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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

 

(Mark One)

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended March 31, 2024

OR

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from to

Commission File Number: 001-41255

 

Ponce Financial Group, Inc.

(Exact Name of Registrant as Specified in its Charter)

 

 

Maryland

87-1893965

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer
Identification No.)

2244 Westchester Avenue

Bronx, NY

10462

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (718) 931-9000

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange on which registered

Common stock, par value $0.01 per share

 

PDLB

 

The NASDAQ Stock Market, LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

Accelerated filer

 

 

 

 

Non-accelerated filer

Smaller reporting company

 

 

 

 

 

 

 

Emerging growth company

 

 

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No

As of May 8, 2024, the registrant had 23,811,732 shares of common stock, $0.01 par value per share, outstanding.

Auditor Firm Id: 339

Auditor Name: Mazars USA LLP

Auditor Location: New York, New York, USA

 

 

 


Table of Contents

 

 

 

Page

PART I.

 

FINANCIAL INFORMATION

 

1

Item 1.

 

Consolidated Financial Statements

 

1

 

Consolidated Statements of Financial Condition (Unaudited)

 

1

 

Consolidated Statements of Operations (Unaudited)

 

2

 

Consolidated Statements of Comprehensive Income (Unaudited)

 

3

 

 

Consolidated Statements of Stockholders’ Equity (Unaudited)

 

4

 

Consolidated Statements of Cash Flows (Unaudited)

 

5

 

Notes to Consolidated Financial Statements (Unaudited)

 

6

Item 2.

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

30

Item 3.

 

Quantitative and Qualitative Disclosures About Market Risk

 

47

Item 4.

 

Controls and Procedures

 

47

PART II.

 

OTHER INFORMATION

 

48

Item 1.

 

Legal Proceedings

 

48

Item 1A.

 

Risk Factors

 

48

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

 

48

Item 3.

 

Defaults Upon Senior Securities

 

48

Item 4.

 

Mine Safety Disclosures

 

48

Item 5.

 

Other Information

 

48

Item 6.

 

Exhibits

 

49

Signatures

 

50

 

 

 

i


PART I—FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements.

Ponce Financial Group, Inc. and Subsidiaries

 

Consolidated Statements of Financial Condition (Unaudited)

March 31, 2024 and December 31, 2023

(Dollars in thousands, except share data)

 

 

 

March 31,

 

 

December 31,

 

 

 

2024

 

 

2023

 

 

 

(unaudited)

 

 

 

 

ASSETS

 

 

 

 

 

 

Cash and due from banks:

 

 

 

 

 

 

Cash

 

$

29,972

 

 

$

28,930

 

Interest-bearing deposits

 

 

104,752

 

 

 

110,260

 

Total cash and cash equivalents

 

 

134,724

 

 

 

139,190

 

Available-for-sale securities, at fair value (Note 3)

 

 

116,044

 

 

 

119,902

 

Held-to-maturity securities, net of allowance for credit losses of $473 at March 31, 2024 and $398 at December 31, 2023; at amortized cost (fair value 2024 $438,113; 2023 $450,042) (Note 3)

 

 

452,955

 

 

 

461,748

 

Placements with banks

 

 

249

 

 

 

249

 

Mortgage loans held for sale, at fair value (Note 4)

 

 

7,860

 

 

 

9,980

 

Loans receivable, net of allowance for credit losses of $24,664 at March 31, 2024 and $26,154 at December 31, 2023 (Note 5)

 

 

1,981,428

 

 

 

1,895,886

 

Accrued interest receivable

 

 

18,063

 

 

 

18,010

 

Premises and equipment, net

 

 

17,396

 

 

 

16,053

 

Right of use assets (Note 6)

 

 

31,021

 

 

 

31,272

 

Federal Home Loan Bank of New York (FHLBNY) stock, at cost

 

 

23,892

 

 

 

19,377

 

Deferred tax assets

 

 

13,919

 

 

 

14,332

 

Other assets

 

 

21,151

 

 

 

24,723

 

Total assets

 

$

2,818,702

 

 

$

2,750,722

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

Deposits (Note 7)

 

$

1,585,784

 

 

$

1,507,620

 

Operating lease liabilities

 

 

32,486

 

 

 

32,684

 

Accrued interest payable

 

 

4,218

 

 

 

11,965

 

Advance payments by borrowers for taxes and insurance

 

 

13,245

 

 

 

10,778

 

Borrowings (Note 8)

 

 

680,421

 

 

 

684,421

 

Other liabilities

 

 

8,866

 

 

 

11,859

 

Total liabilities

 

 

2,325,020

 

 

 

2,259,327

 

Commitments and contingencies (Note 11)

 

 

 

 

 

 

Stockholders' Equity:

 

 

 

 

 

 

Preferred stock, $0.01 par value; 100,000,000 shares authorized, 225,000 shares issued and outstanding
     as of March 31, 2024 and as of December 31, 2023.

 

 

225,000

 

 

 

225,000

 

Common stock, $0.01 par value; 200,000,000 shares authorized; 24,886,711 shares issued and 23,790,497 shares outstanding as of March 31, 2024 and 24,886,711 shares issued and 23,785,520 shares outstanding as of December 31, 2023

 

 

249

 

 

 

249

 

Treasury stock, at cost; 1,096,214 shares as of March 31, 2024 and 1,101,191 shares as of December 31, 2023

 

 

(9,702

)

 

 

(9,747

)

Additional paid-in-capital

 

 

207,584

 

 

 

207,106

 

Retained earnings

 

 

99,834

 

 

 

97,420

 

Accumulated other comprehensive loss (Note 14)

 

 

(16,590

)

 

 

(15,649

)

Unearned compensation ─ ESOP; 1,402,296 shares as of March 31, 2024 and 1,435,732
   shares as of December 31, 2023

 

 

(12,693

)

 

 

(12,984

)

Total stockholders' equity

 

 

493,682

 

 

 

491,395

 

Total liabilities and stockholders' equity

 

$

2,818,702

 

 

$

2,750,722

 

 

 

The accompanying notes are an integral part of the consolidated financial statements (unaudited).

1


Ponce Financial Group, Inc. and Subsidiaries

 

Consolidated Statements of Operations (Unaudited)

Three Months Ended March 31, 2024 and 2023

(Dollars in thousands, except share data)

 

 

 

For the Three Months Ended March 31,

 

 

 

2024

 

 

2023

 

Interest and dividend income:

 

 

 

 

 

 

Interest on loans receivable

 

$

30,664

 

 

$

19,700

 

Interest on deposits due from banks

 

 

2,911

 

 

 

197

 

Interest and dividend on securities and FHLBNY stock

 

 

6,091

 

 

 

6,459

 

Total interest and dividend income

 

 

39,666

 

 

 

26,356

 

Interest expense:

 

 

 

 

 

 

Interest on certificates of deposit (1)

 

 

6,380

 

 

 

3,225

 

Interest on other deposits (1)

 

 

6,540

 

 

 

2,812

 

Interest on borrowings

 

 

7,923

 

 

 

5,074

 

Total interest expense

 

 

20,843

 

 

 

11,111

 

Net interest income

 

 

18,823

 

 

 

15,245

 

Benefit for credit losses (Note 3) (Note 5)

 

 

(180

)

 

 

(174

)

Net interest income after benefit for credit losses

 

 

19,003

 

 

 

15,419

 

Non-interest income:

 

 

 

 

 

 

Service charges and fees

 

 

473

 

 

 

491

 

Brokerage commissions

 

 

8

 

 

 

15

 

Late and prepayment charges

 

 

359

 

 

 

729

 

Income on sale of mortgage loans

 

 

302

 

 

 

99

 

Other

 

 

565

 

 

 

485

 

Total non-interest income

 

 

1,707

 

 

 

1,819

 

Non-interest expense:

 

 

 

 

 

 

Compensation and benefits

 

 

7,844

 

 

 

7,446

 

Occupancy and equipment

 

 

3,667

 

 

 

3,570

 

Data processing expenses

 

 

1,127

 

 

 

1,192

 

Direct loan expenses

 

 

732

 

 

 

412

 

Provision for contingencies

 

 

164

 

 

 

985

 

Insurance and surety bond premiums

 

 

253

 

 

 

265

 

Office supplies, telephone and postage

 

 

249

 

 

 

399

 

Professional fees

 

 

1,723

 

 

 

1,455

 

Grain recoveries (Note 5)

 

 

(53

)

 

 

(914

)

Marketing and promotional expenses

 

 

100

 

 

 

128

 

Directors' fees and regulatory assessment

 

 

179

 

 

 

155

 

Other operating expenses

 

 

965

 

 

 

1,268

 

Total non-interest expense

 

 

16,950

 

 

 

16,361

 

Income before income taxes

 

 

3,760

 

 

 

877

 

Provision for income taxes

 

 

1,346

 

 

 

546

 

Net income

 

$

2,414

 

 

$

331

 

Earnings per common share (Note 10):

 

 

 

 

 

 

Basic

 

$

0.11

 

 

$

0.01

 

Diluted

 

$

0.11

 

 

$

0.01

 

Weighted average common shares outstanding (Note 10):

 

 

 

 

 

 

Basic

 

 

22,353,492

 

 

 

23,293,013

 

Diluted

 

 

22,366,728

 

 

 

23,324,532

 

 

(1)
For the three months ended March 31, 2023, $1.4 million of interest expense were reclassified from Interest on other deposits to Interest on certificates of deposits.

 

The accompanying notes are an integral part of the consolidated financial statements (unaudited).

2


Ponce Financial Group, Inc. and Subsidiaries

Consolidated Statements of Comprehensive Income (Unaudited)

Three Months Ended March 31, 2024 and 2023

(In thousands)

 

 

 

For the Three Months Ended March 31,

 

 

 

2024

 

 

2023

 

Net income

 

$

2,414

 

 

$

331

 

Net change in unrealized (losses) gain on securities:

 

 

 

 

 

 

Unrealized (losses) gain

 

 

(1,196

)

 

 

1,564

 

Income benefit (tax) effect

 

 

255

 

 

 

(333

)

Total other comprehensive (loss) income, net of tax

 

 

(941

)

 

 

1,231

 

Total comprehensive income

 

$

1,473

 

 

$

1,562

 

 

The accompanying notes are an integral part of the consolidated financial statements (unaudited).

 

3


Ponce Financial Group, Inc. and Subsidiaries

Consolidated Statements of Stockholders’ Equity (Unaudited)

Three Months Ended March 31, 2024 and 2023

(Dollars in thousands, except share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

Unallocated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Treasury

 

 

Additional

 

 

 

 

 

Other

 

 

Common

 

 

 

 

 

 

Preferred Stock

 

 

Common Stock

 

 

Stock,

 

 

Paid-in

 

 

Retained

 

 

Comprehensive

 

 

Stock

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

At Cost

 

 

Capital

 

 

Earnings

 

 

Income (Loss)

 

 

of ESOP

 

 

Total

 

Balance, December 31, 2023

 

 

225,000

 

 

$

225,000

 

 

 

23,785,520

 

 

$

249

 

 

$

(9,747

)

 

$

207,106

 

 

$

97,420

 

 

$

(15,649

)

 

$

(12,984

)

 

$

491,395

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,414

 

 

 

 

 

 

 

 

 

2,414

 

Other comprehensive loss, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(941

)

 

 

 

 

 

(941

)

Release of restricted stock units

 

 

 

 

 

 

 

 

4,977

 

 

 

 

 

 

45

 

 

 

(45

)

 

 

 

 

 

 

 

 

 

 

 

 

ESOP shares committed to be released (33,436 shares)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6

 

 

 

 

 

 

 

 

 

291

 

 

 

297

 

Share-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

517

 

 

 

 

 

 

 

 

 

 

 

 

517

 

Balance, March 31, 2024

 

 

225,000

 

 

$

225,000

 

 

 

23,790,497

 

 

$

249

 

 

$

(9,702

)

 

$

207,584

 

 

$

99,834

 

 

$

(16,590

)

 

$

(12,693

)

 

$

493,682

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

Unallocated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Treasury

 

 

Additional

 

 

 

 

 

Other

 

 

Common

 

 

 

 

 

 

Preferred Stock

 

 

Common Stock

 

 

Stock,

 

 

Paid-in

 

 

Retained

 

 

Comprehensive

 

 

Stock

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

At Cost

 

 

Capital

 

 

Earnings

 

 

Loss

 

 

of ESOP

 

 

Total

 

Balance, December 31, 2022

 

 

225,000

 

 

$

225,000

 

 

 

24,859,353

 

 

$

249

 

 

$

(2

)

 

$

206,508

 

 

$

92,955

 

 

$

(17,860

)

 

$

(14,150

)

 

 

492,700

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

331

 

 

 

 

 

 

 

 

 

331

 

Other comprehensive income, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,231

 

 

 

 

 

 

1,231

 

Impact of CECL adoption, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,113

 

 

 

 

 

 

 

 

 

1,113

 

Release of restricted stock units

 

 

 

 

 

 

 

 

4,147

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ESOP shares committed to be released (33,436 shares)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(29

)

 

 

 

 

 

 

 

 

291

 

 

 

262

 

Share-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

404

 

 

 

 

 

 

 

 

 

 

 

 

404

 

Balance, March 31, 2023

 

 

225,000

 

 

$

225,000

 

 

 

24,863,500

 

 

$

249

 

 

$

(2

)

 

$

206,883

 

 

$

94,399

 

 

$

(16,629

)

 

$

(13,859

)

 

$

496,041

 

 

 

The accompanying notes are an integral part of the consolidated financial statements (unaudited).

4


Ponce Financial Group, Inc. and Subsidiaries

Consolidated Statements of Cash Flows (Unaudited)

Three Months Ended March 31, 2024 and 2023

(In thousands)

 

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2024

 

 

2023

 

Cash Flows From Operating Activities:

 

 

 

 

 

 

Net income

 

$

2,414

 

 

$

331

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

Amortization of premiums/discounts on securities, net

 

 

(39

)

 

 

(30

)

Gain on sale of loans

 

 

(276

)

 

 

 

Gain on derivatives

 

 

 

 

 

(119

)

Grain recoveries

 

 

(53

)

 

 

(914

)

Benefit for credit losses

 

 

(180

)

 

 

(174

)

Depreciation and amortization

 

 

673

 

 

 

742

 

ESOP compensation expense

 

 

297

 

 

 

262

 

Share-based compensation expense

 

 

517

 

 

 

404

 

Deferred income taxes

 

 

667

 

 

 

391

 

Changes in assets and liabilities:

 

 

 

 

 

 

Decrease (increase) in mortgage loans held for sale, fair value

 

 

2,396

 

 

 

(1,008

)

Increase in accrued interest receivable

 

 

(53

)

 

 

(386

)

Decrease (increase) in other assets

 

 

3,572

 

 

 

(778

)

(Decrease) increase in accrued interest payable

 

 

(7,747

)

 

 

377

 

Decrease in operating lease liabilities

 

 

(198

)

 

 

(224

)

Increase in advance payments by borrowers

 

 

2,467

 

 

 

5,178

 

(Decrease) increase in other liabilities

 

 

(2,996

)

 

 

2,094

 

Net cash provided by operating activities

 

 

1,461

 

 

 

6,146

 

Cash Flows From Investing Activities:

 

 

 

 

 

 

Net purchase and redemption of FHLBNY stock

 

 

(4,500

)

 

 

5,452

 

Proceeds from maturities, calls and principal repayments on securities

 

 

11,419

 

 

 

21,140

 

Placements with banks

 

 

 

 

 

249

 

Net increase in loans

 

 

(79,278

)

 

 

(117,890

)

Purchase of loans

 

 

(5,956

)

 

 

 

Purchases of premises and equipment

 

 

(1,776

)

 

 

(235

)

Net cash used in investing activities

 

 

(80,091

)

 

 

(91,284

)

Cash Flows From Financing Activities:

 

 

 

 

 

 

Net increase in deposits

 

 

78,164

 

 

 

84,465

 

Net proceeds from borrowings

 

 

(4,000

)

 

 

131,000

 

Net cash provided by financing activities

 

 

74,164

 

 

 

215,465

 

Net (decrease) increase in cash and cash equivalents

 

 

(4,466

)

 

 

130,327

 

Cash and cash equivalents at beginning of period

 

 

139,190

 

 

 

54,360

 

Cash and cash equivalents at end of period

 

$

134,724

 

 

$

184,687

 

Supplemental disclosures of cash flow information:

 

 

 

 

 

 

Cash paid for interest on deposits and borrowings

 

$

28,590

 

 

$

10,734

 

Cash paid for income taxes

 

$

290

 

 

$

37

 

 

 

The accompanying notes are an integral part of the consolidated financial statements (unaudited).

5


Table of Contents

Ponce Financial Group, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

 

Note 1. Nature of Business

Basis of Presentation and Consolidation:

Ponce Financial Group, Inc. (hereafter referred to as “we,” “our,” “us,” “Ponce Financial Group, Inc.,” or the “Company”) is the holding company of Ponce Bank (“Ponce Bank” or the “Bank”), a federally chartered stock savings association. The Company’s Consolidated Financial Statements presented herein have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

The Consolidated Financial Statements include the accounts of the Company, its wholly-owned subsidiary Ponce Bank (the “Bank”) and the Bank’s wholly-owned subsidiary, Ponce De Leon Mortgage Corp., which is a mortgage banking entity. All significant intercompany transactions and balances have been eliminated in consolidation.

 

For further information, refer to the audited Consolidated Financial Statements and Notes included in the Company' Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on March 19, 2024 (the "2023 Form 10-K").

 

Reclassification of Prior Periods Presentation: Certain prior periods amounts have been reclassified for consistency with the current period presentation. These reclassifications had no effect on the reporting results of operations and did not affect previously reported amounts in the Consolidated Statements of Operations. Refer to Deposits (Note 8) for the Three Months Ended March 31, 2023 for details on the reclassification.

 

Recent Accounting Pronouncements Not Yet Adopted:

In November 2023, FASB issued ASU 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures." The amendments in this ASU require improved reportable segment information on an annual and interim basis, primarily through enhanced disclosures about significant segment expenses. This update will be effective for financial statements issued for fiscal years beginning after December 15, 2023, and interim periods for fiscal years beginning after December 15, 2024. Early adoptions is permitted. The Company does not expect this standard to have an impact on the consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, "Improvements to Income Tax Disclosures (Topic 740)." The amendment to this update addresses investor requests for more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. This update also includes certain other amendments to improve the effectiveness of income tax disclosures. The amendments in this update are effective for annual periods beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance.

Note 2. Preferred Stock

Preferred Stock

On June 7, 2022, the Company‎ closed a private placement (the “Private Placement”) of 225,000 shares of the Company’s Senior Non-Cumulative Perpetual Preferred Stock, Series A‎, par value $0.01 (the “Preferred Stock”) for an aggregate purchase price equal to $225.0 million in cash, to the United States Department of the Treasury (the “Treasury”) pursuant to the Emergency Capital Investment Program (“ECIP”).‎ The holders of the Preferred Stock will be entitled to a dividend payable in cash quarterly at an annual rate dependent on certain factors as reported by the Company to Treasury in a quarterly supplemental report. The initial dividend rate is zero percent for the first two years after issuance, and thereafter the floor dividend rate is 0.50% and the ceiling dividend rate is 2.00%. After 10 years of issuance, the perpetual dividend rate in effect, will be determined based on said floor and ceiling. The actual dividend rate that will be paid by the Company on the Preferred Stock cannot be determined at this time.

The ECIP investment by the Treasury is part of a program to invest over $8.7 billion into Community Development Financial Institution (“CDFI”) or ‎Minority Depository Institution (“MDI”), of which Ponce Bank is both. The ECIP is intended to incentivize CDFIs and MDIs to provide loans, grants, ‎and forbearance to small businesses, minority-owned businesses, and consumers in low-income and underserved communities that may have been ‎disproportionately impacted by the economic effects of the COVID-19 pandemic.‎

In the event of a liquidation, dissolution or winding up of the Company, the Preferred Stock will be entitled to a liquidation preference, subject to certain limitations, in the amount of the sum of $1,000 per share plus declared and unpaid dividends (without accumulation of undeclared dividends) on each share.

6


Table of Contents

Ponce Financial Group, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

 

 

Note 3. Securities

The amortized cost, gross unrealized gains and losses, and fair value of securities at March 31, 2024 and December 31, 2023 are summarized as follows:

 

 

 

March 31, 2024

 

 

 

 

 

 

Gross

 

 

Gross

 

 

 

 

 

 

Amortized

 

 

Unrealized

 

 

Unrealized

 

 

 

 

 

 

Cost

 

 

Gains

 

 

Losses

 

 

Fair Value

 

 

 

(in thousands)

 

Available-for-Sale Securities:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Government Bonds

 

$

2,991

 

 

$

 

 

$

(211

)

 

$

2,780

 

Corporate Bonds

 

 

25,782

 

 

 

 

 

 

(2,262

)

 

 

23,520

 

Mortgage-Backed Securities:

 

 

 

 

 

 

 

 

 

 

 

 

Collateralized Mortgage Obligations (1)

 

 

38,183

 

 

 

 

 

 

(6,229

)

 

 

31,954

 

FHLMC Certificates

 

 

9,903

 

 

 

 

 

 

(1,424

)

 

 

8,479

 

FNMA Certificates

 

 

60,158

 

 

 

 

 

 

(10,948

)

 

 

49,210

 

GNMA Certificates

 

 

102

 

 

 

 

 

 

(1

)

 

 

101

 

Total available-for-sale securities

 

$

137,119

 

 

$

 

 

$

(21,075

)

 

$

116,044

 

 

 

 

 

 

 

 

 

 

 

 

 

Held-to-Maturity Securities:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Agency Bonds

 

$

25,000

 

 

$

 

 

$

(289

)

 

$

24,711

 

Corporate Bonds

 

 

82,500

 

 

 

 

 

 

(2,211

)

 

 

80,289

 

Mortgage-Backed Securities:

 

 

 

 

 

 

 

 

 

 

 

 

Collateralized Mortgage Obligations (1)

 

 

207,079

 

 

 

 

 

 

(7,468

)

 

 

199,611

 

FHLMC Certificates

 

 

3,819

 

 

 

 

 

 

(253

)

 

 

3,566

 

FNMA Certificates

 

 

116,085

 

 

 

 

 

 

(5,263

)

 

 

110,822

 

SBA Certificates

 

 

18,945

 

 

 

169

 

 

 

 

 

 

19,114

 

Allowance for Credit Losses

 

 

(473

)

 

 

 

 

 

 

 

 

 

Total held-to-maturity securities

 

$

452,955

 

 

$

169

 

 

$

(15,484

)

 

$

438,113

 

 

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

 

7


Table of Contents

Ponce Financial Group, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

 

 

 

December 31, 2023

 

 

 

 

 

 

Gross

 

 

Gross

 

 

 

 

 

 

Amortized

 

 

Unrealized

 

 

Unrealized

 

 

 

 

 

 

Cost

 

 

Gains

 

 

Losses

 

 

Fair Value

 

 

(in thousands)

 

Available-for-Sale Securities:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Government Bonds

 

$

2,990

 

 

$

 

 

$

(206

)

 

$

2,784

 

Corporate Bonds

 

 

25,790

 

 

 

 

 

 

(2,122

)

 

 

23,668

 

Mortgage-Backed Securities:

 

 

 

 

 

 

 

 

 

 

 

 

Collateralized Mortgage Obligations (1)

 

 

39,375

 

 

 

 

 

 

(6,227

)

 

 

33,148

 

FHLMC Certificates

 

 

10,163

 

 

 

 

 

 

(