PDL Community Bancorp Announces that PFS Service Corp. entered into a Contract of Sale of Real Property

Rhea-AI Summary

PDL Community Bancorp, through its subsidiary PFS Service Corp, has entered a leaseback agreement for its real property located at 3821 Bergenline Avenue, Union City, New Jersey, valued at $2.4 million, while its carrying value was $512,000 as of the transaction date, December 22, 2020. The Bank will lease the property for an initial 15 years with an annual rent of $145,000, increasing by 1.5% annually. CEO Carlos P. Naudon stated that 2021 will focus on investing in organizational safety and stakeholder value enhancement.

Positive

• Successful leaseback agreement for $2.4 million enhances liquidity.
• Initial annual rent of $145,000 with annual increases provides steady revenue stream.

Negative

• The leaseback may incur additional closing expenses.
• Potential risks associated with property value fluctuations.

NEW YORK, Dec. 31, 2020 (GLOBE NEWSWIRE) -- On December 22, 2020, PDL Community Bancorp (the “Company”), through PFS Service Corp. (“PFS”), the service company of its subsidiary Ponce Bank (the “Bank”), entered into a contract of sale and leaseback of the real property that PFS owns located at 3821 Bergenline Avenue, Union City, New Jersey (the “Real Property”). The purchase price for the Real Property is $2.4 million. PFS’ carrying value of the Real Property as of December 22, 2020 was $512,000. It is anticipated that there will be additional expenses incurred during the closing of the transaction.

In the leaseback transaction, the Bank will lease back the Real Property for an initial term of 15 years and will have four optional terms of five years each. The initial base annual rent will be $145,000 subject to annual rent increases of 1.5%.

Carlos P. Naudon, the Company’s President and CEO, noted “2021 will continue 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.”

About PDL Community Bancorp

PDL Community Bancorp is the financial holding company for Ponce Bank and Mortgage World Bankers, Inc. 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. 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.

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

FAQ

What is the significance of PDL Community Bancorp's leaseback agreement on December 22, 2020?

The leaseback agreement for $2.4 million improves liquidity while committing to lease the property for 15 years.

How much will PDL Community Bancorp earn annually from the leaseback agreement?

PDL Community Bancorp will earn an initial annual rent of $145,000, increasing by 1.5% each year.

What is the carrying value of the real property involved in the leaseback transaction?

The carrying value of the real property was $512,000 as of December 22, 2020.

What potential risks does PDL Community Bancorp face with this leaseback transaction?

Potential risks include additional closing expenses and fluctuations in property values.