Northeast Community Bancorp, Inc. is a federally chartered stock holding company
established on July 5, 2006 to be the holding company for Northeast Community
Bank (the “Bank”). Northeast Community Bancorp’s business
activity is the ownership of the outstanding capital stock of the Bank. Northeast
Community Bancorp does not own or lease any property but instead uses the premises,
equipment and other property of the Bank with the payment of appropriate rental
fees, as required by applicable law and regulations, under the terms of an expense
allocation agreement.
Northeast Community Bancorp, MHC (the “MHC”) is the Company’s
federally chartered mutual holding company parent. As a mutual holding company,
the MHC is a non-stock company that has as its members the depositors of Northeast
Community Bank. The MHC does not engage in any business activity other than
owning a majority of the common stock of Northeast Community Bancorp. So long
as we remain in the mutual holding company form of organization, the MHC will
own a majority of the outstanding shares of Northeast Community Bancorp.
Northeast Community Bank was originally chartered in 1934 as a federal savings
association. In 2006, Northeast Community Bank changed its name from “Fourth
Federal Savings Bank” to “Northeast Community Bank.” The Bank
completed its conversion from a federally-chartered savings bank to a New York
State-chartered savings bank effective as of the close of business on June 29,
2012.
We operate as a community-oriented financial institution offering traditional
financial services to consumers and businesses in our market area and our lending
territory. We attract deposits from the general public and use those funds to
originate multi-family residential and mixed-use real estate and non-residential
loans, which we hold for investment.
We originate non-owner occupied one- to four-family residential mortgage loans
as investment vehicles as an accommodation to develop and/or maintain relationships
with our deposit and certain of our multi-family, mixed-use, non-residential,
and commercial and industrial loan customers. We offer investment advisory and
financial planning services under the name Hayden Wealth Management Group, a
division of the Bank, through a networking arrangement with a registered broker-dealer
and investment advisor.
We originate loans primarily for investment purposes. The largest segment of
our loan portfolio is multi-family residential real estate loans. We also originate
mixed-use real estate loans and non-residential loans and in 2007 we began originating
commercial and industrial loans. To a limited degree, we make consumer loans.
We on occasion originate non-owner occupied one- to four-family residential
mortgage loans as investment vehicles as an accommodation to develop and/or
maintain relationships with our deposit and certain of our multi-family, mixed-use,
non-residential, and commercial and industrial loan customers. We consider our
lending territory to be the Northeastern United States, including New York,
Massachusetts, New Jersey, Connecticut, Pennsylvania, and New Hampshire.
We have legal authority to invest in various types of liquid assets, including
U.S. Treasury obligations, securities of various federal agencies and municipal
governments, deposits at the FHLB of New York and certificates of deposit of
federally insured institutions. Within certain regulatory limits, we also may
invest a portion of our assets in mutual funds.
Our investment management policy is designed to provide adequate liquidity
to meet any reasonable decline in deposits and any anticipated increase in the
loan portfolio through conversion of secondary reserves to cash and to provide
safety of principal and interest through investment in securities under limitations
and restrictions prescribed in banking regulations. Consistent with liquidity
and safety requirements, our policy is designed to generate a significant amount
of stable income and to provide collateral for advances and repurchase agreements.
The policy is also designed to serve as a counter-cyclical balance to earnings
in that the investment portfolio will absorb funds when loan demand is low and
will infuse funds when loan demand is high.
In 2011, we initiated a program under which we acted as a residential mortgage
loan broker for nationally recognized third-party mortgage originators. Under
this program, our mortgage brokerage team marketed one- to four-family residential
mortgage loans, collected loan applications and forwarded such documentation
to the third-party mortgage originator who made all credit decisions and originated
all loans. We received an agreed upon fee from the third-party mortgage originator
upon the closing of the loan. We marketed these services solely through our
branch network in Massachusetts. In January 2013, we discontinued this program
and laid off our mortgage brokerage staff.
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