Ponce Financial's Net Interest Income Growth Accelerates
Net interest income rose 13.07% sequentially to $34.0 million as the margin reached 3.86% and net income available to common stockholders was $18.0 million, or $0.76 a share.
Ponce Financial Group, Inc. (PDLB), the holding company for Ponce Bank, National Association, reported net interest income of $34.0 million for the three months ended September 30, 2026, a $3.9 million, or 13.07%, sequential increase that accelerated from a $1.8 million, or 6.50%, rise in the second quarter.
Net interest margin was 3.86%, up 20 bps from 3.66% in the prior quarter. Interest income for the quarter included $0.8 million from a satisfied former non-accrual loan. The company attributed the $3.9 million sequential increase in net interest income to a $5.9 million rise in total interest and dividend income, offset by a $1.9 million increase in interest expense. Versus the year-ago quarter, net interest income rose $8.7 million, or 34.62%, from $25.2 million, and the margin was 56 bps above 3.30%.
Net income available to common stockholders was $18.0 million, or $0.76 a share, compared with $8.2 million, or $0.35 a share, in the second quarter. Net income was $18.2 million. The company said the $9.8 million sequential increase in net income was attributed mainly to the $3.9 million increase in net interest income and an $8.7 million increase in the benefit for income taxes, offset by $1.1 million increases in non-interest expense and in the provision for credit losses and a $0.7 million decrease in non-interest income.
The tax benefit included the release of a $10.5 million valuation allowance against New York State and New York City deferred tax assets. President and Chief Executive Officer Carlos P. Naudon said the quarter included non-recurring items and that performance was robust even before those one-time events. Book value per share stood at $14.60, a $1.90 increase over the last twelve months, he said.
The balance sheet continued to expand. Net loans receivable were $3.08 billion at September 30, 2026, after a $201.4 million sequential increase from $2.88 billion at June 30. Deposits were $2.37 billion, up $95.9 million from $2.27 billion at June 30. Total assets were $3.69 billion. Securities totaled $320.7 million, down $44.5 million from $365.2 million at year-end 2025, primarily due to regular principal payments and the maturity of a $3.0 million available-for-sale security.
Credit quality improved. Non-performing assets were 0.50% of total assets at September 30, down from 0.67% at June 30. Total non-performing assets and accruing modifications to borrowers experiencing financial difficulty were $21.8 million, compared with $26.8 million at June 30. The provision for credit losses was $3.2 million, including $2.0 million on the funded portion and $1.2 million on the unfunded portion. The allowance for credit losses on loans was 0.94% of total loans.
Non-interest income was $0.9 million, down $0.7 million, or 44.34%, from $1.5 million in the second quarter. The decline was largely attributable to a $1.2 million loss on real property from moving the Flushing property to held for sale, offset by a $0.4 million increase in other non-interest income. Non-interest expense was $19.2 million, up $1.1 million, or 6.07%, mainly from a $1.4 million increase in compensation and benefits from new hires, partially offset by a $0.2 million decrease in professional fees. The efficiency ratio improved to 55.21% from 57.41%.
Common equity Tier 1 capital to risk-weighted assets at the holding company was 10.93%, down from 11.51% at June 30. Naudon said the capital position remains well in excess of regulatory requirements.
Executive Chairman Steven A. Tsavaris said the company filed its second-quarter Quarterly Supplemental Report, marking 16 consecutive quarters of deep impact lending above the 60% threshold required to repurchase its Preferred Stock, and that the U.S. Department of the Treasury has confirmed the company met that threshold. The company said it is collaborating with Treasury to finalize next steps for the Preferred Stock repurchase, which remains subject to additional conditions.
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