UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 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): April 30, 2021

 

PDL Community Bancorp

(Exact name of Registrant as Specified in Its Charter)

 

 

Registrant’s Telephone Number, Including Area Code: (718) 931-9000

 

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 (see General Instructions A.2. below):

 

Securities registered pursuant to Section 12(b) of the Act:

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☒

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. ☐

 

  

 

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Item 2.02Results of Operations and Financial Condition

On April 30, 2021, PDL Community Bancorp (the “Company”), the holding company for Ponce Bank and Mortgage World Bankers, Inc., issued a press release announcing its financial results with respect to its first quarter ended March 31, 2021. The Company’s press release is included as Exhibit 99.1 to this report.

The information set forth in this Item 2.02 and in the attached Exhibit 99.1 is deemed to be “furnished” and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended ( the “Exchange Act”), or otherwise subject to the liabilities of that Section.

Item 9.01Financial Statements and Exhibits.

(d) Exhibits.

 

 

 

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SIGNATURES

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.

 

 

 

Exhibit 99.1

PDL Community Bancorp Announces 2021 First Quarter Results

New York (April 30, 2021): PDL Community Bancorp (the “Company”) (NASDAQ: PDLB), the financial holding company for Ponce Bank (the “Bank”) and Mortgage World Bankers, Inc. (“Mortgage World”), reported net income of $2.5 million, or $0.15 per basic and diluted share, for the first quarter of 2021, compared to net income of $1.6 million, or $0.10 per basic and diluted share, for the prior quarter and a net loss of ($1.2 million), or ($0.07) per basic and diluted share, for the first quarter of 2020.

First Quarter Highlights

President and Chief Executive Officer’s Comments

Carlos P. Naudon, the Company’s President and CEO, noted “This is a great start for the new year and reflects our executing well on all fronts. We significantly grew our deposit base while lowering our cost of funds; our loan portfolio continued to expand while improving our net interest margin. We continue investing in GPS, our Sales Force initiative, while lowering our operating expenses and increasing profitability. In addition, Mortgage World is contributing nicely to our product and income diversification. Importantly, these accomplishments could not have happened without the dedication and commitment of our expanding Ponce Family to each other, our values and our stakeholders. We are now poised to benefit from the rediscovery of the important role MDIs and CDFIs like us have in remediating the disparate effects of the pandemic, and the wealth and financial gaps present, in our communities.”

Executive Chairman’s Comments

Steven A. Tsavaris, the Company’s Executive Chairman, added “Our focus on building stakeholder value during 2021 is reflected in our Company’s nine-month payback of its $1.8 million acquisition of Mortgage World, the repurchase of 107,717 common shares during the first quarter of 2021, the renovation of four more branches and contributing to the stabilization of our communities with $132.5 million in PPP loans to over 1,700 small businesses.

Loan Payment Deferrals

Through March 31, 2021, 406 loans aggregating $376.1 million had received forbearance primarily consisting of the deferral of principal, interest, and escrow payments for a period of three months. Of those 406 loans, 337 loans aggregating $303.6 million are no longer in deferment and continue performing pursuant to their terms and 69 loans in the amount of $72.4 million remained in deferment and are in renewed forbearance. All of these loans had been performing in accordance with their contractual obligations prior to the granting of the initial forbearance. The Company actively monitors the business activities of borrowers in forbearance and seeks to determine their capacity to resume payments as contractually obligated upon the termination of the forbearance period. The initial and extended forbearances are short-term modifications made on a good faith basis in response to the COVID-19 pandemic and in furtherance of governmental policies.

Results of Operations Summary

Net income for the three months ended March 31, 2021 was $2.5 million, compared to $1.6 million of net income for the three months ended December 31, 2020 and a ($1.2 million) net loss for the three months ended March 31, 2020. The change from the three months ended March 31, 2020 is primarily due to a $3.3 million increase in non-interest income, a $3.0 million increase in net interest income,

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a decrease of $460,000 in provision for loan losses, offset by a $2.1 million increase in non-interest expense and a $941,000 increase in provision for income taxes.

Net interest income for the three months ended March 31, 2021 was $12.9 million, an increase of $1.2 million, or 10.4%, from the three months ended December 31, 2020 and an increase of $3.0 million, or 29.9%, from the three months ended March 31, 2020.

Net interest margin was 4.00% for the three months ended March 31, 2021, an increase of 22 basis points from 3.78% for the three months ended December 31, 2020 and an increase of 13 basis points from 3.87% for the three months ended March 31, 2020.

Net interest rate spread increased by 25 basis points to 3.76% for the three months ended March 31, 2021 from 3.51% for the three months ended March 31, 2020. The increase in the net interest rate spread was primarily due to a decrease in the average rates on interest-bearing liabilities of 62 basis points to 0.94% for the three months ended March 31, 2020 from 1.56% for the three months ended March 31, 2020 offset by a decrease on the average yield on interest-earning assets of 37 basis points to 4.70% for the three months ended March 31, 2021 from 5.07% for the three months ended March 31, 2020.

Non-interest income decreased $906,000 to $3.9 million for the three months ended March 31, 2021 from $4.8 million for the three months ended December 31, 2020 and increased $3.3 million from $622,000 for the three months ended March 31, 2020. The decrease in non-interest income for the three months ended March 31, 2021 compared to the three months ended December 31, 2020 was primarily due to a $1.2 million decrease on income from the sale of mortgage loans, a $232,000 decrease in brokerage commissions, and a decrease of $209,000 in other non-interest income, offset by a non-recurring $663,000 gain, net of expenses, on the sale of real property recognized in the first quarter of 2021 and an increase of $163,000 in late and prepayment charges. The increase in non-interest income for the three months ended March 31, 2021 compared to the three months ended March 31, 2020 was due to $1.5 million in income on sale of mortgage loans attributable to Mortgage World operations, a non-recurring $663,000 gain, net of expenses, on the sale of real property recognized in the first quarter of 2021 and an increase of $539,000 in loan origination fees.

Non-interest expense decreased $1.0 million, or 7.5%, to $12.9 million for the three months ended March 31, 2021, compared to $14.0 million for the three months ended December 31, 2020 and increased $2.1 million, or 19.3% from $10.8 million for the three months ended March 31, 2020. The decrease in non-interest expense for the three months ended March 31, 2021, compared to the three months ended December 31, 2020 was attributable to decreases of $1.2 million in compensation and benefits and $271,000 in professional fees, offset by an increase of $410,000 in direct loan expenses. The increase in non-interest expense for the three months ended March 31, 2021, compared to the three months ended March 31, 2020 primarily reflects Mortgage World operations and was attributable to increases of $797,000 in direct loan expenses, $656,000 in compensation and benefits, $617,000 in occupancy and equipment, $325,000 in other non-interest expense and $127,000 in data processing expenses, offset by decreases of $365,000 in professional fees and $196,000 in marketing and promotional expenses.

Balance Sheet Summary

Total assets increased $78.5 million, or 5.8%, to $1.43 billion at March 31, 2021 from $1.36 billion at December 31, 2020. The increase in total assets is attributable to increases in net loans receivable of $71.8 million, including $57.7 million in PPP loans, cash and cash equivalents of $18.0 million, available-for-sale securities of $13.4 million, premises and equipment, net, of $1.6 million and accrued interest receivable of $1.2 million. The increase in total assets was reduced by decreases in mortgage loans held for sale, at fair value, of $21.7 million, other assets of $5.4 million, FHLBNY stock of $369,000 and deferred taxes of $87,000.

Total liabilities increased $76.8 million, or 6.4%, to $1.27 billion at March 31, 2021 from $1.20 billion at December 31, 2020. The increase in total liabilities was mainly attributable to increases of $109.0 million in deposits and $2.2 million in advance payments by borrowers for taxes and insurance. The increase in total liabilities was offset by decreases of $18.3 million in warehouse lines of credit, $8.0 million in advances from FHLBNY, $7.3 million in other liabilities and $807,000 in mortgage loan fundings payable.

Total stockholders’ equity increased $1.7 million, or 1.0%, to $161.2 million at March 31, 2021 from $159.5 million at December 31, 2020. The $1.7 million increase in stockholders’ equity was mainly attributable to $2.5 million in net income, $352,000 related to restricted stock units and stock options, $134,000 related to the Company’s Employee Stock Ownership Plan, offset by $1.2 million in stock repurchases and $107,000 related to unrealized loss on available-for-sale securities.

As of March 31, 2021, the Company had repurchased a total of 1,631,570 shares under the repurchase programs at a weighted average price of $13.27 per share, of which 1,444,776 were reported as treasury stock. Of the 1,631,570 shares repurchased, a total of 186,960 shares have been used for grants given to directors, executive officers and non-executive officers under the Company’s 2018 Long-Term Incentive Plan pursuant to restricted stock units which vested on December 4, 2020 and 2019. Of these 186,960 shares, 166 shares were retained to satisfy a recipient’s taxes and other withholding obligations and these shares remain as part of treasury stock.

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About PDL Community Bancorp

PDL Community Bancorp is the financial holding company for Ponce Bank and Mortgage World Bankers, Inc. Ponce Bank is a federally chartered savings association. Ponce Bank is designated 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 from alternative funding sources and investing those deposits, 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 and 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. Mortgage World Bankers, Inc. is a mortgage lender operating in five states. As a Federal Housing Administration (“FHA”)-approved Title II lender, Mortgage World Bankers, Inc. originates and sells to investors single family mortgage loans guaranteed by the FHA, as well as conventional mortgages.

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; the anticipated impact of the COVID-19 novel coronavirus pandemic and the Company’s attempts at mitigation; 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 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. 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.

  

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PDL Community Bancorp and Subsidiaries

Consolidated Statements of Financial Condition

(Dollars in thousands, except for share data)

 

 

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PDL Community Bancorp and Subsidiaries

Consolidated Statements of Operations

(Dollars in thousands, except per share data)

 

 

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PDL Community Bancorp and Subsidiaries

Consolidated Statements of Operations

(Dollars in thousands, except per share data)

 

 

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PDL Community Bancorp and Subsidiaries

Key Metrics

 

 

 

 

 

 

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PDL Community Bancorp and Subsidiaries

Loan Portfolio

 

 

 

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PDL Community Bancorp and Subsidiaries

Deposits

 

 

 

 

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PDL Community Bancorp and Subsidiaries

Nonperforming Assets

 

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PDL Community Bancorp and Subsidiaries

Average Balance Sheets

 

 

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PDL Community Bancorp and Subsidiaries

Other Data

 

 

 

 

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