Ponce Financial Group, Inc. Reports Third Quarter 2025 Results

NEW YORK, Oct. 24, 2025 (GLOBE NEWSWIRE) -- Ponce Financial Group, Inc., (the “Company”) (NASDAQ: PDLB), the holding company for Ponce Bank, N.A. (the “Bank”), today announced results for the third quarter of 2025.

Third Quarter 2025 Highlights (Compared to Prior Periods):

Nine Months 2025 Highlights (Compared to 2024):

President and Chief Executive Officer’s Comments

Carlos P. Naudon, Ponce Financial Group, Inc.’s President and CEO, stated “In these uncertain times, we continue to execute on our long-term strategy of increasing margin through yield improvement and controlled cost of funds and operating expenses. We are very pleased with the results. We note our incremental profitability year-on-year and the consistency of our earnings. Our diluted earnings per share of $0.77 for the nine months ended September 30, 2025, more than doubled from the same period last year, driven by incremental net interest and non-interest income, achieved while keeping non-interest expenses almost flat. Our net interest margin this quarter increased by 3 basis points compared to the prior quarter, reflecting our decreasing funding costs. We were also busy working on the future and opened a new branch in the Inwood neighborhood of Manhattan and modernized our charter, becoming both a financial holding company and a bank holding company while Ponce Bank converted to a national bank. These developments should enhance our funding sources and level our playing fields."

Executive Chairman’s Comment

Steven A. Tsavaris, Ponce Financial Group’s Executive Chairman added “We continue to make progress towards our commitments under the U.S. Treasury’s Emergency Capital Investment Program. Our strong level of loan originations from April 2025 to September 2025 ensures that our dividend yield will continue at the 0.50% level in the next dividend period starting in 2026. Also, we’re mindful of our percentage of deep impact lending, as we need to be at 60% or above for 16 quarters cumulatively, as a condition to buy the preferred stock back. After 13 quarters, including the quarter ended September 30, 2025, we are at 81% deep impact lending.”

The table below indicate the Key Metrics at or for the three months ended:

(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 September 30, 2025 was $6.5 million compared to net income of $6.1 million for the three months ended June 30, 2025 and net income of $2.4 million for the three months ended September 30, 2024.

The $0.4 million increase of net income for the three months ended September 30, 2025 compared to the three months ended June 30, 2025 was attributed mainly to an increase of $0.8 million in net interest income and decreases of $0.3 million in provision for credit losses and $0.3 million in non-interest expense, offset by a decrease of $0.6 million in non-interest income and an increase of $0.4 million in provision for income taxes.

The $4.1 million increase of net income for the three months ended September 30, 2025 compared to the three months ended September 30, 2024 was largely due to increases of $6.2 million in net interest income and $0.3 million in non-interest income, offset by increases of $1.6 million in provision for income taxes and $0.8 million in provision for credit losses while remain flat on non-interest expense

Net income for the nine months ended September 30, 2025 was $18.6 million compared to net income of $8.0 million for the nine months ended September 30, 2024. The $10.5 million increase of net income for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 was attributed mainly to increases of $16.1 million in net interest income and $0.8 million in non-interest income, partially offset by increases of $3.1 million in provision for credit losses, $2.9 million in provision for income taxes and $0.4 million in non-interest expense.

Net Interest Income and Net Interest Margin

Net interest income for the three months ended September 30, 2025, increased $0.8 million, or 3.37%, to $25.2 million compared to $24.4 million for the three months ended June 30, 2025 and increased $6.2 million, or 32.72%, compared to $19.0 million for the three months ended September 30, 2024.

The $0.8 million increase in net interest income from the three months ended June 30, 2025 was attributable to an increase of $1.0 million in total interest and dividend income, offset by an increase of $0.2 million in total interest expense. The $6.2 million increase in net interest income from the three months ended September 30, 2024 was attributable to an increase of $5.6 million in total interest and dividend income and a decrease of $0.7 million in total interest expense.

Net interest income for the nine months ended September 30, 2025, increased $16.1 million, or 28.93%, to $71.9 million compared to $55.8 million for the nine months ended September 30, 2024. The $16.1 million increase in net interest income was attributable to an increase of $17.0 million in total interest and dividend income, offset by an increase of $0.8 million in total interest expense.

Net interest margin was 3.30% for the three months ended September 30, 2025 compared to 3.27% for the prior quarter, an increase of 3bps and 2.65% for the same period last year, an increase of 65bps.

Net interest margin was 3.18% for the nine months ended September 30, 2025 compared to 2.66% for the nine months ended September 30, 2024, an increase of 52bps.

Non-interest Income

Non-interest income for the three months ended September 30, 2025, was $1.5 million, a decrease of $0.6 million, or 27.57%, compared to $2.1 million for the three months ended June 30, 2025 and an increase of $0.3 million, or 29.63%, compared to $1.2 million for the three months ended September 30, 2024.

The $0.6 million decrease in non-interest income from the three months ended June 30, 2025 was largely attributable to decreases of

$0.5 million in other non-interest income attributable to the Bank's investment in Oaktree SBIC Fund, L.P. ("Oaktree") as a result of a loss from Oaktree's investment and $0.1 million in late and prepayment charges.

The $0.3 million increase in non-interest income from the three months ended September 30, 2024 was largely attributable to increases of $0.4 million in grant income and $0.3 million in late and prepayment charges, partially offset by a decrease of $0.4 million in other non-interest income attributable to the Bank's investment in Oaktree as a result of a loss from Oaktree's investment.

Non-interest income for the nine months ended September 30, 2025, was $5.9 million, an increase of $0.8 million, or 15.97%, compared to $5.1 million for the nine months ended September 30, 2024. The $0.8 million increase in non-interest income was largely attributable to increases of $0.9 million in grant income, $0.8 million in late and prepayment charges and $0.4 million in income on sale of SBA loans, partially offset by decreases of $1.0 million in other non-interest income attributable to the Bank's investment in Oaktree as a result of a loss from Oaktree's investment and $0.3 million in income on the sale of mortgage loans.

Non-interest Expense

Non-interest expense for the three months ended September 30, 2025 was $16.6 million, a decrease of $0.3 million, or 1.49%, compared to $16.9 million for the three months ended June 30, 2025 and remained flat at $16.6 million when compared to the three months ended September 30, 2024.

The $0.3 million decrease in non-interest expense from the three months ended June 30, 2025 was mainly attributable to decreases of $0.3 million in federal deposit insurance and regulatory assessment, $0.2 million in other non-interest expense, partially offset by an increase of $0.2 million in compensation and benefits.

Non-interest expense for the nine months ended September 30, 2025, was $50.4 million, an increase of $0.4 million, or 0.77%, compared to $50.0 million for the nine months ended September 30, 2024. The $0.4 million increase in non-interest expense was mainly attributable to increases of $0.7 million in occupancy and equipment, $0.4 million in data processing expenses and $0.4 million in other operating expense, partially offset by decreases of $1.2 million in direct loan expenses and $0.3 million in professional fees.

Credit Quality:

Total non-performing assets and accruing modifications to borrowers experiencing financial difficulty were $32.4 million at September 30, 2025 compared to $28.5 million at June 30, 2025 and $22.0 million at September 30, 2024.

During the three months ended September 30, 2025, a credit loss provision of $1.4 million on loans was recorded, consisting of $0.9 million charged on the funded portion and $0.5 million charged on the unfunded portion on loans. During the three months ended June 30, 2025, a credit loss provision of $1.6 million on loans was recorded, consisting of $1.3 million charged on the funded portion and $0.3 million charged on the unfunded portion on loans. During the three months ended September 30, 2024, a credit loss provision of $0.5 million on loans was recorded, consisting of $0.8 million charged on the funded portion on loans and a benefit of $0.3 million on the unfunded portion on loans.

During the nine months ended September 30, 2025, a credit loss provision of $2.7 million on loans was recorded, consisting of $2.9 million charged on the funded portion and a benefit of $0.2 million on the unfunded portion on loans. During the nine months ended September 30, 2024, a credit loss benefit of $0.2 million on loans was recorded, consisting of $0.4 million charged on the funded portion on loans and a benefit of $0.6 million on unfunded portion on loans.

Balance Sheet Summary

Total assets increased $117.1 million, or 3.85%, to $3.16 billion as of September 30, 2025 from $3.04 billion as of December 31, 2024. The increase in total assets is largely attributable to increases of $203.4 million in net loans receivable, $8.1 million in other assets, $6.7 million in cash and cash equivalents, $1.1 million in accrued interest receivable and $0.3 million in deferred tax asset, partially offset by decreases of $82.8 million in held-to-maturity securities, $10.1 million in available-for-sale securities, $4.9 million in mortgage loans held for sale, $3.2 million in Federal Home Loan Bank of New York stock, $0.8 million in right of use asset and $0.7 million in premises and equipment, net.

Total liabilities increased $92.8 million, or 3.66%, to $2.63 billion as of September 30, 2025 from $2.53 billion as of December 31, 2024. The increase in total liabilities was largely attributable to increases of $164.0 million in deposits, $3.9 million in advance payments by borrowers for taxes and insurance and $0.7 million in accrued interest payable, partially offset by decreases of $75.0 million in borrowings and $0.7 million in operating lease liabilities.

Total stockholders’ equity increased $24.3 million, or 4.81%, to $529.8 million as of September 30, 2025, from $505.5 million as of December 31, 2024. The $24.3 million increase in stockholders’ equity was largely attributable to $18.6 million in net income, $3.7 million in other comprehensive income, $1.4 million impact to additional paid in capital as a result of share-based compensation, $1.4 million from release of ESOP shares and $0.1 million from exercise of stock options, offset by $0.8 million in dividends on preferred shares.

About Ponce Financial Group, Inc.

Ponce Financial Group, Inc. is the holding company for Ponce Bank, N.A.. Ponce Bank, N.A. is a Minority Depository Institution, a Community Development Financial Institution, and a certified Small Business Administration lender. Ponce Bank, N.A.’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. N.A. 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, Federal Home Loan Bank stock and Federal Reserve 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, N.A. operates, including changes that adversely affect borrowers’ ability to service and repay Ponce Bank, N.A.’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, N.A.’s market area; Ponce Bank, N.A.’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.

(1) As of June 30, 2025, March 31. 2025, December 31, 2024 and September 30, 2024, Advance payments by borrowers for taxes and insurance in the amounts of $10.9 million, $12.9 million, $10.3 million and $13.7 million, respectively, were reclassified to Deposits.

(1) For the three months ended December 31, 2024, and September 30, 2024, benefit for contingencies in the amounts of $0.2 million and $0.3 million were reclassified from total non-interest expense to benefit for credit losses.

(2) For the three months ended September 30, 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 of the periods.

Ponce Financial Group, Inc. and Subsidiaries

Average Balance Sheets

Contact:

Sergio J. Vaccaro

sergio.vaccaro@poncebank.net

718-931-9000