NorthEast Community Bancorp, Inc. to Record Loan Write Down in Third Quarter
13 October 2021 - 7:29AM
As previously reported, NorthEast Community Bancorp, Inc.
(NasdaqCM: NECB) (the “Company”), the parent company of NorthEast
Community Bank, had one non-performing loan as of June 30, 2021
that was a non-residential real estate loan with a balance of
$3.593 million that is secured by commercial real estate located in
Greenwich, Connecticut and guaranteed by the two borrowers. The
loan was originated in 2016 as a two-year bridge loan and, upon the
borrower’s failure to satisfy the loan at the maturity date, the
loan was accelerated and a foreclosure action was instituted. The
loan remains in foreclosure but is subject to Connecticut’s
continuing foreclosure moratorium and backlog. The property
securing the loan is subject to a parking easement and based on a
recently updated appraisal showing the property’s value with the
parking easement to be zero, the Company has determined to write
off the $3.5 million loan. The write down is a non-cash charge. The
Company intends to aggressively seek recovery of all amounts due
from the personal guarantors of the foreclosed loan. However, the
recovery process is uncertain, and it may take an extended period
of time to resolve this matter. In the event the Company is
successful against the guarantors, any recovery received would be
added back to the loan loss provision and taken back into income at
such time.
As a result of the write down, the Company
expects to record a provision for loan losses during the quarter
ending September 30, 2021 in an amount at least equal to the amount
of the write down in order to replenish NorthEast Community Bank’s
allowance for loan losses. Following the third quarter provision
and charge off of the foreclosed loan, the allowance for loan
losses is expected to be approximately equal to the allowance for
loan losses reported for the quarter ended June 30, 2021, which was
approximately $5.1 million. While the write down of this loan and
the replenishment of the allowance for loan losses will adversely
affect net income for the third quarter, the Company anticipates
that it will report net income for the quarter ended September 30,
2021 of approximately $730,000. At September 30, 2021, as of the
result of the charge off of the foreclosed loan, the Company
expects to have no nonperforming assets in its portfolio. The
Company intends to announce third quarter results during the week
of October 24, 2021.
About NorthEast Community Bancorp
NorthEast Community Bancorp, headquartered at 325 Hamilton
Avenue, White Plains, New York 10601, is the holding company for
NorthEast Community Bank, which conducts business through its nine
branch offices located in Bronx, New York, Orange, and Rockland
Counties in New York and Essex, Middlesex, and Norfolk Counties in
Massachusetts and three loan production offices located in New
City, New York, White Plains, New York, and Danvers, Massachusetts.
For more information about NorthEast Community Bancorp and
NorthEast Community Bank, please visit www.necb.com.
Forward Looking Statement
This press release 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.” Forward-looking statements, by their nature, are
subject to risks and uncertainties. Certain 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, the effect of the
COVID-19 pandemic (including its impact on NorthEast Community
Bank’s business operations and credit quality, on our customers and
their ability to repay their loan obligations and on general
economic and financial market 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, deposit
flows, 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 and changes in
relevant accounting principles and guidelines. 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.
CONTACT: Kenneth A. Martinek
Chairman and Chief Executive Officer
PHONE: (914) 684-2500
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