NorthEast Community Bancorp, Inc. Reports Results For the Fourth Quarter and Year Ended December 31, 2019

WHITE PLAINS, N.Y., Feb. 07, 2020 (GLOBE NEWSWIRE) -- 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 $2.76 million for the quarter ended December 31, 2019 compared to net income of $4.92 million for the quarter ended December 31, 2018.  For the year ended December 31, 2019, the Company reported net income of $12.76 million compared to net income of $13.03 million for the year ended December 31, 2018.

Financial Condition and Operating Results for December 31, 2019 compared to December 31, 2018:

Net income before taxes for the three months ended December 31, 2019 was $3.62 million compared to $6.23 million for the three months ended December 31, 2018.  The decrease in net income before taxes was the result of a credit to provision for loan losses of $2.32 million for the three months ended December 31, 2018 compared to no provision for loan losses for the three months ended December 31, 2019.

Net interest income for the three months ended December 31, 2019 decreased by $685,000, or 6.85%, to $9.32 million from $10.00 million for the three months ended December 31, 2018.  The decrease in net interest income was the result of three interest rate cuts in 2019 by the Federal Reserve that impacted the yield on our construction loan portfolio.

The Company had a credit of $2.32 million in provision for loan losses during the quarter ended December 31, 2018 compared to no provision for loan losses during the quarter ended December 31, 2019.  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 $4.61 million as of December 31, 2019 compared to $4.20 million as of December 31, 2018.  The increase in the allowance reflects the growth in our construction loan portfolio, which currently represents 61.85% 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.