Northeast Community Bancorp, Inc. operates as a holding company for NorthEast Community Bank (the ‘bank’).
The bank is a New York State-chartered savings bank. The bank is a community-oriented financial institution dedicated to serving the financial services needs of individuals and businesses within its market area. The bank conducts business through its branch offices located in Bronx, New York, Orange, Rockland, and Sullivan Counties in New York, as well as Essex, Middlesex, and Norfolk Coun...
Northeast Community Bancorp, Inc. operates as a holding company for NorthEast Community Bank (the ‘bank’).
The bank is a New York State-chartered savings bank. The bank is a community-oriented financial institution dedicated to serving the financial services needs of individuals and businesses within its market area. The bank conducts business through its branch offices located in Bronx, New York, Orange, Rockland, and Sullivan Counties in New York, as well as Essex, Middlesex, and Norfolk Counties in Massachusetts, and three loan production offices located in White Plains, New York, New City, New York, and Danvers, Massachusetts.
The bank’s principal business consists of originating primarily construction loans and, to a lesser extent, commercial and industrial loans, multifamily and mixed-use residential real estate loans, and non-residential real estate loans. The bank offers a variety of retail deposit products to the general public in the areas surrounding its main office and its branch offices, with interest rates that are competitive with those of similar products offered by other financial institutions operating in its market area. The bank also utilizes wholesale deposits and borrowings as a source of funds. The bank’s revenues are derived primarily from interest on loans and, to a lesser extent, interest on investment securities and mortgage-backed securities. The bank also generates revenues from other income, including deposit fees, service charges, and investment advisory fees.
The bank previously offered investment advisory and financial planning services under the name of Harbor West Wealth Management Group, a division of the bank, through a networking arrangement with a registered broker-dealer and investment advisor. In December 2023, the bank entered into an agreement to sell all of the bank’s assets relating to Harbor West Wealth Management Group to a third party, and the asset sale was completed in January 2024.
Market Area
The company is headquartered in White Plains, New York, which is located in Westchester County, and it operates through the company’s main and annex offices in White Plains, full-service branch offices in the New York City borough of Manhattan (New York County), a full-service branch office in the New York City borough of the Bronx (Bronx County), full-service branch offices in Rockland County, New York, full-service branch offices in Orange County, New York, a full-service branch office in Sullivan County, New York, and full-service branches in Danvers (Essex County), Framingham (Middlesex County), and Quincy (Norfolk County), Massachusetts, as well as loan production offices in White Plains, New York, New City, New York, and Danvers, Massachusetts. The company generates deposits through its main office and various branch offices. The company conducts lending activities primarily in the State of New York, the Commonwealth of Massachusetts, and, to a lesser extent, in New Jersey.
The company’s construction loans originated in Orange, Rockland, and Sullivan Counties in New York, and Brooklyn (Kings County), are almost exclusively located within homogeneous communities that demonstrate significant population growth concentrated in well-defined existing, and newer expanding, communities.
The company periodically evaluates its network of banking offices to optimize its penetration in its market area. The company’s business strategy currently includes opening new branches in and around its market area.
Lending Activities
The company originates loans primarily for investment purposes. The largest segment of its loan portfolio is construction loans, followed by multifamily real estate loans. The company also originates mixed-use and non-residential real estate loans, as well as commercial and industrial loans. The company considers its lending territory to be the New York State/New York City Metropolitan area and the Massachusetts/Boston Metropolitan area. The company also originates a limited number of loans in New Jersey. Although the company no longer originates loans in Connecticut, it still has a limited number of loans in this state.
Construction Loans: The company has been originating construction loans secured by the construction of multifamily and single-family properties in Massachusetts and by the construction primarily of multifamily, residential condominium properties, and occasionally non-residential properties located in New York State, primarily in Bronx, Orange, Rockland, and Sullivan Counties, for more than a decade.
The company will make construction loans on condominium buildings containing between two to more than 250 units, or for single-family homes and single-family housing developments of as many as 400 homes, in each case in high absorption and/or homogeneous areas. For such loans, the company does not offer permanent financing. The company originates land acquisition and development loans whereby the land is ready to build with all permits in place, or construction is ‘as of right.’ The company also originates occasional land loans to existing well-established borrowers with the understanding that the borrower will obtain all required permits prior to requesting a construction loan to develop the property.
Construction loans in Orange, Rockland, and Sullivan Counties consist primarily of loans to construct contemporary townhouse-style condominium buildings and complexes containing from four to 250 units. Construction loans in Bronx County consist primarily of loans to construct affordable rental apartment buildings containing between ten and 100 or more apartments. Most buildings in the Bronx are granted real estate tax abatements under New York City’s former 421-A tax abatement program or the new 485-x tax abatement program approved on April 27, 2024, by New York State to replace the expired 421-A tax abatement program.
The company typically grants separate land and construction loans and occasionally site development loans secured by the project.
Commercial and Industrial Loans: The company provides credit to commercial and industrial businesses that are located within its market area. The company also provides commercial and industrial loans to real estate developers in the New York Metropolitan Area.
Multifamily and Mixed-Use Real Estate Loans: The company offers adjustable-rate mortgage loans secured by multifamily and mixed-use real estate. These loans consist primarily of loans on moderate-income apartment buildings located in the company’s lending territory and include loans on cooperative apartment buildings (in the New York area), as well as loans for Section 8 multifamily housing. In New York, most of the apartment buildings that the company lends on are rent-stabilized or free market buildings. Mixed-use real estate loans are secured by properties that are intended for both residential and business use. The company originates multifamily and mixed-use real estate loans in Massachusetts and, on a limited basis, in New Jersey.
The company offers construction/renovation loans on multifamily and mixed-use rental properties in high absorption areas, dependent on vacancy rates in relation to borough or town averages.
The company has been originating multifamily and mixed-use real estate loans in the New York State/New York Metropolitan Area. In the New York State/New York Metropolitan Area, the company’s ability to continue to grow its portfolio is dependent on the continuation of its relationships with mortgage brokers, as the multifamily and mixed-use real estate loan market is primarily broker-driven. The company has longstanding relationships with mortgage brokers in the New York market area, who are familiar with its lending practices and its underwriting standards. The company also deals directly with building owners throughout its lending area.
In the Massachusetts/Boston Metropolitan Area, where the company has also originated such loans, the primary source of mortgage loan originations is from personal contacts by its loan officer and referrals from existing customers. The company generally retains all of the loans that it originates in Massachusetts for its portfolio.
The company originates a variety of adjustable-rate and balloon multifamily and mixed-use real estate loans. The majority of the multifamily real estate loans in the company’s portfolio are secured by ten-unit to 100-unit apartment buildings.
Non-Residential Real Estate Loans: The company’s non-residential real estate loans are generally secured by office buildings, medical facilities, and retail shopping centers that are primarily located within its lending area.
Consumer Loans: The company offers personal loans and overdraft protection for checking accounts that are linked to statement savings accounts and have the ability to transfer funds from the statement savings account to the checking account when needed to cover overdrafts. The company no longer offers overdraft protection for checking accounts linked to statement savings accounts. The company also considers any checking accounts with overdrawn balances as a consumer loan, even though the customer typically deposits sufficient funds the next business day to cover the overdrawn balance.
Investment Activities
As of December 31, 2024, the company’s investment portfolio consisted primarily of mutual funds, residential mortgage-backed securities issued by Fannie Mae, Freddie Mac, and Ginnie Mae with stated final maturities of 10 years or more, and municipal securities with maturities of one year or more.
Deposit Accounts
The vast majority of the company’s depositors are residents of the States of New York and Massachusetts. Deposits are obtained primarily from customers residing in or working in the communities in which its branches are located, and the company relies on its long-standing relationships with its customers to retain these deposits. The company also obtains deposits from its commercial and industrial and construction loan customers. These deposits tend to be a stable source of funds. The company offers a broad selection of deposit instruments, including checking accounts, money market accounts, regular savings accounts, and non-interest bearing demand accounts (such as checking accounts and certificates of deposits).
In addition, the company utilizes brokered, listing service, and military deposits, which represent a viable and cost-effective addition to the company’s deposit gathering and maintenance strategy, often at a lower ‘all-in’ cost when compared to its retail branch network. This strategy allows the company to match the maturity of these deposits very effectively to the term of its construction loans, which make up a majority of the loans in its loan portfolio.
Regulation and Supervision
The bank is a New York-chartered savings bank. The bank’s deposits are insured up to applicable limits by the Federal Deposit Insurance Corporation (the ‘FDIC’). The bank is subject to extensive regulation by the New York State Department of Financial Services, as its chartering agency, and by the FDIC, as its primary federal regulator. The bank is a member of the Federal Home Loan Bank of New York.
The bank has elected to be deemed a ‘savings association’ under the Home Owners’ Loan Act, as amended. As a result, the company is a savings and loan holding company and is required to comply with the rules and regulations of the Board of Governors of the Federal Reserve System (the ‘Federal Reserve Board’) applicable to savings and loan holding companies. The company is required to file certain reports with the Federal Reserve Board and is subject to examination by and the enforcement authority of the Federal Reserve Board. The company is also subject to the rules and regulations of the Securities and Exchange Commission under the federal securities laws.
The bank derives its lending, investment, and other authority primarily from the applicable provisions of New York State banking law and the regulations of the New York State Department of Financial Services, as limited by FDIC regulations.
The bank is a member of the Deposit Insurance Fund, which is administered by the FDIC. Deposit accounts in the bank are insured up to a maximum of $250,000 for each separately insured depositor.
The bank’s latest FDIC Community Reinvestment Act, or CRA rating was ‘Outstanding.’
The bank is also subject to provisions of the New York State banking law which imposes continuing and affirmative obligations upon banking institutions organized in New York State to serve the credit needs of its local community (the ‘NYCRA’), which are substantially similar to those imposed by the federal CRA. The bank’s latest NYCRA rating was ‘Outstanding.’
The bank is subject to the USA PATRIOT Act, which gave federal agencies additional powers to address terrorist threats through enhanced domestic security measures, expanded surveillance powers, increased information sharing, and broadened anti-money laundering requirements.
The Cybersecurity Information Sharing Act (the ‘CISA’) is intended to improve cybersecurity in the U.S. through sharing of information about security threats between the U.S. government and private sector organizations, including financial institutions such as the company.
The deposit operations of the bank are also subject to, among others, the: Right to Financial Privacy Act; Check Clearing for the 21st Century Act (also known as ‘Check 21’); and Electronic Funds Transfer Act and Regulation E.
The bank is a member of the Federal Home Loan Bank System, which consists of 11 regional Federal Home Loan Banks. The bank, as a member of the Federal Home Loan Bank of New York, is required to acquire and hold shares of capital stock in that Federal Home Loan Bank.
As a savings and loan holding company, the company is subject to Federal Reserve Board regulations, examinations, supervision, reporting requirements, and regulations regarding its activities.
The company is subject to the Federal Reserve Board’s capital adequacy guidelines for savings and loan holding companies (on a consolidated basis), which have historically been similar to, though less stringent than, those of the FDIC for the bank.
The Sarbanes-Oxley Act of 2002 is intended to improve corporate responsibility, to provide for enhanced penalties for accounting and auditing improprieties at publicly traded companies, and to protect investors by improving the accuracy and reliability of corporate disclosures pursuant to the securities laws. The company has policies, procedures, and systems designed to comply with these regulations, and it reviews and documents such policies, procedures, and systems to ensure continued compliance with these regulations.
The company’s common stock is registered with the Securities and Exchange Commission, and, as a result, the company is subject to the information, proxy solicitation, insider trading restrictions, and other requirements under the Securities Exchange Act of 1934.
Subsidiaries
The company’s only direct subsidiary is the bank. The bank maintains the following subsidiaries: New England Commercial Properties LLC; NECB Financial Services Group, LLC; 72 West Eckerson LLC; 166 Route 59 Realty LLC; and 3 Winterton Realty LLC.
History
Northeast Community Bancorp, Inc. was founded in 1934. The company, a Maryland corporation, was incorporated in 2021.
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