Ponce Financial Group, Inc. Reports Fourth Quarter 2024 Results

NEW YORK, Jan. 28, 2025 (GLOBE NEWSWIRE) -- Ponce Financial Group, Inc., (the “Company”) (NASDAQ: PDLB), the holding company for Ponce Bank (the “Bank”), today announced results for the fourth quarter of 2024. Fourth Quarter 2024 Highlights (Compared to Prior Periods): Net income available to common stockholders was $2.7 million, or $0.12 per diluted share for the three months ended December 31, 2024, as compared to net income available to common stockholders of $2.2 million, or $0.10 per diluted share for the three months ended September 30, 2024 and net income available to common stockholders of $0.5 million, or $0.02 per diluted share for the three months ended December 31, 2023. Total net income for the three months ended December 31, 2024 was $2.9 million. The Company paid dividends of $0.3 million on its preferred stock during the three months ended December 31, 2024.Included in the $2.7 million of net income available to common stockholders for the fourth quarter of 2024 results is $42.9 million in interest and dividend income and $2.1 million in non-interest income, offset by $22.2 million in interest expense, $17.3 million in non-interest expense, $1.5 million in provision for income taxes. $1.1 million in provision for credit losses and $0.3 million in dividends on preferred shares.Net interest income of $20.7 million for the fourth quarter of 2024 increased $1.7 million, or 8.97%, from the prior quarter and increased $3.5 million, or 20.54%, from the same quarter last year. Net interest margin was 2.80% for the fourth quarter of 2024, versus 2.65% for the prior quarter and 2.66% for the same quarter last year. Full Year 2024 Highlights (Compared to 2023): Net income available to common stockholders was $10.3 million, or $0.46 per diluted share for the year ended December 31, 2024, compared to net income available to common stockholders of $3.4 million, or $0.15 per diluted share for the year ended December 31, 2023. Total net income for the year ended December 31, 2024, prior to the payment of $0.6 million in dividends on preferred shares, was $11.0 million.Net interest income for the year ended December 31, 2024 was $76.5 million, an increase of $11.2 million, or 17.18%, compared to $65.3 million for the year ended December 31, 2023.Non-interest income for the year ended December 31, 2024 was $7.2 million, a decrease of $3.0 million, or 29.44%, from $10.2 million for the year ended December 31, 2023. The decrease was primarily driven by $4.2 million in grants that were received in the prior year.Non-interest expense for the year ended December 31, 2024 was $66.7 million, a decrease of $2.0 million, or 2.90%, compared to $68.7 million for the year ended December 31, 2023.Cash and equivalents were $139.8 million as of December 31, 2024, an increase of $0.6 million, or 0.47%, from $139.2 million as of December 31, 2023.Securities totaled $472.9 million as of December 31, 2024, a decrease of $108.7 million, or 18.70%, from $581.7 million as of December 31, 2023 primarily due to regular principal payments, the maturity of one available-for-sale security in the amount of $4.0 million and one held-to-maturity security in the amount of $25.0 million and the call of one held-to-maturity security in the amount of $25.0 million.Net loans receivable were $2.29 billion as of December 31, 2024, an increase of $390.7 million, or 20.61%, from $1.90 billion as of December 31, 2023.Deposits were $1.88 billion as of December 31, 2024, an increase of $377.2 million, or 25.02%, from $1.51 billion as of December 31, 2023. President and Chief Executive Officer’s Comments Carlos P. Naudon, Ponce Financial Group, Inc.’s President and CEO, stated, “We are pleased with the progress we have made in 2024. We executed an agreement with the U.S. Treasury that gives us the option, upon achievement of certain conditions, to buy back the ECIP preferred shares we previously issued at favorable prices, we launched our PonceDirect digital bank and gained significant traction with SBA loans. Our levels of liquidity and capital remain strong, while our loans grew by 20.61% and deposits by 25.02%. We have seen consistent profitability over the past several quarters as we continue to see increases both in net interest income as well as net interest margin, while expenses are down year on year, reflecting both reduced development and continued adoption of our new technology. We remain committed to the communities we serve and our status as a Minority Depository Institution (“MDI”)/Community Development Financial Institution ("CDFI"), and we continue to invest in our people and in technology to improve our efficiency.” Executive Chairman’s Comment Steven A. Tsavaris, Ponce Financial Group’s Executive Chairman added, “We are working diligently to ensure that we will meet the conditions necessary to allow us to repurchase our ECIP preferred stock in the future. The agreement we executed with the U.S. Treasury in December 2024, allows for a repurchase of the ECIP preferred stock once we have achieved Deep Impact Lending, as defined under the ECIP program, that is at least 60% of our total originations on average over 16 consecutive quarters, provided that we also meet certain other conditions at the time we exercise the repurchase option. As of December 31, 2024, our Deep Impact Lending over the last 10 consecutive quarters stands at 79%, well above the threshold. Also, from second quarter of 2024 to fourth quarter of 2024, we have originated $514 million of Deep Impact Lending as well as $54 million of qualified lending which represents 383% of our base, which period, together with the first quarter of 2025, will determine the rate of dividends payable on the ECIP preferred stock from the third quarter of 2025 to the second quarter of 2026. With one quarter to go, we are confident that we will get to over 400% of our base and ensure another year of preferred dividends of 0.50%, which is the lowest dividend rate.” 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): 2024 2024 2024 2024 2023 Return on average assets (1) 0.38% 0.33% 0.45% 0.33% 0.08%Return on average equity (1) 2.30% 1.93% 2.59% 1.97% 0.42%Net interest rate spread (1) (2) 1.98% 1.77% 1.72% 1.82% 1.74%Net interest margin (1) (3) 2.80% 2.65% 2.62% 2.71% 2.66%Non-interest expense to average assets (1) 2.25% 2.19% 2.28% 2.35% 2.66%Efficiency ratio (4) 75.63% 80.87% 80.09% 82.56% 96.83%Average interest-earning assets to average interest- bearing liabilities 127.60% 128.35% 129.73% 129.69% 133.50%Average equity to average assets 16.59% 16.97% 17.41% 17.00% 18.25% At or for the Three Months Ended December 31, September 30, June 30, March 31, December 31, Capital Ratios (Annualized): 2024 2024 2024 2024 2023 Total capital to risk-weighted assets (Bank only) 21.47% 21.61% 22.47% 22.79% 23.30%Tier 1 capital to risk-weighted assets (Bank only) 20.40% 20.45% 21.24% 21.54% 22.05%Common equity Tier 1 capital to risk-weighted assets (Bank only) 20.40% 20.45% 21.24% 21.54% 22.05%Tier 1 capital to average assets (Bank only) 15.81% 16.19% 16.70% 16.26% 17.49% At or for the Three Months Ended December 31, September 30, June 30, March 31, December 31, Asset Quality Ratios (Annualized): 2024 2024 2024 2024 2023 Allowance for loan losses as a percentage of total loans 0.97% 1.09% 1.18% 1.23% 1.36%Allowance for loan losses as a percentage of nonperforming loans 82.29% 139.52% 130.28% 140.90% 152.99%Net (charge-offs) recoveries to average outstanding loans (1) (0.45%) (0.17%) (0.10%) (0.25%) (0.24%)Non-performing loans as a percentage of total gross loans 1.18% 0.78% 0.89% 0.87% 0.89%Non-performing loans as a percentage of total assets 0.90% 0.57% 0.65% 0.62% 0.62%Total non-performing assets as a percentage of total assets 0.90% 0.57% 0.65% 0.62% 0.62%Total non-performing assets and accruing modifications to borrowers experiencing financial difficulty as a percentage of total assets (5) 1.06% 0.73% 0.82% 0.79% 0.81% (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. (5)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. Summary of Results of Operations Net income for the three months ended December 31, 2024 was $2.9 million compared to net income of $2.4 million for the three months ended September 30, 2024 and net income of $0.5 million for the three months ended December 31, 2023. The $0.5 million increase of net income for the three months ended December 31, 2024 compared to the three months ended September 30, 2024 was attributed mainly to increases of $1.7 million in net interest income and $1.0 million in non-interest income, partially offset by increases of $1.0 million in non-interest expense, $0.9 million in provision for income taxes and $0.3 million in provision for credit losses. The $2.4 million increase of net income for the three months ended December 31, 2024 compared to the three months ended December 31, 2023 was largely due to increases of $3.5 million in net interest income and $0.9 million in non-interest income and a decrease of $0.5 million in non-interest expense, partially offset by increases of $1.5 million in provision for credit losses and $1.1 million in provision for income taxes. Net income for the year ended December 31, 2024 was $11.0 million compared to a net income of $3.4 million for the year ended December 31, 2023. The $7.6 million increase in net income was attributable to an increase of $11.2 million in net interest income and a decrease of $1.9 million in non-interest expense, partially offset by a decrease of $2.9 million in non-interest income and increases of $2.2 million in provision for income taxes and $0.4 million in provision for credit losses. Net Interest Income and Net Margin Net interest income for the three months ended December 31, 2024, increased $1.7 million, or 8.97%, to $20.7 million compared to $19.0 million for the three months ended September 30, 2024 and increased $3.5 million, or 20.54%, compared to $17.2 million for the three months ended December 31, 2023. Net interest income for the year ended December 31, 2024, increased $11.2 million, or 17.18%, to $76.5 million, compared to $65.3 million for the year ended December 31, 2023. The $11.2 million increase in net interest income was attributable to an increase of $36.8 million in total interest and dividend income, offset by an increase of $25.6 million in total interest expense. For the year ended December 31, 2024, provision for credit losses amounted to $1.3 million, consisting of a provision for credit losses on loans in the amount of $1.5 million and a benefit on credit losses on held-to-maturity securities in the amount of $0.2 million. Net interest margin was 2.80% for the three months ended December 31, 2024 compared to 2.65% for the prior quarter, an increase of 15bps and 2.66% for the same period last year, an increase of 14bps. Net interest margin was 2.70% for the year ended December 31, 2024 compared to 2.66% for the year ended December 31, 2023, an increase of 4bps. Non-interest Income Non-interest income for the three months ended December 31, 2024, was $2.1 million, an increase of $0.9 million, or 82.19%, compared to $1.2 million for the three months ended September 30, 2024 and an increase of $0.8 million, or 63.19%, compared to $1.3 million for the three months ended December 31, 2023. The $0.9 million increase in non-interest income for the three months ended December 31, 2024 compared to the three months ended September 30, 2024 was largely attributable to increases of $0.5 million in other non-interest income, $0.2 million in late and prepayment charges and $0.1 million in income on sale of SBA loans. The $0.8 million increase in non-interest income for the three months ended December 31, 2024 compared to the three months ended December 31, 2023 was largely attributable to increases of $1.1 million in other non-interest income and $0.1 million in income on sale of SBA loans, partially offset by a decrease of $0.4 million in grant income received in the fourth quarter of 2023. Non-interest income for the year ended December 31, 2024, was $7.2 million, a decrease of $3.0 million, or 29.44%, compared to $10.2 million for the year ended December 31, 2023. The $3.0 million decrease in non-interest income was largely attributable to $4.2 million related to grants received in 2023 and a decrease of $1.2 million in late and prepayment charges, partially offset by increases of $1.8 million in other non-interest income, $0.5 million in income on sale of mortgage loans and $0.1 million in income on sale of SBA loans. Non-interest Expense Non-interest expense for the three months ended December 31, 2024, was $17.3 million, an increase of $0.9 million, or 5.82%, compared to $16.3 million for the three months ended September 30, 2024 and a decrease of $0.6 million, or 3.54%, compared to $17.9 million for the three months ended December 31, 2023. The $0.9 million increase in non-interest expense from the three months ended September 30, 2024 was mainly attributable to increases of $0.4 million in professional fees, $0.2 million in other operating expense, $0.1 million in marketing and promotional expenses, $0.1 million in office supplies, telephone and postage and $0.1 million in occupancy and equipment. The $0.6 million decrease in non-interest expense from the three months ended December 31, 2023 was mainly attributable to decreases of $0.6 million in provision for contingencies, $0.6 million in compensation and benefits and $0.3 million in professional fees, partially offset by increases of $0.3 million in other operating expense, $0.2 million in occupancy and equipment, $0.1 million in marketing and promotional expenses and $0.1 million in direct loan expenses. Non-interest expense for the year ended December 31, 2024, was $66.7 million, a decrease of $2.0 million, or 2.90%, compared to $68.7 million for the year ended December 31, 2023. The $2.0 million decrease in non-interest expense from the year ended December 31, 2023 was mainly attributable to decreases of $3.1 million in provision for contingencies, $0.9 million in professional fees, $0.7 million in data processing expenses, $0.5 million in office supplies, telephone and postage, partially offset by a decrease in microloans recoveries of $1.3 million and increases of $0.9 million in direct loan expenses, $0.3 million in occupancy and equipment and $0.2 million in compensation and benefits. Balance Sheet Summary Total assets increased $289.2 million, or 10.51%, to $3.04 billion as of December 31, 2024 from $2.75 billion as of December 31, 2023. The increase in total assets is largely attributable to increases of $390.7 million in net loans receivable, $9.8 million in Federal Home Loan Bank of New York stock, $0.8 million in mortgage loans held for sale, $0.7 million in premises and equipment and $0.6 million in cash and cash equivalents, partially offset by decreases of $93.8 million in held-to-maturity securities, $14.9 million in available-for-sale securities, $2.3 million in deferred tax assets and $2.2 million in right of use assets. Total liabilities increased $275.1 million, or 12.18%, to $2.53 billion as of December 31, 2024 from $2.26 billion as of December 31, 2023. The increase in total liabilities was largely attributable to an increase of $377.2 million in deposits, partially offset by decreases of $88.3 million in borrowings, $8.3 million in accrued interest payable, $3.1 million in other liabilities, $2.0 million in operating lease liabilities and $0.4 million in advance payments by borrowers for taxes. Total stockholders’ equity increased $14.1 million, or 2.87%, to $505.5 million as of December 31, 2024, from $491.4 million as of December 31, 2023. The $14.1 million increase in stockholders’ equity was largely attributable to $11.0 million in net income, $2.1 million impact to additional paid in capital as a result of share-based compensation and $1.4 million from release of ESOP shares and $0.3 million in other comprehensive income, offset by $0.6 million in dividends on preferred shares. About Ponce Financial Group, Inc. Ponce Financial Group, Inc. is the holding company for Ponce Bank. Ponce Bank is a Minority Depository Institution, a Community Development Financial Institution, and a certified Small Business Administration lender. Ponce Bank’s business primarily consists of taking deposits from the general public and to a lesser extent alternative funding sources and investing those funds, together with funds generated from operations and borrowings, in mortgage loans, consisting of 1-4 family residences (investor-owned and owner-occupied), multifamily residences, nonresidential properties, construction and land, and, to a lesser extent, in business and consumer loans. Ponce Bank also invests in securities, which consist of U.S. Government and federal agency securities and securities issued by government-sponsored or government-owned enterprises, as well as, mortgage-backed securities, corporate bonds and obligations, and Federal Home Loan Bank stock. Forward Looking Statements Certain statements herein constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act and are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements may be identified by words such as “believes,” “will,” “would,” “expects,” “project,” “may,” “could,” “developments,” “strategic,” “launching,” “opportunities,” “anticipates,” “estimates,” “intends,” “plans,” “targets” and similar expressions. These statements are based upon the current beliefs and expectations of management and are subject to significant risks and uncertainties. Actual results may differ materially from those set forth in the forward-looking statements as a result of numerous factors. Factors that could cause such differences to exist include, but are not limited to, adverse conditions in the capital and debt markets and the impact of such conditions on business activities; changes in interest rates; competitive pressures from other financial institutions; the effects of general economic conditions on a national basis or in the local markets in which Ponce Bank operates, including changes that adversely affect borrowers’ ability to service and repay Ponce Bank’s loans; changes in 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 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, 2024 2024 2024 2024 2023 ASSETS Cash and due from banks: Cash$35,478 $32,061 $23,128 $29,972 $28,930 Interest-bearing deposits 104,361 123,751 80,038 104,752 110,260 Total cash and cash equivalents 139,839 155,812 103,166 134,724 139,190 Available-for-sale securities, at fair value 104,970 111,005 113,125 116,044 119,902 Held-to-maturity securities, at amortized cost 367,938 403,736 442,113 452,955 461,748 Placement with banks 249 249 249 249 249 Mortgage loans held for sale, at fair value 10,736 9,566 37,764 7,860 9,980 Loans receivable, net 2,286,599 2,180,331 2,022,173 1,981,428 1,895,886 Accrued interest receivable 17,771 16,890 17,441 18,063 18,010 Premises and equipment, net 16,794 16,843 16,976 17,396 16,053 Right of use assets 29,093 29,785 30,349 31,021 31,272 Federal Home Loan Bank of New York stock (FHLBNY), at cost 29,182 28,515 23,972 23,892 19,377 Deferred tax assets 12,074 11,845 13,172 13,919 14,332 Other assets 24,693 51,392 21,507 21,151 24,723 Total assets$3,039,938 $3,015,969 $2,842,007 $2,818,702 $2,750,722 LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Deposits$1,884,864 $1,870,323 $1,606,097 $1,585,784 $1,507,620 Operating lease liabilities 30,696 31,343 31,861 32,486 32,684 Accrued interest payable 3,712 2,918 6,820 4,218 11,965 Advance payments by borrowers for taxes and insurance 10,349 13,733 10,838 13,245 10,778 Borrowings 596,100 580,421 680,421 680,421 684,421 Other liabilities 8,717 12,642 8,313 8,866 11,859 Total liabilities 2,534,438 2,511,380 2,344,350 2,325,020 2,259,327 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 (7,707) (9,445) (9,519) (9,702) (9,747)Additional paid-in-capital 207,319 208,478 207,934 207,584 207,106 Retained earnings 107,754 105,103 102,951 99,834 97,420 Accumulated other comprehensive loss (15,297) (12,686) (16,557) (16,590) (15,649)Unearned compensation ─ ESOP (11,818) (12,110) (12,401) (12,693) (12,984)Total stockholders' equity 505,500 504,589 497,657 493,682 491,395 Total liabilities and stockholders' equity$3,039,938 $3,015,969 $2,842,007 $2,818,702 $2,750,722 Ponce Financial Group, Inc. 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, 2024 2024 2024 2024 2023 Interest and dividend income: Interest on loans receivable$35,622 $32,945 $31,281 $30,664 $27,814 Interest on deposits due from banks 1,783 2,430 1,542 2,911 990 Interest and dividend on securities and FHLBNY stock 5,481 5,918 5,969 6,091 6,146 Total interest and dividend income 42,886 41,293 38,792 39,666 34,950 Interest expense: Interest on certificates of deposit 8,104 6,926 6,358 6,380 5,103 Interest on other deposits 8,476 8,519 7,389 6,540 5,706 Interest on borrowings 5,576 6,825 7,141 7,923 6,944 Total interest expense 22,156 22,270 20,888 20,843 17,753 Net interest income 20,730 19,023 17,904 18,823 17,197 Provision (benefit) for credit losses 1,099 789 (374) (180) (375)Net interest income after provision (benefit) for credit losses 19,631 18,234 18,278 19,003 17,572 Non-interest income: Service charges and fees 500 508 492 473 498 Brokerage commissions 44 — 9 8 13 Late and prepayment charges 318 77 426 359 365 Income on sale of mortgage loans 254 218 274 302 244 Income on sale of SBA loans 148 — — — — Grant income — — — — 438 Other 833 348 1,057 565 (273)Total non-interest income 2,097 1,151 2,258 1,707 1,285 Non-interest expense: Compensation and benefits 7,668 7,674 7,724 7,844 8,262 Occupancy and equipment 3,863 3,786 3,564 3,667 3,686 Data processing expenses 1,143 1,099 1,013 1,127 1,101 Direct loan expenses 617 573 633 732 497 (Benefit) provision for contingencies (202) (252) (493) 164 418 Insurance and surety bond premiums 293 292 263 253 250 Office supplies, telephone and postage 294 222 233 249 294 Professional fees 1,703 1,351 1,369 1,723 2,040 Microloans recoveries (29) (54) (65) (53) (152)Marketing and promotional expenses 289 180 145 100 146 Federal deposit insurance and regulatory assessment (1) 418 392 428 389 395 Other operating expenses (1) 1,206 1,051 1,333 755 960 Total non-interest expense 17,263 16,314 16,147 16,950 17,897 Income before income taxes 4,465 3,071 4,389 3,760 960 Provision for income taxes 1,532 638 1,197 1,346 442 Net income$2,933 $2,433 $3,192 $2,414 $518 Dividends on preferred shares 282 281 75 — — Net income available to common stockholders$2,651 $2,152 $3,117 $2,414 $518 Earnings per common share: Basic$0.12 $0.10 $0.14 $0.11 $0.02 Diluted$0.12 $0.10 $0.14 $0.11 $0.02 Weighted average common shares outstanding: Basic 22,528,160 22,446,009 22,409,803 22,353,492 22,224,945 Diluted 22,807,644 22,612,028 22,419,309 22,366,728 22,406,102 (1) For the three months ended September 30, 2024, June 30, 2024, March 31, 2024 and December 31, 2023, $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 Subsidiaries Consolidated Statements of Operations (Dollars in thousands, except per share data) For the Years Ended December 31, 2024 2023 Variance $ Variance % Interest and dividend income: Interest on loans receivable $130,512 $95,805 $34,707 36.23%Interest on deposits due from banks 8,666 4,973 3,693 74.26%Interest and dividend on securities and FHLBNY stock 23,459 25,089 (1,630) (6.50%)Total interest and dividend income 162,637 125,867 36,770 29.21%Interest expense: Interest on certificates of deposit 27,768 16,571 11,197 67.57%Interest on other deposits 30,924 18,570 12,354 66.53%Interest on borrowings 27,465 25,460 2,005 7.88%Total interest expense 86,157 60,601 25,556 42.17%Net interest income 76,480 65,266 11,214 17.18%Provision for credit losses 1,334 973 361 37.10%Net interest income after provision for credit losses 75,146 64,293 10,853 16.88%Non-interest income: Service charges and fees 1,973 1,986 (13) (0.65%)Brokerage commissions 61 80 (19) (23.75%)Late and prepayment charges 1,180 2,365 (1,185) (50.11%)Income on sale of mortgage loans 1,048 598 450 75.25%Income on sale of SBA loans 148 — 148 100.00%Grant income — 4,156 (4,156) (100.00%)Other 2,803 1,038 1,765 170.04%Total non-interest income 7,213 10,223 (3,010) (29.44%)Non-interest expense: Compensation and benefits 30,910 30,699 211 0.69%Occupancy and equipment 14,880 14,568 312 2.14%Data processing expenses 4,382 5,083 (701) (13.79%)Direct loan expenses 2,555 1,623 932 57.42%(Benefit) provision for contingencies (783) 2,311 (3,094) (133.88%)Insurance and surety bond premiums 1,101 1,018 83 8.15%Office supplies, telephone and postage 998 1,483 (485) (32.70%)Professional fees 6,146 7,092 (946) (13.34%)Microloans recoveries (201) (1,481) 1,280 (86.43%)Marketing and promotional expenses 714 825 (111) (13.45%)Federal deposit insurance and regulatory assessments (1) 1,627 1,472 155 10.53%Other operating expenses (1) 4,345 3,970 375 9.45%Total non-interest expense 66,674 68,663 (1,989) (2.90%)Income before income taxes 15,685 5,853 9,832 167.98%Provision for income taxes 4,713 2,501 2,212 88.44%Net income $10,972 $3,352 $7,620 227.33%Dividends on preferred shares 638 — 638 100.00%Net income available to common stockholders $10,334 $3,352 $6,982 208.29%Earnings per common share: Basic $0.46 $0.15 $0.31 206.67%Diluted $0.46 $0.15 $0.31 206.67%Weighted average common shares outstanding: Basic 22,434,654 22,745,317 (310,663) (1.37%)Diluted 22,551,715 22,822,313 (270,598) (1.19%) (1) For the year ended December 31, 2023, $1.2 million of federal deposit insurance was reclassified from other operating expenses to federal deposit insurance and regulatory assessments and $0.4 million of directors fees were reclassified from federal deposit insurance and regulatory assessments to other operating expenses. Ponce Financial Group, Inc. and Subsidiaries Key Metrics At or for the Three Months Ended December 31, September 30, June 30, March 31, December 31, 2024 2024 2024 2024 2023 Performance Ratios: Return on average assets (1) 0.38% 0.33% 0.45% 0.33% 0.08%Return on average equity (1) 2.30% 1.93% 2.59% 1.97% 0.42%Net interest rate spread (1) (2) 1.98% 1.77% 1.72% 1.82% 1.74%Net interest margin (1) (3) 2.80% 2.65% 2.62% 2.71% 2.66%Non-interest expense to average assets (1) 2.25% 2.19% 2.28% 2.35% 2.66%Efficiency ratio (4) 75.63% 80.87% 80.09% 82.56% 96.83%Average interest-earning assets to average interest- bearing liabilities 127.60% 128.35% 129.73% 129.69% 133.50%Average equity to average assets 16.59% 16.97% 17.41% 17.00% 18.25%Capital Ratios: Total capital to risk-weighted assets (Bank only) 21.47% 21.61% 22.47% 22.79% 23.30%Tier 1 capital to risk-weighted assets (Bank only) 20.40% 20.45% 21.24% 21.54% 22.05%Common equity Tier 1 capital to risk-weighted assets (Bank only) 20.40% 20.45% 21.24% 21.54% 22.05%Tier 1 capital to average assets (Bank only) 15.81% 16.19% 16.70% 16.26% 17.49%Asset Quality Ratios: Allowance for credit losses on loans as a percentage of total loans 0.97% 1.09% 1.18% 1.23% 1.36%Allowance for credit losses on loans as a percentage of nonperforming loans 82.29% 139.52% 130.28% 140.90% 152.99%Net (charge-offs) recoveries to average outstanding loans (1) (0.45%) (0.17%) (0.10%) (0.25%) (0.24%)Non-performing loans as a percentage of total gross loans 1.18% 0.78% 0.89% 0.87% 0.89%Non-performing loans as a percentage of total assets 0.90% 0.57% 0.65% 0.62% 0.62%Total non-performing assets as a percentage of total assets 0.90% 0.57% 0.65% 0.62% 0.62%Total non-performing assets and accruing modifications to borrowers experiencing financial difficulty as a percentage of total assets (5) 1.06% 0.73% 0.82% 0.79% 0.81%Other: Number of offices 19 19 18 18 18 Number of full-time equivalent employees 218 228 227 233 237 (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 non-interest income. (5)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. Ponce Financial Group, Inc. and Subsidiaries Securities Portfolio December 31, 2024 December 31, 2023 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 $2,994 $— $(121) $2,873 $2,990 $— $(206) $2,784 Corporate Bonds 21,762 10 (1,368) 20,404 25,790 — (2,122) 23,668 Mortgage-Backed Securities: Collateralized Mortgage Obligations (1) 34,526 — (5,991) 28,535 39,375 — (6,227) 33,148 FHLMC Certificates 9,028 — (1,366) 7,662 10,163 — (1,482) 8,681 FNMA Certificates 56,010 — (10,602) 45,408 61,359 — (9,842) 51,517 GNMA Certificates 88 — — 88 104 — — 104 Total available-for-sale securities $124,408 $10 $(19,448) $104,970 $139,781 $— $(19,879) $119,902 Held-to-Maturity Securities: U.S. Agency Bonds $25,000 $— $(40) $24,960 $25,000 $— $(181) $24,819 Corporate Bonds 32,500 12 (535) 31,977 82,500 — (2,691) 79,809 Mortgage-Backed Securities: Collateralized Mortgage Obligations (1) 186,634 — (7,052) 179,582 212,093 104 (5,170) 207,027 FHLMC Certificates 3,229 — (223) 3,006 3,897 — (244) 3,653 FNMA Certificates 105,417 — (5,114) 100,303 118,944 — (4,088) 114,856 SBA Certificates 15,374 92 — 15,466 19,712 166 — 19,878 Allowance for Credit Losses (216) — — — (398) — — — Total held-to-maturity securities $367,938 $104 $(12,964) $355,294 $461,748 $270 $(12,374) $450,042 (1) Comprised of Federal Home Loan Mortgage Corporation (“FHLMC”), Federal National Mortgage Association (“FNMA”) and Ginnie Mae (“GNMA”) issued securities. The following table presents the activity in the allowance for credit losses for held-to-maturity securities. For the Years Ended December 31, 2024 2023 Allowance for credit losses on securities at beginning of the period $398 $— CECL adoption — 662 Benefit for credit losses (182) (264)Allowance for credit losses on securities at end of the period $216 $398 Ponce Financial Group, Inc. and Subsidiaries Loan Portfolio As of December 31, September 30, June 30, March 31, December 31, 2024 2024 2024 2024 2023 Amount Percent Amount Percent Amount Percent Amount Percent Amount Percent (Dollars in thousands) Mortgage loans: 1-4 family residential Investor Owned $330,053 14.30% $332,380 15.09% $337,292 16.49% $339,331 16.92% $343,689 17.89%Owner-Occupied 142,363 6.17% 145,065 6.59% 147,485 7.21% 150,842 7.52% 152,311 7.93%Multifamily residential 670,159 29.04% 678,029 30.78% 545,323 26.66% 545,825 27.22% 550,559 28.65%Nonresidential properties 389,898 16.89% 383,277 17.40% 337,583 16.51% 327,350 16.32% 342,343 17.81%Construction and land 733,660 31.79% 631,461 28.67% 641,879 31.39% 608,665 30.35% 503,925 26.22%Total mortgage loans 2,266,133 98.19% 2,170,212 98.53% 2,009,562 98.26% 1,972,013 98.33% 1,892,827 98.50%Non-mortgage loans: Business loans 40,849 1.77% 28,499 1.29% 30,222 1.48% 26,664 1.33% 19,779 1.03%Consumer loans (1) 1,038 0.04% 4,021 0.18% 5,305 0.26% 6,741 0.34% 8,966 0.47%Total non-mortgage loans 41,887 1.81% 32,520 1.47% 35,527 1.74% 33,405 1.67% 28,745 1.50%Total loans, gross 2,308,020 100.00% 2,202,732 100.00% 2,045,089 100.00% 2,005,418 100.00% 1,921,572 100.00%Net deferred loan origination costs 1,081 1,565 1,145 674 468 Allowance for credit losses on loans (22,502) (23,966) (24,061) (24,664) (26,154) Loans, net $2,286,599 $2,180,331 $2,022,173 $1,981,428 $1,895,886 (1) As of September 30, 2024, June 30, 2024, March 31, 2024 and December 31, 2023, consumer loans include $3.0 million, $4.3 million, $5.7 million and $8.0 million, respectively, of microloans originated by the Bank. As of December 31, 2024, these microloans were charged-off. Ponce Financial Group, Inc. and Subsidiaries Microloans Exposure (previously originated by the Bank under its arrangement with Grain) Total Microloans Exposure as of December 31, 2024 (in thousands) Microloans Receivable from Grain Microloans originated - put back (inception-to-December 31, 2024) $23,903 Write-downs, net of recoveries (inception-to-date as of December 31, 2024) (15,258)Cash receipts (inception-to-December 31, 2024) (6,819)Grant/reserve (1,826)Net receivable as of December 31, 2024 $— Microloans Receivables from Borrowers Microloans receivable as of December 31, 2024 $— Allowance for credit losses on loans as of December 31, 2024 — Microloans, net of allowance for credit losses on loans as of December 31, 2024 $— Investments Investment in Grain $1,000 Investment write-off in Q3 2022 (1,000)Net investment as of December 31, 2024 — Total exposure related to microloans as of December 31, 2024 (1) $— (1) As of December 31, 2024, the remaining microloans were charged-off. Ponce Financial Group, Inc. and Subsidiaries Allowance for Credit Losses on Loans For the Three Months Ended December 31, September 30, June 30, March 31, December 31, 2024 2024 2024 2024 2023 (Dollars in thousands) Allowance for credit losses on loans at beginning of the period$23,966 $24,061 $24,664 $26,154 $27,414 Provision (benefit) for credit losses on loans 1,090 801 (120) (255) (126)Charge-offs: Mortgage loans: 1-4 family residences Investor owned — — — — — Owner occupied — — — — — Multifamily residences — — — — — Nonresidential properties — (7) — — — Construction and land — — — — — Non-mortgage loans: Business (232) (450) — (52) (63)Consumer (2,465) (634) (747) (1,302) (1,135)Total charge-offs (2,697) (1,091) (747) (1,354) (1,198)Recoveries: Non-mortgage loans: Business — 1 7 1 — Consumer 143 194 257 118 64 Total recoveries 143 195 264 119 64 Net (charge-offs) recoveries (2,554) (896) (483) (1,235) (1,134)Allowance for credit losses on loans at end of the period$22,502 $23,966 $24,061 $24,664 $26,154 Ponce Financial Group, Inc. and Subsidiaries Deposits As of December 31, September 30, June 30, March 31, December 31, 2024 2024 2024 2024 2023 Amount Percent Amount Percent Amount Percent Amount Percent Amount Percent (Dollars in thousands) Demand (1) $169,178 8.98% $182,737 9.78% $178,125 11.09% $191,541 12.07% $185,151 12.28%Interest-bearing deposits: NOW/IOLA accounts (1) 62,616 3.32% 71,445 3.82% 81,178 5.05% 73,202 4.62% 77,909 5.17%Money market accounts 636,219 33.75% 660,168 35.30% 502,255 31.27% 482,344 30.42% 432,735 28.70%Reciprocal deposits 130,677 6.93% 94,145 5.03% 109,945 6.85% 97,718 6.16% 96,860 6.42%Savings accounts 105,870 5.62% 108,941 5.82% 109,694 6.83% 112,713 7.11% 114,139 7.57%Total NOW, money market, reciprocal and savings accounts 935,382 49.62% 934,699 49.97% 803,072 50.00% 765,977 48.31% 721,643 47.86%Certificates of deposit of $250K or more (3) 204,293 10.84% 210,262 11.25% 189,683 11.82% 183,478 11.57% 167,530 11.12%Brokered certificates of deposit (2) 94,531 5.02% 94,531 5.05% 94,614 5.89% 94,689 5.97% 98,729 6.55%Listing service deposits (2) 7,376 0.39% 7,376 0.39% 9,361 0.58% 12,688 0.80% 14,433 0.96%All other certificates of deposit less than $250K (3) 474,104 25.15% 440,718 23.56% 331,242 20.62% 337,411 21.28% 320,134 21.23%Total certificates of deposit 780,304 41.40% 752,887 40.25% 624,900 38.91% 628,266 39.62% 600,826 39.86%Total interest-bearing deposits 1,715,686 91.02% 1,687,586 90.22% 1,427,972 88.91% 1,394,243 87.93% 1,322,469 87.72%Total deposits $1,884,864 100.00% $1,870,323 100.00% $1,606,097 100.00% $1,585,784 100.00% $1,507,620 100.00% (1)As of December 31, 2023, $58.2 million was reclassified from demand to NOW/IOLA accounts. (2)As of December 31, 2023, there were $0.3 million in individual listing service deposits amounting to $250,000 or more. As of December 31, 2024, there were no individual listing service deposits amounting to $250,000 or more. All brokered certificates of deposit individually amounted to less than $250,000. (3)As of September 30, 2024, June 30,2024, March 31, 2024 and December 31, 2023, $36.2 million, $33.5 million, $37.2 million and $35.4 million, respectively, were reclassified from all other certificates of deposit less than $250K to certificates of deposit of $250K or more. Ponce Financial Group, Inc. and Subsidiaries Borrowings December 31, December 31, 2024 2023 Scheduled Maturity Redeemable at Call Date Weighted Average Rate Scheduled Maturity Redeemable at Call Date Weighted Average Rate (Dollars in thousands) Overnight line of credit advance$25,000 $25,000 4.69% $— $— — % Term advances ending: 2024 — — — 363,321 363,321 4.55 2025 100,000 100,000 4.48 50,000 50,000 4.41 2026 200,000 200,000 4.25 — — — 2027 212,000 212,000 3.44 212,000 212,000 3.44 2028 9,100 9,100 3.84 9,100 9,100 3.84 2029 50,000 50,000 3.35 50,000 50,000 3.35 $596,100 $596,100 3.94% $684,421 $684,421 4.10% Ponce Financial Group, Inc. and Subsidiaries Nonperforming Assets As of Three Months Ended December 31, September 30, June 30, March 31, December 31, 2024 2024 2024 2024 2023 (Dollars in thousands) Non-accrual loans: Mortgage loans: 1-4 family residential Investor owned$436 $436 $436 $399 $793 Owner occupied 1,423 1,423 1,423 1,426 1,682 Multifamily residential 10,271 4,685 5,754 4,098 2,979 Nonresidential properties — 824 828 441 — Construction and land 14,158 8,907 8,907 10,277 10,759 Non-mortgage loans: Business 343 180 396 146 165 Consumer — — — — — Total non-accrual loans (not including non-accruing modifications to borrowers experiencing financial difficulty) (1)$26,631 $16,455 $17,744 $16,787 $16,378 Non-accruing modifications to borrowers experiencing financial difficulty (1): Mortgage loans: 1-4 family residential Investor owned$279 $278 $277 $270 $270 Owner occupied 435 444 448 447 447 Multifamily residential — — — — — Nonresidential properties — — — — — Construction and land — — — — — Non-mortgage loans: Business — — — — — Consumer — — — — — Total non-accruing modifications to borrowers experiencing financial difficulty (1) 714 722 725 717 717 Total non-accrual loans (2)$27,345 $17,177 $18,469 $17,504 $17,095 Accruing modifications to borrowers experiencing financial difficulty (1): Mortgage loans: 1-4 family residential Investor owned$1,807 $1,821 $1,830 $1,850 $2,112 Owner occupied 2,062 2,116 2,171 2,288 2,313 Multifamily residential — — — — — Nonresidential properties 652 672 707 748 757 Construction and land — — — — — Non-mortgage loans: Business 215 222 — — — Consumer — — — — — Total accruing modifications to borrowers experiencing financial difficulty (1)$4,736 $4,831 $4,708 $4,886 $5,182 Total non-performing assets and accruing modifications to borrowers experiencing financial difficulty (1)$32,081 $22,008 $23,177 $22,390 $22,277 Total non-performing loans to total gross loans 1.18% 0.78% 0.89% 0.87% 0.89%Total non-performing assets to total assets 0.90% 0.57% 0.65% 0.62% 0.62%Total non-performing assets and accruing modifications to borrowers experiencing financial difficulty as a percentage of total assets (1) 1.06% 0.73% 0.82% 0.79% 0.81% (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 December 31, 2024 2023 Average Average Outstanding Average Outstanding Average Balance Interest Yield/Rate (1) Balance Interest Yield/Rate (1) (Dollars in thousands)Interest-earning assets: Loans (2)$2,261,426 $35,622 6.27% $1,884,301 $27,814 5.86%Securities (3) 507,510 4,860 3.81% 582,563 5,715 3.89%Other (4) 179,701 2,404 5.32% 96,070 1,421 5.87%Total interest-earning assets 2,948,637 42,886 5.79% 2,562,934 34,950 5.41%Non-interest-earning assets 108,558 107,305 Total assets$3,057,195 $2,670,239 Interest-bearing liabilities: NOW/IOLA (5) (6)$68,776 $119 0.69% $75,926 $181 0.95%Money market (6) 761,130 8,329 4.35% 474,306 5,495 4.60%Savings 109,217 27 0.10% 116,600 28 0.10%Certificates of deposit 783,335 8,104 4.12% 559,713 5,103 3.62%Total deposits 1,722,458 16,579 3.83% 1,226,545 10,807 3.50%Advance payments by borrowers 15,147 1 0.03% 15,033 2 0.05%Borrowings 573,316 5,576 3.87% 678,235 6,944 4.06%Total interest-bearing liabilities 2,310,921 22,156 3.81% 1,919,813 17,753 3.67%Non-interest-bearing liabilities: Non-interest-bearing demand (5) 191,355 — 211,434 — Other non-interest-bearing liabilities 47,875 — 51,764 — Total non-interest-bearing liabilities 239,230 — 263,198 — Total liabilities 2,550,151 22,156 2,183,011 17,753 Total equity 507,044 487,228 Total liabilities and total equity$3,057,195 3.81% $2,670,239 3.67%Net interest income $20,730 $17,197 Net interest rate spread (7) 1.98% 1.74%Net interest-earning assets (8)$637,716 $643,121 Net interest margin (9) 2.80% 2.66%Average interest-earning assets to interest-bearing liabilities 127.60% 133.50% (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)Includes reclassification of $55.7 million average outstanding balances from non-interest bearing demand to NOW/IOLA for the three months ended December 31, 2023. (6)Includes $0.2 million of interest expense reclassified from money market to NOW/IOLA for the three months ended December 31, 2023. (7)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. (8)Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities. (9)Net interest margin represents net interest income divided by average total interest-earning assets. Ponce Financial Group, Inc. and Subsidiaries Average Balance Sheets For the Years Ended December 31, 2024 2023 Average Average Outstanding Average Outstanding Average Balance Interest Yield/Rate Balance Interest Yield/Rate (Dollars in thousands) Interest-earning assets: Loans (1)$2,094,820 $130,512 6.23% $1,730,275 $95,805 5.54%Securities (2) 548,641 21,289 3.88% 606,815 23,342 3.85%Other (3) 192,403 10,836 5.63% 119,923 6,720 5.60%Total interest-earning assets 2,835,864 162,637 5.74% 2,457,013 125,867 5.12%Non-interest-earning assets 107,017 115,760 Total assets$2,942,881 $2,572,773 Interest-bearing liabilities: NOW/IOLA (4) (5)$74,796 $662 0.89% $70,993 $1,314 1.85%Money market (5) 654,521 30,148 4.61% 424,160 17,132 4.04%Savings 111,028 107 0.10% 121,550 116 0.10%Certificates of deposit 676,306 27,768 4.11% 528,999 16,571 3.13%Total deposits 1,516,651 58,685 3.87% 1,145,702 35,133 3.07%Advance payments by borrowers 14,034 7 0.05% 14,869 8 0.05%Borrowings 670,982 27,465 4.09% 633,116 25,460 4.02%Total interest-bearing liabilities 2,201,667 86,157 3.91% 1,793,687 60,601 3.38%Non-interest-bearing liabilities: Non-interest-bearing demand (4) 191,155 — 241,510 — Other non-interest-bearing liabilities 50,259 — 45,858 — Total non-interest-bearing liabilities 241,414 — 287,368 — Total liabilities 2,443,081 86,157 2,081,055 60,601 Total equity 499,800 491,718 Total liabilities and total equity$2,942,881 3.91% $2,572,773 3.38%Net interest income $76,480 $65,266 Net interest rate spread (6) 1.83% 1.74%Net interest-earning assets (7)$634,197 $663,326 Net interest margin (8) 2.70% 2.66%Average interest-earning assets to interest-bearing liabilities 128.81% 136.98% (1)Loans include loans and mortgage loans held for sale, at fair value. (2)Securities include available-for-sale securities and held-to-maturity securities. (3)Includes FHLBNY demand account, FHLBNY stock dividends and FRBNY demand deposits. (4)Includes reclassification of $48.8 million average outstanding balances from non-interest bearing demand to NOW/IOLA for the three months ended December 31, 2023. (5)Includes $1.3 million of interest expense reclassified from money market to NOW/IOLA for the year ended December 31, 2023. (6)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. (7)Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities. (8)Net interest margin represents net interest income divided by average total interest-earning assets. Ponce Financial Group, Inc. and Subsidiaries Other Data As of December 31, September 30, June 30, March 31, December 31, 2024 2024 2024 2024 2023 Other Data Common shares issued 24,886,711 24,886,711 24,886,711 24,886,711 24,886,711 Less treasury shares 925,497 1,067,248 1,074,979 1,096,214 1,101,191 Common shares outstanding at end of period 23,961,214 23,819,463 23,811,732 23,790,497 23,785,520 Book value per common share$11.71 $11.74 $11.45 $11.29 $11.20 Tangible book value per common share$11.71 $11.74 $11.45 $11.29 $11.20 Contact: Sergio Vaccaro Sergio.vaccaro@poncebank.net 718-931-9000

Ponce Financial Group, Inc. Reports Fourth Quarter 2024 Results

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