Breaking Down Northeast Community Bancorp, Inc. (NECB) Financial Health: Key Insights for Investors

You're looking at Northeast Community Bancorp, Inc. (NECB) and trying to map its trajectory in this volatile rate environment, and honestly, the numbers paint a nuanced picture. The good news is the bank is still a profitability outlier; for the third quarter of 2025, they posted a stellar return on average total assets (ROAA) of 2.35% and a return on average shareholders' equity (ROAE) of 13.84%, metrics that far outpace many regional peers. Plus, asset quality is defintely a strength, with non-performing assets to total assets at an incredibly low 0.03% as of September 30, 2025. But, you have to be a realist: the bank's concentration in variable-rate construction loans is creating some near-term net interest margin (NIM) pressure-it was 5.38% in Q3 2025, a slight drop from the prior year, and that's the risk you need to model. Here's the quick math: strong fundamentals and a low P/E ratio of around 5.6 suggest deep value, but the interest rate sensitivity demands a closer look at their loan book. So, how do you capitalize on that value while hedging the margin compression risk? We'll break down the full 2025 fiscal year data to give you clear, actionable steps.

Revenue Analysis

You're looking at Northeast Community Bancorp, Inc. (NECB) and trying to figure out where the money is actually coming from, which is the right move. For a bank holding company like NECB, the core revenue isn't just a single line item; it's mostly Net Interest Income (NII)-the difference between what they earn on loans and what they pay on deposits, which is the lifeblood of a community bank.

The direct takeaway for the 2025 fiscal year is clear: while the company is maintaining a strong lending focus, the overall revenue picture is showing a slight contraction, driven by pressure on its net interest margin (NIM). The consensus revenue forecast for the full fiscal year 2025 is approximately $105.22 million.

Primary Revenue Streams: The Lending Engine

NECB's revenue is overwhelmingly driven by interest income, primarily from its lending activities. The bank's strategy is heavily concentrated in real estate, particularly in high-demand sub-markets across New York and Massachusetts. Honestly, this focus is their biggest strength, but also their biggest risk if the real estate market turns.

• Construction Loans: This is the principal business, focusing on multi-family, residential condominium, and non-residential properties.
• Commercial Lending: Includes commercial and industrial loans, which offer diversification.
• Real Estate Loans: Multifamily, mixed-use residential, and non-residential real estate loans contribute significantly.
• Non-Interest Income: A smaller but stable source comes from deposit fees and service charges.

For a deeper dive into the company's long-term strategy that guides this lending, you should review their Mission Statement, Vision, & Core Values of Northeast Community Bancorp, Inc. (NECB).

Year-Over-Year Growth and Margin Pressure

The growth story has definitely slowed down from the high-growth years of 2022 and 2023. Looking at the most recent data, the trend is a near-term dip, which is a key signal for investors. Here's the quick math on the core revenue metric:

For the nine months ended September 30, 2025, the Net Interest Income was $75.3 million. This marks a decrease of $2.2 million, or 2.9%, compared to the $77.5 million reported for the same period in 2024. The trailing twelve months (TTM) revenue ending March 31, 2025, was $104.39 million, which still represented a 6% year-over-year growth at that point, showing the decelerating trend in the latter half of the year.

The slowdown is mainly due to a decrease in the Net Interest Margin (NIM)-the profitability measure for a bank. The NIM dropped to 5.38% in Q3 2025 from 5.68% in Q3 2024. That's a 30-basis-point compression, and it tells you they're paying more for deposits or earning less on new loans, or both. This is the significant change in the revenue stream: lower interest income from loans and deposits exceeding the decrease in interest expense.

What this estimate hides is the resilience of their construction loan portfolio, which still shows strong demand and asset quality, with no non-performing loans reported as of September 30, 2025. The action for you is to watch the Q4 2025 earnings report closely for any stabilization in the NIM; if it drops below 5.25%, the revenue pressure becomes a serious structural concern.

Profitability Metrics

You need to know if Northeast Community Bancorp, Inc. (NECB) is still a high-margin performer, especially as interest rate dynamics shift. The direct takeaway is that NECB remains exceptionally profitable compared to its peers, but the margin compression trend is a clear near-term risk you must track.

For a bank, we look at Net Interest Income (NII) as the core revenue, which is your 'gross profit' equivalent. For the nine months ended September 30, 2025, NECB's Net Interest Income was Exploring Northeast Community Bancorp, Inc. (NECB) Investor Profile: Who's Buying and Why? $75.3 million, a slight decrease from the prior year period, driven by the Federal Reserve's rate cuts impacting the Net Interest Margin (NIM).

The real story is in the net result. NECB's net profit margin currently stands at an impressive 42.7%. That's defintely high for a community bank. However, this is down from 45.9% in the prior year, showing the pressure from higher funding costs and lower yields on earning assets. This margin decline is the key trend to watch.

Here's the quick math on the nine-month net: Net income for the nine months ended September 30, 2025, was $33.6 million, a decline from the $36.9 million reported in the same period in 2024.

• Net Income (9M 2025): $33.6 million.
• Net Profit Margin: 42.7% (high but declining).
• Efficiency Ratio: 38.40% (excellent operational control).

Peer Comparison and Operational Efficiency

NECB's profitability ratios are still well above the industry average, which supports a strong underlying business model focused on high-demand construction and multi-family lending in New York and Massachusetts. The firm's Return on Average Total Assets (ROA) for Q3 2025 was 2.35%. Compare that to the broader community bank industry, which reported an average ROA of about 1.13% in Q2 2025. That's more than double the industry average. That's a massive performance gap.

The Net Interest Margin (NIM)-your core profitability on lending-was 5.38% in Q3 2025. The community bank average NIM in Q2 2025 was only 3.62%. This outperformance is why the market is paying attention, even with the recent margin compression.

Operational efficiency is another bright spot. The efficiency ratio (non-interest expense as a percentage of revenue) for Q3 2025 was an excellent 38.40%. A lower ratio is better, and this figure indicates NECB is managing its non-interest costs very tightly, which helps cushion the impact of the shrinking NIM.

The near-term risk is the continued decline in the Net Interest Margin due to Federal Reserve rate cuts and deposit pressures, which could push the NIM below 5% in late 2026. Still, the current valuation, with a Price-to-Earnings ratio of just 5.6x compared to the industry average of 11.2x, suggests the market has already priced in a significant portion of this risk.

Debt vs. Equity Structure

You need to know how Northeast Community Bancorp, Inc. (NECB) is funding its expansion, and the quick answer is they are strategically increasing debt to fuel loan growth, but their capital base remains exceptionally strong. NECB's debt-to-equity ratio is low compared to the broader financial sector, giving them a significant buffer against market volatility.

As of the most recent quarter (Q3 2025), Northeast Community Bancorp, Inc. reported total stockholders' equity of approximately $344.0 million, a solid foundation that increased by 8.1% over the previous year. This equity base is funding a total asset pool of around $2.1 billion. The company's conservative financing approach is clear when you look at the total stockholders' equity to assets ratio, which stood at a robust 16.73% as of September 30, 2025. That's a defintely healthy capital position for a bank.

The Recent Shift to Debt Financing

The notable change in 2025 is the company's deliberate pivot toward debt to manage deposit outflows and support strong loan demand, especially in construction and multi-family lending. The total debt (borrowings) for Northeast Community Bancorp, Inc. has seen a sharp increase this year, rising from virtually no debt at the end of 2024 to approximately $174.97 million in the most recent quarter. This debt is primarily in the form of borrowings, a common funding source for banks, used to diversify away from a reliance on deposits.

Here's the quick math on the leverage picture as of Q3 2025:

• Total Debt (MRQ): $174.97 million
• Total Stockholders' Equity (Q3 2025): $344.0 million
• Calculated Debt-to-Equity Ratio: 0.51:1 (or 51.0%)

This calculated Debt-to-Equity ratio (total debt divided by total equity) of about 0.51:1 is still well below the sector average for companies in the Financials sector, which typically averages around 97.1%. The low ratio signals that the company is using significantly more equity than debt to finance its assets compared to its peers, a sign of financial conservatism and low leverage risk. For context, the company's debt-to-equity ratio had been as low as 1.5% in December 2024, highlighting just how recent and strategic this current debt increase is.

Balancing Capital and Growth

Northeast Community Bancorp, Inc. is balancing its financing needs by simultaneously using debt for growth and equity for shareholder returns. While increasing borrowings to fund loan expansion, the company has also been actively repurchasing its own stock, a clear equity-side action. As of June 30, 2025, the company had repurchased 1,091,174 shares of common stock at a cost of $17.2 million under its second program. This dual strategy shows management is confident enough in its capital position to return money to shareholders while still accessing external debt markets to capture loan growth opportunities, particularly given the strong demand with unfunded commitments exceeding $645 million at September 30, 2025.

You can find more detailed analysis on this shift in the full post: Breaking Down Northeast Community Bancorp, Inc. (NECB) Financial Health: Key Insights for Investors

Liquidity and Solvency

You're looking at Northeast Community Bancorp, Inc. (NECB) and want to know if they have enough cash to cover their short-term obligations. This is a smart move. For a bank, liquidity isn't just about cash in the vault; it's about stable funding-deposits-versus loan demand.

The core takeaway is that while NECB's traditional liquidity ratios are low, which is normal for a bank, the recent trend of declining deposits and rising wholesale debt is the real liquidity risk to watch. They are actively funding strong loan growth, but the cost of that funding is rising.

Assessing Liquidity Positions: Ratios and Context

When you look at a bank's Current Ratio (Current Assets / Current Liabilities) and Quick Ratio (most liquid assets / Current Liabilities), you'll see numbers that would be a huge red flag for a manufacturing company. For Northeast Community Bancorp, Inc., the Annual 2024 Current Ratio and Quick Ratio were both around 0.05. This is not a sign of imminent failure; it's simply a function of the banking business model.

Here's the quick math on why: a bank's primary asset is long-term loans, which are not considered 'current' (i.e., convertible to cash within a year) in this calculation. But their primary liability, customer deposits, is considered current. So, don't panic over the low ratio. Instead, focus on the stability of their deposits and their ability to raise new funds.

Working Capital and Funding Trends

The true measure of near-term liquidity for Northeast Community Bancorp, Inc. is its ability to maintain and grow its deposit base. This is where we see a clear, and defintely concerning, trend in the 2025 fiscal year data.

• Deposits Declining: Total deposits decreased by $155.0 million, or 9.3%, from the end of 2024 through the third quarter of 2025.
• Debt Increasing: To offset these deposit outflows, the bank took on debt, which rose to $138.1 million by the end of Q2 2025, up from virtually $0 at the end of 2024.
• Cash Shrinking: Cash and cash equivalents dropped by $13.9 million, a 17.8% decrease, to $64.3 million as of September 30, 2025.

This shift from low-cost customer deposits to higher-cost wholesale debt is a direct hit to the net interest margin (NIM) and the cost of capital. That's the real liquidity pressure point.

Cash Flow Statements Overview (Nine Months Ended September 30, 2025)

The cash flow statement for Northeast Community Bancorp, Inc. tells the story of a bank that is aggressively lending, which requires significant funding, and is having to pay more to get it. The net income for the first nine months of 2025 was a solid $33.6 million, which drives the operating cash flow, but the investing and financing sections show the strain.

The cash flow dynamics break down like this:

The bank has outstanding unfunded loan commitments exceeding $645 million as of September 30, 2025. This is a huge potential future cash outflow, meaning they must defintely keep securing new funding sources to meet these obligations and continue their growth trajectory. To dive deeper into the full financial picture, you can read the full post at Breaking Down Northeast Community Bancorp, Inc. (NECB) Financial Health: Key Insights for Investors.

Next Step: Check the cost of their new debt versus their loan yields to see how much more pressure their net interest margin will face in Q4 2025.

Valuation Analysis

You're looking at Northeast Community Bancorp, Inc. (NECB) and trying to figure out if the market has it priced right. The direct takeaway is that, based on key metrics for the 2025 fiscal year, the stock appears to be trading at a discount to its intrinsic value, but the recent price action signals near-term risk.

As a seasoned analyst, I see a classic value-trap signal: a low Price-to-Earnings (P/E) multiple paired with a steep price drop. The trailing twelve-month (TTM) P/E ratio sits at a low 6.07x, which is well below the sector average. This suggests the stock is cheap on an earnings basis. Also, the Price-to-Book (P/B) ratio is at a modest 1.01x, meaning you are paying almost exactly the book value for the bank's assets. Even better, the Price-to-Tangible Book Value (P/TBV) is even lower at about 0.95, which means you are buying the tangible assets for less than their accounting value. That's defintely a value indicator.

Here's the quick math: with the stock trading around $20.32 as of November 2025, and a Tangible Book Value Per Share of approximately $24.23, the market is clearly pricing in some skepticism about future earnings or asset quality. This is a common theme with regional banks right now, so you need to look closer at the risk factors that are driving this discount.

• P/E Ratio (TTM): 6.07x
• P/B Ratio (TTM): 1.01x
• P/TBV (Approx.): 0.95x

Stock Price Trend and Analyst Consensus

The market's skepticism is visible in the stock's recent performance. Over the last 52 weeks leading up to November 2025, Northeast Community Bancorp, Inc.'s stock price has decreased by a significant -32.91%. The 52-week range tells the story of the volatility, moving from a high of $31.72 down to a low of $19.27. This deep correction is what creates the low valuation multiples we see today.

The analyst community is reflecting this uncertainty. The current consensus on the stock valuation is a unanimous Hold. Only one analyst has offered a short-term price target, setting it at $24.00. That target represents a potential upside of about 18% from the current price, but the lack of a strong Buy signal tells you that Wall Street is waiting for clearer signals on interest rate trends and commercial real estate risk before committing.

Dividend Profile and Payout Health

For income-focused investors, the dividend profile is a bright spot and a key reason for the 'Hold' rating. The forward dividend yield is a healthy 3.94%. More importantly, the bank's forward payout ratio-the percentage of earnings paid out as dividends-is very conservative at just 22.88%. This low ratio is a strong indicator of dividend safety, suggesting the company has ample room to maintain or even grow the dividend, even if earnings dip slightly. This is a well-covered dividend.

The bank's valuation ratios (P/E and P/B) point to an undervalued stock, but the price trend and analyst consensus say 'caution.' You need to treat this as a deep-value opportunity with a clear near-term risk profile. For a full breakdown of the underlying financial health, including asset quality and capital ratios, you should read our comprehensive analysis: Breaking Down Northeast Community Bancorp, Inc. (NECB) Financial Health: Key Insights for Investors.

Risk Factors

You're looking at Northeast Community Bancorp, Inc. (NECB) because the numbers look great-a return on average total assets of 2.35% for Q3 2025 is impressive for a regional bank. But as a seasoned analyst, I focus on what can break that trend. The primary risks for NECB aren't about current credit quality, which remains exceptionally strong, but about the external pressures squeezing their core business model and the concentration in their loan book.

The most immediate financial risk is Net Interest Margin (NIM) Compression. This is the difference between what the bank earns on loans and pays on deposits. NECB's NIM slipped to 5.38% in Q3 2025 from 5.68% a year prior, a clear sign of pressure. Why? Recent deposit outflows, combined with the Federal Reserve's rate cuts in late 2024, mean the bank has to pay more for deposits or borrow from more expensive sources to fund its growing loan portfolio. This is a defintely a tight spot for a bank with an elevated loan-to-deposit ratio.

The company also faces significant Credit Concentration Risk. NECB is a specialist, with approximately 74% of its total loan portfolio dedicated to real estate financing, primarily construction loans in New York and Massachusetts. This focus is a double-edged sword: it drives high returns but ties the bank's fate tightly to the regional real estate market's health. While asset quality remains robust-non-performing assets were only 0.04% of total assets at June 30, 2025-a sharp downturn in their core markets could rapidly change the picture. This is the big one. To understand the investor landscape around this risk, you should read Exploring Northeast Community Bancorp, Inc. (NECB) Investor Profile: Who's Buying and Why?

Here's a quick look at the key risks highlighted in recent Q3 2025 filings:

• Interest Rate Volatility: Ongoing NIM pressure from deposit costs and Fed policy.
• Real Estate Market Decline: Risk to construction loan portfolio value in New York and Massachusetts.
• Funding/Liquidity: A decrease in deposit levels forcing reliance on costlier wholesale funding.
• Operational Security: The ever-present threat of cyberattacks or system failures, which all banks face.

To be fair, Northeast Community Bancorp, Inc. (NECB) is not ignoring these risks. They maintain a very strong capital cushion, with a Tier 1 leverage capital ratio of 16.10% as of September 30, 2025. This is well above regulatory minimums and provides a substantial buffer against unexpected credit losses. Plus, they have significant available borrowing power for liquidity, including access to $740.2 million from the Federal Reserve Bank of New York as of Q3 2025. This is their mitigation plan: keep capital high and liquidity lines open.

The strategic risk is a lack of diversification. While the bank is a top performer in its niche-reporting net income of $33.6 million for the first nine months of 2025-that niche is narrow. Any new regulatory changes specific to construction lending or New York City cooperative corporation lending could have an outsized impact on their earnings per share, which was $0.87 (diluted) in Q3 2025. You have to weigh the high return on equity (ROE of 13.84% in Q3 2025) against the concentration risk that generates it.

Here is a summary of the key financial risks and their current status:

The takeaway is simple: the current financial health is excellent, but the model is sensitive to interest rate and regional real estate cycles. Your action is to monitor the NIM trend and the non-performing loan ratio in the upcoming Q4 2025 report.

Growth Opportunities

You're looking past the current market noise to see where Northeast Community Bancorp, Inc. (NECB) is actually building its future, and that's smart. The direct takeaway is that while net interest margin (NIM) pressure is a real near-term headwind, the bank's core business-specialized construction lending-is a powerful, persistent growth engine.

The company's primary growth driver remains its focus on construction financing in high-demand areas like New York and Massachusetts. This isn't just a generic banking play; it's a targeted product innovation. Loan demand has remained strong throughout 2025, with originations and outstanding commitments robust. For example, in the second quarter of 2025 alone, the bank's outstanding unfunded commitments exceeded $636 million, signaling a deep pipeline of future business.

Here's the quick math on near-term earnings: analyst consensus for the full 2025 fiscal year projects earnings per share (EPS) at $3.29. Looking ahead, the consensus EPS forecast for 2026 is $3.37. This suggests a steady, if modest, earnings growth of around 2.43% as they navigate the current interest rate environment. Revenue is also expected to finish the year strong, with the Q4 2025 consensus revenue forecast at $27.335 million.

Their strategic initiatives are focused on capital return and shoring up the balance sheet, which is defintely a realist's approach. They aren't chasing risky acquisitions, but rather executing on a disciplined plan:

• Capital Return: Continuing a stock repurchase program, which is a direct way to boost EPS and return value to shareholders.
• Funding Diversification: Increasing borrowings, which stood at $170.0 million as of September 30, 2025, to diversify funding sources and reduce reliance on potentially more costly deposits.
• Physical Expansion: Investing in the physical footprint with the expansion of a branch office, which signals confidence in their core market and local presence.

What this estimate hides is the potential for an acquisition, which some analysts see as an upside given their attractive valuation and strong asset quality. Still, you can't bank on a takeover. What you can rely on is their rock-solid competitive advantage in a challenging sector. Northeast Community Bancorp, Inc. has maintained exceptional asset quality, reporting no non-performing loans as of the end of Q3 2025.

This focus on quality translates directly into top-tier performance metrics that position them well against peers:

Plus, they've earned industry accolades like the Raymond James Community Bankers Cup for 2023 and 2024, recognizing their excellence in community banking. This is a small bank with the operational discipline of a much larger one. For a deeper dive into the financials, check out Breaking Down Northeast Community Bancorp, Inc. (NECB) Financial Health: Key Insights for Investors.