NC
NorthEast Community Bancorp, Inc./MD/ (NECB)·Q1 2025 Earnings Summary
Executive Summary
- Q1 2025 EPS was $0.80 basic and $0.78 diluted; net income was $10.6M. Net interest margin compressed to 5.11% and the efficiency ratio rose to 41.64%, reflecting higher average interest-bearing liabilities and lower asset yields .
- Asset quality remained strong: no non-accrual loans; non-performing assets were 0.26% of total assets, consisting entirely of two foreclosed properties (Bronx $4.4M; Pittsburgh $0.8M) .
- Deposits fell $84.4M QoQ as management “called” higher-rate brokered CDs; mix shifted toward higher-yield money market accounts, while total assets declined $76.2M QoQ to $1.93B .
- Dividend increased to $0.20/share (from $0.15), signaling confidence in capital and earnings power; Tier 1 leverage ratio was 15.09% and total risk-based capital 15.10% .
- Versus S&P Global consensus, Q1 2025 Primary EPS of $0.7633* modestly missed the $0.77* mean; revenue estimate was unavailable for Q1, but Q4 2024 saw an EPS beat and a revenue miss versus consensus*.
What Went Well and What Went Wrong
What Went Well
- Strong asset quality and conservative underwriting: no non-performing loans; allowance for credit losses increased to 0.30% of total loans; NPA/Assets stable at 0.26% .
- Loan demand and origination momentum: $170.1M of new loans in Q1 (construction $110.2M, multi-family $49.1M, C&I $10.1M; mixed-use $0.7M) with staged construction disbursements (38.4% at closing) .
- Management emphasis on core focus: “construction lending in high demand-high absorption areas continues to be our focus,” indicating disciplined growth in target geographies .
What Went Wrong
- Margin compression and efficiency deterioration: NIM fell to 5.11% (from 5.29% in Q4 and 5.68% in Q3) and efficiency ratio increased to 41.64% due to asset yield decline outpacing cost of funds reductions and higher operating expenses .
- Deposit outflows and funding mix: total deposits down 5.1% QoQ; certificates of deposit fell $125.1M, partly by design (calling higher-rate brokered CDs), with offsetting increases in money market accounts (+$45.9M) .
- Net interest income down sequentially: $24.3M in Q1 vs $25.3M in Q4 and $26.3M in Q3 as higher average interest-bearing liabilities and lower asset yields pressured spreads .
Financial Results
Quarterly Comparison: Core Financials and Ratios
S&P Global Consensus vs Actuals
Values retrieved from S&P Global.*
Loan Portfolio Composition
KPIs and Capital
Guidance Changes
No explicit financial guidance was issued for revenue, margins, OpEx, OI&E, tax rate, or segments in Q1 2025 filings and press releases .
Earnings Call Themes & Trends
No Q1 2025 earnings call transcript was found; themes derived from press releases.
Management Commentary
- “We are, once again, pleased to report another quarter of strong earnings due to the excellent performance of our loan portfolio… As in the past, construction lending in high demand-high absorption areas continues to be our focus.” — Kenneth A. Martinek, Chairman & CEO .
- On NIM pressure: total interest and dividend income rose modestly, but yields fell 72 bps YoY and cost of funds fell 24 bps; net interest margin decreased to 5.11% .
- On deposits/funding: certificates of deposit decreased $125.1M; strategy included “calling” higher-rate brokered deposits; NOW/money market accounts increased $45.9M .
Q&A Highlights
No Q1 2025 earnings call transcript was filed; Q&A highlights are unavailable [ListDocuments returned none for earnings-call-transcript].
Estimates Context
- Q1 2025 EPS: Primary EPS actual $0.7633* vs consensus $0.77* — slight miss (~$0.0067). Q1 revenue actual $25.262M*; consensus unavailable*.
- Q4 2024 EPS: actual $0.8326* vs $0.82* — modest beat; revenue actual $24.421M* vs $26.453M* — miss.
- Q3 2024 EPS: actual $0.9161* vs $0.91* — slight beat; revenue actual $27.530M*; consensus unavailable*.
Values retrieved from S&P Global.*
Key Takeaways for Investors
- Margin compression remains the key headwind; watch deposit cost trajectory and asset yields given management’s active strategy to reduce higher-cost brokered CDs and grow money market balances .
- Credit quality is a differentiator: zero non-accrual loans and low NPA/Assets should support valuation resilience versus peers amid macro uncertainty .
- Origination pipeline in construction/multi-family is robust; staged funding tempers immediate balance sheet growth but preserves future earnings potential .
- Operating efficiency slippage (41.64%) and higher non-interest expense suggest near-term pressure on pre-provision net revenue; monitor expense discipline and fee income trends .
- Capital strength (Tier 1 leverage 15.09%; TRBC 15.10%) plus dividend increase to $0.20 offers total-return support; buyback program remains active though not expanded this quarter .
- Estimate setup is benign: small EPS variances vs consensus and sparse coverage (single estimate) imply limited “surprise risk,” but improvements in NIM and deposit mix are needed for upside*.
- Near-term trading: dividend increase and strong asset quality are positives; watch funding mix updates and NIM commentary for catalysts at the next print .
Notes:
- Company figures and ratios from NECB Q1 2025 Form 8-K and press release **[1847398_0001104659-25-037348_tm2512806d1_ex99-1.htm:0]** **[1847398_0001104659-25-037348_tm2512806d1_ex99-1.htm:9]**; Q4 2024 press release/8-K **[1847398_0001104659-25-007935_tm254961d1_ex99-1.htm:10]** **[1847398_0001104659-25-007935_tm254961d1_ex99-1.htm:11]**; Q3 2024 press release/8-K **[1847398_0001104659-24-112281_tm2427012d1_ex99-1.htm:10]** **[1847398_0001104659-24-112281_tm2427012d1_ex99-1.htm:11]**.
- Dividend actions: $0.20 declared Mar 20, 2025 **[1847398_5d76c0719aca46ff8dc69bcfb946508d_0]**; prior $0.15 Dec 19, 2024 **[1847398_c40b5b38d8cc4d03a793ceafd17b0496_0]**.
- S&P Global consensus and actuals marked with * and sourced from S&P Global.