WHITE PLAINS, N.Y., July 31, 2020 (GLOBE NEWSWIRE) -- NorthEast Community Bancorp, Inc. (OTC: NECB) (the “Company”), a majority owned subsidiary of NorthEast Community Bancorp, MHC, and the parent holding company of NorthEast Community Bank (the “Bank”), reported net income of $2.48 million for the quarter ended June 30, 2020 compared to net income of $3.54 million for the quarter ended June 30, 2019.
Results of Operations for the Six Months Ended June 30, 2020 and June 30, 2019:
Net interest income for the six months ended June 30, 2020 decreased by $938,000, or 4.63%, to $19.32 million from $20.26 million for the six months ended June 30, 2019. The decrease in net interest income was due to the decrease in interest rates during the third and fourth quarters of 2019 coupled with an additional 150 basis point cut in interest rates in March 2020 in response to the COVID-19 pandemic, resulting in a compression of interest rate spread and net interest margin.
Net income before taxes for the six months ended June 30, 2020 was $7.48 million compared to $8.83 million for the six months ended June 30, 2019, a decrease of 15.31%. The decrease in net income before taxes was the result of increases in the provision for loan losses of $295,000 and operating expenses of $224,000 and decrease in net interest income of $938,000, partially offset by an increase in other income of $105,000.
Financial Condition for June 30, 2020 Compared to December 31, 2019
Total consolidated assets decreased by $3.59 million, or 0.38%, to $951.58 million at June 30, 2020 from $955.17 million at December 31, 2019. Loans receivable (net) increased by $53.99 million or 7.22% to $801.87 million at June 30, 2020 from $747.88 million at December 31, 2019, while commitments, loans-in-process and standby letters of credit outstanding increased to $480.04 million as of June 30, 2020 compared to $434.96 million at December 31, 2019.
The balance of the allowance for loan losses increased by $553,000 to $5.16 million at June 30, 2020 from $4.61 million at December 31, 2019 due primarily to provision for loan losses of $532,000 and net recoveries of $21,000 during the six months ended June 30, 2020. The increase in provision for loan losses and the allowance for loan losses was primarily due to the potential credit risk associated with the COVID-19 pandemic, although no specific or probable losses have been identified.
Total liabilities at June 30, 2020 were $804.10 million compared to $813.06 million at December 31, 2019, a decrease of $8.96 million, or 1.10%. The decrease in total liabilities was due to a $13.81 million decrease in deposits from $779.16 million at December 31, 2019 to $765.35 million at June 30, 2020, offset partially by an increase of $7.00 million, or 33.33%, in Federal Home Loan Bank advances from $21.00 million at December 31, 2019 to $28.00 million June 30, 2020.
Total stockholder’s equity increased by $5.37 million, or 3.78%, to $147.48 million at June 30, 2020 from $142.11 million at December 31, 2019. The increase was a result of net income of $5.73 million for the six month period ended June 30, 2020, partially offset by dividends declared and paid during the six month period.
NorthEast Community Bancorp, Inc.’s total stockholders’ equity at June 30, 2020 is a strong 15.50% compared to 14.88% at December 31, 2019.
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 six 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. Martinek
Chief Executive Officer
(914) 684-2500