Ponce Financial Soars on Strong Q1, Proving Community-First Model

NEW YORK, NY – April 24, 2026 – Ponce Financial Group, Inc. (Nasdaq: PDLB) delivered a powerful first-quarter performance for 2026, significantly surpassing analyst expectations and demonstrating robust health in a competitive regional banking landscape. The company reported a 44% year-over-year increase in diluted earnings per share, underscoring a strategy that successfully marries strong financial returns with a deep commitment to its community-focused mission.

For the three months ending March 31, 2026, the holding company for Ponce Bank posted net income available to common stockholders of $8.3 million, or $0.36 per diluted share. This figure comfortably beat consensus analyst estimates of $0.27 per share and marks a substantial improvement from the $5.7 million, or $0.25 per diluted share, reported in the same quarter last year. The strong results were propelled by significant growth in net interest income and a marked improvement in asset quality.

A Quarter of Decisive Outperformance

The engine behind Ponce Financial's impressive quarter was its expanding profitability from core lending operations. Net interest income surged to $28.2 million, a remarkable 27.13% increase from the $22.2 million recorded in the first quarter of 2025. This growth was accompanied by a significant expansion of its net interest margin (NIM), which climbed to 3.61%. This represents a 63-basis-point improvement year-over-year and a 4-basis-point increase from the prior quarter, a clear sign of the bank's ability to effectively manage its assets and liabilities in the current interest rate environment.

This performance stands out within the broader regional banking sector. While many regional banks reported solid Q1 results, Ponce's 44% EPS growth is particularly noteworthy. Its NIM of 3.61% is highly competitive, and its simultaneous growth in both its loan book and deposit base signals strong customer confidence and market demand. Net loans receivable grew by a healthy $99.4 million, or 3.82%, from the previous quarter to reach $2.70 billion. On the other side of the ledger, deposits also saw a significant inflow, increasing by $87.2 million, or 4.26%, to $2.13 billion. This balanced growth provides a stable foundation for future expansion.

"Our disciplined execution continues to serve Ponce well," stated Carlos P. Naudon, President and CEO of Ponce Financial Group, in the earnings release. He highlighted the 44% year-over-year increase in diluted earnings per share and a 12% rise in book value per share to $13.49 over the same period, affirming the success of the bank's strategy.

The Dual Mandate: Profitability Meets Purpose

What makes Ponce Financial's story compelling is not just its financial success, but how that success is intertwined with its identity as a Minority Depository Institution (MDI) and a Community Development Financial Institution (CDFI). The bank has demonstrated that a focus on underserved communities can be a powerful and profitable business model.

A cornerstone of this strategy is its participation in the U.S. Treasury's Emergency Capital Investment Program (ECIP), which provided the company with a $225 million investment in preferred stock. The program is designed to empower institutions like Ponce Bank to increase lending in low- and moderate-income communities. A key requirement is to meet targets for "deep impact lending"—a specific category of loans directed at low-income borrowers, deeply affordable housing, and businesses in persistent-poverty areas.

Executive Chairman Steven A. Tsavaris announced a significant milestone in this endeavor. "We continue to make progress towards our commitments under the U.S. Treasury’s Emergency Capital Investment Program and we’re one quarter away from achieving 16 quarters of a cumulative deep impact lending percentage of more than 60%," he stated. As of this quarter, the 15th in the measurement period, the bank has achieved an impressive 82% deep impact lending percentage.

Meeting these ECIP targets has tangible financial benefits. The bank has already seen its dividend obligation on the Treasury's investment reduced from 2.0% to just 0.50% due to its success in qualified lending. Successfully completing the 16-quarter commitment opens up further strategic options, including the potential to repurchase the preferred stock, which would further enhance shareholder value.

Fortifying the Balance Sheet for Future Growth

Alongside top-line growth, Ponce Financial has made significant strides in strengthening its balance sheet and managing risk. A key indicator of this is the dramatic improvement in asset quality. Non-performing assets (NPAs) as a percentage of total assets fell to just 0.62%, a substantial decrease from 0.83% in the prior quarter and 0.88% a year ago. This level of asset quality is on par with some of the nation's largest regional banks and speaks to a prudent and effective credit risk management framework.

Furthermore, the bank's allowance for credit losses now covers 128.93% of its nonperforming loans, a significant improvement from 94.74% in the previous quarter. This provides a robust cushion against potential future credit events. Management's strategic decision to shift its asset mix, prioritizing loan growth over holding securities, has been a key driver of increased net interest income and overall profitability.

The company's capital position remains exceptionally strong, with capital ratios well in excess of regulatory requirements. As of March 31, 2026, Ponce Financial Group's total capital to risk-weighted assets stood at 21.23%, providing a formidable buffer and ample capacity to support continued growth and investment in its communities. This financial fortitude, combined with its proven community-centric lending model, positions Ponce Financial Group for sustained success and reinforces its role as a vital economic engine in the markets it serves.