PDL Community Bancorp Announces 2020 Second Quarter Results

Rhea-AI Summary

PDL Community Bancorp (NASDAQ: PDLB) reported a net loss of $571,000, or $0.03 per share, for Q2 2020, a reduction from a $1.2 million loss in Q1. This contrasts with a net income of $950,000 in Q2 2019. The company noted an investment in community support and business resilience amid COVID-19, securing over 1,000 PPP loans. Despite decreasing interest income and rising noninterest expenses, they maintained asset quality and resumed share repurchases. Total assets increased 15.8% to $1.22 billion, while stockholders’ equity declined by 2.1% to $155 million due to losses and stock buybacks.

Positive

• Secured over 1,000 Paycheck Protection Program loans, enhancing community support.
• Total assets increased by 15.8% to $1.22 billion.
• Resumed share repurchases under a new program initiated in June 2020.

Negative

• Reported a net loss of $571,000, a decrease from net income of $950,000 in Q2 2019.
• Noninterest expenses increased by 19.8% compared to Q2 2019.
• Net interest margin decreased by 42 basis points to 3.45%.

NEW YORK, July 31, 2020 (GLOBE NEWSWIRE) -- PDL Community Bancorp (the “Company”) (NASDAQ: PDLB), the holding company for Ponce Bank (the “Bank”), reported a net loss of ($571,000), or ($0.03) per basic and diluted share, for the second quarter of 2020, compared to a net loss of ($1.2 million), or ($0.07) per basic and diluted share, for the prior quarter and net income of $950,000, or $0.05 per basic and diluted share, for the second quarter of 2019.

Carlos P. Naudon, the Company’s President and CEO, noted “2020 continues to be a year of investing – in the safety of our people and the future of our organization and our communities – with the clear goal of enhancing stakeholder values. Although the COVID-19 pandemic slowed our business, we continued our implementation of GPS, our Salesforce based CRM; we attended to the needs of Ponce Bankers by maintaining their jobs and temporarily enhancing their benefits; we responded to the needs of our communities by handling over 1,000 applications for Paycheck Protection Program (“PPP”) loans from customers and non-customers alike, allowing loan forbearances upon requests and ensuring that we publicly stood by our commitment to fairness and justice for all; we enhanced our asset quality by significantly increasing reserves; and, we increased our shareholders’ value by resuming repurchases of our shares. Although these steps resulted in a loss per share of ($0.11) for the six months ended June 30, 2020, we remain confident that our investments in the first half of the year, coupled with the closing of the Mortgage World Bankers, Inc. transaction in July as well as other initiatives, will continue to build stakeholder value.”

Steven A. Tsavaris, the Company’s Executive Chairman, added “It is gratifying that our commitment to our communities was recognized by the National Community Investment Fund in their Banking Industry Peer Group report for the first quarter of 2020. Ponce Bank was ranked 11th nationally in total assets and 7th in total loans among the 140 banks that also are CDFIs.  Among the 20 largest, we were ranked 1st in our housing focus, 2nd in our lending in LMI areas and 6th in the proportion of branches in LMI areas. This data is not an anomaly; we are consistently a top performer in their Social Performance Metrics.”

Net Income (Loss)

The $571,000 net loss for the three months ended June 30, 2020 is $642,000 less than the $1.2 million net loss for the three months ended March 31, 2020 and is primarily the result of an $875,000, or 76.4%, decrease in provision for loan losses, a $387,000, or 3.6%, decrease in noninterest expense and a $234,000, or 7.5%, decrease in interest expense, offset by a $637,000, or 4.9%, decrease in interest and dividend income, a $169,000, or 80.9%, decrease in benefit for income taxes and a $48,000, or 7.7%, decrease in noninterest income.

The $571,000 net loss for the quarter ended June 30, 2020 compared to $950,000 in net income for the second quarter of 2019 reflects a $1.7 million, or 19.8%, increase in noninterest expense, a $271,000 increase in provision for loan losses, a $112,000, or 16.3%, decrease in noninterest income and a $21,000, or 0.2%, decrease in interest and dividend income, offset by a $413,000, or 110.7%, decrease in provision for income taxes and a $198,000, or 6.4%, decrease in interest expense.

The $1.8 million net loss for the six months ended June 30, 2020 compared to $1.6 million in net income for the six months ended June 30, 2019 reflects a $3.5 million, or 19.4%, increase in noninterest expense, a $1.3 million increase in provision for loan losses and a $243,000, or 16.9%, decrease in noninterest income, offset by a $929,000, or 136.6%, decrease in provision for income taxes, a $627,000, or 2.5%, increase in interest and dividend income and a $12,000, or 0.2%, decrease in interest expense.

Net Interest Margin

Net interest margin decreased by 42 basis points to 3.45% for the three months ended June 30, 2020 from 3.87% for the three months ended March 31, 2020, while the net interest rate spread decreased by 38 basis points to 3.13% from 3.51% for the same periods. Average interest-earning assets increased by $77.7 million, or 7.5%, mainly as a result of $30.3 million in average outstanding Payment Protection Program (“PPP”) loans, to $1,109.7 million for the three months ended June 30, 2020 from $1,031.9 million for the three months ended March 31, 2020. The average yield on interest-earning assets decreased by 58 basis points to 4.49% from 5.07%, for the same periods. Average interest-bearing liabilities increased by $49.9 million, or 6.2%, mainly as a result of $48.9 million in average net PPP funding, to $848.9 million for the three months ended June 30, 2020 from $799.0 million for the three months ended March 31, 2020. The weighted average rate on interest-bearing liabilities decreased by 20 basis points to 1.36% from 1.56% for the same periods. 

Net interest margin decreased by 30 basis points to 3.45% for the three months ended June 30, 2020 from 3.75% for the three months ended June 30, 2019, while the net interest rate spread decreased by 21 basis points to 3.13% from 3.34% for the same periods. Average interest-earning assets increased by $110.2 million, or 11.0%, mainly as a result of $30.3 million in average outstanding PPP loans, to $1,109.7 million, for the three months ended June 30, 2020 from $999.4 million for the three months ended June 30, 2019. The average yield on interest-earning assets decreased by 49 basis points to 4.49% from 4.98%, for the same periods. Average interest-bearing liabilities increased by $98.5 million, or 13.1%, mainly as a result of $48.9 million in average net PPP funding, to $848.9 million, for the three months ended June 30, 2020 from $750.3 million for the three months ended June 30, 2019. The average rate on interest-bearing liabilities decreased by 28 basis points to 1.36% from 1.64% for the same periods.

Noninterest Income

Noninterest income was $574,000 for the three months ended June 30, 2020, down $48,000, or 7.7%, from $622,000 for the three months ended March 31, 2020. The decrease was attributable to decreases of $106,000, or 89.1%, in late and prepayment charges related to mortgage loans, $103,000, or 41.5%, in service charges and fees and $28,000, or 56.0%, in brokerage commissions, offset by an increase of $189,000, or 92.2%, in other noninterest income, of which $163,000 were fees related to PPP loans.

Noninterest income was $574,000 for the three months ended June 30, 2020, down $112,000, or 16.3%, from $686,000 for the three months ended June 30, 2019. The decrease was mainly attributable to decreases of $249,000, or 95.0%, in late and prepayment charges related to mortgage loans, $83,000, or 36.4%, in service charges and fees and $2,000, or 8.3%, in brokerage commissions, offset by an increase of $222,000, or 129.1%, in other noninterest income, of which $163,000 were fees related to PPP loans.

Noninterest Expense

Total noninterest expense decreased $387,000, or 3.6%, to $10.4 million for the three months ended June 30, 2020 compared to $10.8 million for the three months ended March 31, 2020. Compensation and benefits decreased $363,000, which primarily includes $256,000 of deferred compensation expenses related to PPP loan originations. Other decreases in noninterest expense at June 30, 2020 from March 31, 2020 are $291,000 of professional services, $89,000 of marketing and promotional expenses and $13,000 in direct loan expenses. The decrease in noninterest expense was offset by increases of $260,000 in occupancy and equipment, $67,000 in other noninterest expenses, $29,000 in data processing expenses, $10,000 in regulatory dues and $7,000 in insurance and surety bond premiums. Included in noninterest expense for the three months ended June 30, 2020 is $475,000 of additional expenses incurred as a result of the COVID-19 pandemic.

Total noninterest expense increased $1.7 million, or 19.8%, to $10.4 million for the three months ended June 30, 2020, compared to $8.7 million for the three months ended June 30, 2019. The increase in noninterest expense was attributable to increases of $603,000 in professional fees, $545,000 in occupancy and equipment expense mainly due to investments in software licenses, $169,000 in compensation and benefits, $140,000 in other operating expenses mainly due to employment agency fees, $98,000 in marketing and promotional expenses, $65,000 in data processing expenses as a result of system enhancements and implementation charges related to software upgrades, $45,000 in insurance and surety bond premiums, $41,000 in office supplies, telephone and postage and $17,000 in direct loan expenses. The increase of $603,000 in professional fees is mainly attributable to increases in consulting fees of $250,000 and professional services of $344,000 related to the document imaging project adopted in late 2019.

Asset Quality

Total nonperforming assets were $11.6 million, or 0.95% of total assets, at June 30, 2020, an increase of $1.9 million from $9.7 million, or 0.85% of total assets, at March 31, 2020 and remain comparable with total nonperforming assets of $11.6 million, or 1.10% of total assets, at December 31, 2019. Comparing nonperforming assets at June 30, 2020 to March 31, 2020, total nonaccruals inclusive of TDRs related to nonresidential loans increased by $1.1 million and 1-4 family residential loans increased by $707,000. Comparing nonperforming assets at June 30, 2020 to December 31, 2019, total nonaccruals inclusive of TDRs related to construction and land loans decreased by $1.1 million, nonresidential loans increased by $810,000 and 1-4 family residential loans increased by $285,000.

The Company continues to assess the economic impact of the COVID-19 pandemic on borrowers and believes that it is likely that it will be a detriment to their ability to repay in the short-term and that the likelihood of long-term detrimental effects will depend significantly on the resumption of normalized economic activities, a factor not yet determinable. The allowance for loan losses was $13.8 million, or 1.27% of total loans (total loans include $83.6 million of PPP loans) at June 30, 2020, compared to $12.3 million, or 1.28% of total loans, at December 31, 2019 and $12.5 million, or 1.32% of total loans, at June 30, 2019. Excluding PPP loans, the allowance for loan losses is 1.38% of total loans. Net recoveries totaled $6,000 for the quarter ended June 30, 2020, $9,000 for the quarter ended March 31, 2020 and $11,000 for the quarter ended June 30, 2019.

As of July 21, 2020, there were 421 loans aggregating $384.0 million, in forbearance primarily consisting of the deferral of principal, interest, and escrow payments for a period of three months. Of the 421 loans in forbearance, 329 loans aggregating $297.4 million have not requested, and 92 loans in the amount of $86.6 million have requested, up-to-an-additional three-month forbearance extension at the conclusion of their initial three-month forbearance period. 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. Under the current economic conditions and based upon available data, the Company is unable to conclusively determine the repayment capacity, if any, of most of such borrowers. 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.

Balance Sheet

Total assets increased $166.5 million, or 15.8%, to $1,220.2 million at June 30, 2020 from $1,053.8 million at December 31, 2019. The increase in total assets is mainly attributable to increases in net loans receivable of $116.7 million, mainly due to $83.6 million in PPP loans, cash and cash equivalents of $49.0 million, other assets of $4.2 million, accrued interest receivable of $3.7 million, FHLBNY stock of $687,000 and deferred taxes of $604,000, offset by decreases in available-for-sale securities of $7.7 million and premises and equipment, net of $644,000.

Cash and cash equivalents at June 30, 2020 increased $49.0 million from December 31, 2019 due to increases of $154.2 million in net deposits, of which $65.1 million related to net PPP funding, $16.4 million from sales and maturities of available-for-sale securities and $12.9 million increase in net advances from FHLBNY, offset by increases of $116.7 million in net loans and $9.1 million purchases of available-for-sale securities.

Net loans receivable at June 30, 2020 increased $116.7 million from December 31, 2019 primarily due to increases of $82.5 million, or 758.6%, in business loans, mainly due to $83.6 million in PPP loans, $24.4 million, or 9.8%, in multifamily residential loans, $11.2 million, or 2.8%, in 1-4 family residential loans, $1.8 million, or 0.9%, in nonresidential properties loans, $347,000, or 28.2%, in consumer loans and $286,000, or 14.5%, in net deferred loan origination costs, offset by a decrease of $2.5 million, or 2.5%, in construction and land loans and an increase in the allowance for losses on loans of $1.4 million substantially related to the COVID-19 pandemic.

Total deposits increased $154.2 million, or 19.7%, to $936.2 million at June 30, 2020 from $782.0 million at December 31, 2019. The increase in deposits was mainly attributable to increases of $85.3 million, or 30.1%, in NOW, money market, reciprocal deposits and savings accounts, $82.9 million, or 75.7%, in demand deposits, of which $65.1 million related to net PPP funding, offset by a decrease of $14.0 million, or 3.6 %, in total certificates of deposit, which includes brokered certificates of deposit and listing service deposits. The $85.3 million increase in NOW, money market, reciprocal deposits and savings accounts was mainly attributable to increases of $49.3 million, or 103.4%, in reciprocal deposits, $38.9 million, or 44.9%, in money market accounts, $3.5 million, or 3.1%, in savings accounts offset by a decrease of $6.4 million, or 19.4%, in NOW/IOLA accounts.

Net advances from the FHLBNY increased $12.9 million, or 12.3%, to $117.3 million at June 30, 2020 from $104.4 million at December 31, 2019. The net increase in advances was due to a new FHLBNY advance of $12.9 million, at a weighted average rate of 0.9%.

Total stockholders’ equity decreased $3.4 million, or 2.1%, to $155.0 million at June 30, 2020, from $158.4 million at December 31, 2019. The decrease in stockholders’ equity was mainly attributable to $2.7 million of stock repurchases and a net loss of $1.8 million, offset by increases of $698,000 related to restricted stock units and stock options, $247,000 related to the Company’s Employee Stock Ownership Plan and $130,000 related to unrealized gains on available-for-sale securities. 

The Company adopted a share repurchase program effective March 25, 2019 which expired on September 24, 2019. Under the repurchase program, the Company was permitted to repurchase up to 923,151 shares of the Company’s stock, or approximately 5% of the Company’s then current issued and outstanding shares. On November 13, 2019, the Company adopted a second share repurchase program. Under this second program, the Company was permitted to repurchase up to 878,835 shares of the Company’s stock, or approximately 5% of the Company’s then current issued and outstanding shares. The Company’s share repurchase program was terminated on March 27, 2020. On June 1, 2020, the Company adopted a third share repurchase program. Under this third program, the Company is permitted to repurchase up to 864,987 shares of the Company’s stock, or approximately 5% of the Company’s then current issued and outstanding shares. The repurchase program may be suspended or terminated at any time without prior notice, and it will expire no later than November 30, 2020.

As of June 30, 2020, the Company had repurchased a total of 1,318,872 shares under the repurchase programs at a weighted average price of $13.99 per share, which were reported as treasury stock. Of the 1,318,872 shares of treasury stock, 90,135 shares have been granted to directors and executive officers under the Company’s 2018 Long-Term Incentive Plan pursuant to restricted stock units which vested on December 4, 2019. As of June 30, 2020, 1,228,737 shares are reported as treasury stock in the Company’s consolidated statement of financial condition.

About PDL Community Bancorp

PDL Community Bancorp is the financial holding company for Ponce Bank. Ponce Bank is a Minority Depository Institution, a Community Development Financial Institution, and a certified Small Business Administration lender. The Bank’s business primarily consists of taking deposits from the general public and to a lesser extent 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. The 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 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 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.

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

PDL Community Bancorp and Subsidiaries
Consolidated Statements of Financial Condition
(Dollars in thousands, except for share data)

	As of
	June 30,				March 31,				December 31,				September 30,				June 30,
	2020				2020				2019				2019				2019
ASSETS
Cash and due from banks:
Cash	$	15,875			$	13,165			$	6,762			$	6,425			$	6,003
Interest-bearing deposits in banks		60,756				90,795				20,915				40,965				47,007
Total cash and cash equivalents		76,631				103,960				27,677				47,390				53,010
Available-for-sale securities, at fair value		13,800				19,140				21,504				51,966				22,154
Loans held for sale		1,030				1,030				1,030				—				—
Loans receivable, net of allowance for losses		1,072,417				972,979				955,737				948,548				934,236
Accrued interest receivable		7,677				4,198				3,982				3,893				3,773
Premises and equipment, net		32,102				32,480				32,746				32,805				32,205
Other real estate owned		—				—				—				—				58
Federal Home Loan Bank of New York stock (FHLBNY), at cost		6,422				7,889				5,735				8,659				4,609
Deferred tax assets		4,328				4,140				3,724				3,925				3,913
Other assets		5,824				5,127				1,621				2,802				2,158
Total assets	$	1,220,231			$	1,150,943			$	1,053,756			$	1,099,988			$	1,056,116
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits	$	936,219			$	829,741			$	782,043			$	757,845			$	802,408
Accrued interest payable		48				86				97				81				88
Advance payments by borrowers for taxes and insurance		6,007				8,295				6,348				7,780				6,059
Advances from the Federal Home Loan Bank of New York and others		117,284				152,284				104,404				169,404				79,404
Other liabilities		5,674				4,794				2,462				4,324				2,954
Total liabilities		1,065,232				995,200				895,354				939,434				890,913
Commitments and contingencies
Stockholders' Equity:
Preferred stock, $0.01 par value; 10,000,000 shares authorized		—				—				—				—				—
Common stock, $0.01 par value; 50,000,000  shares authorized		185				185				185				185				185
Treasury stock, at cost		(17,172	)			(16,490	)			(14,478	)			(12,663	)			(6,798	)
Additional paid-in-capital		85,481				85,132				84,777				85,750				85,357
Retained earnings		91,904				92,475				93,688				101,140				100,431
Accumulated other comprehensive income (loss)		150				110				20				(7,947	)			(7,941	)
Unearned compensation - ESOP		(5,549	)			(5,669	)			(5,790	)			(5,911	)			(6,031	)
Total stockholders' equity		154,999				155,743				158,402				160,554				165,203
Total liabilities and stockholders' equity	$	1,220,231			$	1,150,943			$	1,053,756			$	1,099,988			$	1,056,116

PDL Community Bancorp and Subsidiaries
Consolidated Statements of Income
(Dollars in thousands, except per share data)

	For the Quarters Ended
	June 30,				March 31,				December 31,				September 30,				June 30,
	2020				2020				2019				2019				2019
Interest and dividend income:
Interest on loans receivable	$	12,162			$	12,782			$	12,488			$	12,663			$	12,060
Interest on deposits due from banks		3				66				73				117				278
Interest and dividend on available-for-sale securities and FHLBNY stock		228				182				181				173				76
Total interest and dividend income		12,393				13,030				12,742				12,953				12,414
Interest expense:
Interest on certificates of deposit		1,730				1,827				1,921				1,896				1,904
Interest on other deposits		534				692				616				759				821
Interest on borrowings		608				587				643				533				345
Total interest expense		2,872				3,106				3,180				3,188				3,070
Net interest income		9,521				9,924				9,562				9,765				9,344
Provision for loan losses		271				1,146				95				14				—
Net interest income after provision for loan losses		9,250				8,778				9,467				9,751				9,344
Noninterest income:
Service charges and fees		145				248				266				247				228
Brokerage commissions		22				50				43				36				24
Late and prepayment charges		13				119				204				150				262
Other		394				205				152				146				172
Total noninterest income		574				622				665				579				686
Noninterest expense:
Compensation and benefits		4,645				5,008				4,726				4,667				4,476
Loss on termination of  pension plan		—				—				9,930				—				—
Occupancy and equipment		2,277				2,017				2,026				1,943				1,732
Data processing expenses		496				467				394				398				431
Direct loan expenses		199				212				171				183				182
Insurance and surety bond premiums		128				121				102				146				83
Office supplies, telephone and postage		312				316				316				281				271
Professional fees		1,336				1,627				1,038				956				733
Marketing and promotional expenses		145				234				39				46				47
Directors fees		69				69				69				69				73
Regulatory dues		56				46				58				70				47
Other operating expenses		772				705				606				575				632
Total noninterest expense		10,435				10,822				19,475				9,334				8,707
Income (loss) before income taxes		(611	)			(1,422	)			(9,343	)			996				1,323
Provision (benefit) for income taxes		(40	)			(209	)			(1,891	)			287				373
Net income (loss)	$	(571	)		$	(1,213	)		$	(7,452	)		$	709			$	950
Earnings (loss) per share:
Basic	$	(0.03	)		$	(0.07	)		$	(0.43	)		$	0.04			$	0.05
Diluted	$	(0.03	)		$	(0.07	)		$	(0.43	)		$	0.04			$	0.05

PDL Community Bancorp and Subsidiaries
Consolidated Statements of Income
(Dollars in thousands, except per share data)

		For the Six Months Ended June 30,
		2020				2019				Variance $				Variance %
Interest and dividend income:
Interest on loans receivable		$	24,944			$	24,155			$	789				3.27	%
Interest on deposits due from banks			69				478				(409	)			(85.56	%)
Interest and dividend on available-for-sale securities and FHLBNY stock			410				163				247				151.53	%
Total interest and dividend income			25,423				24,796				627				2.53	%
Interest expense:
Interest on certificates of deposit			3,557				3,860				(303	)			(7.85	%)
Interest on other deposits			1,226				1,452				(226	)			(15.56	%)
Interest on borrowings			1,195				678				517				76.25	%
Total interest expense			5,978				5,990				(12	)			(0.20	%)
Net interest income			19,445				18,806				639				3.40	%
Provision for loan losses			1,417				149				1,268				851.01	%
Net interest income after provision for loan losses			18,028				18,657				(629	)			(3.37	%)
Noninterest income:
Service charges and fees			393				458				(65	)			(14.19	%)
Brokerage commissions			72				133				(61	)			(45.86	%)
Late and prepayment charges			132				401				(269	)			(67.08	%)
Other			599				447				152				34.00	%
Total noninterest income			1,196				1,439				(243	)			(16.89	%)
Noninterest expense:
Compensation and benefits			9,653				9,490				163				1.72	%
Occupancy and equipment			4,294				3,643				651				17.87	%
Data processing expenses			963				784				179				22.83	%
Direct loan expenses			411				338				73				21.60	%
Insurance and surety bond premiums			249				166				83				50.00	%
Office supplies, telephone and postage			628				588				40				6.80	%
Professional fees			2,963				1,243				1,720				138.37	%
Marketing and promotional expenses			379				73				306				419.18	%
Directors fees			138				156				(18	)			(11.54	%)
Regulatory dues			102				103				(1	)			(0.97	%)
Other operating expenses			1,477				1,214				263				21.66	%
Total noninterest expense			21,257				17,798				3,459				19.43	%
Income (loss) before income taxes			(2,033	)			2,298				(4,331	)			(188.47	%)
Provision (benefit) for income taxes			(249	)			680				(929	)			(136.62	%)
Net income (loss)		$	(1,784	)		$	1,618			$	(3,402	)			(210.26	%)
Earnings (loss) per share:
Basic		$	(0.11	)		$	0.09			N/A				N/A
Diluted		$	(0.11	)		$	0.09			N/A				N/A

PDL Community Bancorp and Subsidiaries
Key Metrics

	At or for the Quarters Ended
	June 30,				March 31,				December 31,				September 30,				June 30,
	2020				2020				2019				2019				2019
Performance Ratios:
Return on average assets		(0.20	%)			(0.46	%)			(2.79	%)			0.27	%			0.37	%
Return on average equity		(1.47	%)			(3.07	%)			(18.24	%)			1.71	%			2.26	%
Net interest rate spread (1)		3.13	%			3.51	%			3.34	%			3.44	%			3.34	%
Net interest margin (2)		3.45	%			3.87	%			3.71	%			3.83	%			3.75	%
Noninterest expense to average assets		3.57	%			4.07	%			7.30	%			3.54	%			3.38	%
Efficiency ratio (3)		103.37	%			102.62	%			190.43	%			90.24	%			86.81	%
Average interest-earning assets to average interest- bearing liabilities		130.72	%			129.16	%			130.64	%			131.38	%			133.20	%
Average equity to average assets		13.30	%			14.85	%			15.32	%			15.71	%			16.27	%
Capital Ratios:
Total capital to risk weighted assets (bank only)		17.52	%			17.84	%			18.62	%			19.29	%			19.54	%
Tier 1 capital to risk weighted assets (bank only)		16.26	%			16.59	%			17.36	%			18.03	%			18.29	%
Common equity Tier 1 capital to risk-weighted assets (bank only)		16.26	%			16.59	%			17.36	%			18.03	%			18.29	%
Tier 1 capital to average assets (bank only)		11.63	%			12.76	%			12.92	%			13.62	%			13.64	%
Asset Quality Ratios:
Allowance for loan losses as a percentage of total loans		1.27	%			1.37	%			1.28	%			1.27	%			1.32	%
Allowance for loan losses as a percentage of nonperforming loans		118.89	%			138.47	%			106.30	%			117.72	%			123.50	%
Net (charge-offs) recoveries to average outstanding loans		0.01	%			0.00	%			0.03	%			(0.15	%)			0.00	%
Non-performing loans as a percentage of total loans		1.08	%			1.00	%			1.20	%			1.09	%			1.08	%
Non-performing loans as a percentage of total assets		0.95	%			0.85	%			1.10	%			0.94	%			0.96	%
Total non-performing assets as a percentage of total assets		0.95	%			0.85	%			1.10	%			0.94	%			0.96	%
Total non-performing assets, accruing loans past due 90 days or more,  and accruing troubled debt restructured loans as a percentage of total assets		1.51	%			1.49	%			1.92	%			1.73	%			1.82	%
Other:
Number of offices	14				14				14				14				14
Number of full-time equivalent employees	179				184				183				187				183

____________
(1)   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.
(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.

Key metrics calculated on income statement items were annualized where appropriate.

PDL Community Bancorp and Subsidiaries
Loan Portfolio

		As of
		June 30,							March 31,							December 31,							September 30,							June 30,
		2020							2020							2019							2019							2019
		Amount				Percent			Amount				Percent			Amount				Percent			Amount				Percent			Amount				Percent
		(Dollars in thousands)
Mortgage loans:
1-4 family residential
Investor Owned		$	317,055			29.25	%		$	308,206			31.31	%		$	305,272			31.60	%		$	309,065			32.23	%		$	302,428			32.00	%
Owner-Occupied			91,345			8.43	%			93,887			9.54	%			91,943			9.52	%			90,843			9.47	%			92,904			9.83	%
Multifamily residential			274,641			25.34	%			259,326			26.35	%			250,239			25.90	%			244,644			25.51	%			238,974			25.28	%
Nonresidential properties			209,068			19.29	%			210,225			21.36	%			207,225			21.45	%			195,952			20.43	%			197,367			20.88	%
Construction and land			96,841			8.93	%			100,202			10.18	%			99,309			10.28	%			106,124			11.07	%			100,995			10.69	%
Total mortgage loans			988,950			91.24	%			971,846			98.74	%			953,988			98.75	%			946,628			98.72	%			932,668			98.68	%
Nonmortgage loans:
Business loans (1)			93,394			8.62	%			11,183			1.13	%			10,877			1.12	%			11,040			1.15	%			11,373			1.20	%
Consumer loans			1,578			0.14	%			1,288			0.13	%			1,231			0.13	%			1,252			0.13	%			1,151			0.12	%
Total nonmortgage loans			94,972			8.76	%			12,471			1.26	%			12,108			1.25	%			12,292			1.28	%			12,524			1.32	%
Total loans, gross			1,083,922			100.00	%			984,317			100.00	%			966,096			100.00	%			958,920			100.00	%			945,192			100.00	%
Net deferred loan origination costs			2,256							2,146							1,970							1,788							1,562
Allowance for losses on loans			(13,761	)						(13,484	)						(12,329	)						(12,160	)						(12,518	)
Loans, net		$	1,072,417						$	972,979						$	955,737						$	948,548						$	934,236

(1)     As of June 30, 2020, business loans include $83.6 million of PPP loans.

PDL Community Bancorp and Subsidiaries
Deposits

		As of
		June 30,							March 31,							December 31,							September 30,							June 30,
		2020							2020							2019							2019							2019
		Amount				Percent			Amount				Percent			Amount				Percent			Amount				Percent			Amount				Percent
		(Dollars in thousands)
Demand (1)		$	192,429			20.55	%		$	110,801			13.35	%		$	109,548			14.01	%		$	104,181			13.75	%		$	115,262			14.36	%
Interest-bearing deposits:
NOW/IOLA accounts			26,477			2.83	%			31,586			3.81	%			32,866			4.20	%			28,600			3.77	%			23,018			2.87	%
Money market accounts			125,631			13.42	%			121,629			14.66	%			86,721			11.09	%			98,707			13.02	%			105,632			13.16	%
Reciprocal deposits			96,915			10.35	%			62,384			7.52	%			47,659			6.09	%			42,292			5.58	%			52,686			6.57	%
Savings accounts			119,277			12.74	%			112,318			13.53	%			115,751			14.80	%			115,402			15.23	%			126,746			15.80	%
Total NOW,  money market, reciprocal and savings accounts			368,300			39.34	%			327,917			39.52	%			282,997			36.18	%			285,001			37.60	%			308,082			38.40	%
Certificates of deposit of $250K or more			81,786			8.74	%			81,486			9.82	%			84,263			10.77	%			86,498			11.41	%			82,767			10.31	%
Brokered certificates of deposit			55,878			5.97	%			51,661			6.23	%			76,797			9.82	%			58,570			7.73	%			58,570			7.30	%
Listing service deposits			54,370			5.81	%			55,842			6.73	%			32,400			4.14	%			22,458			2.96	%			28,688			3.58	%
Certificates of deposit less than $250K			183,456			19.59	%			202,034			24.35	%			196,038			25.08	%			201,137			26.55	%			209,039			26.05	%
Total certificates of deposit			375,490			40.11	%			391,023			47.13	%			389,498			49.81	%			368,663			48.65	%			379,064			47.24	%
Total interest-bearing deposits			743,790			79.45	%			718,940			86.65	%			672,495			85.99	%			653,664			86.25	%			687,146			85.64	%
Total deposits		$	936,219			100.00	%		$	829,741			100.00	%		$	782,043			100.00	%		$	757,845			100.00	%		$	802,408			100.00	%

(1)     As of June 30, 2020, included in demand deposits are $65.1 million related to net PPP funding.

PDL Community Bancorp and Subsidiaries
Nonperforming Assets

	For the Quarters Ended
	June 30,				March 31,				December 31,				September 30,				June 30,
	2020				2020				2019				2019				2019
	(Dollars in thousands)
Nonaccrual loans:
Mortgage loans:
1-4 family residential
Investor owned	$	2,767			$	2,327			$	2,312			$	1,281			$	1,299
Owner occupied		1,327				1,069				1,009				1,052				479
Multifamily residential						—				—				—				7
Nonresidential properties		4,355				3,228				3,555				3,099				3,288
Construction and land		—				—				1,118				1,292				1,327
Nonmortgage loans:
Business		—				—				—				—				—
Consumer		—				—				—				—				2
Total nonaccrual loans (not including non-accruing troubled debt restructured loans)	$	8,449			$	6,624			$	7,994			$	6,724			$	6,402
Non-accruing troubled debt restructured loans:
Mortgage loans:
1-4 family residential
Investor owned	$	272			$	276			$	467			$	471			$	493
Owner occupied		2,198				2,185				2,491				2,488				2,499
Multifamily residential		—				—				—				—				—
Nonresidential properties		656				653				646				647				742
Construction and land		—				—				—				—				—
Nonmortgage loans:
Business		—				—				—				—				—
Consumer		—				—				—				—				—
Total non-accruing troubled debt restructured loans		3,126				3,114				3,604				3,606				3,734
Total nonaccrual loans	$	11,575			$	9,738			$	11,598			$	10,330			$	10,136
Total nonperforming assets	$	11,575			$	9,738			$	11,598			$	10,330			$	10,136
Accruing troubled debt restructured loans:
Mortgage loans:
1-4 family residential
Investor owned	$	3,730			$	3,730			$	5,191			$	5,226			$	5,267
Owner occupied		2,348				2,359				2,090				2,114				2,493
Multifamily residential		—				—				—				—				—
Nonresidential properties		762				1,300				1,306				1,317				1,330
Construction and land		—				—				—				—				—
Nonmortgage loans:
Business		—				—				14				35				37
Consumer		—				—				—				—				—
Total accruing troubled debt restructured loans	$	6,840			$	7,389			$	8,601			$	8,692			$	9,127
Total nonperforming assets and accruing troubled debt restructured loans	$	18,415			$	17,127			$	20,199			$	19,022			$	19,263
Total nonperforming loans to total net loans		1.08	%			1.00	%			1.20	%			1.09	%			1.08	%
Total nonperforming assets to total assets		0.95	%			0.85	%			1.10	%			0.94	%			0.96	%
Total nonperforming assets and accruing troubled debt restructured loans to total assets		1.51	%			1.49	%			1.92	%			1.73	%			1.82	%

PDL Community Bancorp and Subsidiaries
Average Balance Sheets

	For the Three Months Ended June 30,
	2020											2019
	Average Outstanding Balance				Interest				Average Yield/Rate (1)			Average Outstanding Balance				Interest				Average Yield/Rate (1)
	(Dollars in thousands)
Interest-earning assets:
Loans (2)	$	1,024,019			$	12,162			4.78	%		$	928,806			$	12,060			5.21	%
Available-for-sale securities		16,750				146			3.50	%			22,127				76			1.38	%
Other (3)		68,900				85			0.50	%			48,512				278			2.30	%
Total interest-earning assets		1,109,669				12,393			4.49	%			999,445				12,414			4.98	%
Non-interest-earning assets		65,829											35,130
Total assets	$	1,175,498										$	1,034,575
Interest-bearing liabilities:
NOW/IOLA	$	29,692			$	38			0.51	%		$	25,306			$	26			0.41	%
Money market		196,707				458			0.94	%			140,239				755			2.16	%
Savings		117,166				37			0.13	%			121,423				39			0.13	%
Certificates of deposit		375,708				1,730			1.85	%			400,317				1,904			1.91	%
Total deposits		719,273				2,263			1.27	%			687,285				2,724			1.59	%
Advance payments by borrowers		8,947				1			0.04	%			9,566				1			0.04	%
Borrowings		120,647				608			2.03	%			53,474				345			2.59	%
Total interest-bearing liabilities		848,867				2,872			1.36	%			750,325				3,070			1.64	%
Non-interest-bearing liabilities:
Non-interest-bearing demand		165,161				—							112,069				—
Other non-interest-bearing liabilities		5,165				—							3,819				—
Total non-interest-bearing liabilities		170,326				—							115,888				—
Total liabilities		1,019,193				2,872							866,213				3,070
Total equity		156,305											168,362
Total liabilities and total equity	$	1,175,498							1.36	%		$	1,034,575							1.64	%
Net interest income					$	9,521										$	9,344
Net interest rate spread (4)									3.13	%										3.34	%
Net interest-earning assets (5)	$	260,802										$	249,120
Net interest margin (6)									3.45	%										3.75	%
Average interest-earning assets to interest-bearing liabilities									130.72	%										133.20	%

____________
(1)  Annualized where appropriate.
(2)  Loans include loans and loans held for sale.
(3)  Includes FHLBNY demand account and FHLBNY stock dividends.
(4)  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.
(5)  Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.
(6)  Net interest margin represents net interest income divided by average total interest-earning assets.

PDL Community Bancorp and Subsidiaries
Average Balance Sheets

	For the Six Months Ended June 30,
	2020											2019
	Average Outstanding Balance				Interest				Average Yield/Rate (1)			Average Outstanding Balance				Interest				Average Yield/Rate
	(Dollars in thousands)
Interest-earning assets:
Loans (2)	$	999,758			$	24,944			5.02	%		$	932,323			$	24,155			5.22	%
Available-for-sale securities		17,484				229			2.63	%			22,954				163			1.43	%
Other (3)		53,560				250			0.93	%			41,155				478			2.34	%
Total interest-earning assets		1,070,802				25,423			4.77	%			996,432				24,796			5.02	%
Non-interest-earning assets		51,647											34,785
Total assets	$	1,122,449										$	1,031,217
Interest-bearing liabilities:
NOW/IOLA	$	29,359			$	77			0.53	%		$	26,848			$	53			0.40	%
Money market		178,589				1,075			1.21	%			113,893				1,318			2.33	%
Savings		115,438				72			0.13	%			121,988				79			0.13	%
Certificates of deposit		377,431				3,557			1.90	%			422,638				3,860			1.84	%
Total deposits		700,817				4,781			1.37	%			685,367				5,310			1.56	%
Advance payments by borrowers		8,464				2			0.05	%			8,643				2			0.05	%
Borrowings		114,643				1,195			2.10	%			52,030				678			2.63	%
Total interest-bearing liabilities		823,924				5,978			1.46	%			746,040				5,990			1.62	%
Non-interest-bearing liabilities:
Non-interest-bearing demand		136,903				—							111,360				—
Other non-interest-bearing liabilities		4,065				—							4,434				—
Total non-interest-bearing liabilities		140,968				—							115,794				—
Total liabilities		964,892				5,978							861,834				5,990
Total equity		157,557											169,383
Total liabilities and total equity	$	1,122,449							1.46	%		$	1,031,217							1.62	%
Net interest income					$	19,445										$	18,806
Net interest rate spread (4)									3.31	%										3.40	%
Net interest-earning assets (5)	$	246,878										$	250,392
Net interest margin (6)									3.65	%										3.81	%
Average interest-earning assets to
interest-bearing liabilities									129.96	%										133.56	%

____________
(1)  Annualized where appropriate.
(2)  Loans include loans and loans held for sale.
(3)  Includes FHLBNY demand account and FHLBNY stock dividends.
(4)  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.
(5)  Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.
(6)  Net interest margin represents net interest income divided by average total interest-earning assets.

FAQ

What were PDLB's earnings for Q2 2020?

PDL Community Bancorp reported a net loss of $571,000, or $0.03 per share, for Q2 2020.

How did PDLB perform compared to Q1 2020?

PDLB's net loss decreased from $1.2 million in Q1 2020 to $571,000 in Q2 2020.

What is the total asset growth reported by PDLB?

PDL Community Bancorp reported a 15.8% increase in total assets, reaching $1.22 billion.

What actions did PDLB take in response to COVID-19?

PDLB handled over 1,000 PPP loan applications and enhanced support for its staff and communities.

What is the current stockholder equity for PDLB?

As of June 30, 2020, PDLB's stockholders' equity decreased to $155 million, a 2.1% decline.