Executive Summary

Q2 2025 diluted EPS was $0.82 and net income $11.2M, down year over year (Q2 2024 diluted EPS $0.97; net income $12.8M) as net interest margin compressed to 5.35% vs 5.79% YoY and efficiency ratio rose to 40.52% vs 35.24% YoY .
Against S&P Global consensus, EPS modestly beat ($0.82 actual vs $0.79 estimate), while total revenue was essentially in line ($25.93M actual vs $25.96M estimate); only one estimate was available for each metric* [Values retrieved from S&P Global].
Funding mix intentionally shifted: certificates of deposit fell $251.5M QoQ, offset by $135.0M in new borrowings and growth in NOW/money market accounts; management is “calling” higher-rate brokered CDs to lower cost of funds .
Asset quality remains a standout: no non-performing loans at quarter-end and NPA/total assets at 0.04% after selling a $4.3M foreclosed Bronx property at no loss; allowance for credit losses on loans at 0.26% of total loans .
Loan production remained strong with $462.7M originations (construction $338.8M, multi-family $95.4M, C&I $27.8M), and unfunded commitments exceeded $636M, supporting near-term growth visibility .

What Went Well and What Went Wrong

What Went Well

Asset quality: no non-performing loans, NPA/total assets at 0.04%, and sale of a $4.3M foreclosed property at no loss with financing to complete the project .
Strategic funding actions: brokered CDs reduced by $129.1M as management “called” higher-rate deposits; NOW/money market balances rose $56.4M, lowering the cost of funds trajectory .
Strong loan demand and pipeline: $462.7M in originations and $636M+ unfunded commitments; CEO: “continued strong performance… focus on construction lending in high demand, high absorption sub-markets, [and] growing cooperative building lending program” .

What Went Wrong

Net interest margin compression (5.35% vs 5.79% YoY) tied to the Fed’s 100bp rate cuts from Sep–Dec 2024 that reduced asset yields faster than liability costs .
Higher operating costs: non-interest expense rose 10.6% YoY to $10.5M on salaries, data processing, occupancy, and REO-related costs, pressuring the efficiency ratio (40.52% vs 35.24% YoY) .
Deposit outflows (-$191.2M QoQ), especially CDs (-$251.5M), necessitated $135.0M borrowings to diversify funding sources; accrued borrowing interest expense increased $905k .

Financial Results

Reported quarterly performance

Metric	Q4 2024	Q1 2025	Q2 2025
Net Interest Income ($USD Millions)	$25.298	$24.264	$25.074
Non-Interest Income ($USD Millions)	$0.149	$1.235	$0.858
Net Income ($USD Millions)	$10.933	$10.567	$11.170
Diluted EPS ($)	$0.80	$0.78	$0.82
Net Interest Margin (%)	5.29%	5.11%	5.35%
Efficiency Ratio (%)	38.99%	41.64%	40.52%
ROA (%)	2.19%	2.12%	2.27%
ROE (%)	13.80%	12.98%	13.37%

YoY comparison (Q2)

Metric	Q2 2024	Q2 2025
Net Interest Income ($USD Millions)	$26.222	$25.074
Non-Interest Income ($USD Millions)	$0.731	$0.858
Net Income ($USD Millions)	$12.798	$11.170
Diluted EPS ($)	$0.97	$0.82
Net Interest Margin (%)	5.79%	5.35%
Efficiency Ratio (%)	35.24%	40.52%
ROA (%)	2.70%	2.27%
ROE (%)	17.28%	13.37%

Consensus vs actual (S&P Global)*

Metric	Q4 2024	Q1 2025	Q2 2025
EPS Estimate ($, Primary)*	0.82	0.77	0.79
EPS Actual ($, Primary)*	0.8326	0.7633	0.8205
Revenue Estimate ($USD Millions)*	26.453	N/A	25.960
Revenue Actual ($USD Millions)*	24.421	25.262	25.932
Beat/Miss (EPS / Revenue)*	Beat / Miss	Miss / N/A	Beat / In-line

Note: Asterisks indicate values retrieved from S&P Global.

Segment (Loan) breakdown

Loan Category ($USD Thousands)	Dec 31, 2024	Jun 30, 2025
One-to-Four Family	$3,472	$3,398
Multi-Family	$206,606	$292,552
Mixed-Use	$26,571	$26,089
Total Residential Real Estate	$236,649	$322,039
Non-Residential Real Estate	$29,446	$28,971
Construction	$1,426,167	$1,323,477
Commercial & Industrial	$119,736	$123,084
Consumer	$1,649	$47
Gross Loans	$1,813,647	$1,797,618

KPIs and Asset Quality / Capital

KPI	Q4 2024	Q1 2025	Q2 2025
Non-Performing Assets ($USD Thousands)	$5,120	$5,120	$767
NPA / Total Assets (%)	0.25%	0.26%	0.04%
Allowance for Credit Losses / Total Loans (%)	0.27%	0.30%	0.26%
Tier 1 Leverage Ratio (%)	14.44%	15.09%	15.87%
Total Risk-Based Capital Ratio (%)	13.92%	15.10%	14.99%

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY/Quarter	None provided	None provided	Maintained (no formal guidance)
Net Interest Margin	FY/Quarter	None provided	Commentary links NIM pressure to Fed cuts, not formal targets	Informational only
Operating Expenses	FY/Quarter	None provided	None provided	Maintained (no formal guidance)
Tax Rate	FY/Quarter	None provided	Effective rate ~27.6% (quarter) disclosed, no forward guide	Informational only
Dividends	FY/Quarter	Not guided	$5.4M dividends declared YTD (six months), no forward guide	Informational only

NECB did not issue formal quantitative guidance ranges in the quarter; disclosures were backward-looking and strategic.

Earnings Call Themes & Trends

No earnings call transcript was located for Q2 2025; themes below reflect management statements in press releases.

Topic	Previous Mentions (Q-2: Q4 2024)	Previous Mentions (Q-1: Q1 2025)	Current Period (Q2 2025)	Trend
Interest rate/macro	Fed cuts starting Sep 2024 reduced asset yields; cost of deposits increased; NIM down	Yield decline outpaced liability cost decline; NIM down	NIM down YoY due to 100bp Fed Funds decrease; asset yields fell faster than deposit costs	Continued NIM pressure, gradual liability cost relief
Funding mix & cost of funds	Paid off prior borrowings; deposit growth at competitive rates	Deposits down; mix shift (CDs down, NOW/MM up); strategy to reduce brokered CDs	CDs -$251.5M; NOW/MM +$56.4M; $135.0M borrowings; “calling” high-rate brokered CDs	Active cost-of-funds management, more diversified funding
Loan growth focus	2024 originations $656M, construction-centric	Originations $170.1M; construction emphasis	Originations $462.7M; construction $338.8M; co-op building loans growing; unfunded commitments $636M+	Strong pipeline; co-op segment momentum
Asset quality	NPA 0.25%; foreclosed Bronx property recognized	NPA 0.26%; two foreclosed properties	NPA 0.04%; Bronx property sold at no loss; no NPLs	Improving; exceptionally low NPA

Management Commentary

“We are once again pleased to be able to report continued strong performance throughout our entire loan portfolio… continuing focus on construction lending in high demand, high absorption sub-markets, as well as our growing cooperative building lending program… loan demand continues to increase with outstanding unfunded commitments exceeding $636 million at June 30, 2025.” — Kenneth A. Martinek, Chairman & CEO .
Strategic funding actions: management emphasized reducing cost of funds by “calling” higher-rate brokered CDs and shifting deposits to high-yield money market products .
Capital and liquidity: equity/assets 17.06%; available borrowing capacity of ~$771.3M across FRBNY/FHLB/ACBB underscores ample liquidity .

Q&A Highlights

No Q2 2025 earnings call transcript was available; no Q&A themes to report this quarter.

Estimates Context

Q2 2025: EPS beat ($0.8205 vs $0.79); revenue in-line ($25.93M vs $25.96M), reflecting resilient net interest income and higher non-interest income, offset by NIM compression from prior Fed cuts* [Values retrieved from S&P Global].
Q1 2025: EPS slightly missed ($0.7633 vs $0.77), consistent with NIM compression and higher operating expenses; revenue estimate not available* [Values retrieved from S&P Global] .
Q4 2024: EPS beat ($0.8326 vs $0.82), revenue missed ($24.42M vs $26.45M), driven by lower non-interest income (unrealized losses on equity securities) and NIM headwinds* [Values retrieved from S&P Global] .

Consensus coverage appears limited (one estimate), suggesting potential volatility in modeled expectations* [Values retrieved from S&P Global].

Key Takeaways for Investors

Credit quality is a differentiator: zero NPLs and NPA/total assets at 0.04% provide downside protection amid macro uncertainty .
Margin pressure persists but is moderating as deposit costs decline and brokered CDs are “called”; watch funding mix shifts and incremental borrowing costs for NIM trajectory .
Growth pipeline is strong: $462.7M quarterly originations and $636M+ unfunded commitments highlight continued demand in construction and co-op segments, especially in NYC boroughs .
Operating costs rose double digits YoY; efficiency ratio elevated. Near-term EPS leverage depends on cost discipline vs. revenue resilience .
Capital and liquidity robust (equity/assets 17.06%; significant borrowing capacity), enabling flexibility on funding strategy and growth execution .
Estimate breadth is thin; small beats/misses may drive outsized stock reactions. Focus on NIM and deposit beta updates in future disclosures* [Values retrieved from S&P Global].
Tactical view: near-term trading may hinge on signs of NIM stabilization and deposit mix normalization; medium-term thesis centers on credit strength, disciplined funding, and NYC construction/co-op lending expertise .

Sources: NECB Form 8-K press releases and exhibits for Q2 2025, Q1 2025, and Q4 2024. 
Note: Asterisks indicate values retrieved from S&P Global.

NorthEast Community Bancorp, Inc./MD/ (NECB)·Q2 2025 Earnings Summary