Ponce Financial Group, Inc. Reports First Quarter 2025 Results

NEW YORK, April 25, 2025 (GLOBE NEWSWIRE) -- Ponce Financial Group, Inc., (the “Company”) (NASDAQ: PDLB), the holding company for Ponce Bank (the “Bank”), today announced results for the first quarter of 2025. First Quarter 2025 Highlights (Compared to Prior Periods): Net income available to common stockholders was $5.7 million, or $0.25 per diluted share for the three months ended March 31, 2025, as compared to net income available to common stockholders of $2.7 million, or $0.12 per diluted share for the three months ended December 31, 2024 and net income available to common stockholders of $2.4 million, or $0.11 per diluted share for the three months ended March 31, 2024. Total net income for the three months ended March 31, 2025 was $6.0 million. The Company paid dividends of $0.3 million on its preferred stock during the three months ended March 31, 2025.Included in the $5.7 million of net income available to common stockholders for the first quarter of 2025 results is $44.0 million in interest and dividend income, $2.4 million in non-interest income and $0.3 million in benefit for credit losses, offset by $21.8 million in interest expense, $16.9 million in non-interest expense, $2.0 million in provision for income taxes and $0.3 million in dividends on preferred shares.Net interest income of $22.2 million for the first quarter of 2025 increased $1.5 million, or 7.11%, from the prior quarter and increased $3.4 million, or 17.96%, from the same quarter last year. Net interest margin was 2.98% for the first quarter of 2025, versus 2.80% for the prior quarter and 2.71% for the same quarter last year.Non-interest income for the three months ended March 31, 2025 was $2.4 million, an increase of $0.3 million, or 13.54%, from $2.1 million for the three months ended December 31, 2024, and an increase of $0.7 million, or 39.48%, from $1.7 million for the three months ended March 31, 2024.Non-interest expense for the three months ended March 31, 2025 was $16.9 million, a decrease of $0.6 million, or 3.30%, from $17.5 million for the three months ended December 31, 2024, and an increase of $0.1 million, or 0.61%, compared to $16.8 million for the three months ended March 31, 2024.Cash and equivalents were $129.9 million as of March 31, 2025, a decrease of $9.9 million, or 7.11%, from $139.8 million as of December 31, 2024.Securities totaled $461.6 million as of March 31, 2025, a decrease of $11.3 million, or 2.39%, from $472.9 million as of December 31, 2024 primarily due to regular principal payments and the call of one available-for-sale security in the amount of $1.0 million.Net loans receivable were $2.37 billion as of March 31, 2025, an increase of $84.3 million, or 3.69%, from $2.29 billion as of December 31, 2024.Deposits were $2.00 billion as of March 31, 2025, an increase of $120.1 million, or 6.37%, from $1.88 billion as of December 31, 2024. President and Chief Executive Officer’s Comments Carlos P. Naudon, Ponce Financial Group, Inc.’s President and CEO, stated “We continued executing well our strategy of focusing on net interest margin, operating expenses and fee income, which translated into several positive trends this quarter. Our net interest margin this quarter increased by 18 basis points, reflecting both our high-yielding construction loans and our decreasing borrowing costs. In fact, our loan yields rose by 9 basis points while our cost of funds decreased by 10 basis points. Our operating expenses have decreased quarter over quarter, and our non-interest income compares favorably to prior periods. All-in-all, a very good quarter in these turbulent and uncertain times." Executive Chairman’s Comment Steven A. Tsavaris, Ponce Financial Group’s Executive Chairman added “Most of our high-yielding construction lending has an additional benefit – it qualifies as Deep Impact lending under the U.S. Treasury’s Emergency Capital Investment Program and serves to lower the dividends payable on our preferred stock to the U.S. Treasury. Importantly, our construction initiatives also reflect our conservative underwriting, high developer equity requirements and short duration. Of our 64 on-going projects, more than 43 percent already have at least a temporary certificate of occupancy and 80 percent are at least halfway through construction.” The table below indicate the Key Metrics at or for the three months ended: At or for the Three Months Ended March 31, December 31, September 30, June 30, March 31, 2025 2024 2024 2024 2024 Performance Ratios: Return on average assets(1) 0.77% 0.38% 0.33% 0.45% 0.33%Return on common equity(1) 7.97% 3.76% 3.06% 4.60% 3.61%Net interest margin(1) (2) 2.98% 2.80% 2.65% 2.62% 2.71%Non-interest expense to average assets(1) 2.19% 2.25% 2.19% 2.28% 2.35%Efficiency ratio(3) 68.70% 75.63% 80.87% 80.09% 82.56%Capital Ratios: Total capital to risk-weighted assets (Ponce Financial Group) 22.84% 22.98% 22.87% 23.86% 24.47%Common equity Tier 1 capital to risk-weighted assets (Ponce Financial Group) 12.51% 12.44% 12.28% 12.71% 12.98%Tier 1 capital to total assets (Ponce Financial Group) 16.84% 17.70% 17.81% 17.88% 17.59%Total capital to risk-weighted assets (Bank only) 21.38% 21.47% 21.61% 22.47% 22.79%Common equity Tier 1 capital to risk-weighted assets (Bank only) 20.35% 20.40% 20.45% 21.24% 21.54%Tier 1 capital to total assets (Bank only) 15.61% 15.81% 16.19% 16.70% 16.26%Asset Quality Ratios: Allowance for credit losses on loans as a percentage of total loans 0.96% 0.97% 1.09% 1.18% 1.23%Allowance for credit losses on loans as a percentage of nonperforming loans 84.15% 82.29% 139.52% 130.28% 140.90%Net (charge-offs) recoveries to average outstanding loans(1) (0.04%) (0.45%) (0.17%) (0.10%) (0.25%)Non-performing loans as a percentage of total assets 0.88% 0.90% 0.57% 0.65% 0.62%Other: Number of offices 18 19 19 18 18 Number of full-time equivalent employees 211 218 228 227 233 (1) Annualized where appropriate.(2) Net interest margin represents net interest income divided by average total interest-earning assets.(3) Efficiency ratio represents noninterest expense divided by the sum of net interest income and noninterest income. Summary of Results of Operations Net income for the three months ended March 31, 2025 was $6.0 million compared to net income of $2.9 million for the three months ended December 31, 2024 and net income of $2.4 million for the three months ended March 31, 2024. The $3.0 million increase of net income for the three months ended March 31, 2025 compared to the three months ended December 31, 2024 was attributed mainly to increases of $1.5 million in net interest income, an increase of $1.2 million in benefit for credit losses, a decrease of $0.6 million in non-interest expense and an increase of $0.3 million in non-interest income; partially offset by an increase of $0.5 million in provision for income taxes. The $3.5 million increase of net income for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 was largely due to increases of $3.4 million in net interest income, $0.7 million in non-interest income and $0.3 million in benefit for credit losses, partially offset by increases of $0.7 million in provision for income taxes and $0.1 million in non-interest expense Net Interest Income and Net Margin Net interest income for the three months ended March 31, 2025, increased $1.5 million, or 7.11%, to $22.2 million compared to $20.7 million for the three months ended December 31, 2024 and increased $3.4 million, or 17.96%, compared to $18.8 million for the three months ended March 31, 2024. The $1.5 million increase in net interest income from the three months ended December 31, 2024 was attributable to an increase of $1.1 million in total interest and dividend income and a decrease of $0.4 million in total interest expense. The $3.4 million increase in net interest income from the three months ended March 31, 2024 was attributable to an increase of $4.3 million in total interest and dividend income, offset by an increase of $0.9 million in total interest expense. For the three months ended March 31, 2025, benefit for credit losses amounted to $0.3 million, compared to $0.9 million in provision for credit losses for the prior quarter and a credit loss benefit on loans of less than $0.1 million during the first quarter of 2024. Net interest margin was 2.98% for the three months ended March 31, 2025 compared to 2.80% for the prior quarter, an increase of 18bps and 2.71% for the same period last year, an increase of 27bps. Non-interest Income Non-interest income for the three months ended March 31, 2025, was $2.4 million, an increase of $0.3 million, or 13.54%, compared to $2.1 million for the three months ended December 31, 2024 and an increase of $0.7 million, or 39.48%, compared to $1.7 million for the three months ended March 31, 2024. The $0.3 million increase in non-interest income from the three months ended December 31, 2024 was largely attributable to increases of $0.4 million in late and prepayment charges and $0.3 million in income on sale of SBA loans, partially offset by decreases of $0.2 million in other non-interest income and $0.1 million in income on sale of mortgage loans. The $0.7 million increase in non-interest income from the three months ended March 31, 2024 was largely attributable to increases of $0.4 million in income on sale of SBA loans and $0.3 million in late and prepayment charges, partially offset by a decrease of $0.2 million in income on the sale of mortgage loans. Non-interest Expense Non-interest expense for the three months ended March 31, 2025, was $16.9 million, a decrease of $0.6 million, or 3.30%, compared to $17.5 million for the three months ended December 31, 2024 and an increase of $0.1 million, or 0.61%, compared to $16.8 million for the three months ended March 31, 2024. The $0.6 million decrease in non-interest expense from the three months ended December 31, 2024 was mainly attributable to decreases of $0.3 million in professional fees, $0.2 million in marketing and promotional expenses, $0.2 million in direct loan expenses, $0.1 million in office supplies, telephone and postage, partially offset by an increase of $0.1 million in compensation and benefits. The $0.1 million increase in non-interest expense from the three months ended March 31, 2024 was mainly attributable to increases of $0.5 million in other operating expense and $0.2 million in occupancy and equipment, partially offset by decreases of $0.4 million in professional fees and $0.3 million in direct loan expenses. Credit Quality: Non-performing loans were $32.0 million at March 31, 2025 compared to $32.1 million at December 31, 2024 and $22.4 million at March 31, 2024. During the three months ended March 31, 2025, a credit loss benefit of $0.3 million on loans was recorded, consisting of $0.7 million charged on the funded portion and a benefit of $1.0 million on the unfunded portion on loans. During the three months ended December 31, 2024, a credit loss provision of $0.9 million on loans were recorded, consisting of $1.1 million charged on the funded portion and a benefit of $0.2 million on unfunded portion on loans. During the three months ended March 31, 2024, a credit loss benefit of $0.1 million on loans were recorded, consisting of $0.3 million benefit on the funded portion and a $0.2 million charged on the on unfunded portion on loans. Balance Sheet Summary Total assets increased $49.9 million, or 1.64%, to $3.09 billion as of March 31, 2025 from $3.04 billion as of December 31, 2024. The increase in total assets is largely attributable to increases of $84.3 million in net loans receivable, $1.2 million in accrued interest receivable and $0.4 million in right of use assets, partially offset by decreases of $9.9 million in cash and cash equivalents, $9.9 million in held-to-maturity securities, $8.4 million in other assets, $3.4 million in Federal Home Loan Bank of New York stock, $2.2 million in mortgage loans held for sale and $1.4 million in available-for-sale securities. Total liabilities increased $41.5 million, or 1.64%, to $2.58 billion as of March 31, 2025 from $2.53 billion as of December 31, 2024. The increase in total liabilities was largely attributable to an increase of $120.1 million in deposits, $2.6 million in advance payments by borrowers for taxes, $0.9 million in accrued interest payable, $0.4 million in operating lease liabilities, partially offset by decreases of $75.0 million in borrowings and $7.5 million in other liabilities. Total stockholders’ equity increased $8.4 million, or 1.66%, to $513.9 million as of March 31, 2025, from $505.5 million as of December 31, 2024. The $8.4 million increase in stockholders’ equity was largely attributable to $6.0 million in net income, $1.8 million in other comprehensive income, $0.5 million impact to additional paid in capital as a result of share-based compensation and $0.4 million from release of ESOP shares, offset by $0.3 million in dividends on preferred shares. About Ponce Financial Group, Inc. Ponce Financial Group, Inc. is the holding company for Ponce Bank. Ponce Bank is a Minority Depository Institution, a Community Development Financial Institution, and a certified Small Business Administration lender. Ponce Bank’s business primarily consists of taking deposits from the general public and to a lesser extent alternative funding sources and investing those funds, together with funds generated from operations and borrowings, in mortgage loans, consisting of 1-4 family residences (investor-owned and owner-occupied), multifamily residences, nonresidential properties, construction and land, and, to a lesser extent, in business and consumer loans. Ponce Bank also invests in securities, which consist of U.S. Government and federal agency securities and securities issued by government-sponsored or government-owned enterprises, as well as, mortgage-backed securities, corporate bonds and obligations, and Federal Home Loan Bank stock. Forward Looking Statements Certain statements herein constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act and are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements may be identified by words such as “believes,” “will,” “would,” “expects,” “project,” “may,” “could,” “developments,” “strategic,” “launching,” “opportunities,” “anticipates,” “estimates,” “intends,” “plans,” “targets” and similar expressions. These statements are based upon the current beliefs and expectations of management and are subject to significant risks and uncertainties. Actual results may differ materially from those set forth in the forward-looking statements as a result of numerous factors. Factors that could cause such differences to exist include, but are not limited to, adverse conditions in the capital and debt markets and the impact of such conditions on business activities; changes in interest rates; competitive pressures from other financial institutions; the effects of general economic conditions on a national basis or in the local markets in which Ponce Bank operates, including changes that adversely affect borrowers’ ability to service and repay Ponce Bank’s loans; changes in U.S. trade policies, including the imposition of tariffs and retaliatory tariffs, and their related impacts on the economy; changes in the value of securities in the investment portfolio; changes in loan default and charge-off rates; fluctuations in real estate values; the adequacy of loan loss reserves; decreases in deposit levels necessitating increased borrowing to fund loans and investments; operational risks including, but not limited to, cybersecurity, fraud and natural disasters; changes in government regulation; changes in accounting standards and practices; the risk that intangibles recorded in the financial statements will become impaired; demand for loans in Ponce Bank’s market area; Ponce Bank’s ability to attract and maintain deposits; risks related to the implementation of acquisitions, dispositions, and restructurings; the risk that Ponce Financial Group, Inc. may not be successful in the implementation of its business strategy; changes in assumptions used in making such forward-looking statements and the risk factors described in Ponce Financial Group, Inc.’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q as filed with the Securities and Exchange Commission (the “SEC”), which are available at the SEC’s website, www.sec.gov. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. Ponce Financial Group, Inc. disclaims any obligation to publicly update or revise any forward-looking statements to reflect changes in underlying assumptions or factors, new information, future events or other changes, except as may be required by applicable law or regulation. Ponce Financial Group, Inc. and SubsidiariesConsolidated Statements of Financial Condition(Dollars in thousands, except for share data) As of March 31, December 31, September 30, June 30, March 31, 2025 2024 2024 2024 2024 ASSETS Cash and due from banks: Cash $32,113 $35,478 $32,061 $23,128 $29,972 Interest-bearing deposits 97,780 104,361 123,751 80,038 104,752 Total cash and cash equivalents 129,893 139,839 155,812 103,166 134,724 Available-for-sale securities, at fair value 103,570 104,970 111,005 113,125 116,044 Held-to-maturity securities, at amortized cost 358,024 367,938 403,736 442,113 452,955 Placement with banks 249 249 249 249 249 Mortgage loans held for sale, at fair value 8,567 10,736 9,566 37,764 7,860 Loans receivable, net 2,370,931 2,286,599 2,180,331 2,022,173 1,981,428 Accrued interest receivable 19,008 17,771 16,890 17,441 18,063 Premises and equipment, net 16,417 16,794 16,843 16,976 17,396 Right of use assets 29,496 29,093 29,785 30,349 31,021 Federal Home Loan Bank of New York stock (FHLBNY), at cost 25,807 29,182 28,515 23,972 23,892 Deferred tax assets 11,629 12,074 11,845 13,172 13,919 Other assets 16,245 24,693 51,392 21,507 21,151 Total assets $3,089,836 $3,039,938 $3,015,969 $2,842,007 $2,818,702 LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Deposits $2,004,947 $1,884,864 $1,870,323 $1,606,097 $1,585,784 Operating lease liabilities 31,126 30,696 31,343 31,861 32,486 Accrued interest payable 4,628 3,712 2,918 6,820 4,218 Advance payments by borrowers for taxes and insurance 12,901 10,349 13,733 10,838 13,245 Borrowings 521,100 596,100 580,421 680,421 680,421 Other liabilities 1,248 8,717 12,642 8,313 8,866 Total liabilities 2,575,950 2,534,438 2,511,380 2,344,350 2,325,020 Commitments and contingencies Stockholders' Equity: Preferred stock, $0.01 par value; 100,000,000 shares authorized 225,000 225,000 225,000 225,000 225,000 Common stock, $0.01 par value; 200,000,000 shares authorized 249 249 249 249 249 Treasury stock, at cost (7,641) (7,707) (9,445) (9,519) (9,702)Additional paid-in-capital 207,888 207,319 208,478 207,934 207,584 Retained earnings 113,432 107,754 105,103 102,951 99,834 Accumulated other comprehensive loss (13,515) (15,297) (12,686) (16,557) (16,590)Unearned compensation ─ ESOP (11,527) (11,818) (12,110) (12,401) (12,693)Total stockholders' equity 513,886 505,500 504,589 497,657 493,682 Total liabilities and stockholders' equity $3,089,836 $3,039,938 $3,015,969 $2,842,007 $2,818,702 Ponce Financial Group, Inc. and SubsidiariesConsolidated Statements of Operations(Dollars in thousands, except per share data) Three Months Ended March 31, December 31, September 30, June 30, March 31, 2025 2024 2024 2024 2024 Interest and dividend income: Interest on loans receivable $37,136 $35,622 $32,945 $31,281 $30,664 Interest on deposits due from banks 1,668 1,783 2,430 1,542 2,911 Interest and dividend on securities and FHLBNY stock 5,193 5,481 5,918 5,969 6,091 Total interest and dividend income 43,997 42,886 41,293 38,792 39,666 Interest expense: Interest on certificates of deposit 7,754 8,104 6,926 6,358 6,380 Interest on other deposits 8,554 8,476 8,519 7,389 6,540 Interest on borrowings 5,486 5,576 6,825 7,141 7,923 Total interest expense 21,794 22,156 22,270 20,888 20,843 Net interest income 22,203 20,730 19,023 17,904 18,823 (Benefit) provision for credit losses(1) (285) 897 537 (867) (16)Net interest income after (benefit) provision for credit losses 22,488 19,833 18,486 18,771 18,839 Non-interest income: Service charges and fees 525 500 508 492 473 Brokerage commissions 4 44 — 9 8 Late and prepayment charges 697 318 77 426 359 Income on sale of mortgage loans 148 254 218 274 302 Income on sale of SBA loans 404 148 — — — Other 603 833 348 1,057 565 Total non-interest income 2,381 2,097 1,151 2,258 1,707 Non-interest expense: Compensation and benefits 7,780 7,668 7,674 7,724 7,844 Occupancy and equipment 3,913 3,863 3,786 3,564 3,667 Data processing expenses 1,152 1,143 1,099 1,013 1,127 Direct loan expenses 388 617 573 633 732 Insurance and surety bond premiums 315 293 292 263 253 Office supplies, telephone and postage 170 294 222 233 249 Professional fees 1,364 1,703 1,351 1,369 1,723 Microloans recoveries — (29) (54) (65) (53)Marketing and promotional expenses 83 289 180 145 100 Federal deposit insurance and regulatory assessment(2) 461 418 392 428 389 Other operating expenses(2) 1,262 1,206 1,051 1,333 755 Total non-interest expense(1) 16,888 17,465 16,566 16,640 16,786 Income before income taxes 7,981 4,465 3,071 4,389 3,760 Provision for income taxes 2,022 1,532 638 1,197 1,346 Net income $5,959 $2,933 $2,433 $3,192 $2,414 Dividends on preferred shares 281 282 281 75 — Net income available to common stockholders $5,678 $2,651 $2,152 $3,117 $2,414 Earnings per common share: Basic $0.25 $0.12 $0.10 $0.14 $0.11 Diluted $0.25 $0.12 $0.10 $0.14 $0.11 Weighted average common shares outstanding: Basic 22,662,916 22,528,160 22,446,009 22,409,803 22,353,492 Diluted 22,876,740 22,807,644 22,612,028 22,419,309 22,366,728 (1) For the three months ended December 31, 2024, September 30, 2024, June 30, 2024, and March 31, 2024, (benefit) provision for contingencies in the amounts of ($0.2 million), ($0.3 million), ($0.5 million) and $0.2 million were reclassified from total non-interest expense to (benefit) provision for credit losses. (2) For the three months ended September 30, 2024, June 30, 2024, and March 31, 2024, $0.3 million of federal deposit insurance was reclassified from other operating expenses to federal deposit insurance and regulatory assessments and $0.1 million of directors' fees were reclassified from federal deposit insurance and regulatory assessments to other operating expenses for each periods.Ponce Financial Group, Inc. and SubsidiariesConsolidated Statements of Operations(Dollars in thousands, except per share data) For the Three Months Ended March 31, 2025 2024 Variance $ Variance % Interest and dividend income: Interest on loans receivable $37,136 $30,664 $6,472 21.11%Interest on deposits due from banks 1,668 2,911 (1,243) (42.70%)Interest and dividend on securities and FHLBNY stock 5,193 6,091 (898) (14.74%)Total interest and dividend income 43,997 39,666 4,331 10.92%Interest expense: Interest on certificates of deposit 7,754 6,380 1,374 21.54%Interest on other deposits 8,554 6,540 2,014 30.80%Interest on borrowings 5,486 7,923 (2,437) (30.76%)Total interest expense 21,794 20,843 951 4.56%Net interest income 22,203 18,823 3,380 17.96%Benefit for credit losses (1) (285) (16) (269) 1,681.25%Net interest income after benefit for credit losses 22,488 18,839 3,649 19.37%Non-interest income: Service charges and fees 525 473 52 10.99%Brokerage commissions 4 8 (4) (50.00%)Late and prepayment charges 697 359 338 94.15%Income on sale of mortgage loans 148 302 (154) (50.99%)Income on sale of SBA loans 404 — 404 —%Other 603 565 38 6.73%Total non-interest income 2,381 1,707 674 39.48%Non-interest expense: Compensation and benefits 7,780 7,844 (64) (0.82%)Occupancy and equipment 3,913 3,667 246 6.71%Data processing expenses 1,152 1,127 25 2.22%Direct loan expenses 388 732 (344) (46.99%)Insurance and surety bond premiums 315 253 62 24.51%Office supplies, telephone and postage 170 249 (79) (31.73%)Professional fees 1,364 1,723 (359) (20.84%)Microloans recoveries — (53) 53 (100.00%)Marketing and promotional expenses 83 100 (17) (17.00%)Federal deposit insurance and regulatory assessments (2) 461 389 72 18.51%Other operating expenses (2) 1,262 755 507 67.15%Total non-interest expense (1) 16,888 16,786 102 0.61%Income before income taxes 7,981 3,760 4,221 112.26%Provision for income taxes 2,022 1,346 676 50.22%Net income $5,959 $2,414 $3,545 146.85%Dividends on preferred shares 281 — 281 —%Net income available to common stockholders $5,678 $2,414 $3,264 135.21%Earnings per common share: Basic $0.25 $0.11 $0.14 127.27%Diluted $0.25 $0.11 $0.14 127.27%Weighted average common shares outstanding: Basic 22,662,916 22,353,492 309,424 1.38%Diluted 22,876,740 22,366,728 510,012 2.28% (1) For the three months ended March 31, 2024, provision for contingencies in the amount of $0.2 million were reclassified from total non-interest expense to benefit for credit losses. (2) For the three months ended March 31, 2024, $0.3 million of federal deposit insurance was reclassified from other operating expenses to federal deposit insurance and regulatory assessments and $0.1 million of directors' fees were reclassified from federal deposit insurance and regulatory assessments to other operating expenses. Ponce Financial Group, Inc. and SubsidiariesLoans Receivable excluding Mortgage Loans Held for Sale As of March 31, December 31, September 30, June 30, March 31, 2025 2024 2024 2024 2024 Amount Percent Amount Percent Amount Percent Amount Percent Amount Percent (Dollars in thousands) Mortgage loans: 1-4 family residential Investor Owned $325,866 13.62% $330,053 14.30% $332,380 15.09% $337,292 16.49% $339,331 16.92%Owner-Occupied 137,676 5.75% 142,363 6.17% 145,065 6.59% 147,485 7.21% 150,842 7.52%Multifamily residential 675,541 28.24% 670,159 29.04% 678,029 30.78% 545,323 26.66% 545,825 27.22%Nonresidential properties 390,681 16.33% 389,898 16.89% 383,277 17.40% 337,583 16.51% 327,350 16.32%Construction and land 815,425 34.08% 733,660 31.79% 631,461 28.67% 641,879 31.39% 608,665 30.35%Total mortgage loans 2,345,189 98.02% 2,266,133 98.19% 2,170,212 98.53% 2,009,562 98.26% 1,972,013 98.33%Non-mortgage loans: Business loans 46,329 1.94% 40,849 1.77% 28,499 1.29% 30,222 1.48% 26,664 1.33%Consumer loans(1) 997 0.04% 1,038 0.04% 4,021 0.18% 5,305 0.26% 6,741 0.34%Total non-mortgage loans 47,326 1.98% 41,887 1.81% 32,520 1.47% 35,527 1.74% 33,405 1.67%Total loans, gross 2,392,515 100.00% 2,308,020 100.00% 2,202,732 100.00% 2,045,089 100.00% 2,005,418 100.00%Net deferred loan origination costs 1,390 1,081 1,565 1,145 674 Allowance for credit losses on loans (22,974) (22,502) (23,966) (24,061) (24,664) Loans, net $2,370,931 $2,286,599 $2,180,331 $2,022,173 $1,981,428 (1) As of September 30, 2024, June 30, 2024, and March 31, 2024, consumer loans include $3.0 million, $4.3 million, and $5.7 million, respectively, of microloans originated by the Bank. As of December 31, 2024, these microloans were charged-off. Ponce Financial Group, Inc. and SubsidiariesAllowance for Credit Losses on Loans For the Three Months Ended March 31, December 31, September 30, June 30, March 31, 2024 2024 2024 2024 2024 (Dollars in thousands) Allowance for credit losses on loans at beginning of the period $22,502 $23,966 $24,061 $24,664 $26,154 Provision (benefit) for credit losses on loans 731 1,090 801 (120) (255)Charge-offs: Mortgage loans: 1-4 family residences Investor owned (38) — — — — Owner occupied — — — — — Multifamily residences — — — — — Nonresidential properties — — (7) — — Construction and land — — — — — Non-mortgage loans: Business (222) (232) (450) — (52)Consumer (3) (2,465) (634) (747) (1,302)Total charge-offs (263) (2,697) (1,091) (747) (1,354)Recoveries: Non-mortgage loans: Business 4 — 1 7 1 Consumer — 143 194 257 118 Total recoveries 4 143 195 264 119 Net (charge-offs) recoveries (259) (2,554) (896) (483) (1,235)Allowance for credit losses on loans at end of the period $22,974 $22,502 $23,966 $24,061 $24,664 Ponce Financial Group, Inc. and SubsidiariesDeposits As of March 31, December 31, September 30, June 30, March 31, 2025 2024 2024 2024 2024 Amount Percent Amount Percent Amount Percent Amount Percent Amount Percent (Dollars in thousands) Demand $212,139 10.58% $169,178 8.98% $182,737 9.78% $178,125 11.09% $191,541 12.07%Interest-bearing deposits: NOW/IOLA accounts 74,430 3.71% 62,616 3.32% 71,445 3.82% 81,178 5.05% 73,202 4.62%Money market accounts 692,753 34.55% 636,219 33.75% 660,168 35.30% 502,255 31.27% 482,344 30.42%Reciprocal deposits 141,838 7.07% 130,677 6.93% 94,145 5.03% 109,945 6.85% 97,718 6.16%Savings accounts 106,122 5.29% 105,870 5.62% 108,941 5.82% 109,694 6.83% 112,713 7.11%Total NOW, money market, reciprocal and savings accounts 1,015,143 50.62% 935,382 49.62% 934,699 49.97% 803,072 50.00% 765,977 48.31%Certificates of deposit of $250K or more(1) 219,721 10.96% 204,293 10.84% 210,262 11.25% 189,683 11.82% 183,478 11.57%Brokered certificates of deposit(2) 84,531 4.22% 94,531 5.02% 94,531 5.05% 94,614 5.89% 94,689 5.97%Listing service deposits(2) 6,140 0.31% 7,376 0.39% 7,376 0.39% 9,361 0.58% 12,688 0.80%All other certificates of deposit less than $250K(1) 467,273 23.31% 474,104 25.15% 440,718 23.56% 331,242 20.62% 337,411 21.28%Total certificates of deposit 777,665 38.80% 780,304 41.40% 752,887 40.25% 624,900 38.91% 628,266 39.62%Total interest-bearing deposits 1,792,808 89.42% 1,715,686 91.02% 1,687,586 90.22% 1,427,972 88.91% 1,394,243 87.93%Total deposits $2,004,947 100.00% $1,884,864 100.00% $1,870,323 100.00% $1,606,097 100.00% $1,585,784 100.00% (1) As of September 30, 2024, June 30, 2024 and March 31, 2024, $36.2 million, $33.5 million and $37.2 million, respectively, were reclassified from all other certificates of deposit less than $250K to certificates of deposit of $250K or more. (2) There were no individual listing service deposits amounting to $250,000 or more. There was one brokered certificates of deposit in the amount of $1.5 million amounting to $250,000 or more. All other brokered certificates of deposit individually amounted to less than $250,000. Ponce Financial Group, Inc. and Subsidiaries Nonperforming Assets As of Three Months Ended March 31, December 31, September 30, June 30, March 31, 2025 2024 2024 2024 2024 (Dollars in thousands) Non-accrual loans: Mortgage loans: 1-4 family residential Investor owned $1,052 $436 $436 $436 $399 Owner occupied 1,423 1,423 1,423 1,423 1,426 Multifamily residential 9,788 10,271 4,685 5,754 4,098 Nonresidential properties — — 824 828 441 Construction and land 14,159 14,158 8,907 8,907 10,277 Non-mortgage loans: Business 170 343 180 396 146 Consumer — — — — — Total non-accrual loans (not including non-accruing modifications to borrowers experiencing financial difficulty)(1) $26,592 $26,631 $16,455 $17,744 $16,787 Non-accruing modifications to borrowers experiencing financial difficulty(1): Mortgage loans: 1-4 family residential Investor owned $279 $279 $278 $277 $270 Owner occupied 431 435 444 448 447 Multifamily residential — — — — — Nonresidential properties — — — — — Construction and land — — — — — Non-mortgage loans: Business — — — — — Consumer — — — — — Total non-accruing modifications to borrowers experiencing financial difficulty(1) 710 714 722 725 717 Total non-accrual loans(2) $27,302 $27,345 $17,177 $18,469 $17,504 Accruing modifications to borrowers experiencing financial difficulty (1): Mortgage loans: 1-4 family residential Investor owned $1,792 $1,807 $1,821 $1,830 $1,850 Owner occupied 2,038 2,062 2,116 2,171 2,288 Multifamily residential — — — — — Nonresidential properties 644 652 672 707 748 Construction and land — — — — — Non-mortgage loans: Business 209 215 222 — — Consumer — — — — — Total accruing modifications to borrowers experiencing financial difficulty(1) $4,683 $4,736 $4,831 $4,708 $4,886 Total non-performing assets and accruing modifications to borrowers experiencing financial difficulty(1) $31,985 $32,081 $22,008 $23,177 $22,390 Total non-performing assets to total assets 0.88% 0.90% 0.57% 0.65% 0.62% (1) Balances include both modifications to borrowers experiencing financial difficulty, in accordance with ASU 2022-02 adopted on January 1, 2023, and previously existing troubled debt restructurings. (2) Includes nonperforming mortgage loans held for sale. Ponce Financial Group, Inc. and Subsidiaries Average Balance Sheets For the Three Months Ended March 31, 2025 2024 Average Average Outstanding Average Outstanding Average Balance Interest Yield/Rate(1) Balance Interest Yield/Rate(1) (Dollars in thousands)Interest-earning assets: Loans(2) $2,369,433 $37,136 6.36% $1,979,263 $30,664 6.23%Securities(3) 467,560 4,521 3.92% 576,235 5,619 3.92%Other(4) 186,021 2,340 5.10% 238,432 3,383 5.71%Total interest-earning assets 3,023,014 43,997 5.90% 2,793,930 39,666 5.71%Non-interest-earning assets 109,166 106,566 Total assets $3,132,180 $2,900,496 Interest-bearing liabilities: NOW/IOLA $72,354 $115 0.64% $82,849 $218 1.06%Money market 827,948 8,411 4.12% 544,563 6,292 4.65%Savings 105,171 26 0.10% 113,501 28 0.10%Certificates of deposit 794,270 7,754 3.96% 629,528 6,380 4.08%Total deposits 1,799,743 16,306 3.67% 1,370,441 12,918 3.79%Advance payments by borrowers 12,445 2 0.07% 12,886 2 0.06%Borrowings 568,601 5,486 3.91% 771,070 7,923 4.13%Total interest-bearing liabilities 2,380,789 21,794 3.71% 2,154,397 20,843 3.89%Non-interest-bearing liabilities: Non-interest-bearing demand 196,627 — 198,862 — Other non-interest-bearing liabilities 43,915 — 54,061 — Total non-interest-bearing liabilities 240,542 — 252,923 — Total liabilities 2,621,331 21,794 2,407,320 20,843 Total equity 510,849 493,176 Total liabilities and total equity $3,132,180 3.71% $2,900,496 3.89%Net interest income $22,203 $18,823 Net interest rate spread(5) 2.19% 1.82%Net interest-earning assets(6) $642,225 $639,533 Net interest margin(7) 2.98% 2.71%Average interest-earning assets to interest-bearing liabilities 126.98% 129.69% (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, FHLBNY stock dividends and FRBNY demand deposits.(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. and SubsidiariesOther Data As of March 31, December 31, September 30, June 30, March 31, 2025 2024 2024 2024 2024 Other Data Common shares issued 24,886,711 24,886,711 24,886,711 24,886,711 24,886,711 Less treasury shares 920,520 925,497 1,067,248 1,074,979 1,096,214 Common shares outstanding at end of period 23,966,191 23,961,214 23,819,463 23,811,732 23,790,497 Book value per common share $12.05 $11.71 $11.74 $11.45 $11.29 Tangible book value per common share $12.05 $11.71 $11.74 $11.45 $11.29 Contact:Sergio J. Vaccarosergio.vaccaro@poncebank.net718-931-9000

Ponce Financial Group, Inc. Reports First Quarter 2025 Results

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