NEW YORK, April 02, 2018 (GLOBE NEWSWIRE) -- PDL Community Bancorp, (the “Company”) (NASDAQ:PDLB), the holding company for Ponce Bank (the “Bank”), reported a net loss of $4.4 million for the year ended December 31, 2017 compared to net income of $1.4 million for the same period in 2016. The Company was formed on September 29, 2017 in conjunction with the reorganization of Ponce De Leon Federal Bank, Ponce Bank’s predecessor, into Ponce Bank Mutual Holding Company, a mutual holding company. Accordingly, the Company’s financial results of prior periods are solely those of Ponce Bank. The Company’s results of operations for 2017 include a one-time pre-tax contribution by the Company of 609,279 shares of common stock, valued at $6.1 million, and $200,000 in cash, to establish the Ponce De Leon Foundation (the “Foundation”).

The Company reported a net loss of $2.9 million for the quarter ended December 31, 2017 compared to net income of $239,000 for the same period in 2016. Earnings (loss) per share, for the period of September 29, 2017 to December 31, 2017, was ($0.16). The Company’s results for the quarter ended December 31, 2017 includes a one-time tax expense of $2.1 million due to the enactment of federal tax reform.

“The quarter ended December 31, 2017 was our first full quarter as a public company; it has been a rewarding and challenging period as we embark on deploying and growing into our capital,” said Steven A. Tsavaris, Executive Chairman. Carlos P. Naudon, President and CEO, noted that “we are delighted with our operating results, particularly with our organic loan growth, and its effects, in the face of headwinds from increasing interest rates.”

Net Interest Income

Net interest income was $32.2 million for the year ended December 31, 2017, up $4.4 million, or 15.8% from $27.8 million for the year ended December 31, 2016. The increase in net interest income for the year ended December 31, 2017 compared to the same period in 2016 reflects a $5.2 million, or 15.6%, increase in total interest and dividend income offset by an increase of $847,000, or 14.3% in total interest expense. The increase in interest and dividend income is primarily due to the mortgage loan growth that provided an increase in average outstanding loans of $129.7 million or 21.4%, for the year ended December 31, 2017 compared to the same period in 2016. The net interest rate spread and net interest margin was 3.76% and 4.02%, respectively, for the year ended December 31, 2017 compared to 3.82% and 4.02%, respectively, for the same period in 2016. The yield on loans decreased to 5.19% for the year ended December 31, 2017 from 5.39% for the same period in 2016. The increase in interest expense is due to an increase in average interest-bearing liabilities of $56.7 million, or 10.2%, for the year ended December 31, 2017 compared to the same period in 2016. The cost of interest-bearing liabilities increased to 1.11% for the year ended December 31, 2017 from 1.06% for the same period in 2016.

Net interest income was $8.5 million for the quarter ended December 31, 2017, up $1.5 million, or 21.4%, from $7.0 million for the quarter ended December 31, 2016. The increase in net interest income for the quarter ended December 31, 2017 compared to the same period in 2016 reflects a $1.8 million, or 21.2%, increase in total interest and dividend income offset by an increase of $378,000, or 24.8%, in total interest expense. The increase in interest and dividend income is primarily due to growth in the investor-owned one-to-four family, multifamily, nonresidential, and construction and land loans, that provided an increase in average outstanding loans of $174.0 million or 27.4%, for the quarter ended December 31, 2017 compared to the same period in 2016. The net interest rate spread and net interest margin was 3.58% and 3.88%, respectively, for the quarter ended December 31, 2017 compared to 3.74% and 3.95%, respectively, for the same period in 2016. The yield on loans decreased to 4.96% for the quarter ended December 31, 2017 from 5.23% for the same period in 2016. The increase in interest expense is due to an increase in average interest-bearing liabilities of $70.7 million or 12.5%, for the quarter ended December 31, 2017 compared to the same period in 2016. The cost of interest-bearing liabilities increased to 1.15% for the quarter ended December 31, 2017 from 1.07% for the same period in 2016.

Noninterest Income

Noninterest income was $688,000 for the quarter ended December 31, 2017, up $106,000, or 18.2%, from $582,000 for the same period in 2016. The increase is mainly attributed to an increase of $161,000 in late fees and prepayment charges related to mortgage loans.

Noninterest income was $3.1 million for the year ended December 31, 2017, up $673,000, or 27.7%, from $2.4 million for the same period in 2016. The increase is mainly attributed to an increase of $508,000 in late fees and prepayment charges related to mortgage loans.

Noninterest Expense

Noninterest expenses were $36.6 million for the year ended December 31, 2017, up $8.7 million, or 31.2%, from $27.9 million for the same period in 2016. The increase is mainly attributed to a one-time pre-tax contribution by the Company of 609,279 shares of common stock, valued at of $6.1 million, and $200,000 in cash, in connection with the establishment of the Foundation, combined with an increase of $2.1 million in total compensation and benefits expense which included an increase of $921,000 related to salaries and an expense of $735,000 related to the newly created Employee Stock Ownership Plan.

Noninterest expenses were $8.7 million for the quarter ended December 31, 2017, up $1.6 million, or 22.5%, from $7.1 million for the same period in 2016. The increase is mainly attributed to an increase of $1.1 million in total compensation and benefits expense which included an expense of $735,000 related to the newly created Employee Stock Ownership Plan as part of the reorganization.

Asset Quality

Nonperforming assets increased to $11.4 million or 1.23% of total assets at December 31, 2017 from $7.7 million or 1.04% of total assets at December 31, 2016. The increase is mainly attributed to an increase in nonaccruals of $3.2 million in owner-occupied one-to-four family residences.

Provision for loan losses was $1.2 million for the quarter ended December 31, 2017, compared to $139,000 for the same period in 2016. Provision for loan losses was $1.7 million for the year ended December 31, 2017, compared to a recovery of $57,000 for the same period in 2016. The allowance for loan losses was $11.1 million, or 1.37%, of total loans at December 31, 2017, compared to $10.2 million, or 1.57%, of total loans at December 31, 2016. Net charge-offs totaled $1.3 million for the quarter ended December 31, 2017, or 0.16% of average loans outstanding, compared to a recovery of $102,000 for the same period in 2016. Net charge-offs totaled $850,000 for the year ended December 31, 2017, or 0.12% of average loans outstanding, compared to a recovery of $778,000 for the year ended December 31, 2016.

Balance Sheet

Total assets increased $180.5 million, or 24.2%, to $925.5 million at December 31, 2017 from $745.0 million at December 31, 2016. Net loans increased $156.6 million, or 24.4%, to $798.7 million at December 31, 2017 from $642.1 million at December 31, 2016. The increase in net loans was primarily attributed to increases of $96.9 million in multifamily, nonresidential, construction and land loans and $59.8 million in investor-owned one-to-four family residences.

Total deposits increased $70.9 million, or 11.0%, to $714.0 million at December 31, 2017 from $643.1 million at December 31, 2016. The increase in deposits was primarily attributed to increases in certificates of deposits of $41.3 million and an increase of $24.2 million in demand deposits.

Total stockholders’ equity was $164.8 million at December 31, 2017 compared to $93.0 million at December 31, 2016. The Company and the Bank exceeded all regulatory capital requirements to be deemed well-capitalized at December 31, 2017. The Bank’s total capital to risk-weighted asset ratio was 20.73%, the tier 1 capital to risk-weighted assets ratio and the common equity tier 1 capital ratio was 19.48%, the tier 1 capital to total assets ratio was 14.67% at December 31, 2017 compared to 19.21%, 17.96%, and 13.32% at December 31, 2016.

The Annual Meeting of Stockholders of PDL Community Bancorp will be held at our administrative office located at 2244 Westchester Avenue, Bronx, New York 10462 on May 10, 2018, at 10:00 am, local time.

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. 

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 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.

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

(2)           Net interest margin represents net interest income divided by average total interest-earning assets.

(3)           Efficiency ratio represents noninterest expense divided by the sum of net interest income and noninterest income.

Contact:

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

Source: PDL Community Bancorp