What the changes say
- Interest-rate disclosures now reflect 175 basis points of Federal Reserve cuts through December 2025 and a 3.75% upper limit in January 2026.
- The bank added technology, outsourcing, fraud, climate, ESG, talent, fintech, and low-trading-volume risks.
- Credit-loss reserves rose to $25.4 million, while ACL coverage remained 0.97% of loans.
- Liquidity disclosure now emphasizes customer deposits and wholesale funding after industry bank-closure concerns.
What changed since the prior 10-K
New
- NewRisks Related to Competitive Matters
Consumers may increasingly decide not to use banks to complete their financial transactions, which could have a material adverse impact on our financial condition and operations
Fintech, brokerage accounts, prepaid cards, cryptocurrencies, stablecoins, and direct payments could reduce customer reliance on bank deposits and services.
- NewRisk Related to our Operations and Technology
that could arise as a result of operational deficiencies or as a result of non-compliance with applicable regulatory standards or customer attrition due to potential negative publicity
Failures or cyberattacks at outsourced data processors could disrupt transactions, increase replacement costs, and create additional vendor-supervision burdens.
- NewRisk Related to our Operations and Technology
Our business is technology dependent, and an inability to successfully implement technological improvements may adversely affect our ability to be competitive and our results of operations and financial condition
Failure to implement new technology effectively could weaken customer service, efficiency, product development, and competitiveness.
- NewRisk Related to our Operations and Technology
We are subject to losses due to errors, omissions or fraud by our employees, client, counterparties or other third parties
Employee, customer, counterparty, or third-party errors and fraud—including check, wire, electronic, phishing, and social-engineering fraud—could cause losses.
- NewRisks Related to Accounting Matters
We are subject to physical and financial risks associated with climate change and other weather and natural disaster impacts
Severe weather and climate change could damage New York real estate collateral, increase delinquencies, disrupt operations, and weaken borrowers’ repayment capacity.
- NewRisks Related to Accounting Matters
Increased scrutiny and evolving expectations from customers, regulators, investors and other stakeholders with respect to environmental, social and governance (“ESG”) practices may impose additional costs on the Company or expose it to new or additional risks
Conflicting ESG expectations and changing laws could increase costs, restrict activities, trigger enforcement or litigation, and damage reputation.
- NewRisks Related to Accounting Matters
The success of our business strategies depends on our ability to identify, recruit and retain individuals with experience and relationships in our primary markets
Difficulty recruiting and retaining personnel with relationships in the bank’s primary markets could raise costs and impede growth strategies.
- NewRisks Related to Accounting Matters
The trading volume of our common stock may not provide adequate volume for investors, and future sales of our common stock by stockholders or the perception that those sales could occur may cause our common stock price to decline
Low Nasdaq trading volume or future shareholder sales could make PDLB shares difficult to sell and depress their price.
- NewRisks Related to Accounting Matters
Our common stock price may be volatile, which could result in losses to our investors
Earnings changes, industry conditions, regulation, geopolitical events, and broader market volatility could cause PDLB’s stock price to fluctuate independently of performance.
Dropped
- DroppedRisks Related to our Lending Activities
On January 1, 2023, the Company adopted Current Expected Credit Loss, or CECL. CECL requires financial institutions to determine periodic estimates of lifetime expected credit losses on loans, and recognize the expected credit losses as allowances for credit losses
- DroppedRisks Related to our Business Strategy
Stock has a dividend rate of no more than 0.5%, which dividend rate is calculated pursuant to the ECIP and the terms thereof, at each of six consecutive Reset Dates, as defined in the ECIP
- DroppedRisks Related to Interest Rates
Interest rates may rise and the possibility that we may access higher-cost funds to support our loan growth and operations may adversely affect our net interest income and profitability
- DroppedRisk Related to our Operations
The cost of finance and accounting systems, procedures and controls in order to satisfy our public company reporting requirements increases our expenses
- DroppedRisks Related to Accounting Matters
By engaging in derivative transactions, we are exposed to additional credit and market risk in our banking business
- DroppedRisks Related to Accounting Matters
Societal responses to climate change could adversely affect our business and performance, including indirectly through impacts on our customers
Reworded
- 99% rewrittenRisks Related to Laws and Regulations
We may be limited in our ability to originate new construction loans in our market area due to legislative changes
The disclosure now centers on New York multifamily projects’ dependence on tax incentives and zoning, noting 421-a expired in June 2022 and completion requirements.
- 99% rewrittenRisks Related to Accounting Matters
Financial challenges at other banking institutions could lead to depositor concerns that spread within the banking industry causing disruptive deposit outflows and other destabilizing results
The bank removed detailed 2023 failures and FDIC funding discussion and added broader deposit-outflow risks from funding sources, rates, competitors, and confidence.
- 77% rewrittenRisks Related to our Lending Activities
If our allowance for credit losses is not sufficient to cover actual loan losses, our earnings and capital could decrease
ACL increased from $22.5 million to $25.4 million, while coverage stayed 0.97%; the prior $6.8 million microloan allowance disclosure was removed.
- 72% rewrittenRisks Related to Interest Rates
Any substantial, unexpected, prolonged change in market interest rates could have a material adverse effect on our financial condition, liquidity and results of operations. Changes in the level of interest rates also may negatively affect the value of our assets and ultimately affect our earnings
The bank replaced modeled 100-basis-point sensitivity losses with Federal Reserve rate-cut history, including 175 basis points of cuts through December 2025.
- 71% rewrittenRisk Related to our Operations and Technology
We face significant operational risks because the financial services business involves a high volume of transactions and increased reliance on technology, including risk of loss related to cyber security breaches
The disclosure now omits insurance-coverage limitations while retaining employee, system, fraud, processing, cybersecurity, and business-continuity operational risks.
- 68% rewrittenRisks Related to Interest Rates
the interest expense we pay on interest-bearing liabilities, such as deposits and borrowings
The discussion now describes changing asset-liability interest-rate gaps rather than detailing how rising and falling rates affect deposits, loans, and securities.
- 51% rewrittenRisks Related to Laws and Regulations
Monetary policies and regulations of the Federal Reserve Board could adversely affect our business, financial condition and results of operations
The bank added that Federal Reserve policy can affect financial-instrument values and remains difficult to predict.
- 47% rewrittenRisks Related to Laws and Regulations
Our New York State multi-family loan portfolio could be adversely impacted by changes in legislation or regulation, primarily rent control and rent stabilization
The risk now expressly covers higher interest rates affecting multifamily properties, while removing the separate reference to federal interest-rate regulation.
- 43% rewrittenRisks Related to Interest Rates
Changes in the valuation of securities held could adversely affect us
- 41% rewrittenRisks Related to our Business Strategy
Our business strategy includes growth, and our financial condition and results of operations could be negatively affected if we fail to grow or fail to manage our growth effectively. Growing our operations could also cause our expenses to increase faster than our revenues
- 39% rewrittenRisks Related to Laws and Regulations
Changes in laws and regulations and the cost of regulatory compliance with new laws and regulations may adversely affect our operations and/or increase our costs of operations
- 34% rewrittenRisks Related to our Business Strategy
Our efficiency ratio is high, and we anticipate that it may remain high, as a result of the ongoing implementation of our business strategy
- 32% rewrittenRisks Related to our Lending Activities
We have increased our multifamily, nonresidential and construction and land loans, and intend to continue to increase originations of these types of loans. These loans may carry greater credit risk than loans secured by one-to-four family real estate that could adversely affect our financial condition and net income
- 27% rewrittenRisks Related to our Lending Activities
the net worth and liquidity of loan guarantors may decline, impairing their ability to honor commitments to us
- 24% rewrittenRisks Related to CDFI and MDI Status
We may lose the ability to obtain grants and awards available to CDFIs and/or MDIs institutions
- 22% rewrittenRisks Related to our Lending Activities
The unseasoned nature of our multifamily, nonresidential and construction and land loans portfolio may result in changes to our estimates of collectability, which may lead to additional provisions or charge-offs, which could hurt our profits
- 21% rewrittenRisk Related to our Operations and Technology
a decrease in net interest income from our lending and deposit gathering activities
All 54 risk factors
Headings as the filing states them, in filing order.
Risks Related to CDFI and MDI Status
- 01We may lose the ability to obtain grants and awards available to CDFIs and/or MDIs institutions24% rewritten
Risks Related to our Lending Activities
- 02We have increased our multifamily, nonresidential and construction and land loans, and intend to continue to increase originations of these types of loans. These loans may carry greater credit risk than loans secured by one-to-four family real estate that could adversely affect our financial condition and net income32% rewritten
- 03Our business and our customers are impacted by inflationary pressures
- 04The unseasoned nature of our multifamily, nonresidential and construction and land loans portfolio may result in changes to our estimates of collectability, which may lead to additional provisions or charge-offs, which could hurt our profits22% rewritten
- 05Our business may be adversely affected by credit risk associated with residential property
- 06If our allowance for credit losses is not sufficient to cover actual loan losses, our earnings and capital could decrease77% rewritten
- 07A worsening of economic conditions in our market area could reduce demand for our products and services and/or result in increases in our level of nonperforming loans, which could adversely affect our operations, financial condition and earnings
- 08the net worth and liquidity of loan guarantors may decline, impairing their ability to honor commitments to us27% rewritten
- 09We are subject to environmental liability risk associated with lending activities or properties we own
Risks Related to our Business Strategy
- 10Our business strategy includes growth, and our financial condition and results of operations could be negatively affected if we fail to grow or fail to manage our growth effectively. Growing our operations could also cause our expenses to increase faster than our revenues41% rewritten
- 11We may incur losses due to minority investments in other financial technology related companies
- 12New lines of business or new products and services may subject us to additional risks
- 13Our emphasis on construction lending involves risks that could adversely affect our financial condition and results of operations
- 14Our efficiency ratio is high, and we anticipate that it may remain high, as a result of the ongoing implementation of our business strategy34% rewritten
- 15We may be dependent on advances from the FHLBNY and borrowings from the FRBNY to grow our lending activities, which may negatively impact our results of operations
Risks Related to Competitive Matters
- 16Strong competition within our market areas may limit our growth and profitability
- 17Our small size makes it more difficult for us to compete
- 18Consumers may increasingly decide not to use banks to complete their financial transactions, which could have a material adverse impact on our financial condition and operationsnew
Risks Related to Our Management
- 19We depend on our management team to implement our business strategy and execute successful operations and we could be harmed by the loss of their services
- 20Adherence to our internal policies and procedures by management is critical to our performance and how we are perceived by our regulators
Risks Related to Interest Rates
- 21Future changes in interest rates could reduce our profits and asset values
- 22the interest expense we pay on interest-bearing liabilities, such as deposits and borrowings68% rewritten
- 23Any substantial, unexpected, prolonged change in market interest rates could have a material adverse effect on our financial condition, liquidity and results of operations. Changes in the level of interest rates also may negatively affect the value of our assets and ultimately affect our earnings72% rewritten
- 24Changes in the valuation of securities held could adversely affect us43% rewritten
Risks Related to Laws and Regulations
- 25Changes in laws and regulations and the cost of regulatory compliance with new laws and regulations may adversely affect our operations and/or increase our costs of operations39% rewritten
- 26Our New York State multi-family loan portfolio could be adversely impacted by changes in legislation or regulation, primarily rent control and rent stabilization47% rewritten
- 27We may be limited in our ability to originate new construction loans in our market area due to legislative changes99% rewritten
- 28Imposition of limits by the bank regulators on construction lending activities could curtail our growth and adversely affect our earnings
- 29Non-compliance with the USA PATRIOT Act, Bank Secrecy Act, or other laws and regulations could result in fines or sanctions
- 30Our ability to originate loans could be restricted by federal regulations
- 31terms of longer than 30 years
- 32We are subject to stringent capital requirements, which may adversely impact our return on equity, require us to raise additional capital, or limit our ability to pay dividends or repurchase shares
- 33We have analyzed these capital requirements, and the Bank meets all of these requirements, including the 2.5% capital conservation buffer
- 34The Federal Reserve Board may require us to commit capital resources to support Ponce Bank
- 35Monetary policies and regulations of the Federal Reserve Board could adversely affect our business, financial condition and results of operations51% rewritten
Risk Related to our Operations and Technology
- 36We face significant operational risks because the financial services business involves a high volume of transactions and increased reliance on technology, including risk of loss related to cyber security breaches71% rewritten
- 37that could arise as a result of operational deficiencies or as a result of non-compliance with applicable regulatory standards or customer attrition due to potential negative publicitynew
- 38Our business is technology dependent, and an inability to successfully implement technological improvements may adversely affect our ability to be competitive and our results of operations and financial conditionnew
- 39Negative developments in the U.S. or in our primary markets may adversely impact our results in the future
- 40a decrease in net interest income from our lending and deposit gathering activities21% rewritten
- 41We are subject to losses due to errors, omissions or fraud by our employees, client, counterparties or other third partiesnew
Risks Related to Accounting Matters
- 42Changes in accounting standards could affect reported earnings
- 43Changes in management’s estimates and assumptions may have a material impact on our consolidated financial statements and our financial condition or operating results
- 44Financial challenges at other banking institutions could lead to depositor concerns that spread within the banking industry causing disruptive deposit outflows and other destabilizing results99% rewritten
- 45Ineffective liquidity management could adversely affect our financial results and condition
- 46Legal and regulatory proceedings and related matters could adversely affect us
- 47We are a community bank and our ability to maintain our reputation is critical to the success of our business and the failure to do so may materially adversely affect our performance
- 48Our Equity Incentive Plans have increased our expenses and reduced our income, and may dilute our stockholders' ownership interests
- 49We are subject to physical and financial risks associated with climate change and other weather and natural disaster impactsnew
- 50Increased scrutiny and evolving expectations from customers, regulators, investors and other stakeholders with respect to environmental, social and governance (“ESG”) practices may impose additional costs on the Company or expose it to new or additional risksnew
- 51Our historical markets, minority and immigrant individuals, may be threatened by gentrification and adverse political developments, which could decrease our growth and profitability
- 52The success of our business strategies depends on our ability to identify, recruit and retain individuals with experience and relationships in our primary marketsnew
- 53The trading volume of our common stock may not provide adequate volume for investors, and future sales of our common stock by stockholders or the perception that those sales could occur may cause our common stock price to declinenew
- 54Our common stock price may be volatile, which could result in losses to our investorsnew
Other Ponce Financial Group 10-Ks
- 2025 10-K risk factors
51 risks. Ponce Financial faces primary risks from credit exposure in its growing multifamily and construction loan portfolios within the New York market. The bank relies heavily on high-cost FHLBNY and FRBNY borrowings and is subject to stringent regulatory capital and CDFI status requirements. Operational risks, interest rate volatility, and local rent control laws significantly impact asset values and net interest margins.
Filed Mar 13, 2025
About this page
Item 1A of the 10-K on EDGAR was split into its risk factors and, where the company's previous 10-K is on file, each heading was matched to last year's and the text compared word for word. The headings are the filing's own. The one-line readings and the overview were written by a language model from the text of the new, dropped, and rewritten risks; they refer to risks by position and cannot misquote a heading.