Ponce Financial Group, Inc. Reports Fourth Quarter 2022 Results

Rhea-AI Summary

Ponce Financial Group, as the successor of PDL Community Bancorp (NASDAQ: PDLB), reported a net loss of ($9.2) million for Q4 2022, improving from a net loss of ($14.7) million in Q3 2022, but a decline from a net income of $15.0 million in Q4 2021. The net interest income decreased by 8.21% to $16.2 million, influenced by rising funding costs. Total assets surged by 39.82% to $2.31 billion, largely due to securities purchases funded by a $225 million equity raise. The allowance for loan losses increased to $15.4 million, with a focus on mitigating risks from consumer microloans. The company is winding down its partnership with Grain while exploring new partnerships.

Positive

• Total assets increased by 39.82%, reaching $2.31 billion.
• Total stockholders' equity rose by 160.34% to $492.7 million.
• Net loans receivable grew by 14.41% to $1.49 billion.
• Maintained strong capital ratios after raising $225 million from preferred stock issuance.

Negative

• Net loss of ($30.0) million for the year, a significant decline from net income of $25.4 million in 2021.
• Net interest income decreased by $1.4 million, or 8.21%, from the prior quarter.
• Non-interest income for Q4 2022 fell by 72.29% compared to Q3 2022.
• Increased loan loss reserves by $10.4 million due to higher risks in microloans.

NEW YORK, Jan. 30, 2023 (GLOBE NEWSWIRE) -- Ponce Financial Group, Inc., as the successor by merger with PDL Community Bancorp (the “Company”) (NASDAQ: PDLB), the holding company for Ponce Bank (the “Bank”), today announced results for the fourth quarter of 2022.

Fourth Quarter Highlights (Compared to Prior Periods):

• Net loss of ($9.2) million or ($0.40) per diluted share, for the three months ended December 31, 2022, as compared to net loss of ($14.7) million, or ($0.64) per diluted share for the three months ended September 30, 2022 and net income of $15.0 million, or $0.89 per diluted share for the three months ended December 31, 2021.
• Included in the ($9.2) million 2022 fourth quarter results is a  $10.4 million increase in net provision for loan loss reserves/unused commitments to our Grain-originated microloan portfolio, as well as a reversal of $0.8 million of loan origination income that had been taken upfront (as opposed to deferred over the life of the loan).
• Net interest income of $16.2 million  for the fourth quarter of 2022 decreased $1.4 million, or 8.21%, from the prior quarter and $0.6 million, or 3.67%, from the same quarter last year, largely due to an increase in funding costs driven by the significant increase in interest rates during the quarter.
• Net interest margin was 2.98% for the fourth quarter of 2022, a decrease from 3.62% for the prior quarter and from 4.51% for the same quarter last year. The reduction was largely attributable to an increase of lower yielding securities in the Company's portfolio and to an increase in the cost of funds.
• Securities totaled $640.3 million as of  December 31, 2022, an increase of $526.0 million, or 460.31%, from December 31, 2021.
• Net loans receivable were $1.49 billion as of  December 31, 2022, an increase of $188.0 million, or 14.41%, from December 31, 2021. The increase of $188.0 million was attributable to a $304.8 million net increase in non-PPP loans partially offset by a $116.7 million decrease in PPP loans.
• Deposits were $1.25 billion as of December 31, 2022, an increase of $47.7 million, or 3.96%, from December 31, 2021.

President and Chief Executive Officer’s Comments

Carlos P. Naudon, Ponce Financial Group’s President and CEO, stated “We took action this quarter, within applicable guidelines, to further reduce future exposure to our consumer microloan program with Grain by reducing available credit lines for many borrowers. Grain unused credit line exposure was reduced from $15.3 million at the end of the third quarter of 2022 to $0.4 million at the end of the fourth quarter of 2022. We also increased our allowance for loan losses for this portfolio to $15.4 million, leaving us with total possible remaining exposure, inclusive of unused commitments, of $3.2 million at year-end, down from previous exposure of $28.6 million at the end of the third quarter. We also retained $1.4 million of security deposits from Grain borrowers, which may be available to offset the remaining exposure. While we are winding down our partnership with Grain, we will continue to explore and foster other partnerships, to invest in our people and in efficiency enhancing technologies and to use all available capital management tools to deliver value to our stakeholders as a nationally recognized MDI and CDFI institution.

Mr. Naudon continued, “Looking to the coming year, we are focused on successfully navigating a dramatically changed environment compared to a year ago in terms of credit costs and economic uncertainty. We are keenly aware, as many others in our industry have pointed out, that the road ahead will continue to be more volatile as we navigate through this necessary adjustment from an extended period of ultra-low interest rates. Fortunately for Ponce, during 2022 we significantly increased our capital base, both due to the second-step conversion as well as the $225 million sale of our perpetual preferred stock to the U.S. Department of the Treasury, as evidenced by our strong capital ratios. Our financial strength provides significant capacity for future growth, but we will be patient and judicious in deploying this capital while at the same time making use of our strength to support underserved but not undeserving members of our communities.”

Executive Chairman’s Comment

Steven A. Tsavaris, Ponce Financial Group’s Executive Chairman, added, “Despite a challenging environment, we were able to add almost $200 million to our loan portfolio across most categories during the quarter. We saw healthy growth in our multi-family loan and non-qualified mortgage portfolios. The loan portfolio, excluding Grain originations, continues to show great resiliency and continues to enjoy low LTVs”.

Selected performance metrics are as follows (refer to “Key Metrics” for additional information):

		At or for the Three Months Ended
		December 31,				September 30,				June 30,				March 31,				December 31,
Performance Ratios (Annualized):		2022				2022				2022				2022				2021
Return on average assets (1)			(1.62	%)			(2.80	%)			0.17	%			(1.55	%)			3.69	%
Return on average equity (1)			(7.28	%)			(11.25	%)			1.01	%			(10.06	%)			31.46	%
Net interest rate spread (1) (2)			2.14	%			3.12	%			3.86	%			4.48	%			4.32	%
Net interest margin (1) (3)			2.98	%			3.62	%			4.10	%			4.68	%			4.51	%
Non-interest expense to average assets (1)			2.78	%			4.83	%			3.73	%			6.39	%			3.90	%
Efficiency ratio (4)			94.95	%			132.46	%			93.77	%			143.50	%			44.10	%
Average interest-earning assets to average interest- bearing liabilities			151.73	%			161.30	%			151.98	%			145.54	%			138.10	%
Average equity to average assets			22.32	%			24.90	%			17.32	%			15.76	%			11.71	%

		At or for the Three Months Ended
		December 31,				September 30,				June 30,				March 31,				December 31,
Capital Ratios (Annualized):		2022				2022				2022				2022				2021
Total capital to risk weighted assets (Bank only)			30.53	%			33.39	%			36.00	%			23.27	%			17.23	%
Tier 1 capital to risk weighted assets (Bank only)			29.26	%			32.13	%			34.75	%			22.02	%			15.98	%
Common equity Tier 1 capital to risk-weighted assets (Bank only)			29.26	%			32.13	%			34.75	%			22.02	%			15.98	%
Tier 1 capital to average assets (Bank only)			20.47	%			22.91	%			28.79	%			14.88	%			10.95	%

		At or for the Three Months Ended
		December 31,				September 30,				June 30,				March 31,				December 31,
Asset Quality Ratios (Annualized):		2022				2022				2022				2022				2021
Allowance for loan losses as a percentage of total loans			2.27	%			1.77	%			1.31	%			1.28	%			1.24	%
Allowance for loan losses as a percentage of nonperforming loans			252.33	%			118.43	%			94.05	%			106.84	%			142.90	%
Net (charge-offs) recoveries to average outstanding loans (1)			(0.85	%)			(0.52	%)			(0.05	%)			(0.22	%)			(0.18	%)
Non-performing loans as a percentage of total gross loans			0.90	%			1.50	%			1.39	%			1.20	%			0.87	%
Non-performing loans as a percentage of total assets			0.59	%			0.97	%			0.90	%			0.97	%			0.69	%
Total non-performing assets as a percentage of total assets			0.59	%			0.97	%			0.90	%			0.97	%			0.69	%
Total non-performing assets and accruing troubled debt restructured loans as a percentage of total assets			0.78	%			1.16	%			1.14	%			1.30	%			1.07	%

1. Annualized where appropriate.
2. 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.
3. Net interest margin represents net interest income divided by average total interest-earning assets.
4. Efficiency ratio represents noninterest expense divided by the sum of net interest income and noninterest income.

Summary of Results of Operations

Net loss for the year ended December 31, 2022, was ($30.0) million compared to net income of $25.4 million for the year ended December 31, 2021. This variance was largely due to charges related to Grain and a contribution to the Ponce De Leon Foundation this year, gains on property sales last year versus a loss on equipment sale this year, higher compensation and occupancy expenses and a reduction on the income on sale of mortgage loans.

Net Interest Income and Net Margin

Net interest income for the year ended December 31, 2022, was $66.6 million compared to $58.8 million for the year ended December 31, 2021. This increase is largely explained by the increases in the securities and loan portfolios.

Net interest margin was 3.75% for the year ended December 31, 2022 compared to 4.13% for the same period last year, a decrease of 38bps. The decrease in net interest margin was a result of an increase in the cost of funds driven by higher interest rates as well as a higher proportion of investment securities within interest-earning assets. These securities offer lower yields versus traditional loans. 

Non-interest Income

Non-interest income for the three months ended December 31, 2022, was $0.4 million, a decrease of $1.1 million, or 72.29%, compared to the three months ended September 30, 2022 and a decrease of $18.7 million, or 97.72%, compared to the three months ended December 31, 2021.

The $1.1 million decrease in non-interest income for the three months ended December 31, 2022 compared to the three months ended September 30, 2022 was impacted by the reversal of loan origination income that had been taken upfront (as opposed to deferred) as well as lower income on sale of mortgage loans.

The $18.7 million decrease in non-interest income for the three months ended December 31, 2022 compared to the three months ended December 31, 2021 was attributable to the non-recurring  $15.4 million gains on sale of property last year, a $1.4 million reduction in  loan origination fees and a $1.3 million reduction in income on sale of mortgage loans.

Non-interest income for the year ended December 31, 2022, decreased $28.2 million, or 81.47%, to $6.4 million compared to $34.6 million for the year ended December 31, 2021. The decrease is primarily due to $20.3 million gains on sale of property last year versus a loss on sale of equipment of $0.4 million, a $4.5 million reduction in income on sale of mortgage loans and a $1.7 million reduction in  loan origination fees this year.

Non-interest Expense

Non-interest expense for the three months ended December 31, 2022, was $15.8 million, a decrease of  $9.7 million, or 37.97%, compared to the three months ended September 30, 2022 and  $0.1 million, or 0.56%, compared to the three months ended December 31, 2021. The $9.7 million decrease from the three months ended September 30, 2022 was mainly attributable to the Grain write-off and write-down in the third quarter and to a lesser extent, a decrease in compensation and benefits expense as we reduced the bonus accrual during the fourth quarter. The $0.1 million decrease from the three months ended December 31, 2021 was attributable to a decrease of $0.6 million in direct loan expense, a $0.5 million recovery of Grain charge-offs and a decrease of $0.5 million in compensation and benefits expense, offset by increases of $0.9 million in occupancy and equipment, mainly due to rental expenses incurred after the sale of property during 2021 and $0.3 million in data processing expenses.

Non-interest expense for the year ended December 31, 2022, was $85.8 million, an increase of $28.7 million or 50.19%, compared to $57.1 million the year ended December 31, 2021. The $28.7 million increase in non-interest expense was attributable to the $17.9 million Grain write-off and write-down, $5.0 million contribution to the Ponce De Leon Foundation, and increases of $4.7 million in compensation and benefits expense, $2.6 million in occupancy and equipment expenses, $0.8 million in data processing expenses, $0.5 million in other operating expenses, $0.4 million in marketing and promotional expenses and $0.3 million in insurance and surety bond premiums. These items were partially offset by decreases of $1.7 million in professional fees, $1.4 million in direct loan expenses and $0.5 million in office supplies, telephone and postage.

Balance Sheet Summary

Total assets increased $658.5 million, or 39.82%, to $2.31 billion as of December 31, 2022 from $1.65 billion as of December 31, 2021. The increase in total assets is largely attributable to an increase of $509.9 million resulting from the purchases in held-to-maturity securities utilizing the $225.0 million received from the issuance of preferred stock to the U.S. Treasury pursuant to its Emergency Capital Investment Program. The increase in total assets is further impacted by increases of $188.0 million in net loans receivable (inclusive of a $116.7 million net decrease in PPP loans), $33.4 million in right of use assets, $18.7 million in Federal Home Loan Bank of New York stock, $16.2 million resulting from the purchase of available-for-sale securities and $12.3 million in deferred tax assets. These increases are partially offset by decreases of $99.5 million in cash and equivalents, $13.9 million in mortgage loans held for sale, at fair value and $6.2 million in other assets.

Total liabilities increased $355.0 million, or 24.25%, to $1.82 billion as of December 31, 2022 from $1.46 billion as of December 31, 2021. The increase in total liabilities was largely attributable to increases of $411.1 million in advances from FHLBNY, $47.7 million in deposits, and $34.5 million in operating lease liabilities, offset by decreases of $122.0 million in subscription liabilities related to the conversion of the mutual holding company to a stock company held as of December 31, 2021 pending the closing of the conversion and reorganization on January 27, 2022 and $15.1 million in warehouse lines of credit.

Total stockholders’ equity increased $303.4 million, or 160.34%, to $492.7 million as of December 31, 2022, from $189.3 million as of December 31, 2021. This increase in stockholders’ equity was largely attributable to the $225.0 million issuance of preferred stock to the U.S. Department of the Treasury pursuant to its Emergency Capital Investment Program and the $118.0 million received as a result of the sale of common stock in the conversion of the mutual holding company to a stock company.

About Ponce Financial Group, Inc.

Ponce Financial Group, Inc., as the successor by merger with PDL Community Bancorp, 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; anticipated losses with respect to the Company's investment in Grain; the anticipated impact of the COVID-19 pandemic and Ponce Bank’s attempts at mitigation; 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., as the successor by merger with PDL Community Bancorp, and Subsidiaries
Consolidated Statements of Financial Condition
(Dollars in thousands, except for share data)

	As of
	December 31,				September 30,				June 30,				March 31,				December 31,
	2022				2022				2022				2022				2021
ASSETS
Cash and due from banks:
Cash	$	34,074			$	37,235			$	53,544			$	32,168			$	98,954
Interest-bearing deposits in banks		20,286				25,286				221,262				37,127				54,940
Total cash and cash equivalents		54,360				62,521				274,806				69,295				153,894
Available-for-sale securities, at fair value		129,505				131,977				140,044				154,799				113,346
Held-to-maturity securities, at amortized cost		510,820				494,297				211,517				927				934
Placement with banks		1,494				2,490				2,490				2,490				2,490
Mortgage loans held for sale, at fair value		1,979				3,357				9,234				7,972				15,836
Loans receivable, net		1,493,127				1,392,553				1,324,320				1,300,446				1,305,078
Accrued interest receivable		15,049				14,063				13,255				12,799				12,362
Premises and equipment, net		17,446				17,759				18,945				19,279				19,617
Right of use assets		33,423				34,121				34,416				35,179				—
Federal Home Loan Bank of New York stock (FHLBNY), at cost		24,661				14,272				16,429				5,420				6,001
Deferred tax assets		16,137				13,822				9,658				7,440				3,820
Other assets		13,988				11,170				21,585				13,730				20,132
Total assets	$	2,311,989			$	2,192,402			$	2,076,699			$	1,629,776			$	1,653,510
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits	$	1,252,412			$	1,351,189			$	1,148,728			$	1,181,165			$	1,204,716
Operating lease liabilities		34,532				35,081				35,217				35,821				—
Accrued interest payable		1,390				854				158				223				228
Advance payments by borrowers for taxes and insurance		9,724				10,589				8,668				10,161				7,657
Advances from the FHLBNY and others		517,375				286,375				334,375				93,375				106,255
Warehouse lines of credit		—				—				—				753				15,090
Mutual holding company conversion subscription liabilities		—				—				—				—				122,000
Other liabilities		3,856				7,631				31,471				8,699				8,308
Total liabilities		1,819,289				1,691,719				1,558,617				1,330,197				1,464,254
Commitments and contingencies
Stockholders' Equity:
Preferred stock, $0.01 par value; 100,000,000 shares authorized		225,000				225,000				225,000				—				—
Common stock, $0.01 par value; 200,000,000  shares authorized		249				247				247				247				185
Treasury stock, at cost		(2	)			—				—				—				(13,687	)
Additional paid-in-capital		206,508				206,092				205,669				205,243				85,601
Retained earnings		92,955				102,169				116,907				116,136				122,956
Accumulated other comprehensive loss		(17,860	)			(18,420	)			(15,032	)			(7,035	)			(1,456	)
Unearned compensation ─ ESOP		(14,150	)			(14,405	)			(14,709	)			(15,012	)			(4,343	)
Total stockholders' equity		492,700				500,683				518,082				299,579				189,256
Total liabilities and stockholders' equity	$	2,311,989			$	2,192,402			$	2,076,699			$	1,629,776			$	1,653,510

Ponce Financial Group, Inc., as the successor by merger with PDL Community Bancorp, and Subsidiaries
Consolidated Statements of Operations
(Dollars in thousands, except per share data)

	Three Months Ended
	December 31,				September 30,				June 30,				March 31,				December 31,
	2022				2022				2022				2022				2021
Interest and dividend income:
Interest on loans receivable	$	18,550			$	17,058			$	16,057			$	18,200			$	18,013
Interest on deposits due from banks		199				346				132				36				7
Interest and dividend on securities and FHLBNY stock		6,184				4,230				978				782				632
Total interest and dividend income		24,933				21,634				17,167				19,018				18,652
Interest expense:
Interest on certificates of deposit		1,310				687				677				803				907
Interest on other deposits		4,125				1,543				521				284				309
Interest on borrowings		3,332				1,793				481				593				654
Total interest expense		8,767				4,023				1,679				1,680				1,870
Net interest income		16,166				17,611				15,488				17,338				16,782
Provision for loan losses		12,641				9,330				817				1,258				873
Net interest income after provision for loan losses		3,525				8,281				14,671				16,080				15,909
Non-interest income:
Service charges and fees		481				464				445				440				468
Brokerage commissions		180				288				214				338				401
Late and prepayment charges		263				109				193				58				336
Income on sale of mortgage loans		7				116				200				418				1,294
Loan origination(1)		(557	)			522				696				625				886
(Loss) gain on sale of premises and equipment		—				(436	)			—				—				15,431
Other		63				514				431				347				353
Total non-interest income		437				1,577				2,179				2,226				19,169
Non-interest expense:
Compensation and benefits		6,501				7,377				6,911				7,125				6,959
Occupancy and equipment		3,928				3,611				3,237				3,192				3,007
Data processing expenses		1,114				994				824				847				771
Direct loan expenses		454				654				505				874				1,032
Insurance and surety bond premiums		270				297				156				147				149
Office supplies, telephone and postage		375				369				406				405				552
Professional fees		1,571				1,251				1,748				1,334				1,700
Contribution to the Ponce De Leon Foundation		—				—				—				4,995				—
Grain write-off and write-down		(515	)			8,881				1,500				8,074				—
Marketing and promotional expenses		256				214				52				71				69
Directors fees		112				89				96				71				80
Regulatory assessment		84				99				71				83				69
Other operating expenses		1,615				1,580				1,061				856				1,466
Total non-interest expense		15,765				25,416				16,567				28,074				15,854
(Loss) income before income taxes		(11,803	)			(15,558	)			283				(9,768	)			19,224
(Benefit) provision for income taxes		(2,589	)			(820	)			(488	)			(2,948	)			4,245
Net (loss) income	$	(9,214	)		$	(14,738	)		$	771			$	(6,820	)		$	14,979
(Loss) earnings per common share:
Basic	$	(0.40	)		$	(0.64	)		$	0.03			$	(0.31	)		$	0.90
Diluted	$	(0.40	)		$	(0.64	)		$	0.03			$	(0.31	)		$	0.89
Weighted average common shares outstanding:
Basic		23,168,097				23,094,859				23,056,559				21,721,113				16,864,929
Diluted		23,168,097				23,094,859				23,128,911				21,721,113				16,924,785

1. Amounts for the quarterly period ended December 31, 2022 include the reversal of $0.8 million of loan origination income that had been taken upfront in prior quarters of 2022 (as opposed to deferred over the life of ‎the loan)‎.

Ponce Financial Group, Inc., as the successor by merger with PDL Community Bancorp, and Subsidiaries
Consolidated Statements of Operations
(Dollars in thousands, except per share data)

		For the Years Ended December 31,
		2022				2021				Variance $				Variance %
Interest and dividend income:
Interest on loans receivable		$	69,865			$	65,532			$	4,333				6.61	%
Interest on deposits due from banks			713				20				693				3,465.00	%
Interest and dividend on securities and FHLBNY stock			12,174				1,546				10,628				687.45	%
Total interest and dividend income			82,752				67,098				15,654				23.33	%
Interest expense:
Interest on certificates of deposit			3,477				4,244				(767	)			(18.07	%)
Interest on other deposits			6,473				1,427				5,046				353.61	%
Interest on borrowings			6,199				2,581				3,618				140.18	%
Total interest expense			16,149				8,252				7,897				95.70	%
Net interest income			66,603				58,846				7,757				13.18	%
Provision for loan losses			24,046				2,717				21,329				785.02	%
Net interest income after provision for loan losses			42,557				56,129				(13,572	)			(24.18	%)
Non-interest income:
Service charges and fees			1,830				1,657				173				10.44	%
Brokerage commissions			1,020				1,324				(304	)			(22.96	%)
Late and prepayment charges			623				1,207				(584	)			(48.38	%)
Income on sale of mortgage loans			741				5,265				(4,524	)			(85.93	%)
Loan origination			1,286				3,021				(1,735	)			(57.43	%)
(Loss) gain on sale of premises and equipment			(436	)			20,270				(20,706	)			(102.15	%)
Other			1,355				1,893				(538	)			(28.42	%)
Total non-interest income			6,419				34,637				(28,218	)			(81.47	%)
Non-interest expense:
Compensation and benefits			27,914				23,262				4,652				20.00	%
Occupancy and equipment			13,968				11,328				2,640				23.31	%
Data processing expenses			3,779				3,015				764				25.34	%
Direct loan expenses			2,487				3,888				(1,401	)			(36.03	%)
Insurance and surety bond premiums			870				585				285				48.72	%
Office supplies, telephone and postage			1,555				2,054				(499	)			(24.29	%)
Professional fees			5,904				7,629				(1,725	)			(22.61	%)
Contribution to the Ponce De Leon Foundation			4,995				—				4,995				—	%
Grain write-off and write-down			17,940				—				17,940				—	%
Marketing and promotional expenses			593				206				387				187.86	%
Directors fees			368				285				83				29.12	%
Regulatory assessment			337				323				14				4.33	%
Other operating expenses			5,112				4,567				545				11.93	%
Total non-interest expense			85,822				57,142				28,680				50.19	%
(Loss) income before income taxes			(36,846	)			33,624				(70,470	)			(209.58	%)
(Benefit) provision for income taxes			(6,845	)			8,209				(15,054	)			(183.38	%)
Net (loss) income		$	(30,001	)		$	25,415			$	(55,416	)			(218.04	%)
(Loss) earnings per common share:
Basic		$	(1.32	)		$	1.52			$	(2.84	)			(187.11	%)
Diluted		$	(1.32	)		$	1.51			$	(2.84	)			(187.35	%)
Weighted average common shares outstanding:
Basic			22,690,943				16,744,561				5,946,382				35.51	%
Diluted			22,690,943				16,791,443				5,899,500				35.13	%

Ponce Financial Group, Inc., as the successor by merger with PDL Community Bancorp, and Subsidiaries
Key Metrics

	At or for the Three Months Ended
	December 31,				September 30,				June 30,				March 31,				December 31,
	2022				2022				2022				2022				2021
Performance Ratios:
Return on average assets (1)		(1.62	%)			(2.80	%)			0.17	%			(1.55	%)			3.69	%
Return on average equity (1)		(7.28	%)			(11.25	%)			1.01	%			(10.06	%)			31.46	%
Net interest rate spread (1) (2)		2.14	%			3.12	%			3.86	%			4.48	%			4.32	%
Net interest margin (1) (3)		2.98	%			3.62	%			4.10	%			4.68	%			4.51	%
Non-interest expense to average assets (1)		2.78	%			4.83	%			3.73	%			6.39	%			3.90	%
Efficiency ratio (4)		94.95	%			132.46	%			93.77	%			143.50	%			44.10	%
Average interest-earning assets to average interest- bearing liabilities		151.73	%			161.30	%			151.98	%			145.54	%			138.10	%
Average equity to average assets		22.32	%			24.90	%			17.32	%			15.76	%			11.71	%
Capital Ratios:
Total capital to risk weighted assets (Bank only)		30.53	%			33.39	%			36.00	%			23.27	%			17.23	%
Tier 1 capital to risk weighted assets (Bank only)		29.26	%			32.13	%			34.75	%			22.02	%			15.98	%
Common equity Tier 1 capital to risk-weighted assets (Bank only)		29.26	%			32.13	%			34.75	%			22.02	%			15.98	%
Tier 1 capital to average assets (Bank only)		20.47	%			22.91	%			28.79	%			14.88	%			10.95	%
Asset Quality Ratios:
Allowance for loan losses as a percentage of total loans		2.27	%			1.77	%			1.31	%			1.28	%			1.24	%
Allowance for loan losses as a percentage of nonperforming loans		252.33	%			118.43	%			94.05	%			106.84	%			142.90	%
Net (charge-offs) recoveries to average outstanding loans (1)		(0.85	%)			(0.52	%)			(0.05	%)			(0.22	%)			(0.18	%)
Non-performing loans as a percentage of total gross loans		0.90	%			1.50	%			1.39	%			1.20	%			0.87	%
Non-performing loans as a percentage of total assets		0.59	%			0.97	%			0.90	%			0.97	%			0.69	%
Total non-performing assets as a percentage of total assets		0.59	%			0.97	%			0.90	%			0.97	%			0.69	%
Total non-performing assets and accruing troubled debt restructured loans as a percentage of total assets		0.78	%			1.16	%			1.14	%			1.30	%			1.07	%
Other:
Number of offices		18				18				18				18				19
Number of full-time equivalent employees		253				257				253				223				217

1. Annualized where appropriate.
2. 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.
3. Net interest margin represents net interest income divided by average total interest-earning assets.
4. Efficiency ratio represents noninterest expense divided by the sum of net interest income and noninterest income.
   

Ponce Financial Group, Inc., as the successor by merger with PDL Community Bancorp, and Subsidiaries
Securities Portfolio

		December 31, 2022																December 31, 2021
						Gross				Gross												Gross				Gross
		Amortized				Unrealized				Unrealized								Amortized				Unrealized				Unrealized
		Cost				Gains				Losses				Fair Value				Cost				Gains				Losses				Fair Value
		(in thousands)																(in thousands)
Available-for-Sale Securities:
U.S. Government Bonds		$	2,985			$	—			$	(296	)		$	2,689			$	2,981			$	—			$	(47	)		$	2,934
Corporate Bonds			25,824				—				(2,465	)			23,359				21,243				144				(203	)			21,184
Mortgage-Backed Securities:
Collateralized Mortgage Obligations(1)			44,503				—				(6,726	)			37,777				18,845				—				(497	)			18,348
FHLMC Certificates			11,310				—				(1,676	)			9,634				—				—				—				—
FNMA Certificates			67,199				—				(11,271	)			55,928				71,930				—				(1,231	)			70,699
GNMA Certificates			122				—				(4	)			118				175				6				—				181
Total available-for-sale securities		$	151,943			$	—			$	(22,438	)		$	129,505			$	115,174			$	150			$	(1,978	)		$	113,346
Held-to-Maturity Securities:
U.S. Agency Bonds		$	35,000			$	—			$	(380	)		$	34,620			$	—			$	—			$	—			$	—
Corporate Bonds			82,500				57				(3,819	)			78,738				—				—				—				—
Mortgage-Backed Securities:
Collateralized Mortgage Obligations(1)			235,479				192				(5,558	)			230,113				—				—				—				—
FHLMC Certificates			4,120				—				(268	)			3,852				934				—				(20	)			914
FNMA Certificates			131,918				—				(5,227	)			126,691				—				—				—				—
SBA Certificates			21,803				34				—				21,837				—				—				—				—
Total held-to-maturity securities		$	510,820			$	283			$	(15,252	)		$	495,851			$	934			$	—			$	(20	)		$	914

1. Comprised of Federal Home Loan Mortgage Corporation (“FHLMC”), Federal National Mortgage Association (“FNMA”) and Ginnie Mae (“GNMA”) issued securities.

Ponce Financial Group, Inc., as the successor by merger with PDL Community Bancorp, and Subsidiaries
Loan Portfolio

		As of
		December 31,								September 30,								June 30,								March 31,								December 31,
		2022								2022								2022								2022								2021
		Amount				Percent				Amount				Percent				Amount				Percent				Amount				Percent				Amount				Percent
		(Dollars in thousands)
Mortgage loans:
1-4 family residential
Investor Owned		$	343,968				22.54	%		$	336,667				23.79	%		$	321,671				24.02	%		$	323,442				24.59	%		$	317,304				24.01	%
Owner-Occupied			134,878				8.84	%			112,749				7.97	%			100,048				7.47	%			95,234				7.24	%			96,947				7.33	%
Multifamily residential			494,667				32.42	%			421,917				29.81	%			396,470				29.60	%			368,133				27.98	%			348,300				26.34	%
Nonresidential properties			308,043				20.19	%			282,642				19.97	%			279,877				20.90	%			251,893				19.14	%			239,691				18.13	%
Construction and land			185,018				12.13	%			197,437				13.95	%			165,425				12.35	%			144,881				11.01	%			134,651				10.19	%
Total mortgage loans			1,466,574				96.12	%			1,351,412				95.49	%			1,263,491				94.34	%			1,183,583				89.96	%			1,136,893				86.00	%
Non-mortgage loans:
Business loans (1)			39,965				2.62	%			41,398				2.92	%			45,720				3.41	%			100,253				7.62	%			150,512				11.38	%
Consumer loans (2)			19,129				1.26	%			22,563				1.59	%			30,198				2.25	%			31,899				2.42	%			34,693				2.62	%
Total non-mortgage loans			59,094				3.88	%			63,961				4.51	%			75,918				5.66	%			132,152				10.04	%			185,205				14.00	%
Total loans, gross			1,525,668				100.00	%			1,415,373				100.00	%			1,339,409				100.00	%			1,315,735				100.00	%			1,322,098				100.00	%
Net deferred loan origination costs			2,051								2,288								2,446								1,604								(668	)
Allowance for losses on loans			(34,592	)							(25,108	)							(17,535	)							(16,893	)							(16,352	)
Loans, net		$	1,493,127							$	1,392,553							$	1,324,320							$	1,300,446							$	1,305,078

1. As of December 31, 2022, September 30, 2022, June 30, 2022, March 31, 2022, and December 31, 2021, business loans include $20.0 million, $24.7 million, $30.8 million, $86.0 million and $136.8 million, respectively, of PPP loans.
2. As of December 31, 2022, September 30, 2022, June 30, 2022, March 31, 2022, December 31, 2021, consumer loans include $18.2 million, $21.5 million, $28.3 million, $31.0 million and $33.9 million, respectively, of loans originated by the Bank pursuant to its arrangement with Grain.

Ponce Financial Group, Inc., as the successor by merger with PDL Community Bancorp, and Subsidiaries
Grain Loan Exposure

Grain Technologies, Inc. ("Grain") Total Exposure as of December 31, 2022
(in thousands)
Receivable from Grain
Microloans originated - put back to Grain (inception-to-December 31, 2022)		$	25,467
Write-downs, net of recoveries (year to date as of December 31, 2022)			(17,455	)
Cash receipts from Grain (inception-to-December 31, 2022)			(6,186	)
Grant/reserve			(1,826	)
Net receivable as of December 31, 2022		$	—
Microloan receivables from Grain Borrowers
Grain originated loans receivable as of December 31, 2022		$	18,158
Allowance for loan losses as of December 31, 2022(1)			(15,415	)
Microloans, net of allowance for loan losses as of December 31, 2022		$	2,743
Investments
Investment in Grain		$	1,000
Investment in Grain write-off in Q3 2022			(1,000	)
Investment in Grain as of December 31, 2022			—
Total exposure to Grain as of December 31, 2022		$	2,743

1. Includes $0.03 million for allowance for unused commitments on the $0.4 million of unused commitments available to Grain originated borrowers reported in other liabilities in the accompanying Consolidated Statements of Financial Conditions. Excludes $1.4 million of security deposits by Grain originated borrowers reported in deposits in the accompanying Consolidated Statements of Financial Conditions.

Ponce Financial Group, Inc., as the successor by merger with PDL Community Bancorp, and Subsidiaries
Allowance for Loan Losses

	For the Three Months Ended
	December 31,				September 30,				June 30,				March 31,				December 31,
	2022				2022				2022				2022				2021
	(Dollars in thousands)
Allowance for loan losses at beginning of the period	$	25,108			$	17,535			$	16,893			$	16,352			$	16,008
Provision for loan losses		12,641				9,330				817				1,258				873
Charge-offs:
Mortgage loans:
1-4 family residences
Investor owned		—				—				—				—				—
Owner occupied		—				—				—				—				—
Multifamily residences		—				—				—				—				(38	)
Nonresidential properties		—				—				—				—				—
Construction and land		—				—				—				—				—
Non-mortgage loans:
Business		—				—				—				—				—
Consumer		(3,659	)			(1,799	)			(450	)			(751	)			(560	)
Total charge-offs		(3,659	)			(1,799	)			(450	)			(751	)			(598	)
Recoveries:
Mortgage loans:
1-4 family residences
Investor owned		—				—				156				—				8
Owner occupied		—				39				—				—				45
Multifamily residences		—				—				—				—				—
Nonresidential properties		—				—				—				—				—
Construction and land		—				—				—				—				—
Non-mortgage loans:
Business		—				1				91				2				15
Consumer		502				2				28				32				1
Total recoveries		502				42				275				34				69
Net (charge-offs) recoveries		(3,157	)			(1,757	)			(175	)			(717	)			(529	)
Allowance for loan losses at end of the period	$	34,592			$	25,108			$	17,535			$	16,893			$	16,352

Ponce Financial Group, Inc., as the successor by merger with PDL Community Bancorp, and Subsidiaries
Deposits

		As of
		December 31,								September 30,								June 30,								March 31,								December 31,
		2022								2022								2022								2022								2021
		Amount				Percent				Amount				Percent				Amount				Percent				Amount				Percent				Amount				Percent
		(Dollars in thousands)
Demand		$	289,149				23.08	%		$	288,654				21.37	%		$	284,462				24.77	%		$	281,132				23.81	%		$	274,956				22.83	%
Interest-bearing deposits:
NOW/IOLA accounts			24,349				1.94	%			28,799				2.13	%			28,597				2.49	%			33,010				2.79	%			35,280				2.93	%
Money market accounts			317,815				25.38	%			360,293				26.66	%			181,156				15.77	%			169,847				14.38	%			186,893				15.51	%
Reciprocal deposits			114,049				9.11	%			162,858				12.05	%			151,264				13.17	%			160,510				13.59	%			143,221				11.89	%
Savings accounts			130,432				10.41	%			140,055				10.37	%			139,244				12.12	%			133,966				11.34	%			134,887				11.20	%
Total NOW,  money market, reciprocal and savings accounts			586,645				46.84	%			692,005				51.21	%			500,261				43.55	%			497,333				42.10	%			500,281				41.53	%
Certificates of deposit of $250K or more			70,113				5.60	%			61,900				4.58	%			65,157				5.67	%			75,130				6.36	%			78,454				6.51	%
Brokered certificates of deposit(1)			98,754				7.89	%			98,760				7.31	%			62,650				5.45	%			79,282				6.71	%			79,320				6.58	%
Listing service deposits(1)			35,813				2.86	%			40,964				3.03	%			48,953				4.26	%			53,876				4.56	%			66,411				5.51	%
All other certificates of deposit less than $250K			171,938				13.73	%			168,906				12.50	%			187,245				16.30	%			194,412				16.46	%			205,294				17.04	%
Total certificates of deposit			376,618				30.08	%			370,530				27.42	%			364,005				31.68	%			402,700				34.09	%			429,479				35.64	%
Total interest-bearing deposits			963,263				76.92	%			1,062,535				78.63	%			864,266				75.23	%			900,033				76.19	%			929,760				77.17	%
Total deposits		$	1,252,412				100.00	%		$	1,351,189				100.00	%		$	1,148,728				100.00	%		$	1,181,165				100.00	%		$	1,204,716				100.00	%

1. As of December 31, 2022, September 30, 2022, June 30, 2022, March 31, 2022 and December 31, 2021,  there were $13.6 million, $13.8 million, $18.5 million, $19.0 million, and $29.0 million, respectively, in individual listing service deposits amounting to $250,000 or more. All brokered certificates of deposit individually amounted to less than $250,000.

Ponce Financial Group, Inc., as the successor by merger with PDL Community Bancorp, and Subsidiaries
Nonperforming Assets

	As of Three Months Ended
	December 31,				September 30,				June 30,				March 31,				December 31,
	2022				2022				2022				2022				2021
	(Dollars in thousands)
Non-accrual loans:
Mortgage loans:
1-4 family residential
Investor owned	$	2,844			$	5,902			$	3,460			$	3,596			$	3,349
Owner occupied		961				971				1,140				962				1,284
Multifamily residential		—				—				—				—				1,200
Nonresidential properties		—				778				1,162				1,166				2,163
Construction and land		7,567				10,660				10,817				7,567				917
Non-mortgage loans:
Business		—				359				—				—				—
Consumer		—				—				—				—				—
Total non-accrual loans (not including non-accruing troubled debt restructured loans)	$	11,372			$	18,670			$	16,579			$	13,291			$	8,913
Non-accruing troubled debt restructured loans:
Mortgage loans:
1-4 family residential
Investor owned	$	217			$	221			$	224			$	230			$	234
Owner occupied		2,027				2,215				1,746				2,192				2,196
Multifamily residential		—				—				—				—				—
Nonresidential properties		93				95				96				98				100
Construction and land		—				—				—				—				—
Non-mortgage loans:
Business		—				—				—				—				—
Consumer		—				—				—				—				—
Total non-accruing troubled debt restructured loans		2,337				2,531				2,066				2,520				2,530
Total non-accrual loans	$	13,709			$	21,201			$	18,645			$	15,811			$	11,443
Accruing troubled debt restructured loans:
Mortgage loans:
1-4 family residential
Investor owned	$	2,207			$	2,228			$	2,246			$	2,269			$	3,089
Owner occupied		1,328				1,254				2,019				2,313				2,374
Multifamily residential		—				—				—				—				—
Nonresidential properties		708				715				725				726				732
Construction and land		—				—				—				—				—
Non-mortgage loans:
Business		—				—				—				—				—
Consumer		—				—				—				—				—
Total accruing troubled debt restructured loans	$	4,243			$	4,197			$	4,990			$	5,308			$	6,195
Total non-performing assets and accruing troubled debt restructured loans	$	17,952			$	25,398			$	23,635			$	21,119			$	17,638
Total non-performing loans to total gross loans		0.90	%			1.50	%			1.39	%			1.20	%			0.87	%
Total non-performing assets to total assets		0.59	%			0.97	%			0.90	%			0.97	%			0.69	%
Total non-performing assets and accruing troubled debt restructured loans to total assets		0.78	%			1.16	%			1.14	%			1.30	%			1.07	%

Ponce Financial Group, Inc., as the successor by merger with PDL Community Bancorp, and Subsidiaries
Average Balance Sheets

	For the Three Months Ended December 31,
	2022											2021
	Average											Average
	Outstanding								Average			Outstanding								Average
	Balance				Interest				Yield/Rate(1)			Balance				Interest				Yield/Rate (1)
	(Dollars in thousands)
Interest-earning assets:
Loans(2)	$	1,478,308			$	18,550			4.98	%		$	1,320,635			$	18,013			5.41	%
Securities(3)		636,457				5,931			3.70	%			113,826				566			1.97	%
Other(4)		38,879				452			4.61	%			43,346				73			0.67	%
Total interest-earning assets		2,153,644				24,933			4.59	%			1,477,807				18,652			5.01	%
Non-interest-earning assets		96,051											134,798
Total assets	$	2,249,695										$	1,612,605
Interest-bearing liabilities:
NOW/IOLA	$	25,349			$	22			0.34	%		$	29,771			$	16			0.21	%
Money market		503,286				4,095			3.23	%			340,334				259			0.30	%
Savings		139,115				8			0.02	%			137,383				33			0.10	%
Certificates of deposit		368,895				1,310			1.41	%			433,571				907			0.83	%
Total deposits		1,036,645				5,435			2.08	%			941,059				1,215			0.51	%
Advance payments by borrowers		12,942				—			0.00	%			10,361				1			0.04	%
Borrowings		369,832				3,332			3.57	%			118,692				654			2.19	%
Total interest-bearing liabilities		1,419,419				8,767			2.45	%			1,070,112				1,870			0.69	%
Non-interest-bearing liabilities:
Non-interest-bearing demand		325,616				—							320,074				—
Other non-interest-bearing liabilities		2,424				—							33,506				—
Total non-interest-bearing liabilities		328,040				—							353,580				—
Total liabilities		1,747,459				8,767							1,423,692				1,870
Total equity		502,236											188,913
Total liabilities and total equity	$	2,249,695							2.45	%		$	1,612,605							0.69	%
Net interest income					$	16,166										$	16,782
Net interest rate spread(5)									2.14	%										4.32	%
Net interest-earning assets(6)	$	734,225										$	407,695
Net interest margin(7)									2.98	%										4.51	%
Average interest-earning assets to interest-bearing liabilities									151.73	%										138.10	%

1. Annualized where appropriate.
2. Loans include loans and mortgage loans held for sale, at fair value.
3. Securities include available-for-sale securities and held-to-maturity securities.
4. Includes FHLBNY demand account and FHLBNY stock dividends.
5. 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.
6. Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.
7. Net interest margin represents net interest income divided by average total interest-earning assets.

Ponce Financial Group, Inc., as the successor by merger with PDL Community Bancorp, and Subsidiaries
Average Balance Sheets

	For the Years Ended December 31,
	2022												2021
	Average												Average
	Outstanding								Average				Outstanding								Average
	Balance				Interest				Yield/Rate(1)				Balance				Interest				Yield/Rate
	(Dollars in thousands)
Interest-earning assets:
Loans(2)	$	1,375,723			$	69,865				5.08	%		$	1,312,505			$	65,532				4.99	%
Securities(3)		357,446				11,709				3.28	%			62,908				1,267				2.01	%
Other(4)		44,160				1,178				2.67	%			51,156				299				0.58	%
Total interest-earning assets		1,777,329				82,752				4.66	%			1,426,569				67,098				4.70	%
Non-interest-earning assets		164,324												89,152
Total assets	$	1,941,653											$	1,515,721
Interest-bearing liabilities:
NOW/IOLA	$	30,151			$	65				0.22	%		$	30,851			$	109				0.35	%
Money market		393,555				6,275				1.59	%			310,611				1,168				0.38	%
Savings		138,137				128				0.09	%			133,244				146				0.11	%
Certificates of deposit		382,022				3,477				0.91	%			430,164				4,244				0.99	%
Total deposits		943,865				9,945				1.05	%			904,870				5,667				0.63	%
Advance payments by borrowers		11,514				5				0.04	%			10,106				4				0.04	%
Borrowings		206,969				6,199				3.00	%			121,319				2,581				2.13	%
Total interest-bearing liabilities		1,162,348				16,149				1.39	%			1,036,295				8,252				0.80	%
Non-interest-bearing liabilities:
Non-interest-bearing demand		344,505				—								287,008				—
Other non-interest-bearing liabilities		33,225				—								17,763				—
Total non-interest-bearing liabilities		377,730				—								304,771				—
Total liabilities		1,540,078				16,149								1,341,066				8,252
Total equity		401,575												174,655
Total liabilities and total equity	$	1,941,653								1.39	%		$	1,515,721								0.80	%
Net interest income					$	66,603											$	58,846
Net interest rate spread(5)										3.27	%											3.90	%
Net interest-earning assets(6)	$	614,981											$	390,274
Net interest margin(7)										3.75	%											4.13	%
Average interest-earning assets to
interest-bearing liabilities										152.91	%											137.66	%

1. Annualized where appropriate.
2. Loans include loans and mortgage loans held for sale, at fair value.
3. Securities include available-for-sale securities and held-to-maturity securities.
4. Includes FHLBNY demand account and FHLBNY stock dividends.
5. 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.
6. Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.
7. Net interest margin represents net interest income divided by average total interest-earning assets.

Ponce Financial Group, Inc., as the successor by merger with PDL Community Bancorp, and Subsidiaries
Other Data

	As of
	December 31,				September 30,				June 30,				March 31,				December 31,
	2022				2022				2022				2022				2021
Other Data
Common shares issued		24,859,353				24,728,460				24,724,274				24,724,274				18,463,028
Less treasury shares		—				—				—				—				1,037,041
Common shares outstanding at end of period		24,859,353				24,728,460				24,724,274				24,724,274				17,425,987
Book value per common share	$	10.77			$	11.15			$	11.85			$	12.12			$	10.86
Tangible book value per common share	$	10.77			$	11.15			$	11.85			$	12.12			$	10.86

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

 

FAQ

What are the recent financial results for PDL Community Bancorp (PDLB)?

Ponce Financial Group reported a net loss of ($9.2) million for Q4 2022, improving from the previous quarter but down from a net income of $15.0 million a year earlier.

How did PDLB's loan portfolio perform in Q4 2022?

PDLB's net loans receivable increased by $188.0 million, or 14.41%, year-over-year, totaling $1.49 billion.

What impact did interest rates have on PDLB's financial performance?

The company experienced an 8.21% decrease in net interest income due to rising funding costs linked to increased interest rates.

What strategic actions is PDLB taking regarding its microloan program?

PDLB is winding down its partnership with Grain, significantly reducing available credit lines and increasing loan loss reserves.