or 3.9%, during the six months ended June 30, 2021 to 4.54% compared to 4.37% during the six months ended June 30, 2020.
Non-Interest Income
Non-interest income for the three months ended June 30, 2021 was $778,000 compared to non-interest income of $541,000 for the three months ended June 30, 2020. The increase in total non-interest income was primarily due to an increase of $193,000 in other loan fees and service charges, an increase of $32,000 in investment advisory fees, a net gain of $7,000 on the sale of fixed assets, and an increase of $6,000 in other non-interest income, partially offset by a decrease of $1,000 in bank owned life insurance income.
Non-interest income for the six months ended June 30, 2021 was $1.2 million compared to non-interest income of $1.4 million for the six months ended June 30, 2020. The decrease in total non-interest income was primarily due to an unrealized loss of $62,000 in our equity securities in the 2021 period compared to an unrealized gain of $299,000 in the comparable period in 2020, a decrease of $119,000 in other non-interest income, and a decrease of $10,000 in bank owned life insurance income. These were partially offset by an increase of $245,000 in other loan fees and service charges, an increase of $36,000 in investment advisory fees, and a net gain of $7,000 on the sale of fixed assets.
Non-Interest Expense
Non-interest expense increased by $8,000, or 0.1%, to $6.3 million for the three months ended June 30, 2021 from $6.3 million for the three months ended June 30, 2020. The increase resulted primarily from increases of $244,000 in other operating expense and $45,000 in equipment expense, partially offset by decreases of $88,000 in outside data processing expense, $77,000 in salaries and employee benefits, $67,000 in real estate owned expense, $42,000 in advertising expense, and $7,000 in occupancy expense.
Non-interest expense increased by $493,000, or 4.0%, to $12.9 million for the six months ended June 30, 2021 from $12.4 million for the six months ended June 30, 2020. The increase resulted primarily from increases of $303,000 in salaries and employee benefits, $195,000 in other operating expense, $88,000 in occupancy expense, and $77,000 in equipment expense, partially offset by decreases of $73,000 in real estate owned expense, $71,000 in advertising expense, and $26,000 in outside data processing expense.
Income Taxes
We recorded income tax expense of $1.1 million and $752,000 for the three months ended June 31, 2021 and 2020, respectively. For the three months ended June 30, 2021, we had approximately $174,000 in tax exempt income, compared to approximately $165,000 in tax exempt income for the three months ended June 30, 2020. Our effective income tax rates were 23.2% and 23.3% for the three months ended June 30, 2021 and 2020, respectively.
We recorded income tax expense of $2.1 million and $1.7 million for the six months ended June 31, 2021 and 2020, respectively. For the six months ended June 30, 2021, we had approximately $336,000 in tax exempt income, compared to approximately $337,000 in tax exempt income for the six months ended June 30, 2020. Our effective income tax rates were 23.2% and 23.4% for the six months ended June 30, 2021 and 2020, respectively.
Asset Quality
Our ratio of non-performing assets to total assets remained low at 0.52% as of June 30, 2021. Our net charge-offs remained low with $11,000 of net charge-offs recorded during the six months ended June 30, 2021, compared to a net recovery of $21,000 during the six months ended June 30, 2020. We recorded a $17,000 provision for loan losses during the six months ended June 30, 2021, compared to a $532,000 provision for loan losses during the six months ended June 30, 2020.
The provision recorded for the six months ended June 30, 2020 was primarily attributed to the perceived potential credit risk associated with the COVID-19 pandemic, although no specific or probable losses were identified at that time. Although the COVID-19 pandemic and the resulting recession has impacted the local economy, we have not experienced any significant deterioration of our borrowers’ ability to keep current in accordance with the terms of their obligations. Based on a review of the loans that were in the loan portfolio at June 30, 2021, management believes that the allowance is maintained at a level that represents its best estimate of inherent losses in the loan portfolio that were both probable and reasonably estimable.
Our allowance for loan losses totaled $5.1 million, or 0.61% of total loans as of June 30, 2021, compared to $5.1 million, or 0.62% of total loans as of December 31, 2020.
Capital
The Bank’s capital position remains strong relative to current regulatory requirements and is considered a well-capitalized institution under the Prompt Corrective Action framework. As of June 30, 2021, the Bank had a tier 1 leverage capital ratio of 14.84% and a total risk-based capital ratio of 13.58%. The Company’s total stockholder’s equity to assets was 14.94% as of June 30, 2021. At June 30, 2021, the Company had the ability to borrow $41.2 million from the Federal Home Loan Bank of New York.
About NorthEast Community Bancorp
NorthEast Community Bancorp, headquartered at 325 Hamilton Avenue, White Plains, New York 10601, is the holding company for NorthEast Community Bank, which conducts business through its nine branch offices located in Bronx, New York, Orange, and Rockland Counties in New York and Essex, Middlesex, and Norfolk Counties in Massachusetts and three loan production offices located in New City, New York, White Plains, New York, and Danvers, Massachusetts. For more information about NorthEast Community Bancorp and NorthEast Community Bank, please visit www.necb.com.
Forward Looking Statement
This press release contains certain forward-looking statements. Forward-looking statements include statements regarding anticipated future events and can be identified by the fact that they do not relate strictly to historical or current facts. They often include words such as “believe,” “expect,” “anticipate,” “estimate,” and “intend” or future or conditional verbs such as “will,” “would,” “should,” “could,” or “may.” Forward-looking statements, by their nature, are subject to risks and uncertainties. Certain factors that could cause actual results to differ materially from expected results include, but are not limited to, changes in market interest rates, regional and national economic conditions, the effect of the COVID-19 pandemic (including its impact on NorthEast Community Bank’s business operations and credit quality, on our customers and their ability to repay their loan obligations and on general economic and financial market conditions), legislative and regulatory changes, monetary and fiscal policies of the United States government, including policies of the United States Treasury and the Federal Reserve Board, the quality and composition of the loan or investment portfolios, demand for loan products, deposit flows, competition, demand for financial services in NorthEast Community Bank’s market area, changes in the real estate market values in NorthEast Community Bank’s market area and changes in relevant accounting principles and guidelines. These risks and uncertainties should be considered in evaluating any forward-looking statements and undue reliance should not be placed on such statements. Except as required by applicable law or regulation, the Company does not undertake, and specifically disclaims any obligation, to release publicly the result of any revisions that may be made to any forward-looking statements to reflect events or circumstances after the date of the statements or to reflect the occurrence of anticipated or unanticipated events.
NORTHEAST COMMUNITY BANCORP, INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Unaudited)
| December 31, | |||||
|---|---|---|---|---|---|
| 2020 | |||||
| ASSETS | |||||
| Cash and amounts due from depository institutions | 8,953 | $ | 7,613 | ||
| Interest-bearing deposits | 154,882 | 61,578 | |||
| Cash and cash equivalents | 163,835 | 69,191 | |||
| Certificates of deposit | 100 | 100 | |||
| Equity Securities | 10,270 | 10,332 | |||
| Securities available-for-sale, at fair value | 2 | 2 | |||
| Securities held-to-maturity (fair value of 10,932 and 7,519, respectively) | 10,842 | 7,382 | |||
| Loans receivable | 829,970 | 824,708 | |||
| Deferred loan (fees) costs, net | 338 | 113 | |||
| Allowance for loan losses | (5,094 | ) | (5,088 | ) | |
| Net loans | 825,214 | 819,733 | |||
| Premises and equipment, net | 23,187 | 18,675 | |||
| Investments in restricted stock, at cost | 1,569 | 1,595 | |||
| Bank owned life insurance | 24,987 | 24,691 | |||
| Accrued interest receivable | 3,619 | 3,838 | |||
| Goodwill | 651 | 651 | |||
| Real estate owned | 1,996 | 1,996 | |||
| Property held for investment | 1,500 | 1,518 | |||
| Right of Use Assets – Operating | 2,830 | 3,094 | |||
| Right of Use Assets – Financing | 361 | 363 | |||
| Other assets | 5,570 | 5,060 | |||
| Total assets | 1,076,533 | $ | 968,221 | ||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||
| Liabilities: | |||||
| Deposits: | |||||
| Non-interest bearing | 257,808 | $ | 221,371 | ||
| Interest bearing | 540,996 | 550,335 | |||
| Total deposits | 798,804 | 771,706 | |||
| Advance payments by borrowers for taxes and insurance | 2,012 | 2,258 | |||
| Federal Home Loan Bank advances | 28,000 | 28,000 | |||
| Lease Liability – Operating | 2,864 | 3,115 | |||
| Lease Liability – Financing | 478 | 460 | |||
| Stock Subscription | 74,933 | - | |||
| Accounts payable and accrued expenses | 8,595 | 8,857 | |||
| Total liabilities | 915,686 | 814,396 | |||
| Stockholders’ equity: | |||||
| Preferred stock, 0.01 par value; 1,000,000 shares authorized, none issued | — | — | |||
| Common stock, 0.01 par value; 19,000,000 shares authorized; 13,225,000 shares issued; and 12,194,611 shares outstanding at June 30, 2021 and December 31, 2020, respectively | 132 | $ | 132 | ||
| Additional paid-in capital | 56,974 | 56,901 | |||
| Unearned Employee Stock Ownership Plan (“ESOP”) shares | (1,166 | ) | (1,296 | ) | |
| Treasury stock – at cost, 1,030,389 shares at June 30, 2021 and December 31, 2020, respectively | (7,032 | ) | (7,032 | ) | |
| Retained earnings | 112,127 | 105,305 | |||
| Accumulated other comprehensive loss | (188 | ) | (185 | ) | |
| Total stockholders’ equity | 160,847 | 153,825 | |||
| Total liabilities and stockholders’ equity | 1,076,533 | $ | 968,221 |
All values are in US Dollars.
NORTHEAST COMMUNITY BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
| Three Months Ended<br><br> June 30, | Six Months Ended<br><br> June 30, | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| 2021 | 2020 | 2021 | 2020 | ||||||
| (In thousands, except per share amounts) | (In thousands, except per share amounts) | ||||||||
| INTEREST INCOME: | |||||||||
| Loans | $ | 11,575 | $ | 12,196 | $ | 23,302 | $ | 24,441 | |
| Interest-earning deposits | 11 | 11 | 21 | 331 | |||||
| Securities – taxable | 90 | 108 | 173 | 224 | |||||
| Total Interest Income | 11,676 | 12,315 | 23,496 | 24,996 | |||||
| INTEREST EXPENSE: | |||||||||
| Deposits | 1,113 | 2,622 | 2,395 | 5,685 | |||||
| Borrowings | 176 | 176 | 350 | 332 | |||||
| Financing Lease | 9 | 9 | 18 | 18 | |||||
| Total Interest Expense | 1,298 | 2,807 | 2,763 | 6,035 | |||||
| Net Interest Income | 10,378 | 9,508 | 20,733 | 18,961 | |||||
| Provision for loan loss | — | 518 | 17 | 532 | |||||
| Net Interest Income after Provision for Loan Losses | 10,378 | 8,990 | 20,716 | 18,429 | |||||
| NON-INTEREST INCOME: | |||||||||
| Other loan fees and service charges | 393 | 200 | 715 | 470 | |||||
| Gain on disposition of equipment | 7 | — | 7 | — | |||||
| Earnings on bank owned life insurance | 148 | 149 | 295 | 305 | |||||
| Investment advisory fees | 124 | 92 | 242 | 206 | |||||
| Unrealized gain (loss) on equity securities | 93 | 93 | (62 | ) | 299 | ||||
| Other | 13 | 7 | 24 | 143 | |||||
| Total Non-Interest Income | 778 | 541 | 1,221 | 1,423 | |||||
| NON-INTEREST EXPENSES: | |||||||||
| Salaries and employee benefits | 3,512 | 3,589 | 7,169 | 6,866 | |||||
| Occupancy expense | 472 | 479 | 1,045 | 957 | |||||
| Equipment | 239 | 194 | 488 | 411 | |||||
| Outside data processing | 337 | 425 | 824 | 850 | |||||
| Advertising | 24 | 66 | 47 | 118 | |||||
| Real estate owned expense | 26 | 93 | 68 | 141 | |||||
| Other | 1,699 | 1,455 | 3,223 | 3,028 | |||||
| Total Non-Interest Expenses | 6,309 | 6,301 | 12,864 | 12,371 | |||||
| INCOME BEFORE PROVISION FOR INCOME TAXES | 4,847 | 3,230 | 9,073 | 7,481 | |||||
| PROVISION FOR INCOME TAXES | 1,126 | 752 | 2,107 | 1,747 | |||||
| NET INCOME | $ | 3,721 | $ | 2,478 | $ | 6,966 | $ | 5,734 | |
| EARNINGS PER COMMON SHARE – BASIC AND DILUTED | $ | 0.31 | $ | 0.21 | $ | 0.58 | $ | 0.48 | |
| WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING – BASIC AND DILUTED | 12,075 | 12,049 | 12,075 | 12,049 | |||||
| DIVIDENDS DECLARED PER COMMON SHARE | $ | 0.03 | $ | 0.03 | $ | 0.03 | $ | 0.03 |
NORTHEAST COMMUNITY BANCORP, INC.
SELECTED CONSOLIDATED FINANCIAL DATA
(Unaudited)
| Three Months Ended<br><br> June 30, | Six Months Ended<br><br> June 30, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2021 | 2020 | 2021 | 2020 | |||||||||
| (In thousands, except per share amounts) | (In thousands, except per share amounts) | |||||||||||
| Per share data: | ||||||||||||
| Earnings per share - basic and diluted | $ | 0.31 | $ | 0.21 | $ | 0.58 | $ | 0.48 | ||||
| Weighted average shares outstanding - basic and diluted | 12,075 | 12,049 | 12,075 | 12,049 | ||||||||
| Performance ratios/data: | ||||||||||||
| Return on average total assets | 1.50 | % | 1.05 | % | 1.42 | % | 1.23 | % | ||||
| Return on average shareholders' equity | 9.32 | % | 6.75 | % | 8.83 | % | 7.88 | % | ||||
| Net interest income | $ | 10,378 | $ | 9,509 | $ | 20,733 | $ | 18,960 | ||||
| Net interest margin | 4.49 | % | 4.31 | % | 4.54 | % | 4.37 | % | ||||
| Efficiency ratio | 56.56 | % | 62.71 | % | 58.60 | % | 60.69 | % | ||||
| Loan portfolio composition: | June 30, 2021 | December 31, 2020 | ||||||||||
| One-to-four family | $ | 4,803 | $ | 6,170 | ||||||||
| Multi-family | 89,514 | 90,506 | ||||||||||
| Mixed-use | 28,230 | 30,508 | ||||||||||
| Total residential real estate | 122,547 | 127,184 | ||||||||||
| Non-residential real estate | 55,144 | 60,665 | ||||||||||
| Construction | 571,963 | 545,788 | ||||||||||
| Commercial and industrial | 79,973 | 90,577 | ||||||||||
| Overdrafts | 302 | 452 | ||||||||||
| Consumer | 41 | 42 | ||||||||||
| Gross loans | 829,970 | 824,708 | ||||||||||
| Deferred loan (fees) costs, net | 338 | 113 | ||||||||||
| Total loans | $ | 830,308 | $ | 824,821 | ||||||||
| Asset quality data: | ||||||||||||
| Loans past due over 90 days and still accruing | $ | - | $ | - | ||||||||
| Non-accrual loans | 3,593 | 3,572 | ||||||||||
| OREO property | 1,996 | 1,996 | ||||||||||
| Total non-performing assets | $ | 5,589 | $ | 5,568 | ||||||||
| Net recoveries (charge-offs) | $ | (8 | ) | $ | 7 | $ | (11 | ) | $ | 21 | ||
| Allowance for loan losses to total loans | 0.61 | % | 0.62 | % | ||||||||
| Allowance for loan losses to non-performing loans | 141.78 | % | 142.60 | % | ||||||||
| Non-performing loans to total loans | 0.43 | % | 0.43 | % | ||||||||
| Non-performing assets to total assets | 0.52 | % | 0.58 | % | ||||||||
| Bank's Regulatory Capital ratios: | ||||||||||||
| Common equity tier 1 capital to risk-weighted assets | 13.58 | % | 13.72 | % | ||||||||
| Total capital to risk-weighted assets | 13.12 | % | 13.23 | % | ||||||||
| Tier 1 capital to risk-weighted assets | 13.12 | % | 13.23 | % | ||||||||
| Tier 1 leverage ratio | 14.84 | % | 14.79 | % |
NORTHEAST COMMUNITY BANCORP, INC.
NET INTEREST MARGIN ANALYSIS
(Unaudited)
| Three Months Ended<br><br> June 30, 2021 | Three Months Ended<br><br> June 30, 2020 | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Average | Interest | Average | Average | Average | ||||||||||||
| Balance | and dividend | Yield | Balance | Interest | Yield | |||||||||||
| (In thousands, except yield/cost information) | (In thousands, except yield/cost information) | |||||||||||||||
| Loan receivable Gross | $ | 833,973 | $ | 11,575 | 5.55 | % | $ | 804,843 | $ | 12,196 | 6.06 | % | ||||
| Securities (1) | 21,513 | 90 | 1.67 | % | 20,689 | 108 | 2.09 | % | ||||||||
| Other interest-earning assets | 69,368 | 11 | 0.06 | % | 57,037 | 11 | 0.08 | % | ||||||||
| Total interest-earning assets | 924,854 | 11,676 | 5.05 | % | 882,569 | 12,315 | 5.58 | % | ||||||||
| Allowance for loan losses | (5,103 | ) | (4,881 | ) | ||||||||||||
| Non-interest-earning assets | 72,615 | 62,887 | ||||||||||||||
| Total assets | $ | 992,366 | $ | 940,575 | ||||||||||||
| Interest-bearing demand deposit | $ | 114,675 | $ | 164 | 0.57 | % | $ | 109,640 | $ | 142 | 0.52 | % | ||||
| Savings and club accounts | 101,162 | 48 | 0.19 | % | 104,526 | 236 | 0.90 | % | ||||||||
| Certificates of deposit | 324,420 | 901 | 1.11 | % | 379,913 | 2,244 | 2.36 | % | ||||||||
| Total interest-bearing deposits | 540,257 | 1,113 | 0.82 | % | 594,079 | 2,622 | 1.77 | % | ||||||||
| Borrowed money | 28,000 | 185 | 2.64 | % | 28,000 | 185 | 2.64 | % | ||||||||
| Total interest-bearing liabilities | 568,257 | 1,298 | 0.91 | % | 622,079 | 2,807 | 1.80 | % | ||||||||
| Non-interest-bearing demand deposit | 239,996 | 159,953 | ||||||||||||||
| Other non-interest-bearing liabilities | 24,429 | 11,656 | ||||||||||||||
| Total liabilities | 832,682 | 793,688 | ||||||||||||||
| Equity | 159,684 | 146,887 | ||||||||||||||
| Total liabilities and equity | $ | 992,366 | $ | 940,575 | ||||||||||||
| Net interest income / interest spread | $ | 10,378 | 4.14 | % | $ | 9,508 | 3.78 | % | ||||||||
| Net interest rate margin | 4.49 | % | 4.31 | % | ||||||||||||
| Net interest earning assets | $ | 356,597 | $ | 260,490 | ||||||||||||
| Average interest-earning assets to<br> interest-bearing liabilities | 162.75 | % | 141.87 | % |
(1) Includes Federal Home Loan Bank of New York stock.
| Six Months Ended<br><br> June 30, 2021 | Six Months Ended<br><br> June 30, 2020 | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Average | Interest | Average | Average | Average | ||||||||||||
| Balance | and dividend | Yield | Balance | Interest | Yield | |||||||||||
| (In thousands, except yield/cost information) | (In thousands, except yield/cost information) | |||||||||||||||
| Loan receivable Gross | $ | 834,219 | $ | 23,302 | 5.59 | % | $ | 785,691 | $ | 24,441 | 6.22 | % | ||||
| Securities (1) | 20,312 | 173 | 1.70 | % | 20,683 | 224 | 2.17 | % | ||||||||
| Other interest-earning assets | 58,942 | 21 | 0.07 | % | 61,079 | 331 | 1.08 | % | ||||||||
| Total interest-earning assets | 913,473 | 23,496 | 5.14 | % | 867,453 | 24,996 | 5.76 | % | ||||||||
| Allowance for loan losses | (5,096 | ) | (4,751 | ) | ||||||||||||
| Non-interest-earning assets | 70,157 | 67,842 | ||||||||||||||
| Total assets | $ | 978,534 | $ | 930,544 | ||||||||||||
| Interest-bearing demand deposit | $ | 111,357 | $ | 320 | 0.57 | % | $ | 109,973 | $ | 464 | 0.84 | % | ||||
| Savings and club accounts | 101,893 | 127 | 0.25 | % | 102,163 | 459 | 0.90 | % | ||||||||
| Certificates of deposit | 330,546 | 1,948 | 1.18 | % | 387,125 | 4,762 | 2.46 | % | ||||||||
| Total interest-bearing deposits | 543,796 | 2,395 | 0.88 | % | 599,261 | 5,685 | 1.90 | % | ||||||||
| Borrowed money | 28,000 | 368 | 2.63 | % | 25,577 | 350 | 2.74 | % | ||||||||
| Total interest-bearing liabilities | 571,796 | 2,763 | 0.97 | % | 624,838 | 6,035 | 1.93 | % | ||||||||
| Non-interest-bearing demand deposit | 229,854 | 148,964 | ||||||||||||||
| Other non-interest-bearing liabilities | 19,020 | 11,221 | ||||||||||||||
| Total liabilities | 820,670 | 785,023 | ||||||||||||||
| Equity | 157,864 | 145,521 | ||||||||||||||
| Total liabilities and equity | $ | 978,534 | $ | 930,544 | ||||||||||||
| Net interest income / interest spread | $ | 20,733 | 4.18 | % | $ | 18,961 | 3.83 | % | ||||||||
| Net interest rate margin | 4.54 | % | 4.37 | % | ||||||||||||
| Net interest earning assets | $ | 341,677 | $ | 242,615 | ||||||||||||
| Average interest-earning assets to<br> interest-bearing liabilities | 159.76 | % | 138.83 | % |
(1) Includes Federal Home Loan Bank of New York stock.