NORTHFIELD BANCORP, INC. (Nasdaq:NFBK) (the
“Company”), the holding company for Northfield Bank,
reported net income of $6.0 million, or $0.14 per diluted share for
the three months ended June 30, 2024, compared to $6.2 million, or
$0.15 per diluted share, for the three months ended March 31,
2024, and $9.6 million, or $0.22 per diluted share, for the three
months ended June 30, 2023. For the six months ended June 30,
2024, net income totaled $12.2 million, or $0.29 per diluted share,
compared to $21.3 million, or $0.48 per diluted share, for the six
months ended June 30, 2023. For the three and six months ended June
30, 2024, net income included $795,000 of additional tax expense
related to options that expired in June 2024, and $683,000 of
severance expense related to staffing resource realignments. For
the three and six months ended June 30, 2023, net income included
$440,000, or $0.01 per share of severance expense. The decrease in
net income for both the current quarter and the six months ended
June 30, 2024, compared to the comparable prior year periods was
primarily the result of a decrease in net interest income, which
was negatively impacted by higher funding costs.
Commenting on the quarter, Steven M. Klein, the
Company’s Chairman, President and Chief Executive Officer stated,
“In the second quarter, the Northfield team remained focused on the
fundamentals of serving our communities, developing and building on
relationships, and improving upon our efficiencies.” Mr. Klein
continued, “We delivered solid financial performance for the
quarter prudently managing loan and deposit balances, maintaining
strong asset quality, and managing our expenses, and while
significant risks remain, including the level of inflation and
interest rate movements, we have effectively managed our cost of
funds, and with assets repricing higher, net interest income
increased as compared to the prior quarter.”
Mr. Klein concluded, “We will continue to
prudently manage our strong capital and liquidity and focus on our
Locally Grown approach to community commercial banking, and I am
pleased to announce that the Board of Directors has declared a cash
dividend of $0.13 per common share, payable on August 21, 2024, to
stockholders of record on August 7, 2024.”
Results of Operations
Comparison of Operating Results for the Six Months Ended
June 30, 2024 and 2023
Net income was $12.2 million and $21.3 million
for the six months ended June 30, 2024 and June 30, 2023,
respectively. Significant variances from the comparable prior year
period are as follows: a $9.5 million decrease in net interest
income, a $1.1 million decrease in the provision for credit losses
on loans, a $3.4 million increase in non-interest expense, and a
$2.6 million decrease in income tax expense.
Net interest income for the six months ended
June 30, 2024, decreased $9.5 million, or 14.4%, to $56.6
million, from $66.1 million for the six months ended June 30,
2023 due to a $26.8 million increase in interest expense, which was
partially offset by a $17.3 million increase in interest income.
The increase in interest expense was largely driven by the cost of
interest-bearing liabilities which increased by 112 basis points to
2.92% for the six months ended June 30, 2024, from 1.80% for
the six months ended June 30, 2023, driven primarily by a 134
basis point increase in the cost of interest-bearing deposits from
1.21% to 2.55% for the six months ended June 30, 2024, and a
31 basis point increase in the cost of borrowings from 3.56% to
3.87% due to rising market interest rates and a shift in the
composition of the deposit portfolio towards higher-costing
certificates of deposit and a greater reliance on borrowings. The
increase in interest expense was also due to a $302.3 million, or
7.6%, increase in the average balance of interest-bearing
liabilities, including an increase of $191.0 million in the average
balance of borrowed funds and a $111.2 million increase in average
interest-bearing deposits. The increase in interest income was
primarily due to a $156.4 million, or 2.9%, increase in the average
balance of interest-earning assets coupled with a 51 basis point
increase in the yield on interest-earning assets which increased to
4.33% for the six months ended June 30, 2024, from 3.82% for the
six months ended June 30, 2023, due to the rising rate environment.
The increase in the average balance of interest-earning assets was
primarily due to increases in the average balance of
interest-earning deposits in financial institutions of $154.7
million, the average balance of other securities of $105.4 million,
and the average balance of mortgage-backed securities of $11.7
million, partially offset by a decrease in the average balance of
loans of $113.5 million.
Net interest margin decreased by 42 basis points
to 2.06% from 2.48% for the six months ended June 30, 2023.
The decrease in net interest margin was primarily due to
interest-bearing liabilities repricing at a faster rate than
interest-earning assets. The net interest margin was negatively
affected by approximately 12 basis points due to a $300 million low
risk leverage strategy in the first quarter of 2024. The Company
accreted interest income related to purchased credit-deteriorated
(“PCD”) loans of $747,000 for the six months ended June 30,
2024, as compared to $678,000 for the six months ended
June 30, 2023. Net interest income for the six months ended
June 30, 2024, included loan prepayment income of $561,000 as
compared to $1.2 million for the six months ended June 30,
2023.
The provision for credit losses on loans
decreased by $1.1 million to a benefit of $203,000 for the six
months ended June 30, 2024, compared to a provision of
$894,000 for the six months ended June 30, 2023, primarily due
to a decline in loan balances and an improvement in the
macroeconomic forecast for the current period within our Current
Expected Credit Loss (“CECL”) model. Partially offsetting the
decrease was an increase in reserves in the commercial and
industrial and home equity and lines of credit portfolios related
to an increase in non-performing loans in these portfolios and
higher loan balances. Net charge-offs were $2.6 million for the six
months ended June 30, 2024, primarily due to $2.4 million in
net charge-offs on small business unsecured commercial and
industrial loans, as compared to net charge-offs of $2.4 million
for the six months ended June 30, 2023. Management continues
to closely monitor the small business unsecured commercial and
industrial loan portfolio, which totaled $33.6 million at
June 30, 2024.
Non-interest income remained stable at $6.2
million for the six months ended June 30, 2024 as compared to
$6.1 million for the six months ended June 30, 2023. Fees and
service charges increased by $496,000, primarily due to an increase
in overdraft fees and service charges on deposit accounts, which
was partially offset by a decrease in other non-interest income of
$488,000, primarily due to lower swap fee income.
Non-interest expense increased $3.4 million, or
8.2%, to $45.3 million for the six months ended June 30, 2024,
compared to $41.9 million for the six months ended June 30,
2023. The increase was primarily due to a $2.8 million increase in
employee compensation and benefits, primarily attributable to
higher salary expense, related to annual merit increases, an
increase in medical expense, and an increase in severance expense
to $683,000 as compared to $440,000 for the six months ended
June 30, 2023. Partially offsetting the increase was a
$461,000 decrease in stock compensation expense related to
performance stock awards not expected to vest. During the second
quarter of 2024, due to current economic conditions, the Company
implemented a workforce reduction plan which included modest
layoffs and staffing resource realignments. The annual estimated
cost savings of this plan is $2.0 million, pre-tax. Additionally,
there was a $736,000 increase in credit loss expense/(benefit) for
off-balance sheet exposure due to a provision of $186,000 recorded
during the six months ended June 30, 2024, as compared to a benefit
of $550,000 for the comparative prior year period. The benefit in
the prior year period was attributable to a decrease in the
pipeline of loans committed and awaiting closing. There was also an
increase of $311,000 in other non-interest expense, primarily
office and miscellaneous expenses. Partially offsetting the
increases was a $249,000 decrease in professional fees, and a
$420,000 decrease in advertising expense due to a change in
marketing strategy and the timing of specific deposit and lending
campaigns.
The Company recorded income tax expense of $5.5
million for the six months ended June 30, 2024, compared to
$8.1 million for the six months ended June 30, 2023, with the
decrease due to lower taxable income partially offset by a higher
effective tax rate. The effective tax rate for the six months ended
June 30, 2024, was 31.2% compared to 27.7% for the six months
ended June 30, 2023. In June 2024, options granted in 2014
expired and resulted in additional tax expense of $795,000,
contributing to the higher effective tax rate for the six months
ended June 30, 2024 as compared to the six months ended
June 30, 2023.
Comparison of Operating Results for the Three
Months Ended June 30, 2024 and 2023
Net income was $6.0 million and $9.6 million for
the quarters ended June 30, 2024 and June 30, 2023,
respectively. Significant variances from the comparable prior year
quarter are as follows: a $2.5 million decrease in net
interest income, a $648,000 decrease in the provision for credit
losses on loans, a $2.2 million increase in non-interest
expense, and a $399,000 decrease in income tax
expense.
Net interest income for the quarter ended
June 30, 2024, decreased $2.5 million, or 7.9%, to $28.7
million, from $31.2 million for the quarter ended June 30,
2023, due to an $11.0 million increase in interest expense,
partially offset by an $8.6 million increase in interest income.
The increase in interest expense was largely driven by the impact
of rising market interest rates and a $288.7 million, or 7.2%,
increase in the average balance of interest-bearing liabilities,
including increases of $251.0 million and $37.6 million in the
average balance of interest-bearing deposits and borrowings,
respectively. The increase in interest income was primarily due to
a $177.4 million, or 3.3%, increase in the average balance of
interest-earning assets coupled with a 51 basis point increase in
yields on interest-earning assets due to the rising rate
environment. The increase in the average balance of
interest-earning assets was due to increases in the average balance
of interest-earning deposits in financial institutions of $123.6
million, the average balance of mortgage-backed securities of
$121.1 million, and the average balance of other securities of
$94.6 million, partially offset by decreases in the average balance
of loans outstanding of $156.8 million and the average balance of
Federal Home Loan Bank of New York stock of $5.2 million.
Net interest margin decreased by 25 basis points
to 2.09% for the quarter ended June 30, 2024, from 2.34% for
the quarter ended June 30, 2023, primarily due to the cost of
interest-bearing liabilities increasing faster than the repricing
of interest-earning assets. The cost of interest-bearing
liabilities increased by 90 basis points to 2.95% for the quarter
ended June 30, 2024, from 2.05% for the quarter ended
June 30, 2023, driven primarily by a 117 basis point increase
in the cost of interest-bearing deposits from 1.43% to 2.60%, and a
20 basis point increase in the cost of borrowings from 3.68% to
3.88%. The increase in the cost of interest-bearing liabilities was
partially offset by an increase in the yield on interest-earning
assets which increased by 51 basis points to 4.39% for the quarter
ended June 30, 2024, from 3.88% for the quarter ended
June 30, 2023. Net interest income for the quarter ended
June 30, 2024, included loan prepayment income of $210,000, as
compared to $194,000 for the quarter ended June 30, 2023. The
Company accreted interest income related to PCD loans of $321,000
for the quarter ended June 30, 2024, as compared to $337,000
for the quarter ended June 30, 2023.
The provision for credit losses on loans
decreased by $648,000 to a benefit of $618,000 for the quarter
ended June 30, 2024, from a provision of $30,000 for the
quarter ended June 30, 2023, primarily due to a decrease in
loan balances and an improvement in the macroeconomic forecast for
the current quarter within our CECL model. Partially offsetting the
decrease was an increase in reserves in the commercial and
industrial and home equity and lines of credit portfolios related
to an increase in non-performing loans in these portfolios and
higher balances and an increase in net charge-offs. Net charge-offs
were $1.6 million for the quarter ended June 30, 2024,
compared to net charge-offs of $313,000 for the quarter ended
June 30, 2023, due to $1.5 million in net charge-offs on small
business unsecured commercial and industrial loans.
Non-interest income increased by $43,000, or
1.5%, to $2.9 million for the quarter ended June 30, 2024,
from $2.8 million for the quarter ended June 30, 2023,
primarily due to a $261,000 increase in fees and service charges,
primarily related to higher overdraft fees, partially offset by a
$318,000 decrease in gains on trading securities. For the quarter
ended June 30, 2024, gains on trading securities, net, were
$188,000, compared to gains of $506,000 in the quarter ended
June 30, 2023. The trading portfolio is utilized to fund the
Company’s deferred compensation obligation to certain employees and
directors of the Company's deferred compensation plan (the “Plan”).
The participants of this Plan, at their election, defer a portion
of their compensation. Gains and losses on trading securities have
no effect on net income since participants benefit from, and bear
the full risk of, changes in the trading securities market values.
Therefore, the Company records an equal and offsetting amount in
compensation expense, reflecting the change in the Company’s
obligations under the Plan.
Non-interest expense increased by $2.2 million,
or 10.7%, to $23.0 million for the quarter ended June 30,
2024, from $20.8 million for the quarter ended June 30, 2023.
The increase was primarily due to a $1.0 million increase in
compensation and employee benefits, primarily attributable to
higher salary expense related to annual merit increases, an
increase in medical expense and an increase in severance expense to
$683,000 as compared to $440,000 in the quarter ended June 30,
2023. Partially offsetting the increase was a $461,000 decrease in
stock compensation expense related to performance stock awards not
expected to vest and a $318,000 decrease in the mark to market of
the Company's deferred compensation plan expense, which as
discussed above has no effect on net income. Also contributing to
the increase was a $764,000 increase in the credit loss
expense/(benefit) for off-balance sheet exposures which was due to
$103,000 of expense recorded during the quarter ended June 30,
2024, compared to a benefit of $661,000 recorded in the prior year
quarter. The benefit in the prior year quarter was attributable to
a decrease in the pipeline of loans committed and awaiting closing.
There was also a $415,000 increase in other non-interest
expense.
The Company recorded income tax expense of $3.2
million for the quarter ended June 30, 2024, compared to $3.6
million for the quarter ended June 30, 2023, with the decrease
due to lower taxable income, partially offset by a higher effective
tax rate. The effective tax rate for the quarter ended
June 30, 2024 was 35.0%, compared to 27.4% for the quarter
ended June 30, 2023. During the quarter ended June 30,
2024, options granted in 2014 expired and resulted in additional
tax expense of $795,000, contributing to the higher effective tax
rate for the quarter ended June 30, 2024 as compared to the
quarter ended June 30, 2023.
Comparison of Operating Results for the Three Months Ended
June 30, 2024 and March 31, 2024
Net income was $6.0 million and $6.2 million for
the quarters ended June 30, 2024, and March 31, 2024,
respectively. Significant variances from the prior quarter are as
follows: an $803,000 increase in net interest income, a $1.0
million decrease in the provision for credit losses on loans, a
$522,000 decrease in non-interest income, a $661,000 increase in
non-interest expense, and a $910,000 increase in income tax
expense.
Net interest income for the quarter ended
June 30, 2024, increased by $803,000, or 2.9%, primarily due
to a $1.6 million increase in interest income, partially offset by
a $769,000 increase in interest expense on deposits and borrowings.
The increase in interest income was primarily due to a 12 basis
point increase in the yield on interest-earning assets to 4.39% for
the quarter ended June 30, 2024, from 4.27% for the quarter
ended March 31, 2024, primarily due to higher yields on loans
and securities, partially offset by a $1.3 million decrease in the
average balance of interest-earning assets. The decrease in the
average balance of interest-earning assets was primarily due to
decreases in the average balance of interest-earning deposits in
financial institutions of $71.4 million, the average balance of
other securities of $58.1 million, and the average balance of loans
outstanding of $46.6 million, partially offset by an increase in
the average balance of mortgage-backed securities of $175.7
million. The increase in interest expense on deposits and
borrowings was primarily due to an increase in the cost of
interest-bearing liabilities of six basis points to 2.95% for the
quarter ended June 30, 2024, from 2.89% for the quarter ended
March 31, 2024 as well as a $5.2 million, or 0.1%, increase in
the average balance of interest-bearing liabilities attributable to
a $73.0 million increase in the average balance of interest-bearing
deposits which was partially offset by a decrease of $67.8 million
in the average balance of borrowed funds.
Net interest margin increased by six basis
points to 2.09% from 2.03% for the quarter ended March 31,
2024, primarily due to the increase in yields on interest-earning
assets outpacing the cost of interest-bearing liabilities. Net
interest income for the quarter ended June 30, 2024, included
loan prepayment income of $210,000 as compared to $351,000 for the
quarter ended March 31, 2024. The Company accreted interest
income related to PCD loans of $321,000 for the quarter ended
June 30, 2024, as compared to $426,000 for the quarter ended
March 31, 2024.
The provision for credit losses on loans
decreased by $1.0 million to a benefit of $618,000 for the quarter
ended June 30, 2024, from a provision of $415,000 for the
quarter ended March 31, 2024. The benefit in the current
quarter was primarily due to a decrease in loan balances and an
improvement in the macroeconomic forecast for the current quarter
within our CECL model. Partially offsetting the decrease was an
increase in reserves in the commercial and industrial and home
equity and lines of credit portfolios related to an increase in
non-performing loans in these portfolios as well as higher net
charge-offs. Net charge-offs were $1.6 million for the quarter
ended June 30, 2024, primarily due to $1.5 million in net
charge-offs on small business unsecured commercial and industrial
loans, as compared to net charge-offs of $911,000 for the quarter
ended March 31, 2024.
Non-interest income decreased by $522,000, or
15.4%, to $2.9 million for the quarter ended June 30, 2024,
from $3.4 million for the quarter ended March 31, 2024. The
decrease was primarily due to a $511,000 decrease in gains on sales
of trading securities, net. For the quarter ended June 30,
2024, gains on trading securities, net, were $188,000, compared to
gains of $699,000 for the quarter ended March 31, 2024. Gains
and losses on trading securities have no effect on net income since
participants benefit from, and bear the full risk of, changes in
the trading securities market values.
Non-interest expense increased by $661,000, or
3.0%, to $23.0 million for the quarter ended June 30, 2024,
from $22.3 million for the quarter ended March 31, 2024. The
increase was primarily due to a $623,000 increase in compensation
and employee benefits, primarily attributable to an increase in
medical expense and an increase in severance expense of $683,000,
partially offset by a $461,000 decrease in stock compensation
expense related to performance stock awards not expected to vest
and a $511,000 decrease in the mark to market of the Company's
deferred compensation plan expense. Also contributing to the
increase was an increase of $429,000 in other non-interest expense.
Partially offsetting the increases were decreases of $331,000 in
occupancy expense, primarily lower repairs and maintenance costs
and $128,000 in professional fees, primarily lower audit fees.
The Company recorded income tax expense of $3.2
million for the quarter ended June 30, 2024, compared to $2.3
million for the quarter ended March 31, 2024. The effective
tax rate for the quarter ended June 30, 2024 was 35.0%,
compared to 27.0% for the quarter ended March 31, 2024. During
the quarter ended June 30, 2024, options granted in 2014
expired and resulted in additional tax expense of $795,000,
contributing to the higher effective tax rate for the quarter ended
June 30, 2024 compared to the previous quarter.
Financial Condition
Total assets increased by $148.0 million, or
2.6%, to $5.75 billion at June 30, 2024, from $5.60 billion at
December 31, 2023. The increase was primarily due to increases
in available-for-sale debt securities of $324.0 million, or 40.7%,
equity securities of $3.3 million, or 31.4%, and other assets of
$3.2 million, or 6.6%, partially offset by decreases in loans
receivable of $112.4 million, or 2.7%, and cash and cash
equivalents of $76.0 million, or 33.1%.
Cash and cash equivalents decreased by $76.0
million, or 33.1%, to $153.5 million at June 30, 2024, from
$229.5 million at December 31, 2023, primarily due to a
decrease in Federal Reserve Bank of New York (“FRB”) balances.
Balances fluctuate based on the timing of receipt of security and
loan repayments and the redeployment of cash into higher-yielding
assets such as loans and securities, or the funding of deposit
outflows or borrowing maturities.
Loans held-for-investment, net, decreased by
$112.4 million, or 2.7%, to $4.09 billion at June 30, 2024
from $4.20 billion at December 31, 2023, primarily due to
decreases in multifamily and commercial real estate loans,
partially offset by increases in home equity and lines of credit,
construction and land, and commercial and industrial loans. The
decrease in loan balances reflects the Company remaining
strategically focused on both managing the concentration of its
commercial and multifamily real estate loan portfolios and
disciplined loan pricing, as well as lower customer demand in the
current elevated interest rate environment. Multifamily loans
decreased $85.8 million, or 3.1%, to $2.67 billion at June 30,
2024 from $2.75 billion at December 31, 2023, commercial real
estate loans decreased $33.4 million, or 3.6%, to
$896.2 million at June 30, 2024 from $929.6 million
at December 31, 2023, one-to-four family residential loans
decreased $8.9 million, or 5.5%, to $151.9 million at
June 30, 2024 from $160.8 million at December 31,
2023, and other loans decreased $263,000, or 10.2%, to $2.3 million
at June 30, 2024 from $2.6 million at December 31, 2023.
Partially offsetting these decreases were increases in commercial
and industrial loans of $10.5 million, or 6.8%, to $165.8 million
at June 30, 2024 from $155.3 million at December 31,
2023, home equity and lines of credit of $4.3 million, or 2.6%, to
$167.9 million at June 30, 2024 from $163.5 million at
December 31, 2023, and construction and land loans of $1.6
million, or 5.3%, to $32.6 million at June 30, 2024 from
$31.0 million at December 31, 2023.
As of June 30, 2024, non-owner occupied
commercial real estate loans (as defined by regulatory guidance) to
total risk-based capital was estimated at approximately 456%.
Management believes that Northfield Bank (the “Bank”) maintains
appropriate risk management practices including risk assessments,
board-approved underwriting policies and related procedures, which
include monitoring Bank portfolio performance, performing market
analysis (economic and real estate), and stressing of the Bank’s
commercial real estate portfolio under severe, adverse economic
conditions. Although management believes the Bank has implemented
appropriate policies and procedures to manage its commercial real
estate concentration risk, the Bank’s regulators could require it
to implement additional policies and procedures or could require it
to maintain higher levels of regulatory capital, which might
adversely affect its loan originations, the Company's ability to
pay dividends, and overall profitability.
Our real estate portfolio includes credit risk
exposure to loans collateralized by office buildings and
multifamily properties in New York State subject to some form of
rent regulation limiting rent increases for rent stabilized
multifamily properties. At June 30, 2024, office-related loans
represented $199.6 million, or approximately 5% of our total loan
portfolio, with an average balance of $1.8 million (although we
have originated these type of loans in amounts substantially
greater than this average) and a weighted average loan-to-value
ratio of 58%. Approximately 45% were owner-occupied. The geographic
locations of the properties collateralizing our office-related
loans are: 55.4% in New York and 44.6% in New Jersey. At
June 30, 2024, our largest office-related loan had a principal
balance of $90.0 million (with a net active principal balance for
the Bank of $30.0 million as we have a 33.3% participation
interest), was secured by an office facility located in Staten
Island, New York, and was performing in accordance with its
original contractual terms. At June 30, 2024, multifamily
loans that have some form of rent stabilization or rent control
totaled approximately $440.0 million, or approximately 11% of our
total loan portfolio, with an average balance of $1.7 million
(although we have originated these type of loans in amounts
substantially greater than this average) and a weighted average
loan-to-value ratio of 52%. At June 30, 2024, our largest
rent-regulated loan had a principal balance of $17.0 million, was
secured by an apartment building located in Staten Island, New
York, and was performing in accordance with its original
contractual terms. Management continues to closely monitor its
office and rent-regulated portfolios. For further details on our
rent-regulated multifamily portfolio see “Asset Quality”.
PCD loans totaled $9.3 million and
$9.9 million at June 30, 2024 and December 31, 2023,
respectively. The majority of the remaining PCD loan balance
consists of loans acquired as part of a Federal Deposit Insurance
Corporation-assisted transaction. The Company accreted interest
income of $321,000 and $747,000 attributable to PCD loans for the
three and six months ended June 30, 2024, respectively, as compared
to $337,000 and $678,000 for the three and six months ended June
30, 2023, respectively. PCD loans had an allowance for credit
losses of approximately $2.9 million at June 30, 2024.
Loan balances are summarized as follows (dollars
in thousands):
|
June 30, 2024 |
|
March 31, 2024 |
|
December 31, 2023 |
Real estate loans: |
|
|
|
|
|
Multifamily |
$ |
2,665,202 |
|
$ |
2,715,919 |
|
$ |
2,750,996 |
Commercial mortgage |
|
896,157 |
|
|
916,112 |
|
|
929,595 |
One-to-four family residential mortgage |
|
151,948 |
|
|
156,276 |
|
|
160,824 |
Home equity and lines of credit |
|
167,852 |
|
|
163,493 |
|
|
163,520 |
Construction and land |
|
32,607 |
|
|
30,514 |
|
|
30,967 |
Total real estate loans |
|
3,913,766 |
|
|
3,982,314 |
|
|
4,035,902 |
Commercial and industrial
loans |
|
165,586 |
|
|
168,321 |
|
|
154,984 |
PPP loans |
|
202 |
|
|
243 |
|
|
284 |
Other loans |
|
2,322 |
|
|
1,641 |
|
|
2,585 |
Total commercial and industrial, PPP, and other loans |
|
168,110 |
|
|
170,205 |
|
|
157,853 |
Loans held-for-investment, net (excluding PCD) |
|
4,081,876 |
|
|
4,152,519 |
|
|
4,193,755 |
PCD loans |
|
9,344 |
|
|
9,953 |
|
|
9,899 |
Total loans held-for-investment, net |
$ |
4,091,220 |
|
$ |
4,162,472 |
|
$ |
4,203,654 |
|
|
|
|
|
|
|
|
|
The Company’s available-for-sale debt securities
portfolio increased by $324.0 million, or 40.7%, to $1.12 billion
at June 30, 2024, from $795.5 million at December 31,
2023. The increase was primarily attributable to purchases of
securities, partially offset by paydowns, maturities and calls. At
June 30, 2024, $821.5 million of the portfolio consisted of
residential mortgage-backed securities issued or guaranteed by
Fannie Mae, Freddie Mac, or Ginnie Mae. In addition, the Company
held $74.6 million in U.S. Treasuries, $74.1 million in U.S.
Government agency securities, $148.4 million in corporate bonds,
substantially all of which were investment grade, and $765,000 in
municipal bonds at June 30, 2024. Unrealized losses, net of
tax, on available-for-sale debt securities and held-to-maturity
securities approximated $29.9 million and $389,000, respectively,
at June 30, 2024, and $32.5 million and $279,000,
respectively, at December 31, 2023.
Equity securities were $14.0 million at
June 30, 2024 and $10.6 million at December 31, 2023.
Equity securities are primarily comprised of an investment in a
Small Business Administration Loan Fund. This investment is
utilized by the Bank as part of its Community Reinvestment Act
program.
Total liabilities increased $154.4 million, or
3.2%, to $5.05 billion at June 30, 2024, from $4.90 billion at
December 31, 2023. The increase was primarily attributable to
an increase in borrowings of $230.5 million, partially offset by a
decrease in total deposits of $80.0 million. The Company routinely
utilizes brokered deposits and borrowed funds to manage interest
rate risk, the cost of interest-bearing liabilities, and funding
needs related to loan originations and deposit activity.
Deposits decreased $80.0 million, or 2.1%, to
$3.80 billion at June 30, 2024, as compared to $3.88 billion
at December 31, 2023. Brokered deposits decreased by $100.0
million, or 100.0%, due to maturities that were replaced by
borrowings during the quarter. Deposits, excluding brokered
deposits, increased $20.0 million, or 0.5%. The increase in
deposits, excluding brokered deposits, was primarily attributable
to increases of $10.1 million in transaction accounts and $65.7
million in time deposits, partially offset by decreases of $9.1
million in savings accounts and $46.6 million in money market
accounts. Transaction growth was attributable to dedicated business
development efforts, including targeted marketing mailings, while
growth in time deposits was attributable to the current interest
rate environment and offering competitive interest rates to attract
deposits. Estimated gross uninsured deposits at June 30, 2024
were $1.72 billion. This total includes fully collateralized
uninsured governmental deposits and intercompany deposits of $886.8
million, leaving estimated uninsured deposits of approximately
$835.3 million, or 22.0%, of total deposits. At December 31, 2023,
estimated uninsured deposits totaled $869.9 million, or 22.4% of
total deposits.
Deposit account balances are summarized as
follows (dollars in thousands):
|
June 30, 2024 |
|
March 31, 2024 |
|
December 31, 2023 |
Transaction: |
|
|
|
|
|
Non-interest bearing checking |
$ |
685,574 |
|
$ |
693,671 |
|
$ |
694,903 |
Negotiable orders of withdrawal and interest-bearing checking |
|
1,251,342 |
|
|
1,277,161 |
|
|
1,231,943 |
Total transaction |
|
1,936,916 |
|
|
1,970,832 |
|
|
1,926,846 |
Savings and money market: |
|
|
|
|
|
Savings |
|
916,598 |
|
|
930,766 |
|
|
925,744 |
Money market |
|
255,550 |
|
|
266,464 |
|
|
302,122 |
Brokered money market |
|
— |
|
|
— |
|
|
50,000 |
Total savings |
|
1,172,148 |
|
|
1,197,230 |
|
|
1,277,866 |
Certificates of deposit: |
|
|
|
|
|
$250,000 and under |
|
568,809 |
|
|
546,192 |
|
|
525,454 |
Over $250,000 |
|
120,601 |
|
|
108,358 |
|
|
98,269 |
Brokered deposits |
|
— |
|
|
98,711 |
|
|
50,000 |
Total certificates of deposit |
|
689,410 |
|
|
753,261 |
|
|
673,723 |
Total deposits |
$ |
3,798,474 |
|
$ |
3,921,323 |
|
$ |
3,878,435 |
|
|
|
|
|
|
|
|
|
Included in the table above are business and municipal deposit
account balances as follows (dollars in thousands):
|
June 30, 2024 |
|
March 31, 2024 |
|
December 31, 2023 |
|
|
|
|
|
|
Business customers |
$ |
866,403 |
|
$ |
870,004 |
|
$ |
893,296 |
Municipal (governmental)
customers |
$ |
815,086 |
|
$ |
827,468 |
|
$ |
768,556 |
|
|
|
|
|
|
|
|
|
Borrowed funds increased to $1.15 billion at
June 30, 2024, from $920.5 million at December 31, 2023.
The increase in borrowings for the period was primarily due to a
$205.5 million increase in borrowings under the Federal Reserve
Bank Term Funding Program which included favorable terms and
conditions as compared to FHLB advances. Management utilizes
borrowings to mitigate interest rate risk, for short-term
liquidity, and to a lesser extent from time to time, as part of
leverage strategies.
The following table sets forth borrowing maturities (excluding
overnight borrowings and subordinated debt) and the weighted
average rate by year at June 30, 2024 (dollars in
thousands):
Year |
|
Amount (1) |
|
Weighted Average Rate |
2024 |
|
$50,765 |
|
4.67% |
2025 |
|
482,500 |
|
3.99% |
2026 |
|
148,000 |
|
4.36% |
2027 |
|
173,000 |
|
3.19% |
2028 |
|
154,288 |
|
3.96% |
|
|
$1,008,553 |
|
3.94% |
|
|
|
|
|
(1) Borrowings maturing in 2025 include $300.0 million of
FRB borrowings that can be repaid without any penalty.
Total stockholders’ equity decreased by $6.4
million to $693.0 million at June 30, 2024, from $699.4
million at December 31, 2023. The decrease was attributable to
$11.7 million in stock repurchases and $11.1 million in dividend
payments, partially offset by net income of $12.2 million for the
six months ended June 30, 2024, a $3.0 million increase in
accumulated other comprehensive income associated with an increase
in the estimated fair value of our debt securities
available-for-sale portfolio, and a $1.2 million increase in equity
award activity. On April 24, 2024, the Board of Directors of the
Company approved a $5.0 million stock repurchase program which was
completed in May 2024, and on June 14, 2024, the Board of Directors
of the Company approved a $10.0 million stock repurchase program.
During the six months ended June 30, 2024, the Company
repurchased 1.2 million of its common stock outstanding at an
average price of $9.46 for a total of $11.7 million pursuant to the
approved stock repurchase programs. As of June 30, 2024, the
Company had $6.3 million remaining capacity under its current
repurchase program.
The Company's most liquid assets are cash and
cash equivalents, corporate bonds, and unpledged mortgage-related
securities issued or guaranteed by the U.S. Government, Fannie Mae,
or Freddie Mac, that we can either borrow against or sell. We also
have the ability to surrender bank-owned life insurance contracts.
The surrender of these contracts would subject the Company to
income taxes and penalties for increases in the cash surrender
values over the original premium payments. We also have the ability
to obtain additional funding from the FHLB and Federal Reserve Bank
of New York utilizing unencumbered and unpledged securities and
multifamily loans. The Company expects to have sufficient funds
available to meet current commitments in the normal course of
business. The Company's on-hand liquidity ratio as of June 30,
2024 was 16.5%.
The Company had the following primary sources of liquidity at
June 30, 2024 (dollars in thousands):
Cash and cash equivalents (1) |
|
$ |
138,914 |
Corporate bonds (2) |
|
$ |
136,328 |
Multifamily
loans (2) |
|
$ |
789,586 |
Mortgage-backed securities
(issued or guaranteed by the U.S. Government, Fannie Mae, or
Freddie Mac)(2) |
|
$ |
485,416 |
|
|
|
|
|
|
(1) Excludes $14.6 million of cash at Northfield Bank.(2)
Represents estimated remaining borrowing
potential.
The Company and the Bank utilize the Community
Bank Leverage Ratio (“CBLR”) framework. The CBLR replaces the
risk-based and leverage capital requirements in the generally
applicable capital rules. At June 30, 2024, the Company
and the Bank's estimated CBLR ratios were 11.87% and 11.88%,
respectively, which exceeded the minimum requirement to be
considered well-capitalized of 9%.
Asset Quality
The following table details total non-accrual
loans (excluding PCD), non-performing assets, loans over 90 days
delinquent on which interest is accruing, and accruing loans 30 to
89 days delinquent at June 30, 2024, March 31, 2024, and
December 31, 2023 (dollars in thousands):
|
June 30, 2024 |
|
March 31, 2024 |
|
December 31, 2023 |
Non-accrual loans: |
|
|
|
|
|
Held-for-investment |
|
|
|
|
|
Real estate loans: |
|
|
|
|
|
Multifamily |
$ |
2,691 |
|
|
$ |
2,676 |
|
|
$ |
2,709 |
|
Commercial |
|
10,244 |
|
|
|
10,680 |
|
|
|
6,491 |
|
One-to-four family residential |
|
69 |
|
|
|
101 |
|
|
|
104 |
|
Home equity and lines of credit |
|
1,124 |
|
|
|
1,125 |
|
|
|
499 |
|
Commercial and industrial |
|
2,570 |
|
|
|
2,200 |
|
|
|
305 |
|
Other |
|
6 |
|
|
|
6 |
|
|
|
7 |
|
Total non-accrual
loans |
|
16,704 |
|
|
|
16,788 |
|
|
|
10,115 |
|
Loans delinquent 90 days or
more and still accruing: |
|
|
|
|
|
Held-for-investment |
|
|
|
|
|
Real estate loans: |
|
|
|
|
|
Multifamily |
|
— |
|
|
|
192 |
|
|
|
201 |
|
One-to-four family residential |
|
136 |
|
|
|
137 |
|
|
|
406 |
|
Home equity and lines of credit |
|
467 |
|
|
|
124 |
|
|
|
711 |
|
Total loans
held-for-investment delinquent 90 days or more and still
accruing |
|
603 |
|
|
|
453 |
|
|
|
1,318 |
|
Total non-performing
assets |
$ |
17,307 |
|
|
$ |
17,241 |
|
|
$ |
11,433 |
|
Non-performing loans to total loans |
|
0.42 |
% |
|
|
0.41 |
% |
|
|
0.27 |
% |
Non-performing assets to total assets |
|
0.30 |
% |
|
|
0.29 |
% |
|
|
0.20 |
% |
Accruing loans 30 to
89 days delinquent |
$ |
6,265 |
|
|
$ |
8,266 |
|
|
$ |
8,683 |
|
|
|
|
|
|
|
|
|
|
|
|
|
The increase in non-accrual commercial real
estate loans from December 31, 2023, was primarily attributable to
one loan with a balance of $4.4 million which was put on
non-accrual status during the first quarter of 2024. Based on the
results of the impairment analysis for this loan, no impairment
reserve was necessary as the loan is adequately covered by
collateral (a private residence and retail property, both located
in New Jersey), with aggregate appraised values totaling $8.7
million. The increase in non-accrual commercial and industrial
loans was primarily due to an increase in non-performing unsecured
small business loans. Unsecured small business loans totaled $33.6
million and $37.4 million at June 30, 2024 and December 31, 2023,
respectively. Management continues to closely monitor the small
business unsecured commercial and industrial loan portfolio.
Subsequent to the quarter end, two non-accrual commercial real
estate loans totaling approximately $1.6 million were paid-off.
Accruing Loans 30 to 89 Days Delinquent
Loans 30 to 89 days delinquent and on accrual
status totaled $6.3 million, $8.3 million and $8.7 million at
June 30, 2024, March 31, 2024, and December 31, 2023,
respectively. The following table sets forth delinquencies for
accruing loans by type and by amount at June 30, 2024, March
31, 2024, and December 31, 2023 (dollars in
thousands):
|
June 30, 2024 |
|
March 31, 2024 |
|
December 31, 2023 |
Held-for-investment |
|
|
|
|
|
Real estate loans: |
|
|
|
|
|
Multifamily |
$ |
168 |
|
$ |
171 |
|
$ |
740 |
Commercial |
|
1,557 |
|
|
2,106 |
|
|
1,010 |
One-to-four family residential |
|
1,769 |
|
|
1,171 |
|
|
3,339 |
Home equity and lines of credit |
|
786 |
|
|
1,029 |
|
|
817 |
Construction and land |
|
— |
|
|
1,727 |
|
|
— |
Commercial and industrial loans |
|
1,977 |
|
|
2,062 |
|
|
2,767 |
Other loans |
|
8 |
|
|
— |
|
|
10 |
Total delinquent accruing loans held-for-investment |
$ |
6,265 |
|
$ |
8,266 |
|
$ |
8,683 |
|
|
|
|
|
|
|
|
|
PCD Loans (Held-for-Investment)
The Company accounts for PCD loans at estimated
fair value using discounted expected future cash flows deemed to be
collectible on the date acquired. Based on its detailed review of
PCD loans and experience in loan workouts, management believes it
has a reasonable expectation about the amount and timing of future
cash flows and accordingly has classified PCD loans ($9.3 million
at June 30, 2024 and $9.9 million at December 31, 2023,
respectively) as accruing, even though they may be contractually
past due. At June 30, 2024, 6.9% of PCD loans were past
due 30 to 89 days, and 15.6% were past due 90 days or more, as
compared to 2.9% and 27.1%, respectively, at December 31,
2023.
Our multifamily loan portfolio at June 30,
2024 totaled $2.67 billion, or 65% of our total loan portfolio, of
which $440.0 million, or 11%, included loans collateralized by
properties in New York with units subject to some percentage of
rent regulation. The table below sets forth details about our
multifamily loan portfolio in New York (dollars in thousands).
% RentRegulated |
|
Balance |
|
% PortfolioTotal NYMultifamilyPortfolio |
|
AverageBalance |
|
Largest Loan |
|
LTV* |
|
Debt ServiceCoverage Ratio(DSCR)* |
|
30-89 DaysDelinquent |
|
Non-Accrual |
|
SpecialMention |
|
Substandard |
0 |
|
$ |
307,163 |
|
41.2 |
% |
|
$ |
1,155 |
|
$ |
16,681 |
|
50.2% |
|
1.56x |
|
$ |
168 |
|
$ |
551 |
|
$ |
785 |
|
$ |
879 |
>0-10 |
|
|
4,771 |
|
0.6 |
|
|
|
1,590 |
|
|
238 |
|
51.7 |
|
1.46 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
>10-20 |
|
|
18,820 |
|
2.5 |
|
|
|
1,448 |
|
|
2,881 |
|
49.5 |
|
1.57 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
>20-30 |
|
|
17,965 |
|
2.4 |
|
|
|
2,246 |
|
|
5,543 |
|
55.1 |
|
1.45 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
>30-40 |
|
|
15,291 |
|
2.0 |
|
|
|
1,274 |
|
|
3,112 |
|
48.6 |
|
1.67 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
>40-50 |
|
|
22,332 |
|
3.0 |
|
|
|
1,314 |
|
|
2,756 |
|
48.4 |
|
1.64 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
>50-60 |
|
|
9,526 |
|
1.3 |
|
|
|
1,588 |
|
|
2,354 |
|
40.1 |
|
2.03 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
>60-70 |
|
|
16,697 |
|
2.2 |
|
|
|
3,339 |
|
|
11,416 |
|
54.9 |
|
1.47 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
>70-80 |
|
|
15,432 |
|
2.1 |
|
|
|
2,205 |
|
|
4,733 |
|
47.3 |
|
1.54 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
>80-90 |
|
|
20,965 |
|
2.8 |
|
|
|
1,165 |
|
|
3,159 |
|
46.9 |
|
1.71 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
>90-100 |
|
|
298,182 |
|
39.9 |
|
|
|
1,796 |
|
|
17,011 |
|
52.8 |
|
1.68 |
|
|
— |
|
|
2,141 |
|
|
1,207 |
|
|
4,535 |
Total |
|
$ |
747,144 |
|
100.0 |
% |
|
$ |
1,434 |
|
$ |
17,011 |
|
51.1% |
|
1.62x |
|
$ |
168 |
|
$ |
2,692 |
|
$ |
1,992 |
|
$ |
5,414 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The table below sets forth our New York rent-regulated loans by
county (dollars in thousands).
County |
|
Balance |
|
LTV* |
|
DSCR* |
Bronx |
|
$ |
119,596 |
|
51.9% |
|
1.67x |
Kings |
|
|
191,378 |
|
51.5% |
|
1.65 |
Nassau |
|
|
2,186 |
|
36.4% |
|
1.88 |
New York |
|
|
40,903 |
|
48.3% |
|
1.52 |
Queens |
|
|
39,148 |
|
44.6% |
|
1.88 |
Richmond |
|
|
28,982 |
|
60.9% |
|
1.67 |
Westchester |
|
|
17,787 |
|
62.2% |
|
1.37 |
Total |
|
$ |
439,980 |
|
51.7% |
|
1.66x |
|
|
|
|
|
|
|
* Weighted Average
None of the loans that are rent-regulated in New York are
interest only. During the remainder of 2024, eight loans with an
aggregate principal balance of $13.3 million will re-price.
About Northfield Bank
Northfield Bank, founded in 1887, operates 39
full-service banking offices in Staten Island and Brooklyn, New
York, and Hunterdon, Middlesex, Mercer, and Union counties, New
Jersey. For more information about Northfield Bank, please visit
www.eNorthfield.com.
Forward-Looking Statements:
This release may contain certain "forward looking statements"
within the meaning of the Private Securities Litigation Reform Act
of 1995, and may be identified by the use of such words as "may,"
"believe," "expect," "anticipate," "should," "plan," "estimate,"
"predict," "continue," and "potential" or the negative of these
terms or other comparable terminology. Examples of
forward-looking statements include, but are not limited to,
estimates with respect to the financial condition, results of
operations and business of Northfield Bancorp, Inc. Any or all
of the forward-looking statements in this release and in any other
public statements made by Northfield Bancorp, Inc. may turn out to
be wrong. They can be affected by inaccurate assumptions
Northfield Bancorp, Inc. might make or by known or unknown risks
and uncertainties as described in our SEC filings, including, but
not limited to, those related to general economic conditions,
particularly in the market areas in which the Company operates,
changes in liquidity, the size and composition of our deposit
portfolio and the percentage of uninsured deposits in the
portfolio, the effects of the COVID-19 pandemic, competition among
depository and other financial institutions, including with respect
to fees and interest rates, changes in laws or government
regulations or policies affecting financial institutions, including
changes in the monetary policies of the U.S. Treasury and the Board
of Governors of the Federal Reserve System, changes in asset
quality, prepayment speeds, charge-offs and/or credit loss
provisions, our ability to access cost-effective funding, changes
in the value of our goodwill or other intangible assets, changes in
regulatory fees, assessments and capital requirements,
inflation and changes in the interest rate environment that reduce
our margins, reduce the fair value of financial instruments or
reduce our ability to originate loans, cyber security and fraud
risks against our information technology and those of our
third-party providers and vendors, the effects of war, conflict,
and acts of terrorism, our ability to successfully integrate
acquired entities, and adverse changes in the securities markets.
Consequently, no forward-looking statement can be guaranteed.
Northfield Bancorp, Inc. does not intend to update any of the
forward-looking statements after the date of this release, or
conform these statements to actual events.
(Tables follow)
NORTHFIELD BANCORP, INC. |
SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA |
(Dollars in thousands, except per share
amounts) (unaudited) |
|
|
At or For the Three Months Ended |
|
At or For the Six Months Ended |
|
June 30, |
|
March 31, |
|
June 30, |
|
2024 |
|
2023 |
|
2024 |
|
2024 |
|
2023 |
Selected Financial
Ratios: |
|
|
|
|
|
|
|
|
|
Performance
Ratios (1) |
|
|
|
|
|
|
|
|
|
Return on assets (ratio of net income to average total assets) |
0.41 |
% |
|
0.69 |
% |
|
0.43 |
% |
|
0.42 |
% |
|
0.77 |
% |
Return on equity (ratio of net
income to average equity) |
3.45 |
|
|
5.52 |
|
|
3.59 |
|
|
3.52 |
|
|
6.16 |
|
Average equity to average total
assets |
12.00 |
|
|
12.44 |
|
|
12.04 |
|
|
12.02 |
|
|
12.42 |
|
Interest rate spread |
1.44 |
|
|
1.83 |
|
|
1.39 |
|
|
1.41 |
|
|
2.02 |
|
Net interest margin |
2.09 |
|
|
2.34 |
|
|
2.03 |
|
|
2.06 |
|
|
2.48 |
|
Efficiency ratio (2) |
72.89 |
|
|
61.14 |
|
|
71.43 |
|
|
72.16 |
|
|
58.03 |
|
Non-interest expense to average
total assets |
1.60 |
|
|
1.49 |
|
|
1.55 |
|
|
1.58 |
|
|
1.51 |
|
Non-interest expense to average
total interest-earning assets |
1.68 |
|
|
1.56 |
|
|
1.63 |
|
|
1.65 |
|
|
1.58 |
|
Average interest-earning assets
to average interest-bearing liabilities |
128.47 |
|
|
133.31 |
|
|
128.66 |
|
|
128.57 |
|
|
134.39 |
|
Asset Quality
Ratios: |
|
|
|
|
|
|
|
|
|
Non-performing assets to total
assets |
0.30 |
|
|
0.19 |
|
|
0.29 |
|
|
0.30 |
|
|
0.19 |
|
Non-performing
loans (3) to total loans (4) |
0.42 |
|
|
0.24 |
|
|
0.41 |
|
|
0.42 |
|
|
0.24 |
|
Allowance for credit losses to
non-performing loans |
200.96 |
|
|
398.24 |
|
|
214.83 |
|
|
200.96 |
|
|
398.24 |
|
Allowance for credit losses to
total loans held-for-investment, net (5) |
0.85 |
|
|
0.96 |
|
|
0.89 |
|
|
0.85 |
|
|
0.96 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Annualized where appropriate.
(2) The efficiency ratio represents non-interest expense divided
by the sum of net interest income and non-interest income.
(3) Non-performing loans consist of non-accruing loans and loans
90 days or more past due and still accruing (excluding PCD loans),
and are included in total loans held-for-investment, net.
(4) Includes originated loans held-for-investment, PCD loans,
acquired loans and loans held-for-sale.
(5) Includes originated loans held-for-investment, PCD loans,
and acquired loans.
NORTHFIELD
BANCORP, INC. |
CONSOLIDATED BALANCE
SHEETS |
(Dollars in
thousands, except share and per share amounts) (unaudited) |
|
|
|
|
|
|
|
June 30, 2024 |
|
March 31, 2024 |
|
December 31, 2023 |
ASSETS: |
|
|
|
|
|
Cash and due from banks |
$ |
14,575 |
|
|
$ |
13,550 |
|
|
$ |
13,889 |
|
Interest-bearing deposits in
other financial institutions |
|
138,914 |
|
|
|
225,231 |
|
|
|
215,617 |
|
Total cash and cash
equivalents |
|
153,489 |
|
|
|
238,781 |
|
|
|
229,506 |
|
Trading securities |
|
12,939 |
|
|
|
12,726 |
|
|
|
12,549 |
|
Debt securities
available-for-sale, at estimated fair value |
|
1,119,439 |
|
|
|
1,075,741 |
|
|
|
795,464 |
|
Debt securities
held-to-maturity, at amortized cost |
|
9,749 |
|
|
|
9,810 |
|
|
|
9,866 |
|
Equity securities |
|
13,964 |
|
|
|
11,038 |
|
|
|
10,629 |
|
Loans held-for-investment,
net |
|
4,091,220 |
|
|
|
4,162,472 |
|
|
|
4,203,654 |
|
Allowance for credit losses |
|
(34,780 |
) |
|
|
(37,039 |
) |
|
|
(37,535 |
) |
Net loans
held-for-investment |
|
4,056,440 |
|
|
|
4,125,433 |
|
|
|
4,166,119 |
|
Accrued interest
receivable |
|
19,343 |
|
|
|
19,358 |
|
|
|
18,491 |
|
Bank-owned life insurance |
|
173,483 |
|
|
|
172,507 |
|
|
|
171,543 |
|
Federal Home Loan Bank of New
York stock, at cost |
|
41,785 |
|
|
|
39,848 |
|
|
|
39,667 |
|
Operating lease right-of-use
assets |
|
29,305 |
|
|
|
30,076 |
|
|
|
30,202 |
|
Premises and equipment,
net |
|
23,628 |
|
|
|
24,301 |
|
|
|
24,771 |
|
Goodwill |
|
41,012 |
|
|
|
41,012 |
|
|
|
41,012 |
|
Other assets |
|
51,785 |
|
|
|
50,974 |
|
|
|
48,577 |
|
Total
assets |
$ |
5,746,361 |
|
|
$ |
5,851,605 |
|
|
$ |
5,598,396 |
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY: |
|
|
|
|
|
LIABILITIES: |
|
|
|
|
|
Deposits |
$ |
3,798,474 |
|
|
$ |
3,921,323 |
|
|
$ |
3,878,435 |
|
Securities sold under
agreements to repurchase |
|
— |
|
|
|
25,000 |
|
|
|
25,000 |
|
Federal Home Loan Bank
advances and other borrowings |
|
1,089,727 |
|
|
|
1,039,621 |
|
|
|
834,272 |
|
Subordinated debentures, net
of issuance costs |
|
61,331 |
|
|
|
61,275 |
|
|
|
61,219 |
|
Lease liabilities |
|
34,035 |
|
|
|
34,942 |
|
|
|
35,205 |
|
Advance payments by borrowers
for taxes and insurance |
|
26,113 |
|
|
|
30,202 |
|
|
|
25,102 |
|
Accrued expenses and other
liabilities |
|
43,657 |
|
|
|
40,813 |
|
|
|
39,718 |
|
Total
liabilities |
|
5,053,337 |
|
|
|
5,153,176 |
|
|
|
4,898,951 |
|
|
|
|
|
|
|
STOCKHOLDERS’
EQUITY: |
|
|
|
|
|
Total stockholders’
equity |
|
693,024 |
|
|
|
698,429 |
|
|
|
699,445 |
|
Total liabilities and
stockholders’ equity |
$ |
5,746,361 |
|
|
$ |
5,851,605 |
|
|
$ |
5,598,396 |
|
|
|
|
|
|
|
Total shares outstanding |
|
43,466,961 |
|
|
|
44,462,652 |
|
|
|
44,524,929 |
|
Tangible book value per
share (1) |
$ |
15.00 |
|
|
$ |
14.78 |
|
|
$ |
14.78 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Tangible book value per share is
calculated based on total stockholders' equity, excluding
intangible assets (goodwill and core deposit intangibles), divided
by total shares outstanding as of the balance sheet date. Core
deposit intangibles were $111, $133, and $154 at June 30,
2024, March 31, 2024, and December 31, 2023, respectively, and
are included in other assets.
NORTHFIELD BANCORP, INC. |
CONSOLIDATED STATEMENTS OF INCOME |
(Dollars in thousands, except share and per share
amounts) (unaudited) |
|
|
For the Three Months Ended |
|
For the Six Months Ended |
|
June 30, |
|
March 31, |
|
June 30, |
|
2024 |
|
2023 |
|
2024 |
|
2024 |
|
2023 |
Interest
income: |
|
|
|
|
|
|
|
|
|
Loans |
$ |
45,967 |
|
|
$ |
45,300 |
|
|
$ |
46,047 |
|
$ |
92,014 |
|
|
$ |
89,007 |
|
Mortgage-backed securities |
|
7,355 |
|
|
|
3,714 |
|
|
|
4,398 |
|
|
11,753 |
|
|
|
7,506 |
|
Other securities |
|
3,506 |
|
|
|
1,113 |
|
|
|
3,841 |
|
|
7,347 |
|
|
|
2,498 |
|
Federal Home Loan Bank of New York dividends |
|
935 |
|
|
|
727 |
|
|
|
970 |
|
|
1,905 |
|
|
|
1,192 |
|
Deposits in other financial institutions |
|
2,457 |
|
|
|
816 |
|
|
|
3,392 |
|
|
5,849 |
|
|
|
1,394 |
|
Total interest income |
|
60,220 |
|
|
|
51,670 |
|
|
|
58,648 |
|
|
118,868 |
|
|
|
101,597 |
|
Interest
expense: |
|
|
|
|
|
|
|
|
|
Deposits |
|
20,664 |
|
|
|
10,483 |
|
|
|
19,273 |
|
|
39,937 |
|
|
|
18,304 |
|
Borrowings |
|
10,041 |
|
|
|
9,198 |
|
|
|
10,663 |
|
|
20,704 |
|
|
|
15,589 |
|
Subordinated debt |
|
828 |
|
|
|
828 |
|
|
|
828 |
|
|
1,656 |
|
|
|
1,647 |
|
Total interest expense |
|
31,533 |
|
|
|
20,509 |
|
|
|
30,764 |
|
|
62,297 |
|
|
|
35,540 |
|
Net interest income |
|
28,687 |
|
|
|
31,161 |
|
|
|
27,884 |
|
|
56,571 |
|
|
|
66,057 |
|
(Benefit)/provision for credit
losses |
|
(618 |
) |
|
|
30 |
|
|
|
415 |
|
|
(203 |
) |
|
|
894 |
|
Net interest income after
(benefit)/provision for credit losses |
|
29,305 |
|
|
|
31,131 |
|
|
|
27,469 |
|
|
56,774 |
|
|
|
65,163 |
|
Non-interest
income: |
|
|
|
|
|
|
|
|
|
Fees and service charges for customer services |
|
1,570 |
|
|
|
1,309 |
|
|
|
1,615 |
|
|
3,185 |
|
|
|
2,689 |
|
Income on bank-owned life insurance |
|
976 |
|
|
|
889 |
|
|
|
964 |
|
|
1,940 |
|
|
|
1,759 |
|
Gains/(losses) on available-for-sale debt securities, net |
|
1 |
|
|
|
(18 |
) |
|
|
— |
|
|
1 |
|
|
|
(17 |
) |
Gains on trading securities, net |
|
188 |
|
|
|
506 |
|
|
|
699 |
|
|
887 |
|
|
|
1,018 |
|
Gain on sale of loans |
|
51 |
|
|
|
35 |
|
|
|
— |
|
|
51 |
|
|
|
35 |
|
Other |
|
73 |
|
|
|
95 |
|
|
|
103 |
|
|
176 |
|
|
|
664 |
|
Total non-interest income |
|
2,859 |
|
|
|
2,816 |
|
|
|
3,381 |
|
|
6,240 |
|
|
|
6,148 |
|
Non-interest
expense: |
|
|
|
|
|
|
|
|
|
Compensation and employee benefits |
|
13,388 |
|
|
|
12,353 |
|
|
|
12,765 |
|
|
26,153 |
|
|
|
23,390 |
|
Occupancy |
|
3,222 |
|
|
|
3,244 |
|
|
|
3,553 |
|
|
6,775 |
|
|
|
6,616 |
|
Furniture and equipment |
|
477 |
|
|
|
460 |
|
|
|
484 |
|
|
961 |
|
|
|
914 |
|
Data processing |
|
2,177 |
|
|
|
2,071 |
|
|
|
2,147 |
|
|
4,324 |
|
|
|
4,314 |
|
Professional fees |
|
681 |
|
|
|
768 |
|
|
|
809 |
|
|
1,490 |
|
|
|
1,739 |
|
Advertising |
|
482 |
|
|
|
573 |
|
|
|
518 |
|
|
1,000 |
|
|
|
1,420 |
|
Federal Deposit Insurance Corporation insurance |
|
649 |
|
|
|
568 |
|
|
|
588 |
|
|
1,237 |
|
|
|
1,172 |
|
Credit loss expense/(benefit) for off-balance sheet exposures |
|
103 |
|
|
|
(661 |
) |
|
|
83 |
|
|
186 |
|
|
|
(550 |
) |
Other |
|
1,814 |
|
|
|
1,399 |
|
|
|
1,385 |
|
|
3,199 |
|
|
|
2,888 |
|
Total non-interest
expense |
|
22,993 |
|
|
|
20,775 |
|
|
|
22,332 |
|
|
45,325 |
|
|
|
41,903 |
|
Income before income tax
expense |
|
9,171 |
|
|
|
13,172 |
|
|
|
8,518 |
|
|
17,689 |
|
|
|
29,408 |
|
Income tax
expense |
|
3,214 |
|
|
|
3,613 |
|
|
|
2,304 |
|
|
5,518 |
|
|
|
8,142 |
|
Net
income |
$ |
5,957 |
|
|
$ |
9,559 |
|
|
$ |
6,214 |
|
$ |
12,171 |
|
|
$ |
21,266 |
|
Net income per common
share: |
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.14 |
|
|
$ |
0.22 |
|
|
$ |
0.15 |
|
$ |
0.29 |
|
|
$ |
0.48 |
|
Diluted |
$ |
0.14 |
|
|
$ |
0.22 |
|
|
$ |
0.15 |
|
$ |
0.29 |
|
|
$ |
0.48 |
|
Basic average shares outstanding |
|
41,999,541 |
|
|
|
43,914,110 |
|
|
|
42,367,243 |
|
|
42,181,306 |
|
|
|
44,346,881 |
|
Diluted average shares outstanding |
|
42,002,650 |
|
|
|
43,952,939 |
|
|
|
42,408,953 |
|
|
42,203,715 |
|
|
|
44,438,633 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NORTHFIELD BANCORP, INC. |
ANALYSIS OF NET INTEREST INCOME |
(Dollars in thousands) (unaudited) |
|
|
For the Three Months Ended |
|
June 30, 2024 |
|
March 31, 2024 |
|
June 30, 2023 |
|
Average Outstanding Balance |
|
Interest |
|
Average Yield/ Rate(1) |
|
Average Outstanding Balance |
|
Interest |
|
Average Yield/ Rate(1) |
|
Average Outstanding Balance |
|
Interest |
|
Average Yield/ Rate(1) |
Interest-earning
assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans (2) |
$ |
4,128,105 |
|
$ |
45,967 |
|
4.48 |
% |
|
$ |
4,174,668 |
|
$ |
46,047 |
|
4.44 |
% |
|
$ |
4,284,871 |
|
$ |
45,300 |
|
4.24 |
% |
Mortgage-backed securities (3) |
|
824,498 |
|
|
7,355 |
|
3.59 |
|
|
|
648,811 |
|
|
4,398 |
|
2.73 |
|
|
|
703,415 |
|
|
3,714 |
|
2.12 |
|
Other securities (3) |
|
333,855 |
|
|
3,506 |
|
4.22 |
|
|
|
391,980 |
|
|
3,841 |
|
3.94 |
|
|
|
239,273 |
|
|
1,113 |
|
1.87 |
|
Federal Home Loan Bank of New York stock |
|
38,707 |
|
|
935 |
|
9.72 |
|
|
|
39,599 |
|
|
970 |
|
9.85 |
|
|
|
43,901 |
|
|
727 |
|
6.64 |
|
Interest-earning deposits in financial institutions |
|
191,470 |
|
|
2,457 |
|
5.16 |
|
|
|
262,884 |
|
|
3,392 |
|
5.19 |
|
|
|
67,822 |
|
|
816 |
|
4.83 |
|
Total interest-earning assets |
|
5,516,635 |
|
|
60,220 |
|
4.39 |
|
|
|
5,517,942 |
|
|
58,648 |
|
4.27 |
|
|
|
5,339,282 |
|
|
51,670 |
|
3.88 |
|
Non-interest-earning
assets |
|
265,702 |
|
|
|
|
|
|
266,428 |
|
|
|
|
|
|
244,567 |
|
|
|
|
Total assets |
$ |
5,782,337 |
|
|
|
|
|
$ |
5,784,370 |
|
|
|
|
|
$ |
5,583,849 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings, NOW, and money market accounts |
$ |
2,490,372 |
|
$ |
13,183 |
|
2.13 |
% |
|
$ |
2,464,297 |
|
$ |
12,331 |
|
2.01 |
% |
|
$ |
2,399,631 |
|
$ |
6,486 |
|
1.08 |
% |
Certificates of deposit |
|
701,272 |
|
|
7,481 |
|
4.29 |
|
|
|
654,328 |
|
|
6,942 |
|
4.27 |
|
|
|
540,984 |
|
|
3,997 |
|
2.96 |
|
Total interest-bearing deposits |
|
3,191,644 |
|
|
20,664 |
|
2.60 |
|
|
|
3,118,625 |
|
|
19,273 |
|
2.49 |
|
|
|
2,940,615 |
|
|
10,483 |
|
1.43 |
|
Borrowed funds |
|
1,041,035 |
|
|
10,041 |
|
3.88 |
|
|
|
1,108,880 |
|
|
10,663 |
|
3.87 |
|
|
|
1,003,611 |
|
|
9,198 |
|
3.68 |
|
Subordinated debt |
|
61,294 |
|
|
828 |
|
5.43 |
|
|
|
61,239 |
|
|
828 |
|
5.44 |
|
|
|
61,071 |
|
|
828 |
|
5.44 |
|
Total interest-bearing liabilities |
|
4,293,973 |
|
|
31,533 |
|
2.95 |
|
|
|
4,288,744 |
|
|
30,764 |
|
2.89 |
|
|
|
4,005,297 |
|
|
20,509 |
|
2.05 |
|
Non-interest bearing
deposits |
|
691,384 |
|
|
|
|
|
|
699,640 |
|
|
|
|
|
|
780,806 |
|
|
|
|
Accrued expenses and other
liabilities |
|
103,082 |
|
|
|
|
|
|
99,594 |
|
|
|
|
|
|
102,846 |
|
|
|
|
Total liabilities |
|
5,088,439 |
|
|
|
|
|
|
5,087,978 |
|
|
|
|
|
|
4,888,949 |
|
|
|
|
Stockholders' equity |
|
693,898 |
|
|
|
|
|
|
696,392 |
|
|
|
|
|
|
694,900 |
|
|
|
|
Total liabilities and stockholders' equity |
$ |
5,782,337 |
|
|
|
|
|
$ |
5,784,370 |
|
|
|
|
|
$ |
5,583,849 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
|
$ |
28,687 |
|
|
|
|
|
$ |
27,884 |
|
|
|
|
|
$ |
31,161 |
|
|
Net interest rate
spread (4) |
|
|
|
|
1.44 |
% |
|
|
|
|
|
1.39 |
% |
|
|
|
|
|
1.83 |
% |
Net interest-earning
assets (5) |
$ |
1,222,662 |
|
|
|
|
|
$ |
1,229,198 |
|
|
|
|
|
$ |
1,333,985 |
|
|
|
|
Net interest
margin (6) |
|
|
|
|
2.09 |
% |
|
|
|
|
|
2.03 |
% |
|
|
|
|
|
2.34 |
% |
Average interest-earning
assets to interest-bearing liabilities |
|
|
|
|
128.47 |
% |
|
|
|
|
|
128.66 |
% |
|
|
|
|
|
133.31 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Average yields and rates are annualized.(2) Includes
non-accruing loans.(3) Securities available-for-sale and other
securities are reported at amortized cost.(4) Net interest rate
spread represents the difference between the weighted average yield
on interest-earning assets and the weighted average cost of
interest-bearing liabilities.(5) Net interest-earning assets
represent total interest-earning assets less total interest-bearing
liabilities.(6) Net interest margin represents net interest income
divided by average total interest-earning assets.
|
For the Six Months Ended |
|
June 30, 2024 |
|
June 30, 2023 |
|
Average Outstanding Balance |
|
Interest |
|
Average Yield/ Rate(1) |
|
Average Outstanding Balance |
|
Interest |
|
Average Yield/ Rate(1) |
Interest-earning
assets: |
|
|
|
|
|
|
|
|
|
|
|
Loans (2) |
$ |
4,151,387 |
|
$ |
92,014 |
|
4.46 |
% |
|
$ |
4,264,932 |
|
$ |
89,007 |
|
4.21 |
% |
Mortgage-backed securities (3) |
|
736,654 |
|
|
11,753 |
|
3.21 |
|
|
|
724,955 |
|
|
7,506 |
|
2.09 |
|
Other securities (3) |
|
362,917 |
|
|
7,347 |
|
4.07 |
|
|
|
257,514 |
|
|
2,498 |
|
1.96 |
|
Federal Home Loan Bank of New York stock |
|
39,153 |
|
|
1,905 |
|
9.78 |
|
|
|
41,000 |
|
|
1,192 |
|
5.86 |
|
Interest-earning deposits in financial institutions |
|
227,177 |
|
|
5,849 |
|
5.18 |
|
|
|
72,519 |
|
|
1,394 |
|
3.88 |
|
Total interest-earning assets |
|
5,517,288 |
|
|
118,868 |
|
4.33 |
|
|
|
5,360,920 |
|
|
101,597 |
|
3.82 |
|
Non-interest-earning
assets |
|
266,065 |
|
|
|
|
|
|
242,288 |
|
|
|
|
Total assets |
$ |
5,783,353 |
|
|
|
|
|
$ |
5,603,208 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
liabilities: |
|
|
|
|
|
|
|
|
|
|
|
Savings, NOW, and money market accounts |
$ |
2,477,334 |
|
$ |
25,514 |
|
2.07 |
% |
|
$ |
2,461,283 |
|
$ |
10,329 |
|
0.85 |
% |
Certificates of deposit |
|
677,800 |
|
|
14,423 |
|
4.28 |
|
|
|
582,642 |
|
|
7,975 |
|
2.76 |
|
Total interest-bearing deposits |
|
3,155,134 |
|
|
39,937 |
|
2.55 |
|
|
|
3,043,925 |
|
|
18,304 |
|
1.21 |
|
Borrowed funds |
|
1,074,957 |
|
|
20,704 |
|
3.87 |
|
|
|
883,934 |
|
|
15,589 |
|
3.56 |
|
Subordinated debt |
|
61,266 |
|
|
1,656 |
|
5.44 |
|
|
|
61,183 |
|
|
1,647 |
|
5.43 |
|
Total interest-bearing liabilities |
$ |
4,291,357 |
|
|
62,297 |
|
2.92 |
|
|
$ |
3,989,042 |
|
|
35,540 |
|
1.80 |
|
Non-interest bearing
deposits |
|
695,512 |
|
|
|
|
|
|
814,266 |
|
|
|
|
Accrued expenses and other
liabilities |
|
101,339 |
|
|
|
|
|
|
104,118 |
|
|
|
|
Total liabilities |
|
5,088,208 |
|
|
|
|
|
|
4,907,426 |
|
|
|
|
Stockholders' equity |
|
695,145 |
|
|
|
|
|
|
695,782 |
|
|
|
|
Total liabilities and stockholders' equity |
$ |
5,783,353 |
|
|
|
|
|
$ |
5,603,208 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
|
$ |
56,571 |
|
|
|
|
|
$ |
66,057 |
|
|
Net interest rate
spread (4) |
|
|
|
|
1.41 |
% |
|
|
|
|
|
2.02 |
% |
Net interest-earning
assets (5) |
$ |
1,225,931 |
|
|
|
|
|
$ |
1,371,878 |
|
|
|
|
Net interest
margin (6) |
|
|
|
|
2.06 |
% |
|
|
|
|
|
2.48 |
% |
Average interest-earning
assets to interest-bearing liabilities |
|
|
|
|
128.57 |
% |
|
|
|
|
|
134.39 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
(1) Average yields and rates are annualized.(2)
Includes non-accruing loans.(3) Securities
available-for-sale and other securities are reported at amortized
cost.(4) Net interest rate spread represents the difference
between the weighted average yield on interest-earning assets and
the weighted average cost of interest-bearing liabilities.(5)
Net interest-earning assets represent total interest-earning
assets less total interest-bearing liabilities.(6) Net
interest margin represents net interest income divided by average
total interest-earning assets.
Company Contact:William R. JacobsChief Financial OfficerTel:
(732) 499-7200 ext. 2519
Northfield Bancorp (NASDAQ:NFBK)
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