NECB NorthEast Community Bancorp Inc

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

FORM 8-K/A

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): January 29, 2025

 

NORTHEAST COMMUNITY BANCORP, INC.

(Exact Name of Registrant as Specified in Its Charter)

 

Maryland	001-40589	86-3173858
(State or other jurisdiction of	(Commission	(IRS Employer
incorporation or organization)	File Number)	Identification No.)

 

325 Hamilton Avenue, White Plains, New York 10601

(Address of principal executive offices) (Zip Code)

 

(914) 684-2500

(Registrant’s telephone number, including area code)

 

Not Applicable

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	NECB	The Nasdaq Stock Market LLC

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

 

Emerging growth company x

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

 

Explanatory Note

 

On January 29, 2025, NorthEast Community Bancorp, Inc. (the “Company”) filed a Current Report on Form 8-K furnishing under Items 2.02 and 9.01 the Company’s press release announcing its unaudited financial results for the fourth quarter and fiscal year ended December 31, 2024 (the “Original Filing”). The full test of the press release was included as Exhibit 99.1 to the Original Filing.

 

This Amendment (this “Amendment”) to the Original Filing is being filed to reflect a subsequent event that occurred following the issuance of the Original Filing, more fully described herein. In accordance with ASC 855, Subsequent Events, the Company has determined that this event provided additional evidence about conditions that existed as of the date of the Consolidated Statements of Financial Condition. The adjustment was identified by the Company’s management after the date of the Original Filing and as part of the Company’s customary procedures to finalize its financial statements for inclusion in its Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

 

Item 2.02

Results of Operations and Financial Condition.

 

An updated presentation of the Company’s Consolidated Statements of Financial Condition, Consolidated Statements of Income, Selected Consolidated Financial Data, and Net Interest Margin Analysis is attached as Exhibit 99.1 to this Amendment and is incorporated herein by reference. The following is a summary of the adjustment.

 

During the fourth quarter of 2024, management discovered one of our commercial and industrial (“C&I”) loan borrowers pleaded guilty to Federal criminal loan fraud charges and posted bail pending sentencing. Management immediately downgraded the outstanding $1.0 million balance of the C&I loan to special mention, pending sentencing that was rescheduled numerous times. The loan was performing as of December 31, 2024.

 

The loan became one month delinquent as of February 28, 2025. Management discovered on March 3, 2025 that a Federal judge revoked the borrower’s bail because additional loan fraud charges were brought against the borrower. The borrower is currently incarcerated and waiting for sentencing on March 18, 2025.

 

As a result of these developments, management determined the loan is uncollectible and has completely charged-off the $1.0 million loan effective as of December 31, 2024 due to the magnitude of the borrower’s outstanding debts to other lenders and the borrower’s incarceration for a possible extended period thereby rendering loan repayment highly unlikely. We intend to pursue all available remedies to us.

 

The charge-off resulted in a $717,000 decrease, net of taxes, to fourth quarter 2024 net income and to 2024 annual net income, comprising primarily of an increase of $1.0 million in provision for credit loss, offset by a decrease of $283,000 in provision for income taxes. The Company also decreased total loans by $1.0 million and total stockholders’ equity by $717,000, partially offset by an increase in other assets of $283,000.

 

 

Management has discussed the matters disclosed in this Amendment with S.R. Snodgrass, P.C., the Company’s independent registered public accountant firm, and with the Company’s Board of Directors and Audit Committee.

 

The information contained in this Item 2.02 is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 (the “Securities Act”), or the Exchange Act, except as expressly set forth by specific reference in such filing.

 

Cautionary Note Regarding Forward-Looking Statements

 

This report contains certain forward-looking statements. Forward-looking statements include statements regarding anticipated future events and can be identified by the fact that they do not relate strictly to historical or current facts. They often include words such as “believe,” “expect,” “anticipate,” “estimate,” and “intend” or future or conditional verbs such as “will,” “would,” “should,” “could,” or “may.” These statements are based upon the current beliefs and expectations of the Company’s 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 actual results to differ materially from expected results include, but are not limited to, changes in market interest rates, regional and national economic conditions (including higher inflation and its impact on 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, decreases in deposit levels necessitating increased borrowing to fund loans and securities, competition, demand for financial services in NorthEast Community Bank’s market area, changes in the real estate market values in NorthEast Community Bank’s market area, the impact of failures or disruptions in or breaches of the Company’s operational or security systems, data or infrastructure, or those of third parties, including as a result of cyberattacks or campaigns, and changes in relevant accounting principles and guidelines. Additionally, other risks and uncertainties may be described in our annual and quarterly reports filed with the U.S. Securities and Exchange Commission (the “SEC”), which are available through the SEC’s website located at www.sec.gov. 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.

 

 

Item 9.01	Financial Statements and Other Exhibits.
(d)	Exhibits

 

	Number	Description
	99.1	Updated Presentation of Consolidated Statements of Financial Condition, Consolidated Statements of Income, Selected Consolidated Financial Data, and Net Interest Margin Analysis
	104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.

 

		NORTHEAST COMMUNITY BANCORP, INC.
Date: March 11, 2025	By:	/s/ Kenneth A. Martinek
		Kenneth A. Martinek
		Chairman and Chief Executive Officer

 

 

Exhibit 99.1

 

NORTHEAST COMMUNITY BANCORP, INC.

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(Unaudited)

 

		December 31,				December 31,
		2024				2023
		(In thousands, except share
		and per share amounts)
ASSETS
Cash and amounts due from depository institutions		$	13,700			$	13,394
Interest-bearing deposits			64,559				55,277
Total cash and cash equivalents			78,259				68,671
Certificates of deposit			100				100
Equity securities			21,994				18,102
Securities held-to-maturity ( net of allowance for credit losses of $126 and $136, respectively )			14,616				15,860
Loans receivable			1,812,647				1,586,721
Deferred loan (fees) costs, net			(49	)			176
Allowance for credit losses			(4,830	)			(5,093	)
Net loans			1,807,768				1,581,804
Premises and equipment, net			24,805				25,452
Investments in restricted stock, at cost			397				929
Bank owned life insurance			25,738				25,082
Accrued interest receivable			13,481				12,311
Real estate owned			5,120				1,456
Property held for investment			1,370				1,407
Right of Use Assets – Operating			4,001				4,566
Right of Use Assets – Financing			347				351
Other assets			11,585				8,044
Total assets		$	2,009,581			$	1,764,135
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Deposits:
Non-interest bearing		$	287,135			$	300,184
Interest bearing			1,383,240				1,099,852
Total deposits			1,670,375				1,400,036
Advance payments by borrowers for taxes and insurance			1,618				2,020
Borrowings			-				64,000
Lease Liability – Operating			4,108				4,625
Lease Liability – Financing			609				571
Accounts payable and accrued expenses			14,530				13,558
Total liabilities			1,691,240				1,484,810
Stockholders’ equity:
Preferred stock, $0.01 par value; 25,000,000 shares authorized; none issued or outstanding		$	—			$	—
Common stock, $0.01 par value; 75,000,000 shares authorized; 14,016,254 shares and 14,144,856 shares outstanding, respectively			140				142
Additional paid-in capital			110,091				109,924
Unearned Employee Stock Ownership Plan (“ESOP”) shares			(6,088	)			(6,563	)
Retained earnings			213,974				175,505
Accumulated other comprehensive income			224				317
Total stockholders’ equity			318,341				279,325
Total liabilities and stockholders’ equity		$	2,009,581			$	1,764,135

 

 

 

NORTHEAST COMMUNITY BANCORP, INC.

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

 

		Quarter Ended December 31,								Year Ended December 31,
		2024				2023				2024				2023
										(In thousands, except per share amounts)
INTEREST INCOME:
Loans		$	39,081			$	35,660			$	153,902			$	127,486
Interest-earning deposits			1,144				1,257				5,202				4,143
Securities			247				209				909				859
Total Interest Income			40,472				37,126				160,013				132,488
INTEREST EXPENSE:
Deposits			15,160				11,131				55,619				34,181
Borrowings			5				779				1,564				1,078
Financing lease			9				10				38				38
Total Interest Expense			15,174				11,920				57,221				35,297
Net Interest Income			25,298				25,206				102,792				97,191
Provision for credit loss			1,026				205				740				972
Net Interest Income after Provision for (Reversal of) Credit Loss			24,272				25,001				102,052				96,219
NON-INTEREST INCOME:
Other loan fees and service charges			485				474				2,098				1,891
Gain (loss) on disposition of equipment			22				(18	)			22				(18	)
Earnings on bank owned life insurance			170				156				656				1,013
Investment advisory fees			-				115				-				458
Realized and unrealized (loss) gain on equity securities			(554	)			621				(109	)			294
Other			26				38				116				105
Total Non-Interest Income			149				1,386				2,783				3,743
NON-INTEREST EXPENSES:
Salaries and employee benefits			5,204				4,760				20,942				18,839
Occupancy expense			712				705				2,828				2,595
Equipment			229				211				890				1,055
Outside data processing			680				572				2,604				2,210
Advertising			108				101				418				521
Loss on disposition of business			-				138				-				138
Real estate owned expense			204				41				731				93
Other			2,785				2,706				10,649				9,770
Total Non-Interest Expenses			9,922				9,234				39,062				35,221
INCOME BEFORE PROVISION FOR INCOME TAXES			14,499				17,153				65,773				64,741
PROVISION FOR INCOME TAXES			4,283				5,052				18,699				18,465
NET INCOME		$	10,216			$	12,101			$	47,074			$	46,276

 

  

NORTHEAST COMMUNITY BANCORP, INC.

SELECTED CONSOLIDATED FINANCIAL DATA

(Unaudited)

 

		Quarter Ended December 31,								Year Ended December 31,
		2024				2023				2024				2023
		(In thousands, except per share amounts)								(In thousands, except per share amounts)
Per share data:
Earnings per share - basic		$	0.78			$	0.82			$	3.58			$	3.32
Earnings per share - diluted			0.75				0.82				3.52				3.32
Weighted average shares outstanding - basic			13,132				14,720				13,136				13,930
Weighted average shares outstanding - diluted			13,582				14,778				13,359				13,936
Performance ratios/data:
Return on average total assets			2.04	%			2.77	%			2.46	%			2.90	%
Return on average shareholders' equity			12.90	%			17.49	%			15.59	%			17.09	%
Net interest income		$	25,298			$	25,206			$	102,792			$	97,191
Net interest margin			5.29	%			6.06	%			5.62	%			6.41	%
Efficiency ratio			38.99	%			34.72	%			37.00	%			34.90	%
Net charge-off ratio			0.28	%			0.01	%			0.08	%			0.02	%

 

Loan portfolio composition:											December 31, 2024				December 31, 2023
One-to-four family										$	3,472			$	5,252
Multi-family											206,606				198,927
Mixed-use											26,571				29,643
Total residential real estate											236,649				233,822
Non-residential real estate											29,446				21,130
Construction											1,426,167				1,219,413
Commercial and industrial											118,736				111,116
Consumer											1,649				1,240
Gross loans											1,812,647				1,586,721
Deferred loan (fees) costs, net											(49	)			176
Total loans										$	1,812,598			$	1,586,897
Asset quality data:
Loans past due over 90 days and still accruing										$	-			$	-
Non-accrual loans											-				4,385
OREO property											5,120				1,456
Total non-performing assets										$	5,120			$	5,841
Allowance for credit losses to total loans											0.27	%			0.32	%
Allowance for credit losses to non-performing loans											0.00	%			116.15	%
Non-performing loans to total loans											0.00	%			0.28	%
Non-performing assets to total assets											0.25	%			0.33	%
Bank's Regulatory Capital ratios:
Total capital to risk-weighted assets											13.92	%			13.43	%
Common equity tier 1 capital to risk-weighted assets											13.65	%			13.10	%
Tier 1 capital to risk-weighted assets											13.65	%			13.10	%
Tier 1 leverage ratio											14.44	%			14.43	%

  

 

NORTHEAST COMMUNITY BANCORP, INC.

NET INTEREST MARGIN ANALYSIS

(Unaudited)

 

		Quarter Ended December 31, 2024												Quarter Ended December 31, 2023
		Average				Interest				Average				Average				Interest				Average
		Balance				and dividend				Yield				Balance				and dividend				Yield
		(In thousands, except yield/cost information)												(In thousands, except yield/cost information)
Loan receivable gross		$	1,784,920			$	39,081				8.76	%		$	1,545,446			$	35,660				9.23	%
Securities			36,817				232				2.52	%			33,124				188				2.27	%
Federal Home Loan Bank stock			455				15				13.19	%			929				21				9.04	%
Other interest-earning assets			90,279				1,144				5.07	%			83,436				1,257				6.03	%
Total interest-earning assets			1,912,471				40,472				8.46	%			1,662,935				37,126				8.93	%
Allowance for credit losses			(4,833	)											(4,771	)
Non-interest-earning assets			92,422												87,557
Total assets		$	2,000,060											$	1,745,721
Interest-bearing demand deposit		$	233,112			$	2,198				3.77	%		$	118,691			$	1,026				3.46	%
Savings and club accounts			137,295				767				2.23	%			206,120				1,404				2.72	%
Certificates of deposit			1,026,433				12,195				4.75	%			758,928				8,701				4.59	%
Total interest-bearing deposits			1,396,840				15,160				4.34	%			1,083,739				11,131				4.11	%
Borrowed money			1,293				14				4.33	%			67,049				789				4.71	%
Total interest-bearing liabilities			1,398,133				15,174				4.34	%			1,150,788				11,920				4.14	%
Non-interest-bearing demand deposit			263,711												298,739
Other non-interest-bearing liabilities			21,428												19,449
Total liabilities			1,683,272												1,468,976
Equity			316,788												276,745
Total liabilities and equity		$	2,000,060											$	1,745,721
Net interest income / interest spread						$	25,298				4.12	%						$	25,206				4.79	%
Net interest rate margin											5.29	%											6.06	%
Net interest earning assets		$	514,338											$	512,147
Average interest-earning assets
to interest-bearing liabilities			136.79	%											144.50	%

  

 

 

NORTHEAST COMMUNITY BANCORP, INC.

NET INTEREST MARGIN ANALYSIS

(Unaudited)

 

		Year Ended December 31, 2024												Year Ended December 31, 2023
		Average				Interest				Average				Average				Interest				Average
		Balance				and dividend				Yield				Balance				and dividend				Yield
		(In thousands, except yield/cost information)												(In thousands, except yield/cost information)
Loan receivable gross		$	1,701,079			$	153,902				9.05	%		$	1,401,492			$	127,486				9.10	%
Securities			34,765				839				2.41	%			37,819				777				2.05	%
Federal Home Loan Bank stock			677				70				10.34	%			984				82				8.33	%
Other interest-earning assets			92,610				5,202				5.62	%			76,542				4,143				5.41	%
Total interest-earning assets			1,829,131				160,013				8.75	%			1,516,837				132,488				8.73	%
Allowance for credit losses			(4,940	)											(4,676	)
Non-interest-earning assets			90,675												84,287
Total assets		$	1,914,866											$	1,596,448
Interest-bearing demand deposit		$	209,993			$	8,498				4.05	%		$	93,426			$	2,459				2.63	%
Savings and club accounts			154,430				3,799				2.46	%			248,755				6,777				2.72	%
Certificates of deposit			917,665				43,322				4.72	%			615,124				24,945				4.06	%
Total interest-bearing deposits			1,282,088				55,619				4.34	%			957,305				34,181				3.57	%
Borrowed money			33,117				1,602				4.84	%			29,007				1,116				3.85	%
Total interest-bearing liabilities			1,315,205				57,221				4.35	%			986,312				35,297				3.58	%
Non-interest-bearing demand deposit			277,957												322,185
Other non-interest-bearing liabilities			19,739												17,139
Total liabilities			1,612,901												1,325,636
Equity			301,965												270,812
Total liabilities and equity		$	1,914,866											$	1,596,448
Net interest income / interest spread						$	102,792				4.40	%						$	97,191				5.15	%
Net interest rate margin											5.62	%											6.41	%
Net interest earning assets		$	513,926											$	530,525
Average interest-earning assets
to interest-bearing liabilities			139.08	%											153.79	%

  

v3.25.0.1

Cover	Jan. 29, 2025
Cover [Abstract]
Document Type	8-K/A
Amendment Flag	false
Document Period End Date	Jan. 29, 2025
Entity File Number	001-40589
Entity Registrant Name	NORTHEAST COMMUNITY BANCORP, INC.
Entity Central Index Key	0001847398
Entity Tax Identification Number	86-3173858
Entity Incorporation, State or Country Code	MD
Entity Address, Address Line One	325 Hamilton Avenue
Entity Address, City or Town	White Plains
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	10601
City Area Code	914
Local Phone Number	684-2500
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, par value $0.01 per share
Trading Symbol	NECB
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	true
Elected Not To Use the Extended Transition Period	false

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