NorthEast Community Bancorp, Inc. (the “Company”) (OTCPX: NECB), a
majority owned subsidiary of NorthEast Community Bancorp, MHC, and
the parent holding company of NorthEast Community Bank (the
“Bank”), reported net income of $4.92 million for the quarter ended
December 31, 2018, an increase of 153.09%, compared to net income
of $1.94 million for the quarter ended December 31,
2017. For the year ended December 31, 2018, the Company
reported net income of $13.03 million compared to net income of
$8.05 million for the year ended December 31, 2017.
Financial Condition and Operating
Results for December 31, 2018 compared to December 31,
2017:
Net income before taxes for the three months
ended December 31, 2018 was $6.23 million compared to $4.36 million
for the three months ended December 31, 2017, an increase of
42.64%. The increase in net income before taxes was the
result of our continuing focus on construction lending.
Net interest income for the three months ended
December 31, 2018 increased by $1.51 million, or 17.82%, to $10.00
million from $8.49 million for the three months ended December 31,
2017. The increase in net interest income was the result of
our continuing focus on construction lending.
The Company had a credit of $2.32 million in
provision for loan losses during the quarter ended December 31,
2018 compared to $51,000 in provision for loan losses during the
quarter ended December 31, 2017. The credit of $2.32 million
in provision for loan losses was primarily due to recoveries
totaling $2.70 million as a result of a settlement attributable to
two loans totaling $3.13 million that were fully written off during
the September 30, 2018 quarter.
The allowance for loan losses was $4.20 million
as of December 31, 2018 compared to $3.51 million as of December
31, 2017. The increase in the allowance reflects the growth
in our construction loan portfolio, which currently represents
55.65% of our total loan portfolio, partially offset by the lower
loss factors on construction loans due to their positive credit
performance and lower loan balances on other segments of our
portfolio.
Total consolidated assets increased by $55.50
million, or 6.81%, to $870.32 million at December 31, 2018 from
$814.82 million at December 31, 2017. Loans receivable (net)
increased by $43.72 million, or 6.21%, to $747.84 million at
December 31, 2018 from $704.12 million at December 31, 2017, while
commitments, loans-in-process and standby letters of credit
outstanding increased to $458.05 million at December 31, 2018
compared to $359.42 million at December 31, 2017. The
increase in loans receivable was primarily due to growth in our
construction loan portfolio.
Total liabilities at December 31, 2018 were
$740.70 million compared to $697.92 million at December 31, 2017,
an increase of $42.78 million, or 6.13%. The increase in
total liabilities was primarily due to a $61.89 million increase in
deposits from $625.21 million at December 31, 2017 to $687.10
million at December 31, 2018.
Federal Home Loan Bank advances declined to
$42.46 million at December 31, 2018 from $62.87 million at
December 31, 2017. The decrease in Federal Home Loan Bank
borrowings was the result of several payoffs of maturing
advances.
Total stockholder’s equity increased by $12.72
million, or 10.88%, to $129.62 million at December 31, 2018 from
$116.90 million at December 31, 2017. The increase was a
result of net income of $13.03 million for the year ended December
31, 2018, partially offset by dividends declared and paid during
the twelve month period.
Financial Condition at December 31, 2018
compared to September 30, 2018:
Total consolidated assets increased by $15.98
million, or 1.87%, to $870.32 million at December 31, 2018 from
$854.34 million at September 30, 2018. Loans receivable (net)
decreased by $3.88 million or 0.52% to $747.84 million at December
31, 2018 from $751.72 million at September 30, 2018, while
commitments, loans-in-process and standby letters of credit
outstanding increased to $458.05 million as of December 31, 2018
compared to $443.02 million at September 30, 2018. The
increase in total assets was due to increases in our cash and cash
equivalents. The decrease in loans receivable (net) was due
to decreases in our real estate mortgage and construction loan
portfolio, partially offset by an increase in our commercial and
industrial loan portfolio.
Total liabilities at December 31, 2018 were
$740.71 million compared to $729.68 million at September 30, 2018,
an increase of $11.03 million, or 1.51%. The increase in
total liabilities was due to a $29.54 million increase in deposits
from $657.56 million at September 30, 2018 to $687.10 million at
December 31, 2018. Federal Home Loan Bank advances declined
to $42.46 million at December 31, 2018 compared to $62.03 million
as of September 30, 2018.
Non-performing loans remained unchanged at $1.86
million, or 0.21% of total assets at December 31, 2018 compared to
0.22% of total assets at September 30, 2018. A
provision for loan losses in the amount of $3.35 million was made
in the third quarter of 2018 as a result of the write-off of a two
commercial and industrial loans in the amount of $3.13
million. The pending litigation concerning these loans was
settled during the fourth quarter of 2018 and the Company recovered
$2.70 million in settlement of the debt.
NorthEast Community Bancorp, Inc.’s total
stockholders’ equity at December 31, 2018 is a strong 14.89%
compared to 14.59% at September 30, 2018.
About NorthEast Community Bancorp, Inc. -
NorthEast Community Bancorp, Inc. is the holding company for
NorthEast Community Bank. NorthEast Community Bank is a New York
State-chartered savings bank that operates five full-service
branches in New York State and three full-service branches in
Danvers, Framingham and Quincy, Massachusetts and loan production
offices in White Plains and New City, New York.
This release contains “forward-looking
statements” that are based on assumptions and may describe future
plans, strategies and expectations of the Company. These
forward-looking statements are generally identified by the use of
the words “believe,” “expect,” “intend,” “anticipate,” “estimate,”
“project” or similar expressions. The Company’s ability to predict
results or the actual effect of future plans or strategies is
inherently uncertain. Factors that could have a material adverse
effect on the operations of the Company and its subsidiaries
include, but are not limited to, changes in market interest rates,
regional and national economic conditions, legislative and
regulatory changes, monetary and fiscal policies of the United
States government, including policies of the United States Treasury
and the Federal Reserve Board, the quality and composition of the
loan or investment portfolios, demand for loan products, deposit
flows, competition, demand for financial services in the Company’s
market area, changes in the real estate market values in the
Company’s market area and changes in relevant accounting principles
and guidelines These risks and uncertainties should be
considered in evaluating any forward-looking statements and undue
reliance should not be placed on such statements. Except as
required by applicable law or regulation, the Company does not
undertake, and specifically disclaims any obligation, to release
publicly the result of any revisions that may be made to any
forward-looking statements to reflect events or circumstances after
the date of the statements or to reflect the occurrence of
anticipated or unanticipated events.
Contact:Kenneth A. MartinekChief Executive Officer(914)
684-2500
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