NorthEast Community Bancorp, Inc. Reports Results for the Quarter Ended June 30, 2020

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.