NorthEast Community Bancorp, Inc. Reports a 60.13% Increase in Net Income for the Year Ended December 31, 2017

Date : 02/02/2018 @ 3:46PM
Source : GlobeNewswire Inc.
Stock : (MM) (NECB)
Quote : 6.93  0.0 (0.00%) @ 2:05AM

NorthEast Community Bancorp, Inc. Reports a 60.13% Increase in Net Income for the Year Ended December 31, 2017

(MM) (NASDAQ:NECB)
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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 $8.05 million for the year ended December 31, 2017 compared to net income of $5.03 million for the year ended December 31, 2016, an increase of 60.13%. 

The increase in net income for 2017 continues to be the result of construction loan growth in the lower Hudson Valley and on-going loan portfolio restructuring through attrition of specific asset types.

The Company’s net income for the three and twelve-month periods ended December 31, 2017 was impacted negatively by a one-time adjustment to the net deferred tax asset in the amount of $1.08 million due to the effect of the tax law changes established by the Tax Cuts and Jobs Act (the “Tax Act”), which was signed into law on December 22, 2017.  The Tax Act reduced the federal corporate tax rate to 21%. This change required the Company to revalue its net deferred tax asset, which represents corporate tax benefits anticipated to be realized in the future. The reduction in the federal corporate tax rate reduces the tax benefits of the net deferred tax asset.  While the one-time adjustment caused a reduction in after-tax net income for the three and twelve-month periods ended December 31, 2017, the reduction of the corporate income tax rate is expected to be favorable to the Company in future periods.

Financial Condition and Operating Results for December 31, 2017 compared to December 31, 2016:

Net interest income for the year ended December 31, 2017 increased by $7.61 million, or 32.78%, to $30.81 million from $23.20 million for the year ended December 31, 2016.

Net income before taxes for the year ended December 31, 2017 was $14.53 million compared to $8.14 million for the year ended December 31, 2016, an increase of 78.50%.   Provision for income taxes for 2017 was $6.48 million compared to $3.12 million for 2016.  The increase in net income before taxes was primarily the result of our continued focus on construction lending in Rockland and Orange Counties.  The increase in income taxes was the result of increased net income and the write-down of the deferred tax assets required by the new Tax Act signed in December 2017.

Total consolidated assets increased by $80.32 million, or 10.93%, to $814.82 million at December 31, 2017 from $734.50 million at December 31, 2016.  Loans receivable (net) increased by $77.98 million, or 12.45%, to $704.12 million at December 31, 2017 from $626.14 million at December 31, 2016, while commitments, loans-in-process and standby letters of credit outstanding increased to $359.42 million at December 31, 2017 compared to $253.83 million at December 31, 2016.  The increase in loans receivable was primarily due to growth in our construction loan portfolio resulting from our continued focus on growing our construction lending operations in the lower Hudson Valley.

Total liabilities at December 31, 2017 were $697.92 million compared to $625.05 million at December 31, 2016, an increase of $72.87 million, or 11.66%.  The increase in total liabilities was primarily due to a $79.86 million increase in deposits from $545.35 million at December 31, 2016 to $625.21 million at December 31, 2017.

Federal Home Loan Bank advances and other borrowings decreased by $7.38 million to $62.87 million at December 31, 2017, compared to $70.25 million at December 31, 2016. The decrease in Federal Home Loan Bank Borrowing was the result of a payoff of a maturing advance.

Total stockholder’s equity increased by $7.45 million, or 6.80%, to $116.90 million at December 31, 2017 from $109.45 million at December 31, 2016.  The increase was primarily a result of net income of $8.05 million for the year ended December 31, 2017, partially offset by dividends declared and paid during the year.

Financial Condition and Operating Results for December 31, 2017 compared to September 30, 2017:

Net interest income for the three months ending December 31, 2017 increased by $540.22 thousand, or 6.81% to $8.49 million compared to $7.95 million for the three months ending September 30, 2017.

Net income before taxes for the three months ending December 31, 2017 was $4.36 million compared to $3.91 million for the three months ending September 31, 2017.   Provision for income taxes during the fourth quarter of 2017 was $2.42 million compared to $1.57 million for the third quarter of 2017.   The increase in income taxes was partially due to the write-down of the deferred tax assets required by the Tax Act signed into law in December 2017.

Total consolidated assets increased by $46.19 million, or 6.01%, to $814.82 million at December 31, 2017 from $768.63 million at September 30, 2017.  Loans receivable (net) increased by $30.12 million or 4.47% to $704.12 million at December 31, 2017 from $674.00 million at September 31, 2017, while commitments, loans-in-process and standby letters of credit outstanding decreased to $359.42 million as of December 31, 2017 compared to $361.64 million at September 30, 2017.

Total liabilities at December 31, 2017 were $697.92 million compared to $653.55 million at September 30, 2017, an increase of $44.37 million, or 6.79%.  The increase in total liabilities was due to a $48.16 million increase in deposits from $577.05 million at September 30, 2017 to $625.21 million at December 31, 2017, partially offset by a reduction of $1.00 million in Federal Home Loan Bank advances and other borrowings to $62.87 million at the end of the fourth quarter of 2017, compared to $63.87 million at September 30, 2017.

NorthEast Community Bancorp, Inc.’s total stockholders’ equity at December 31, 2017 is a strong 14.35% compared to 14.97% at September 30, 2017.

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 four full-service branches in New York State and three full-service branches in Danvers, Framingham and Quincy, Massachusetts and loan production offices in Danvers, Massachusetts and 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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