NorthEast Community Bancorp, Inc. Reports Strong Earnings Despite High Interest Rates

NorthEast Community Bancorp, Inc. (NECB) has reported another quarter of robust earnings, despite the challenging high interest rate environment that persisted throughout most of 2024. The company's net income for the fourth quarter ended December 31, 2024, was $10.9 million, or $0.83 per basic share and $0.80 per diluted share, compared to $12.1 million, or $0.82 per basic and diluted share, for the same period in 2023. For the year ended December 31, 2024, NECB's net income was $47.8 million, or $3.64 per basic share and $3.58 per diluted share, compared to $46.3 million, or $3.32 per basic share and diluted share, for the year ended December 31, 2023.



NECB's earnings growth can be attributed to several key factors:

1. Loan portfolio expansion: The company's net loans receivable increased by $227.0 million, or 14.3%, to $1.8 billion at December 31, 2024, compared to $1.6 billion at December 31, 2023. This growth was primarily driven by loan originations of $656.0 million during the year ended December 31, 2024, consisting mainly of construction loans ($573.8 million) and commercial and industrial loans ($54.9 million).
2. Efficient use of assets: NECB's efficiency ratio for the year ended December 31, 2024, was 37.00%, indicating that the bank effectively managed its expenses relative to its revenue.
3. Net interest income growth: NECB's net interest income increased by 5.8% for the year ended December 31, 2024 compared to the same period in 2023.

Kenneth A. Martinek, Chairman of the Board and Chief Executive Officer of NECB, stated, "We are pleased to report another quarter of strong earnings due to the strong performance of our loan portfolio. Despite the challenging high interest rate environment during 2023 that continued into most of 2024, loan demand remained strong with originations and outstanding commitments remaining robust. As has been in the past, construction lending in high demand-high absorption areas continues to be our focus."

NECB's focus on construction lending in high demand-high absorption areas has contributed to its strong earnings performance and growth. As the company continues to originate loans for construction projects, it can also diversify its loan portfolio to mitigate risks associated with the construction sector. By maintaining a strong loan portfolio and efficient use of assets, NECB is well-positioned to continue its robust earnings performance in the future.