Ponce Financial Group, Inc. Reports Second Quarter 2025 Results
NEW YORK, July 25, 2025 (GLOBE NEWSWIRE) -- Ponce Financial Group, Inc., (the "Company") (NASDAQ:PDLB), the holding company for Ponce Bank (the "Bank"), today announced results for the second quarter of 2025.
Second Quarter 2025 Highlights (Compared to Prior Periods):
Net income available to common stockholders was $5.8 million, or $0.25 per diluted share for the three months ended June 30, 2025, as compared to net income available to common stockholders of $5.7 million, or $0.25 per diluted share for the three months ended March 31, 2025, and net income available to common stockholders of $3.1 million, or $0.14 per diluted share for the three months ended June 30, 2024. Total net income for the three months ended June 30, 2025, was $6.1 million. The Company paid dividends of $0.3 million on its preferred stock during the three months ended June 30, 2025.
Included in the $5.8 million of net income available to common stockholders for the second quarter of 2025 results is $45.9 million in interest and dividend income and $2.1 million in non-interest income, offset by $21.4 million in interest expense, $16.9 million in non-interest expense, $1.9 million in provision for income taxes, $1.6 million in provision for credit losses and $0.3 million in dividends on preferred shares.
Net interest income of $24.4 million for the second quarter of 2025 increased $2.2 million, or 10.01%, from the prior quarter and increased $6.5 million, or 36.43%, from the same quarter last year.
Net interest margin was 3.27% for the second quarter of 2025, versus 2.98% for the prior quarter and 2.62% for the same quarter last year.
Six Months 2025 Highlights (Compared to 2024):
Net income available to common stockholders was $11.5 million, or $0.50 per diluted share for the six months ended June 30, 2025, as compared to net income available to common stockholders of $5.5 million, or $0.25 per diluted share for the six months ended June 30, 2024. Total net income for the six months ended June 30, 2025, was $12.1 million. The Company paid dividends of $0.6 million on its preferred stock during the six months ended June 30, 2025.
Net interest income for the six months ended June 30, 2025, was $46.6 million, an increase of $9.9 million, or 26.96%, compared to $36.7 million for the six months ended June 30, 2024.
Non-interest income for the six months ended June 30, 2025, was $4.4 million, an increase of $0.5 million, or 12.01%, from $4.0 million for the six months ended June 30, 2024.
Non-interest expense for the six months ended June 30, 2025, was $33.8 million, an increase of $0.3 million, or 0.99%, compared to $33.4 million for the six months ended June 30, 2024.
Cash and equivalents were $126.6 million as of June 30, 2025, a decrease of $13.2 million, or 9.44%, from $139.8 million as of December 31, 2024.
Securities totaled $433.4 million as of June 30, 2025, a decrease of $39.5 million, or 8.35%, from $472.9 million as of December 31, 2024, primarily due to regular principal payments, the call of two available-for-sale securities in the total amount of $6.0 million and the maturity of one held-for-sale security in the amount of $10.0 million.
Net loans receivable were $2.46 billion as of June 30, 2025, an increase of $172.1 million, or 7.53%, from $2.29 billion as of December 31, 2024.
Deposits were $2.04 billion as of June 30, 2025, an increase of $157.3 million, or 8.35%, from $1.88 billion as of December 31, 2024.
President and Chief Executive Officer's Comments
Carlos P. Naudon, Ponce Financial Group, Inc.'s President and CEO, stated "We continue to execute on our strategy of prudent growth and incremental profitability. Our diluted earnings per share of $0.50 for the six months ended June 30, 2025, doubled from the same period last year driven by incremental net interest income and non-interest income while keeping non-interest expenses almost flat. Our net interest margin this quarter increased by 29 basis points compared to the prior quarter, reflecting both our high-yielding construction loans and our decreasing borrowing costs. Our non-performing loans also decreased this quarter. All-in-all, a very good quarter in these turbulent and uncertain times."
Executive Chairman's Comment
Steven A. Tsavaris, Ponce Financial Group's Executive Chairman, added "We continue to make progress towards our commitments under the U.S. Treasury's Emergency Capital Investment Program. As we previously communicated, given our level of originations from April 2024 to March 2025, we have ensured another year of the lowest possible preferred stock dividend of 0.50%. Regarding next year's dividend period, we're at 69% of the goal to qualify for the 0.50% rate with three more quarters to go. Also, we're mindful of our percentage of deep impact lending, as we need to be at 60% or above for 16 quarters cumulatively, as a condition to buy the preferred stock back. After 12 quarters, including the quarter ended June 30, 2025, we are at 80% deep impact lending."
The table below indicates the Key Metrics at or for the three months ended:
At or for the Three Months Ended
June 30,
March 31,
December 31,
September 30,
June 30,
2025
2025
2024
2024
2024
Performance Ratios:
Return on average assets (1)
0.79
%
0.77
%
0.38
%
0.33
%
0.45
%
Return on common equity (1)
7.88
%
7.97
%
3.76
%
3.06
%
4.60
%
Net interest margin (1) (2)
3.27
%
2.98
%
2.80
%
2.65
%
2.62
%
Non-interest expense to average assets (1)
2.18
%
2.19
%
2.25
%
2.19
%
2.28
%
Efficiency ratio (3)
63.69
%
68.70
%
75.63
%
80.87
%
80.09
%
Capital Ratios:
Total capital to risk-weighted assets (Ponce Financial Group)
22.65
%
22.84
%
22.98
%
22.87
%
23.86
%
Common equity Tier 1 capital to risk-weighted assets (Ponce Financial Group)
12.49
%
12.51
%
12.44
%
12.28
%
12.71
%
Tier 1 capital to total assets (Ponce Financial Group)
17.13
%
16.84
%
17.70
%
17.81
%
17.88
%
Total capital to risk-weighted assets (Bank only)
21.22
%
21.38
%
21.47
%
21.61
%
22.47
%
Common equity Tier 1 capital to risk-weighted assets (Bank only)
20.15
%
20.35
%
20.40
%
20.45
%
21.24
%
Tier 1 capital to total assets (Bank only)
15.99
%
15.61
%
15.81
%
16.19
%
16.70
%
Asset Quality Ratios:
Allowance for credit losses on loans as a percentage of total loans
0.97
%
0.96
%
0.97
%
1.09
%
1.18
%
Allowance for credit losses on loans as a percentage of nonperforming loans
101.01
%
84.15
%
82.29
%
139.52
%
130.28
%
Net (charge-offs) recoveries to average outstanding loans (1)
(0.04
%)
(0.04
%)
(0.45
%)
(0.17
%)
(0.10
%)
Non-performing loans as a percentage of total assets
0.76
%
0.88
%
0.90
%
0.57
%
0.65
%
Other:
Number of offices
17
18
19
19
18
Number of full-time equivalent employees
206
211
218
228
227
(1) Annualized where appropriate.(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.
Summary of Results of Operations
Net income for the three months ended June 30, 2025, was $6.1 million compared to net income of $6.0 million for the three months ended March 31, 2025, and net income of $3.2 million for the three months ended June 30, 2024.
The $0.1 million increase of net income for the three months ended June 30, 2025, compared to the three months ended March 31, 2025, was attributed mainly to increase of $2.2 million in net interest income and a decrease of $0.1 million in provision for income taxes while remaining flat on non-interest expense, partially offset by an increase of $1.9 million in provision for credit losses and a decrease of $0.3 million in non-interest income.
The $2.9 million increase of net income for the three months ended June 30, 2025, compared to the three months ended June 30, 2024 was largely due to increases of $6.5 million in net interest income, partially offset by increases of $2.5 million in provision for credit losses, $0.7 million in provision for income taxes and $0.2 million in non-interest expense and a decrease of $0.2 million in non-interest income.
Net income for the six months ended June 30, 2025, was $12.1 million compared to net income of $5.6 million for the six months ended June 30, 2024. The $6.5 million increase of net income for the six months ended June 30, 2025, compared to the six months ended June 30, 2024, was attributed mainly to increases of $9.9 million in net interest income and $0.5 million in non-interest income; partially offset by increases of $2.2 million in provision for credit losses, $1.4 million in provision for income taxes and $0.3 million in non-interest expense.
Net Interest Income and Net Interest Margin
Net interest income for the three months ended June 30, 2025, increased $2.2 million, or 10.01%, to $24.4 million compared to $22.2 million for the three months ended March 31, 2025, and increased $6.5 million, or 36.43%, compared to $17.9 million for the three months ended June 30, 2024.
The $2.2 million increase in net interest income from the three months ended March 31, 2025, was attributable to an increase of $1.9 million in total interest and dividend income and a decrease of $0.3 million in total interest expense. The $6.5 million increase in net interest income from the three months ended June 30, 2024, was attributable to an increase of $7.0 million in total interest and dividend income, offset by an increase of $0.5 million in total interest expense.
Net interest income for the six months ended June 30, 2025, increased $9.9 million, or 26.96%, to $46.6 million compared to $36.7 million for the six months ended June 30, 2024. The $9.9 million increase in net interest income was attributable to an increase of $11.4 million in total interest and dividend income, offset by an increase of $1.5 million in total interest expense.
Net interest margin was 3.27% for the three months ended June 30, 2025, compared to 2.98% for the prior quarter, an increase of 29bps and 2.62% for the same period last year, an increase of 65bps.
Net interest margin was 3.12% for the six months ended June 30, 2025 compared to 2.67% for the six months ended June 30, 2024, an increase of 45bps.
Non-interest Income
Non-interest income for the three months ended June 30, 2025, was $2.1 million, a decrease of $0.3 million, or 13.48%, compared to $2.4 million for the three months ended March 31, 2025, and a decrease of $0.2 million, or 8.77%, compared to $2.3 million for the three months ended June 30, 2024.
The $0.3 million decrease in non-interest income from the three months ended March 31, 2025, was largely attributable to decreases of$0.4 million in income on sale of SBA loans, $0.2 million in late and prepayment charges and $0.2 million in other non-interest income, partially offset by an increase of $0.4 million in grant income.
The $0.2 million decrease in non-interest income from the three months ended June 30, 2024, was largely attributable to decreases of $0.6 million in other non-interest income and $0.1 million in income on the sale of mortgage loans, partially offset by increases of $0.4 million in grant income and $0.1 million in late and prepayment charges.
Non-interest income for the six months ended June 30, 2025, was $4.4 million, an increase of $0.5 million, or 12.01%, compared to $4.0 million for the six months ended June 30, 2024. The $0.5 million increase in non-interest income was largely attributable to increases of $0.4 million in grant income, $0.4 million in income on sale of SBA loans and $0.4 million in late and prepayment charges, partially offset by decreases of $0.6 million in other non-interest income and $0.3 million in income on the sale of mortgage loans.
Non-interest Expense
Non-interest expense for the three months ended June 30, 2025, remained flat at $16.9 million compared to the three months ended March 31, 2025, and increased $0.2 million, or 1.38%, compared to $16.6 million for the three months ended June 30, 2024.
The $0.2 million increase in non-interest expense from the three months ended June 30, 2024, was mainly attributable to increases of $0.3 million in occupancy and equipment, $0.2 million in data processing expenses, $0.1 million in marketing and promotional expenses and $0.1 million in federal deposit insurance and regulatory assessment, partially offset by a decrease of $0.4 million in direct loan expenses.
Non-interest expense for the six months ended June 30, 2025, was $33.8 million, an increase of $0.3 million, or 0.99%, compared to $33.4 million for the six months ended June 30, 2024. The $0.3 million increase in non-interest expense was mainly attributable to increases of $0.6 million in occupancy and equipment, $0.4 million in other operating expense and $0.2 million in data processing expenses, partially offset by decreases of $0.7 million in direct loan expenses and $0.4 million in professional fees.
Credit Quality:
Total non-performing assets and accruing modifications to borrowers experiencing financial difficulty were $28.5 million at June 30, 2025, compared to $32.0 million at March 31, 2025, and $23.2 million at June 30, 2024.
During the three months ended June 30, 2025, a credit loss provision of $1.6 million on loans was recorded, consisting of $1.3 million charged on the funded portion and $0.3 million charged on the unfunded portion on loans. During the three months ended March 31, 2025, a credit loss benefit of $0.3 million on loans was recorded, consisting of $0.7 million charged on the funded portion and a benefit of $1.0 million on the unfunded portion on loans. During the three months ended June 30, 2024, a credit loss benefit of $0.6 million on loans was recorded, consisting of $0.5 million benefit on the unfunded portion on loans and $0.1 million benefit on the funded portion.
During the six months ended June 30, 2025, a credit loss provision of $1.3 million on loans was recorded, consisting of $2.1 million charged on the funded portion and a benefit of $0.8 million on the unfunded portion on loans. During the six months ended June 30, 2024, a credit loss benefit of $0.7 million on loans was recorded, consisting of $0.4 million benefit on the funded portion and a benefit of $0.3 million on unfunded portion on loans.
Balance Sheet Summary
Total assets increased $113.9 million, or 3.75%, to $3.15 billion as of June 30, 2025, from $3.04 billion as of December 31, 2024. The increase in total assets is largely attributable to increases of $172.1 million in net loans receivable, $1.7 million in other assets and $1.4 million in accrued interest receivable, partially offset by decreases of $31.1 million in held-to-maturity securities, $13.2 million in cash and cash equivalents, $8.4 million in available-for-sale securities, $5.0 million in mortgage loans held for sale and $2.6 million in Federal Home Loan Bank of New York stock.
Total liabilities increased $98.3 million, or 3.88%, to $2.63 billion as of June 30, 2025, from $2.53 billion as of December 31, 2024. The increase in total liabilities was largely attributable to an increase of $157.3 million in deposits, $0.6 million in advance payments by borrowers for taxes and insurance and $0.4 million in accrued interest payable, partially offset by decreases of $60.0 million in borrowings and $0.2 million in operating lease liabilities.
Total stockholders' equity increased $15.6 million, or 3.08%, to $521.1 million as of June 30, 2025, from $505.5 million as of December 31, 2024. The $15.6 million increase in stockholders' equity was largely attributable to $12.1 million in net income, $2.3 million in other comprehensive income, $1.0 million impact to additional paid in capital as a result of share-based compensation and $0.9 million from release of ESOP shares, offset by $0.6 million in dividends on preferred shares.
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; changes in U.S. trade policies, including the imposition of tariffs and retaliatory tariffs, and their related impacts on the economy; 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 SubsidiariesConsolidated Statements of Financial Condition(Dollars in thousands, except for share data)
As of
June 30,
March 31,
December 31,
September 30,
June 30,
2025
2025
2024
2024
2024
ASSETS
Cash and due from banks:
Cash
$
35,767
$
32,113
$
35,478
$
32,061
$
23,128
Interest-bearing deposits
90,872
97,780
104,361
123,751
80,038
Total cash and cash equivalents
126,639
129,893
139,839
155,812
103,166
Available-for-sale securities, at fair value
96,562
103,570
104,970
111,005
113,125
Held-to-maturity securities, at amortized cost
336,879
358,024
367,938
403,736
442,113
Placement with banks
249
249
249
249
249
Mortgage loans held for sale, at fair value
5,703
8,567
10,736
9,566
37,764
Loans receivable, net
2,458,712
2,370,931
2,286,599
2,180,331
2,022,173
Accrued interest receivable
19,126
19,008
17,771
16,890
17,441
Premises and equipment, net
16,067
16,417
16,794
16,843
16,976
Right of use assets
28,806
29,496
29,093
29,785
30,349
Federal Home Loan Bank of New York stock (FHLBNY), at cost
26,620
25,807
29,182
28,515
23,972
Deferred tax assets
12,143
11,629
12,074
11,845
13,172
Other assets
26,363
16,245
24,693
51,392
21,507
Total assets
$
3,153,869
$
3,089,836
$
3,039,938
$
3,015,969
$
2,842,007
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits
$
2,042,209
$
2,004,947
$
1,884,864
$
1,870,323
$
1,606,097
Operating lease liabilities
30,501
31,126
30,696
31,343
31,861
Accrued interest payable
4,161
4,628
3,712
2,918
6,820
Advance payments by borrowers for taxes and insurance
10,942
12,901
10,349
13,733
10,838
Borrowings
536,100
521,100
596,100
580,421
680,421
Other liabilities
8,868
1,248
8,717
12,642
8,313
Total liabilities
2,632,781
2,575,950
2,534,438
2,511,380
2,344,350
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
(7,404
)
(7,641
)
(7,707
)
(9,445
)
(9,519
)
Additional paid-in-capital
208,275
207,888
207,319
208,478
207,934
Retained earnings
119,250
113,432
107,754
105,103
102,951
Accumulated other comprehensive loss
(13,047
)
(13,515
)
(15,297
)
(12,686
)
(16,557
)
Unearned compensation ─ ESOP
(11,235
)
(11,527
)
(11,818
)
(12,110
)
(12,401
)
Total stockholders' equity
521,088
513,886
505,500
504,589
497,657
Total liabilities and stockholders' equity
$
3,153,869
$
3,089,836
$
3,039,938
$
3,015,969
$
2,842,007
Ponce Financial Group, Inc. and SubsidiariesConsolidated Statements of Operations(Dollars in thousands, except per share data)
Three Months Ended
June 30,
March 31,
December 31,
September 30,
June 30,
2025
2025
2024
2024
2024
Interest and dividend income:
Interest on loans receivable
$
40,291
$
37,136
$
35,622
$
32,945
$
31,281
Interest on deposits due from banks
807
1,668
1,783
2,430
1,542
Interest and dividend on securities and FHLBNY stock
4,762
5,193
5,481
5,918
5,969
Total interest and dividend income
45,860
43,997
42,886
41,293
38,792
Interest expense:
Interest on certificates of deposit
7,382
7,754
8,104
6,926
6,358
Interest on other deposits
9,058
8,554
8,476
8,519
7,389
Interest on borrowings
4,994
5,486
5,576
6,825
7,141
Total interest expense
21,434
21,794
22,156
22,270
20,888
Net interest income
24,426
22,203
20,730
19,023
17,904
Provision (benefit) for credit losses (1)
1,626
(285
)
897
537
(867
)
Net interest income after provision (benefit) for credit losses
22,800
22,488
19,833
18,486
18,771
Non-interest income:
Service charges and fees
511
525
500
508
492
Brokerage commissions
—
4
44
—
9
Late and prepayment charges
530
697
318
77
426
Income on sale of mortgage loans
169
148
254
218
274
Income on sale of SBA loans
—
404
148
—
—
Grant income
428
—
—
—
—
Other
422
603
833
348
1,057
Total non-interest income
2,060
2,381
2,097
1,151
2,258
Non-interest expense:
Compensation and benefits
7,627
7,780
7,668
7,674
7,724
Occupancy and equipment
3,907
3,913
3,863
3,786
3,564
Data processing expenses
1,188
1,152
1,143
1,099
1,013
Direct loan expenses
241
388
617
573
633
Insurance and surety bond premiums
297
315
293
292
263
Office supplies, telephone and postage
174
170
294
222
233
Professional fees
1,367
1,364
1,703
1,351
1,369
Microloans recoveries
—
—
(29
)
(54
)
(65
)
Marketing and promotional expenses
266
83
289
180
145
Federal deposit insurance and regulatory assessment (2)
546
461
418
392
428
Other operating expenses (2)
1,256
1,262
1,206
1,051
1,333
Total non-interest expense (1)
16,869
16,888
17,465
16,566
16,640
Income before income taxes
7,991
7,981
4,465
3,071
4,389
Provision for income taxes
1,891
2,022
1,532
638
1,197
Net income
$
6,100
$
5,959
$
2,933
$
2,433
$
3,192
Dividends on preferred shares
282
281
282
281
75
Net income available to common stockholders
$
5,818
$
5,678
$
2,651
$
2,152
$
3,117
Earnings per common share:
