Executive Summary

Q3 EPS of $0.10 declined sequentially from $0.14 on higher provision expense and lower non-interest income, despite 6% q/q net interest income growth and a 3 bps NIM expansion to 2.65% .
Loans grew 7.7% q/q and deposits rose 16.4% q/q; management reduced borrowings by $100M and repaid the entire BTFP loan, positioning the balance sheet for eventual rate cuts per the CEO .
Asset quality improved: NPLs/loans fell to 0.78% (from 0.89% in Q2), while ACL/loans eased to 1.09% (from 1.18%) as net charge-offs remained modest; efficiency ratio rose slightly to 80.9% .
No formal guidance or call transcript available; key near-term catalysts include potential Treasury action on ECIP repurchases and continued deposit mix optimization (NY State BDD $35M already received) .

What Went Well and What Went Wrong

What Went Well

Net interest income increased to $19.0M (+6% q/q; +15% y/y) and NIM expanded to 2.65% (from 2.62% in Q2), aided by loan growth and funding actions .
Strong balance sheet repositioning: deposits up $264M q/q (to $1.87B) and borrowings down $100M q/q; CEO: “we’re well positioned for a decline in interest rates” and “paid off the entirety of our Bank Term Funding Program Loan” .
Asset quality stable-to-better: NPLs/loans improved to 0.78% (from 0.89% in Q2) with total NPAs/Assets down to 0.57% (from 0.65%); ROAA remained positive at 0.33% .

What Went Wrong

EPS fell to $0.10 from $0.14 as provision for credit losses rose by $1.2M q/q and non-interest income declined by $1.1M on lower MTM gains and late/prepayment fees .
Efficiency ratio ticked up to 80.87% (from 80.09% in Q2) and remains above pre-2023 levels, indicating operating leverage still constrained by elevated funding costs and revenue mix .
ACL/loans declined to 1.09% (from 1.18% in Q2); while consistent with credit performance, investors may watch reserve trajectory given continued growth in construction and multifamily exposures .

Financial Results

Income statement and EPS

Metric	Q3 2023	Q2 2024	Q3 2024
Total interest & dividend income ($M)	$33.506	$38.792	$41.293
Total interest expense ($M)	$16.964	$20.888	$22.270
Net interest income ($M)	$16.542	$17.904	$19.023
Provision (benefit) for credit losses ($M)	$0.535	$(0.374)	$0.789
Non-interest income ($M)	$5.627	$2.258	$1.151
Non-interest expense ($M)	$17.316	$16.147	$16.314
Income before taxes ($M)	$4.318	$4.389	$3.071
Net income ($M)	$2.590	$3.192	$2.433
Preferred dividends ($M)	$—	$0.075	$0.281
Net income to common ($M)	$2.590	$3.117	$2.152
Diluted EPS ($)	$0.12	$0.14	$0.10

Margins and profitability

Metric	Q3 2023	Q2 2024	Q3 2024
Net interest margin (%)	2.58%	2.62%	2.65%
Net interest rate spread (%)	1.68%	1.72%	1.77%
Efficiency ratio (%)	78.11%	80.09%	80.87%
ROAA (annualized, %)	0.39%	0.45%	0.33%
ROAE (annualized, %)	2.11%	2.59%	1.93%

Balance sheet and capital

Metric	Q3 2023	Q2 2024	Q3 2024
Total assets ($M)	$2,623.9	$2,842.0	$3,016.0
Loans, net ($M)	$1,787.6	$2,022.2	$2,180.3
Deposits ($M)	$1,401.1	$1,606.1	$1,870.3
Cash & equivalents ($M)	$117.0	$103.2	$155.8
Securities AFS + HTM ($M)	$587.8	$555.2	$514.7
Borrowings ($M)	$675.1	$680.4	$580.4
Total equity ($M)	$485.1	$497.7	$504.6
Total capital/RWA (Bank) (%)	25.10%	22.47%	21.61%
Tier 1 leverage (Bank) (%)	17.51%	16.70%	16.19%

Asset quality

Metric	Q3 2023	Q2 2024	Q3 2024
NPLs/Total loans (%)	0.89%	0.89%	0.78%
NPAs/Assets (%)	0.62%	0.65%	0.57%
NPAs + accruing mods/Assets (%)	0.82%	0.82%	0.73%
ACL/Loans (%)	1.51%	1.18%	1.09%
Net charge-offs to avg loans (ann.) (%)	(0.34%)	(0.10%)	(0.17%)

Deposit mix (selected components)

Component	Q3 2023	Q2 2024	Q3 2024
Total deposits ($M)	$1,401.1	$1,606.1	$1,870.3
Money market ($M, %)	$370.5 (26.44%)	$502.3 (31.27%)	$660.2 (35.30%)
CDs total ($M, %)	$541.7 (38.66%)	$624.9 (38.91%)	$752.9 (40.25%)
Brokered CDs ($M)	$98.7	$94.6	$94.5
Reciprocal deposits ($M)	$82.7	$109.9	$94.1

Loan portfolio mix (% of gross loans)

Category	Q2 2024	Q3 2024
Construction & land	31.39%	28.67%
Multifamily residential	26.66%	30.78%
Nonresidential properties	16.51%	17.40%
1–4 family investor	16.49%	15.09%
1–4 family owner-occupied	7.21%	6.59%

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Financial guidance (revenue/EPS/margins)	FY/Quarter	Not provided	Not provided	Maintained (no formal guidance)
Dividends	Ongoing	Preferred dividends initiated Q2 2024	Preferred dividends $0.281M in Q3	Informational update (no guidance)

No explicit quantitative outlook was issued in Q3 materials; management commentary emphasized rate positioning, capital/liquidity strength, and balance sheet actions (e.g., BTFP repayment) rather than formal targets .

Earnings Call Themes & Trends

No Q3 2024 earnings call transcript was found; analysis below reflects themes from Q1–Q3 press releases.

Topic	Previous Mentions (Q-2 and Q-1)	Current Period (Q3 2024)	Trend
Funding & liquidity	Liquidity + FHLBNY capacity ~$679.9M (~1.7x uninsured deposits) highlighted; capital ratios strong . Q1 cited $724.1M liquidity capacity and strong capital .	Borrowings reduced by $100M; BTFP fully repaid; liquidity and capital “remain strong” .	Improving funding profile; lower wholesale reliance.
Regulatory (ECIP)	Q2: exceeded qualified lending targets; qualified for 0.50% preferred dividend rate .	Treasury proposed ECIP repurchase guidelines; loan growth this quarter partly to ensure qualification if adopted .	Optionality improving; potential capital structure catalyst.
Deposit initiatives	Traditional and direct channels; q/q deposit growth in Q2 .	NY State BDD designation; $35M program deposits received (7/30); cited in Q3 CEO/Chair remarks .	Positive: stable low-cost/public deposits support.
Technology/digital	Continued investment in technology to improve efficiency .	Expansion of PonceBank+Direct; Florida rep office leveraging digital platform .	Ongoing build-out.
Regional expansion	—	Opened Coral Gables representative office to serve dual-state clientele .	Expanding footprint.
Fee/other income	Q2 non-interest income boosted by MTM private equity gains and fees .	Q3 non-interest income fell q/q on lower MTM and late/prepayment charges .	Volatile; stepped down in Q3.
Credit quality	Q1–Q2 reserve release/benefit tied partly to microloans; asset quality stable .	NPL and NPA ratios improved; small provision in Q3; ACL/loans lower .	Stable-to-better.

Management Commentary

“Book value per share continues to grow and is now $11.74… Our levels of liquidity and capital remain strong… we’re well positioned for a decline in interest rates. We reduced our borrowings during the quarter, paying off the entirety of our Bank Term Funding Program Loan…” — Carlos P. Naudon, CEO .
“US Treasury… proposed guidelines [for] ECIP investment [repurchase]… Most of our loan growth of $157.6 million this quarter is explained by our desire to ensure qualification under the proposed regulations, if adopted. Deposits also grew significantly during the quarter including $35.0 million from the Banking Development District program of New York.” — Steven A. Tsavaris, Executive Chairman .
Strategy: continue investing in people and technology (PonceBank+Direct), deepen community presence (MDI/CDFI), broaden geography (Florida representative office) .

Q&A Highlights

No Q3 2024 earnings call transcript was available; we did not identify a call in the document catalog, and searches returned no transcript. We rely on the press release and 8‑K for quantitative detail and management commentary (no call transcript listed) .

Estimates Context

Wall Street consensus (S&P Global) was unavailable at time of analysis due to request limits. As a result, we cannot provide a vs. consensus comparison for Q3 EPS or revenues at this time (values unavailable from S&P Global).
Given the results, areas where estimates may adjust: modest upward bias to NII/NIM trajectories (loan growth, funding costs trending down with borrowings reduced); downward adjustment to non-interest income run-rate given Q3 fee/MTM step-down .
Values retrieved from S&P Global were unavailable due to API limits.

Key Takeaways for Investors

Core spread metrics improved: NIM up to 2.65% with NII +6% q/q; continued balance sheet remix (deposits +$264M; borrowings –$100M) sets up operating leverage if/when rates fall .
EPS decline was largely mechanical (higher provision; lower fee/MTM), not spread-driven; watch the sustainability of fee income and late/prepayment charges into Q4 .
Credit remains benign with improving NPL/NPA ratios; reserves dipped as growth shifted toward qualifying ECIP assets—monitor construction/multifamily exposures and reserve coverage as growth continues .
Regulatory optionality: Treasury’s proposed ECIP repurchase framework could be a capital structure catalyst; management already aligning loan growth to potential eligibility .
Funding momentum: NY BDD program adds stable deposits ($35M received) while brokered balances are steady; mix shift toward money market and CDs continues to pressure funding costs but supports growth .
Near-term trading setup: positive skew from funding/borrowing actions and NIM trend; headline risk around fee income variability and reserve trajectory; no formal guidance or call transcript reduces visibility and may elevate dispersion .
Medium-term thesis: community bank with MDI/CDFI positioning, improving balance sheet efficiency, and regulatory catalysts; execution on deposit mix, expense control (efficiency ratio), and credit discipline will drive multiple re-rating .

Supporting Press Releases in Q3 Window

NY State Banking Development District (BDD) designation; $35M program deposits received July 30, 2024 .
Coral Gables, FL representative office opened to serve dual-state clientele, leveraging PonceBank+Direct platform .

Ponce Financial Group, Inc. (PDLB)·Q3 2024 Earnings Summary