PDL Community Bancorp Announces 2017 Third Quarter Results


NEW YORK, Nov. 13, 2017 (GLOBE NEWSWIRE) -- PDL Community Bancorp, (the “Company”) (NASDAQ:PDLB), the holding company for Ponce Bank (the “Bank”), reported a net loss of $3.2 million for the quarter ended September 30, 2017 compared to net income of $282,000 for the same period in 2016. The Company reported a net loss of $1.5 million for the nine months ended September 30, 2017 compared to net income of $1.2 million for the same period in 2016. The Company’s results for the quarter ended September 30, 2017 include a one-time pre-tax contribution of $6.3 million in connection with the funding of the Ponce De Leon Foundation (the “Foundation”), a charitable organization established in connection with the recent reorganization and dedicated to providing financial support to charitable organizations in the communities in which the Bank operates now and in the future. Excluding this non-recurring expense, net income would have been $953,000 for the quarter ended September 30, 2017 and $2.8 million for the nine months ended September 30, 2017. 

“The current quarter marks our beginning quarter as a public company, for which we thank our depositors for their faith in our reorganization and our investors for their confidence in our future,” said Steven A. Tsavaris, Executive Chairman. Carlos P. Naudon, President and CEO, noted that “we were able to fund the Foundation and are starting with otherwise excellent results in our metrics, as we have reported today.”

Net Interest Income

Net interest income was $8.3 million for the quarter ended September 30, 2017, up $1.4 million, or 20.3%, from $6.9 million for the quarter ended September 30, 2016. The interest rate spread and net interest margin was 3.58% and 3.86%, respectively, for the quarter ended September 30, 2017 compared to 3.73% and 3.94%, respectively, for the quarter ended September 30, 2016. The increase in net interest income for the quarter ended September 30, 2017 compared to the  same period in 2016 reflects a $1.8 million, or 21.4%, increase in total interest and dividend income offset by an increase of $325,000, or 21.8%, in total interest expense. The increase in interest and dividend income is primarily due to the commercial loan growth that provided an increase in average outstanding loans of $148.3 million or 24.2%, for the quarter ended September 30, 2017 compared to the same period in 2016. The yield on loans decreased to 5.15% for the quarter ended September 30, 2017 from 5.27% for the same period in 2016. The increase in interest expense is due to an increase in average interest-bearing liabilities of $82.5 million or 14.8%, for the quarter ended September 30, 2017 compared to the same period in 2016. The cost of interest-bearing liabilities increased to 1.12% for the quarter ended September 30, 2017 from 1.06% for the same period in 2016.

Net interest income was $23.7 million for the nine months ended September 30, 2017, up $2.9 million, or 13.9% from $20.8 million for the nine months ended September 30, 2016. The interest rate spread and net interest margin was 3.83% and 4.07%, respectively, for the nine months ended September 30, 2017 compared to 3.84% and 4.04%, respectively, for the nine months ended September 30, 2016. The increase in net interest income for the nine months ended September 30, 2017 compared to the same period in 2016 reflects a $3.5 million, or 13.7%, increase in total interest and dividend income offset by an increase of $520,000, or 11.8% in total interest expense. The increase in interest and dividend income is primarily due to the commercial loan growth that provided an increase in average outstanding loans of $114.0 million or 19.1%, for the quarter ended September 30, 2017 compared to the same period in 2016. The yield on loans decreased to 5.28% for the nine months ended September 30, 2017 from 5.44% for the same period in 2016. The increase in interest expense is due to an increase in average interest-bearing liabilities of $51.8 million, or 9.3%, for the nine months ended September 30, 2017 compared to the same period in 2016. The cost of interest-bearing liabilities increased to 1.09% for the nine months ended September 30, 2017 from 1.06% for the same period in 2016.

Total borrowings also contributed to the increase in interest expense as the average balance of borrowings increased $20.8 million to $21.3 million for the three months ended September 30, 2017 from $500,000 for the same period in 2016. The cost of borrowings increased to 1.23% for the quarter ended September 30, 2017 from a de minimis amount for the same period in 2016. The average balance of borrowings increased $13.1 million to $14.6 million for the nine months ended September 30, 2017 from $1.5 million for the same period in 2016. The cost of borrowings increased to 1.16% for the nine months ended September 30, 2017 from 0.62% for the same period in 2016.

Noninterest Income

Noninterest income was $768,000 for the quarter ended September 30, 2017, up $130,000, or 20.4%, from $638,000 for the same period in 2016. The increase is mainly attributed to increases in miscellaneous non-recurring income of $41,000, brokerage commission fees of $34,000, other mortgage fees of $27,000, debit card fees of $11,000, and line of credit and letter of credit fees of $12,000.

Noninterest income was $2.4 million for the nine months ended September 30, 2017, up $567,000, or 30.7%, from $1.8 million for the same period in 2016. The increase is mainly attributed to increases in mortgage loan fees of $327,000, letter of credit fees of $81,000, brokerage commissions of $71,000, and debit card fees of $54,000.

Noninterest Expenses

Noninterest expenses were $13.7 million for the quarter ended September 30, 2017, up $6.8 million, or 99.5%, from $6.9 million for the same period in 2016. The increase is mainly attributed to a one-time pre-tax contribution of $6.3 million in connection with the establishment of the Foundation.

Noninterest expenses were $27.8 million for the nine months ended September 30, 2017, up $7.0 million, or 33.6%, from $20.8 million for the same period in 2016. The increase is mainly attributed to a one-time pre-tax contribution of $6.3 million in connection with the establishment of the Foundation.

Asset Quality

Provision for loan losses was $238,000 for the quarter ended September 30, 2017, up $122,000, or 105.2%, from $116,000 for the same period in 2016. Provision for loan losses was $497,000 for the nine months ended September 30, 2017, up $693,000, or 353.6%, from a recovery of $196,000 for the nine months ended September 30, 2016. The increases in the provision for loan losses for both periods are mainly reflections of the commercial loan growth. The increases in the provision for loan losses were based on management’s assessment of the loan portfolio growth and composition changes, improving historical charge-off trends, and ongoing evaluation of credit quality and current economic conditions. The allowance for loan losses was $11.1 million, or 1.43%, of total loans at September 30, 2017, compared to $10.2 million, or 1.59%, of total loans at September 30, 2016. Net charge-offs totaled $6,000 for the quarter ended September 30, 2017, or 0.003% of average loans outstanding on an annualized basis, compared to $13,000 for the quarter ended September 30, 2016, or 0.008% of average loans outstanding on an annualized basis.

Balance Sheet

Total assets increased $147.3 million, or 19.8%, to $892.3 million at September 30, 2017 from $745.0 million at December 31, 2016. Net loans increased $125.6 million, or 19.6%, to $767.7 million at September 30, 2017 from $642.1 million at December 31, 2016. The increase in net loans was primarily attributed to increases of $72.3 million in commercial real estate loans and $51.9 million in investor-owned one-four family residences.

Total deposits increased $55.6 million, or 8.6%, to $698.7 million at September 30, 2017 from $643.1 million at December 31, 2016. The increase in deposits was primarily attributed to increases in certificates of deposits of $31.9 million, demand deposits of $14.2 million and money market accounts of $7.7 million.

Total stockholders’ equity was $168.5 million at September 30, 2017 compared to $93.0 million at December 31, 2016. The Company and the Bank exceed all regulatory capital requirements to be deemed well-capitalized at September 30, 2017.

Attached hereto are selected financial tables.   

About PDL Community Bancorp

PDL Community Bancorp is the holding company for Ponce Bank. The Bank’s business primarily consists of taking deposits from the general public and investing those deposits, together with funds generated from operations and borrowings, in mortgage loans, consisting of one-to-four family residences (investor-owned and owner-occupied), multifamily residences, nonresidential properties and construction and land, and, to a lesser extent, in business and consumer loans. The Bank also invests in securities, which have historically consisted of U.S. Government and federal agency securities and securities issued by government-sponsored or -owned enterprises, as well as, mortgage-backed securities and Federal Home Loan Bank stock. The Bank offers a variety of deposit accounts, including demand, savings, money market and certificates of deposit.  

Attached hereto are selected financial tables.   

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 the Company’s 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 the Company’s 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 the Company operates, including changes that adversely affect borrowers’ ability to service and repay the Company’s loans; changes in the value of securities in the Company’s 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 goodwill and intangibles recorded in the Company’s financial statements will become impaired; demand for loans in the Company’s market area; the Company’s ability to attract and maintain deposits; risks related to the implementation of acquisitions, dispositions, and restructurings; the risk that the Company 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 the prospectus 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. Should one or more of these risks materialize or should underlying beliefs or assumptions prove incorrect, PDL Community Bancorp’s actual results could differ materially from those discussed. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. The Company 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.

PDL Community Bancorp and Subsidiaries

Consolidated Statements of Financial Condition
September 30, 2017 (Unaudited) and December 31, 2016

(Dollars in thousands, except for share data)
       
  September 30,  December 31, 
  2017  2016 
  (Unaudited)     
ASSETS        
Cash and due from banks:        
Cash $4,716  $4,796 
Interest-bearing deposits in banks  51,629   6,920 
Total cash and cash equivalents  56,345   11,716 
Available-for-sale securities, at fair value  29,312   52,690 
Loans held for sale     2,143 
Loans receivable, net of allowance for loan losses - 2017 $11,147; 2016 $10,205  767,721   642,148 
Accrued interest receivable  3,132   2,707 
Other real estate owned      
Premises and equipment, net  25,729   26,028 
Federal Home Loan Bank Stock (FHLB), at cost  1,448   964 
Deferred tax assets  5,563   3,379 
Other assets  3,013   3,208 
Total assets $892,263  $744,983 
LIABILITIES AND STOCKHOLDERS' EQUITY        
Liabilities:        
Deposits $698,655  $643,078 
Accrued interest payable  32   28 
Advance payments by borrowers for taxes and insurance  5,967   3,882 
Advances from the Federal Home Loan Bank  15,000   3,000 
Other liabilities  4,101   2,003 
Total liabilities  723,755   651,991 
Commitments and contingencies      
Stockholders' Equity:        
Preferred stock, $0.01 par value; 10,000,000 shares authorized, none issued      
Common stock, $0.01 par value; 50,000,000  shares authorized; 18,463,028 shares issued and        
outstanding at September 30, 2017  185    
Additional paid-in-capital  84,099    
Retained earnings  97,719   99,242 
Accumulated other comprehensive loss  (6,257)  (6,250)
Unearned compensation - ESOP; 723,751 shares  (7,238)   
Total stockholders' equity  168,508   92,992 
         
Total liabilities and stockholders' equity $892,263  $744,983 
         


PDL Community Bancorp and Subsidiaries

Consolidated Statements of Operations
September 30, 2017 (Unaudited) and December 31, 2016

(Dollars in thousands)
 
 
 For the Three Months Ended September 30,  For the Nine Months Ended September 30, 
  2017  2016  2017  2016 
  (Unaudited)  (Unaudited) 
Interest and dividend income:                
Interest on loans receivable $9,893  $8,128  $28,065  $24,330 
Interest and dividends on investment securities and FHLB stock  271   243   596   870 
Total interest and dividend income  10,164   8,371   28,661   25,200 
Interest expense:                
Interest on certificates of deposit  1,574   1,386   4,318   4,117 
Interest on other deposits  176   104   487   287 
Interest on borrowings  66   1   126   7 
Total interest expense  1,816   1,491   4,931   4,411 
Net interest income  8,348   6,880   23,730   20,789 
Provision for loan losses (recovery)  238   116   497   (196)
Net interest income after provision for loan losses (recovery)  8,110   6,764   23,233   20,985 
Noninterest income:                
Service charges and fees  231   238   684   704 
Brokerage commissions  167   133   453   382 
Late and prepayment charges  157   111   603   257 
Other  213   156   676   506 
Total noninterest income  768   638   2,416   1,849 
Noninterest expense:                
Compensation and benefits  4,220   3,635   12,005   10,986 
Occupancy expense  1,412   1,410   4,235   4,181 
Data processing expenses  316   490   1,181   1,240 
Direct loan expenses  189   214   558   678 
Insurance and surety bond premiums  44   97   205   369 
Office supplies, telephone and postage  250   279   786   819 
FDIC deposit insurance assessment  122   102   246   546 
Charitable foundation contributions  6,293      6,293    
Other operating expenses  884   654   2,320   1,983 
Total noninterest expense  13,730   6,881   27,829   20,802 
Income (loss) before income taxes  (4,852)  521   (2,180)  2,032 
Provision (benefit) for income taxes  (1,643)  239   (657)  846 
Net income (loss) $(3,209) $282  $(1,523) $1,186 
                 


PDL Community Bancorp and Subsidiaries

Average Balances / Yields / Rates
(Unaudited)

(Dollars in thousands)
 
  
  For the Three Months Ended September 30, 
  2017  2016 
  Average          Average         
  Outstanding      Average  Outstanding      Average 
  Balance  Interest  Yield/Rate (1)  Balance  Interest  Yield/Rate (1) 
  (Dollars in thousands) 
Interest-earning assets:                        
Loans $762,048  $9,893   5.15% $613,759  $8,128   5.27%
Available-for-sale securities  29,543   104   1.40%  64,987   227   1.39%
Other (2)  65,468   167   1.01%  15,498   16   0.41%
Total interest-earning assets  857,059   10,164   4.70%  694,244   8,371   4.80%
Non-interest-earning assets  33,946           33,661         
Total assets $891,005          $727,905         
Interest-bearing liabilities:                        
Savings accounts $130,855  $131   0.40% $128,355  $78   0.24%
Interest-bearing demand  78,373   44   0.22%  53,750   26   0.19%
Certificates of deposit  404,365   1,574   1.54%  371,330   1,386   1.48%
Total deposits  613,593   1,749   1.13%  553,435   1,490   1.07%
Advance payments by borrowers  6,060   1   0.07%  4,514   1   0.09%
Borrowings  21,267   66   1.23%  500      0.00%
Total interest-bearing liabilities  640,920   1,816   1.12%  558,449   1,491   1.06%
Non-interest-bearing liabilities:                        
Non-interest-bearing demand  148,251          72,909        
Other non-interest-bearing liabilities  3,391          3,427        
Total non-interest-bearing liabilities  151,642          76,336        
Total liabilities  792,562   1,816       634,785   1,491     
Total equity  98,443           93,120         
Total liabilities and total equity $891,005       1.12% $727,905       1.06%
Net interest income     $8,348          $6,880     
Net interest rate spread (3)          3.58%          3.73%
Net interest-earning assets (4) $216,139          $135,795         
Net interest margin (5)          3.86%          3.94%
Average interest-earning assets to
  interest-bearing liabilities
          133.72%          124.32%
                         


(1) Annualized where appropriate.
(2) Includes FHLB demand accounts and FHLB stock dividends.
(3) 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.
(4) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.
(5) Net interest margin represents net interest income divided by average total interest-earning assets.
   

  

PDL Community Bancorp and Subsidiaries

Average Balances / Yields / Rates
(Unaudited)

(Dollars in thousands)
 
  For the Nine Months Ended September 30, 
  2017  2016 
  Average          Average         
  Outstanding      Average  Outstanding      Average 
  Balance  Interest  Yield/Rate (1)  Balance  Interest  Yield/Rate (1) 
  (Dollars in thousands) 
Interest-earning assets:                        
Loans $711,179  $28,065   5.28% $597,228  $24,330   5.44%
Available-for-sale securities  38,628   376   1.30%  74,859   820   1.46%
Other (2)  29,264   220   1.01%  14,919   50   0.45%
Total interest-earning assets  779,071   28,661   4.92%  687,006   25,200   4.90%
Non-interest-earning assets  33,553           34,457         
Total assets $812,624          $721,463         
Interest-bearing liabilities:                        
Savings accounts $129,673  $375   0.39% $126,028  $213   0.23%
Interest-bearing demand  74,506   108   0.19%  51,777   71   0.18%
Certificates of deposit  382,653   4,318   1.51%  371,721   4,117   1.48%
Total deposits  586,832   4,801   1.09%  549,526   4,401   1.07%
Advance payments by borrowers  5,865   3   0.07%  4,475   3   0.09%
Borrowings  14,616   127   1.16%  1,518   7   0.62%
Total interest-bearing liabilities  607,313   4,931   1.09%  555,519   4,411   1.06%
Non-interest-bearing liabilities:                        
Non-interest-bearing demand  106,222          69,867        
Other non-interest-bearing liabilities  3,346          3,287        
Total non-interest-bearing liabilities  109,568          73,154        
Total liabilities  716,881   4,931       628,673   4,411     
Total equity  95,743           92,790         
Total liabilities and total equity $812,624       1.09% $721,463       1.06%
Net interest income     $23,730          $20,789     
Net interest rate spread (3)          3.83%          3.84%
Net interest-earning assets (4) $171,758          $131,487         
Net interest margin (5)          4.07%          4.04%
Average interest-earning assets to                        
   interest-bearing liabilities          128.28%          123.67%
                         


(1) Annualized where appropriate.
(2) Includes FHLB demand accounts and FHLB stock dividends.
(3) 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.
(4) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.
(5) Net interest margin represents net interest income divided by average total interest-earning assets.
   

Contact:

Frank Perez
frank.perez@poncebank.net 
718-931-9000