NORTHFIELD BANCORP, INC. (Nasdaq:NFBK) (the
“Company”), the holding company for Northfield Bank,
reported net income of $9.6 million, or $0.22 per diluted share
(including severance cost of $440,000, or $0.01, per share), for
the three months ended June 30, 2023, as compared to $11.7 million,
or $0.26 per diluted share, for the three months ended
March 31, 2023, and $15.9 million, or $0.34 per diluted share,
for the three months ended June 30, 2022. For the six months ended
June 30, 2023, net income totaled $21.3 million, or $0.48 per
diluted share (including severance cost of $440,000, or $0.01, per
share), compared to $30.0 million, or $0.64 per diluted share, for
the six months ended June 30, 2022. The decrease in net income for
both the current quarter and six months ended June 30, 2023, as
compared to the trailing quarter and 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,
“The Northfield team continued to successfully manage through the
challenges presented by elevated market interest rates and an
inverted yield curve. During the quarter we remained focused on
managing our cost of funds and net interest margin, while meeting
the lending and deposit needs of our customers.” Mr. Klein
continued, “We delivered solid financial performance during the
quarter by prudently increasing our loan portfolio, maintaining
strong asset quality, and managing our cost of deposits. While
significant risks remain, including recession uncertainty, as well
as inflation and interest rate movements, we will continue to
prudently manage our strong capital and liquidity and focus on our
Locally Grown approach to community commercial banking.”
Mr. Klein further noted, “I am pleased to
announce that the Board of Directors has declared a cash dividend
of $0.13 per common share, payable August 23, 2023, to stockholders
of record on August 9, 2023.”
Results of Operations
Comparison of Operating Results for the Six
Months Ended June 30, 2023 and 2022
Net income was $21.3 million and $30.0 million
for the six months ended June 30, 2023 and June 30, 2022,
respectively. Significant variances from the comparable prior year
period are as follows: a $10.9 million decrease in net interest
income, a $3.7 million increase in non-interest income, a $4.5
million increase in non-interest expense, and a $3.3
million decrease in income tax expense.
Net interest income for the six months ended
June 30, 2023, decreased $10.9 million, or 14.2%, to $66.1
million, from $77.0 million for the six months ended June 30,
2022. The decrease in net interest income was primarily
attributable to a $28.8 million increase in interest expense on
deposits, borrowings and subordinated debt, partially offset by a
$17.9 million increase in interest income. The increase in interest
income was primarily due to a $103.9 million, or 2.0%, increase in
the average balance of interest-earning assets coupled with a 61
basis point increase in yields on interest-earning assets due to
the rising rate environment and a greater percentage of assets
consisting of higher-yielding loans. The increase in the average
balance of interest-earning assets was due to increases in the
average balance of loans outstanding of $344.1 million and the
average balance of Federal Home Loan Bank of New York (“FHLBNY”)
stock of $19.6 million, partially offset by decreases in the
average balance of mortgage-backed securities of $193.9 million,
the average balance of interest-earning deposits in financial
institutions of $46.4 million, and the average balance of other
securities of $19.5 million. The increase in interest expense on
deposits, borrowings and subordinated debt was largely driven by a
$199.1 million, or 5.3%, increase in the average balance of
interest-bearing liabilities, including increases of $486.2 million
and $56.4 million, in average borrowed funds and subordinated debt,
respectively, partially offset by a $343.4 million decrease in
average interest-bearing deposits coupled with the impact of rising
market interest rates.
Net interest margin decreased by 47 basis point
to 2.48% from 2.95% for the six months ended June 30, 2022.
The decrease in net interest margin was 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 144 basis points to 1.80% for the six
months ended June 30, 2023, from 0.36% for the six months
ended June 30, 2022, driven primarily by a 149 basis point
increase in the cost of borrowings from 2.07% to 3.56% for the six
months ended June 30, 2023. Additionally, the cost of
interest-bearing deposits increased by 106 basis points from 0.15%
to 1.21% for the six months ended June 30, 2023, due to rising
market interest rates and a shift in the composition of the deposit
portfolio towards higher-costing certificates of deposit. The
increase in the cost of interest-bearing liabilities was partially
offset by an increase in yields on interest-earning assets which
increased 61 basis points to 3.82% for the six months ended
June 30, 2023, from 3.21% for the six months ended
June 30, 2022. The Company accreted interest income related to
purchased credit-deteriorated (“PCD”) loans of $678,000 for the six
months ended June 30, 2023, as compared to $729,000 for the
six months ended June 30, 2022. Fees recognized from Paycheck
Protection Program (“PPP”) loans totaled $29,000 for the six months
ended June 30, 2023, as compared to $1.1 million for the six
months ended June 30, 2022. Net interest income for the six
months ended June 30, 2023, included loan prepayment income of
$1.2 million as compared to $2.6 million for the six months ended
June 30, 2022.
The provision for credit losses on loans
increased by $342,000 to $894,000 for the six months ended
June 30, 2023, compared to $552,000 for the six months ended
June 30, 2022. The increase in the provision for credit losses
for the current period, as compared to the comparable prior year
period, was primarily the result of a weakening macroeconomic
outlook, higher net charge-offs, and an increase in reserves for
commercial and industrial loans primarily due to a $13.8 million
loan that is current and collateralized by receivables and business
assets being downgraded to substandard, partially offset by a
decrease in non-economic qualitative loss factors in the
multifamily and commercial real estate portfolios and decreased
loan growth. Net charge-offs were $2.4 million for the six months
ended June 30, 2023, as compared to net charge-offs of
$494,000 for the six months ended June 30, 2022, the increase
being due to charge-offs on small business unsecured commercial and
industrial loans. Management continues to monitor the small
business unsecured commercial and industrial loan portfolio which
totaled $41.4 million at June 30, 2023.
Non-interest income increased by $3.7 million,
or 148.1%, to $6.1 million for the six months ended June 30,
2023, from $2.5 million for the six months ended June 30,
2022, due primarily to a $3.4 million increase in mark to market
gains on trading securities, net, and a $478,000 increase in other
income, which was primarily an increase in swap fee income. For the
six months ended June 30, 2023, gains on trading securities
were $1.0 million, as compared to losses of $2.4 million for the
six months ended June 30, 2022. 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 a minimal 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.
Partially offsetting the increases was a decrease of $281,000 in
net realized gains on available-for-sale debt securities.
Non-interest expense increased $4.5 million, or
12.0%, to $41.9 million for the six months ended June 30,
2023, compared to $37.4 million for the six months ended
June 30, 2022. The increase was primarily due to a $4.5
million increase in employee compensation and benefits,
attributable to a $3.4 million increase in the mark to market of
the Company's deferred compensation plan expense, which as
discussed above has no effect on net income, coupled with an
increase in equity award expense related to awards issued in the
first quarter of 2023, annual merit increases, and severance
expense of $440,000, partially offset by a decrease in the accrual
for incentive compensation. During the second quarter of 2023, due
to current economic conditions, the Company implemented a workforce
reduction plan which included modest layoffs and the elimination
of, and/or not filling, certain open positions. The annual
estimated cost savings of this plan is $1.4 million, pre-tax. Data
processing expense increased by $839,000, due to continued
investments in technology, increased transaction costs related to
an increase in the number of customer accounts and related volume
of transactions, and higher pricing effective January 2023.
Advertising expense increased by $583,000 due to the timing of
certain programs and new promotions on deposit products. FDIC
insurance expense increased by $460,000 due to higher assessments.
Partially offsetting the increases was a decrease of $1.2 million
in credit loss (benefit)/expense for off-balance sheet credit
exposures, and a $274,000 decrease in other operating expense. The
decrease in credit loss expense for off-balance sheet credit
exposures was due to a benefit of $550,000 recorded during the six
months ended June 30, 2023, compared to a provision of
$628,000 for the prior year period, attributed to a decrease in the
pipeline of loans committed and awaiting closing.
The Company recorded income tax expense of $8.1
million for the six months ended June 30, 2023, compared to
$11.5 million for the six months ended June 30, 2022, with the
decrease due to lower taxable income. The effective tax rate for
the six months ended June 30, 2023, was 27.7% compared to
27.6% for the six months ended June 30, 2022.
Comparison of Operating Results for the Three
Months Ended June 30, 2023 and 2022
Net income was $9.6 million and $15.9 million
for the quarters ended June 30, 2023 and June 30, 2022,
respectively. Significant variances from the comparable prior year
quarter are as follows: an $8.9 million decrease in net
interest income, a $2.1 million increase in non-interest income, a
$2.1 million increase in non-interest expense, and a $2.5
million decrease in income tax expense.
Net interest income for the quarter ended
June 30, 2023, decreased $8.9 million, or 22.3%, to $31.2
million, from $40.1 million for the quarter ended June 30,
2022. The decrease in net interest income was primarily
attributable to a $17.1 million increase in interest expense on
deposits, borrowings and subordinated debt, partially offset by an
$8.2 million increase in interest income. The increase in interest
income was primarily due to an increase in average interest-earning
assets of $33.8 million, or 0.6%, coupled with a 59 basis point
increase in yields on interest-earning assets due to the rising
rate environment and a greater percentage of assets consisting of
higher-yielding loans. The increase in the average balance of
interest-earning assets was primarily due to increases in the
average balance of loans outstanding of $292.1 million and the
average balance of FHLBNY stock of $23.2 million, partially offset
by decreases in the average balance of mortgage-backed securities
of $196.1 million, the average balance of other securities of $58.6
million, and the average balance of interest-earning deposits in
financial institutions of $26.9 million. The increase in interest
expense on deposits, borrowings and subordinated debt was largely
driven by a $172.0 million, or 4.5%, increase in the average
balance of interest-bearing liabilities, including increases of
$626.6 million and $51.5 million, in average borrowed funds and
subordinated debt, respectively, partially offset by a $506.1
million decrease in average interest-bearing deposits coupled with
the impact of rising market interest rates.
Net interest margin decreased by 69 basis points
to 2.34% for the quarter ended June 30, 2023, from 3.03% for
the quarter ended June 30, 2022, 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 170 basis points to 2.05% for the quarter
ended June 30, 2023, from 0.35% for the quarter ended
June 30, 2022, driven primarily by a 164 basis point increase
in the cost of borrowings from 2.04% to 3.68% for the quarter ended
June 30, 2023. Additionally, the cost of interest-bearing
deposits increased by 127 basis points from 0.16% to 1.43% for the
quarter ended June 30, 2023, due to rising market interest
rates and a shift in the composition of the deposit portfolio
towards higher-yielding certificates of deposit. The increase in
the cost of interest-bearing liabilities was partially offset by an
increase in yields on interest-earning assets which increased by 59
basis points to 3.88% for the quarter ended June 30, 2023,
from 3.29% for the quarter ended June 30, 2022. Net interest
income for the quarter ended June 30, 2023, included loan
prepayment income of $194,000, as compared to $1.5 million for the
quarter ended June 30, 2022. The Company accreted interest
income related to PCD loans of $337,000 for the quarter ended
June 30, 2023, as compared to $339,000 for quarter ended
June 30, 2022. Fees recognized from PPP loans totaled $24,000
for the quarter ended June 30, 2023, as compared to $432,000
for the quarter ended June 30, 2022.
The provision for credit losses on loans
decreased by $119,000 to a provision of $30,000 for the quarter
ended June 30, 2023, from a provision of $149,000 for the
quarter ended June 30, 2022. The decrease in the current
quarter provision for credit losses was primarily due to minimal
loan growth and a decrease in non-economic qualitative loss factors
in the multifamily and commercial real estate portfolios, partially
offset by a worsening macroeconomic outlook and an increase in
reserves for commercial and industrial loans, primarily due to a
$13.8 million loan that is current and collateralized by
receivables and business assets being downgraded to substandard.
Net charge-offs were $313,000 for the quarter ended June 30,
2023, compared to net charge-offs of $392,000 for the quarter ended
June 30, 2022.
Non-interest income increased by $2.1 million,
or 268.1%, to $2.8 million for the quarter ended June 30,
2023, from $765,000 for the quarter ended June 30, 2022,
primarily due to a $2.1 million increase in gains on trading
securities. For the quarter ended June 30, 2023, gains on
trading securities, net, were $506,000, compared to losses of $1.6
million in the comparative prior year quarter. Gains and losses on
trading securities have a minimal 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 $2.1 million,
or 11.0%, to $20.8 million for the quarter ended June 30,
2023, from $18.7 million for the quarter ended June 30, 2022.
The increase was primarily due to a $2.9 million increase in
compensation and employee benefits, primarily attributable to a
$2.1 million increase in the mark to market of the Company's
deferred compensation plan expense, which as discussed above has no
effect on net income, and, to a lesser extent, an increase in
salary expense related to annual merit increases and severance
expense of $440,000. Data processing expense increased by $309,000
due to continued investments in technology. Advertising expense
increased by $169,000 due to the timing of certain programs and new
promotions on demand deposit products. FDIC insurance expense
increased by $213,000 due to higher assessments. Partially
offsetting the increases was a $1.0 million decrease in the credit
loss (benefit)/expense for off-balance sheet exposures, and a
$461,000 decrease in professional fees. The decrease in credit loss
(benefit)/expense for off-balance sheet credit exposures was due to
a benefit of $661,000 recorded during the quarter ended
June 30, 2023, compared to a provision of $349,000 for the
prior year period, attributed to a decrease in the pipeline of
loans committed and awaiting closing. The decrease in professional
fees was due to higher audit and recruiting fees in the prior
year.
The Company recorded income tax expense of $3.6
million for the quarter ended June 30, 2023, compared to $6.1
million for the quarter ended June 30, 2022, with the decrease
due to lower taxable income. The effective tax rate for the quarter
ended June 30, 2023 was 27.4%, compared to 27.8% for the
quarter ended June 30, 2022.
Comparison of Operating Results for the Three
Months Ended June 30, 2023 and March 31, 2023
Net income was $9.6 million and $11.7 million
for the quarters ended June 30, 2023, and March 31, 2023,
respectively. Significant variances from the prior quarter are as
follows: a $3.7 million decrease in net interest income, an
$834,000 decrease in the provision for credit losses on loans, a
$516,000 decrease in non-interest income, a $353,000 decrease in
non-interest expense and a $916,000 decrease in income tax
expense.
Net interest income for the quarter ended
June 30, 2023, decreased by $3.7 million, or 10.7%, to $31.2
million, from $34.9 million for the quarter ended March 31,
2023. The decrease in net interest income was primarily
attributable to a $5.5 million increase in interest expense on
deposits and borrowings, partially offset by a $1.7 million
increase in interest income. The increase in interest income was
primarily due to a 12 basis point increase in yields on
interest-earning assets, partially offset by a $43.5 million, or
0.8%, 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
mortgage-backed securities of $43.3 million, the average balance of
other securities of $36.7 million, and the average balance of
interest-earning deposits in financial institutions of $9.4
million, partially offset by increases in the average balance of
loans outstanding of $40.1 million and the average balance of
FHLBNY stock of $5.8 million. The increase in interest expense on
deposits and borrowings was largely driven by a $33.0 million, or
0.8%, increase in the average balance of interest-bearing
liabilities, including an increase of $240.7 million in average
borrowed funds, coupled with the impact of rising market interest
rates, partially offset by a $207.8 million decrease in average
interest-bearing deposits .
Net interest margin decreased by 29 basis points
to 2.34% from 2.63% for the quarter ended March 31, 2023. The
decrease was primarily due to the increase in the cost of
interest-bearing liabilities outpacing the increase in yields on
interest-earning assets. The cost of interest-bearing liabilities
increased by 52 basis point to 2.05% for the quarter ended
June 30, 2023, from 1.53% for the quarter ended March 31,
2023, driven by both higher costs of deposits and borrowed funds,
reflective of the rising interest rate environment, and was
partially offset by higher yields on interest-earning assets, which
increased by 12 basis points to 3.88% for the quarter ended
June 30, 2023, from 3.76% for the quarter ended March 31,
2023, due to rising market interest rates and a greater percentage
of assets consisting of higher-yielding loans. Net interest income
for the quarter ended June 30, 2023, included loan prepayment
income of $194,000 as compared to $961,000 for the quarter ended
March 31, 2023. The Company accreted interest income related
to PCD loans of $337,000 for the quarter ended June 30, 2023,
as compared to $341,000 for the quarter ended March 31,
2023.
The provision for credit losses on loans
decreased by $834,000 to $30,000 for the quarter ended
June 30, 2023, from $864,000 for the quarter ended
March 31, 2023. The decrease in the provision was primarily
attributable to lower net charge-offs, and a decrease in
non-economic qualitative loss factors in the multifamily and
commercial real estate portfolios, partially offset by an increase
in reserves for commercial and industrial loans. Net charge-offs
were $313,000 for the quarter ended June 30, 2023, as compared
to net charge-offs of $2.0 million for the quarter ended
March 31, 2023.
Non-interest income decreased by $516,000, or
15.5%, to $2.8 million for the quarter ended June 30, 2023,
from $3.3 million for the quarter ended March 31, 2023. The
decrease was primarily due to a $474,000 decrease in other income
caused by higher swap fee income in the prior quarter, and a
$71,000 decrease in fees and service charges for customer services,
partially offset by an increase of $35,000 in gains on sales of
loans for the current quarter.
Non-interest expense decreased by $353,000, or
1.7%, to $20.8 million for the quarter ended June 30, 2023,
from $21.1 million for the quarter ended March 31, 2023. The
decrease was primarily due to a $772,000 decrease in the credit
loss (benefit)/expense for off-balance sheet exposures due to a
benefit of $661,000 recorded during the quarter ended June 30,
2023, compared to a provision of $111,000 for the quarter ended
March 31, 2023, a decrease in advertising expense of $274,000,
a decrease in professional fees of $203,000, a decrease in data
processing costs of $172,000, and a decrease in occupancy expense
of $128,000. Partially offsetting the decreases was a $1.3 million
increase in compensation and employee benefits, primarily related
to annual merit increases which were effective February 27, 2023,
and severance expense of $440,000.
The Company recorded income tax expense of $3.6
million for the quarter ended June 30, 2023, compared to $4.5
million for the quarter ended March 31, 2023 with the decrease
due to lower taxable income. The effective tax rate for the quarter
ended June 30, 2023 was 27.4%, compared to 27.9% for the
quarter ended and March 31, 2023.
Financial Condition
Total assets decreased by $60.5 million, or
1.1%, to $5.54 billion at June 30, 2023, from $5.60 billion at
December 31, 2022. The decrease was primarily due to a
decrease in available-for-sale debt securities of $149.9 million,
or 15.7%, partially offset by increases in cash and cash
equivalents of $43.3 million, or 94.6%, loans receivable of $31.3
million, or 0.7%, FHLBNY stock of $10.0 million, or 32.9%, and
other assets of $3.1 million, or 5.7%.
As of June 30, 2023, our non-owner occupied
commercial real estate loans (as defined by regulatory guidance) to
total risk-based capital was estimated by us at approximately 469%.
Management believes that Northfield Bank (the “Bank”) has
implemented 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.
Cash and cash equivalents increased by $43.3
million, or 94.6%, to $89.1 million at June 30, 2023, from
$45.8 million at December 31, 2022, primarily due to an
increase in Federal Reserve Bank of New York (“FRB”) balances
driven by excess cash from borrowings. 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. For the six months ended June 30, 2023, Management
believed it was prudent to increase balance sheet liquidity given
general market volatility and uncertainty.
Loans held-for-investment, net, increased by
$30.3 million, or 0.7%, to $4.27 billion at June 30, 2023 from
$4.24 billion at December 31, 2022, primarily due to an
increase in commercial real estate loans, partially offset by
decreases in multifamily loans and commercial and industrial loans.
The Company continues to focus on the credit needs of its
customers, and to a lesser extent, the development of new business
given the uncertain economic environment. Commercial real estate
loans increased $43.7 million, or 4.9%, to $943.0 million
at June 30, 2023 from $899.2 million at December 31,
2022, home equity loans increased $6.0 million, or 3.9%, to
$158.5 million at June 30, 2023 from $152.6 million
at December 31, 2022, and construction and land loans
increased $4.5 million, or 18.1%, to $29.4 million at
June 30, 2023 from $24.9 million at December 31,
2022. The increases were partially offset by decreases in
multifamily loans of $9.8 million, or 0.3%, to $2.81 billion at
June 30, 2023 from $2.82 billion at December 31, 2022,
one-to-four family residential loans of $3.2 million, or 1.8%,
to $170.8 million at June 30, 2023 from
$173.9 million at December 31, 2022, and commercial and
industrial loans of $11.4 million, or 7.4%, to $143.3 million at
June 30, 2023 from $154.7 million at December 31,
2022.
At June 30, 2023, office-related loans
represented $213.3 million, or approximately 5% 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 58%. Approximately 46% were owner-occupied. The geographic
locations of the properties collateralizing our office-related
loans are as follows: 53.2% in New York, 46.5% in New Jersey and
0.3% in Pennsylvania. At June 30, 2023, our largest
office-related loan had a principal balance of $85.0 million (with
a net active principal balance for the Bank of $28.3 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.
PCD loans totaled $11.5 million at June 30,
2023 and December 31, 2022, 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 $337,000 and $678,000
attributable to PCD loans for the three and six months ended June
30, 2023, respectively, as compared to $339,000 and $729,000 for
the three and six months ended June 30, 2022, respectively. PCD
loans had an allowance for credit losses of approximately $3.7
million at June 30, 2023.
Loan balances are summarized as follows (dollars
in thousands):
|
June 30, 2023 |
|
March 31, 2023 |
|
December 31, 2022 |
Real estate loans: |
|
|
|
|
|
Multifamily |
$ |
2,814,809 |
|
$ |
2,800,079 |
|
$ |
2,824,579 |
Commercial mortgage |
|
942,980 |
|
|
919,503 |
|
|
899,249 |
One-to-four family residential mortgage |
|
170,767 |
|
|
175,640 |
|
|
173,946 |
Home equity and lines of credit |
|
158,517 |
|
|
155,683 |
|
|
152,555 |
Construction and land |
|
29,444 |
|
|
25,508 |
|
|
24,932 |
Total real estate loans |
|
4,116,517 |
|
|
4,076,413 |
|
|
4,075,261 |
Commercial and industrial
loans |
|
142,948 |
|
|
146,751 |
|
|
149,557 |
PPP loans |
|
366 |
|
|
5,081 |
|
|
5,143 |
Other loans |
|
2,663 |
|
|
2,095 |
|
|
2,230 |
Total commercial and industrial, PPP, and other loans |
|
145,977 |
|
|
153,927 |
|
|
156,930 |
Loans held-for-investment, net (excluding PCD) |
|
4,262,494 |
|
|
4,230,340 |
|
|
4,232,191 |
PCD loans |
|
11,548 |
|
|
11,591 |
|
|
11,502 |
Total loans held-for-investment, net |
$ |
4,274,042 |
|
$ |
4,241,931 |
|
$ |
4,243,693 |
The Company’s available-for-sale debt securities
portfolio decreased by $149.9 million, or 15.7%, to $802.3 million
at June 30, 2023, from $952.2 million at December 31,
2022. The decrease was primarily attributable to paydowns,
maturities and calls. At June 30, 2023, $614.6 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 $72.1 million in U.S. Government agency
securities and $115.6 million in corporate bonds, all of which were
considered investment grade at June 30, 2023. Unrealized
losses, net of tax, on available-for-sale debt securities and
held-to-maturity securities approximated $45.3 million and
$326,000, respectively, at June 30, 2023, and $48.6 million
and $332,000, respectively, at December 31, 2022.
Equity securities were $10.7 million at
June 30, 2023 and $10.4 million at December 31, 2022.
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 decreased $45.7 million, or
0.9%, to $4.85 billion at June 30, 2023, from $4.90 billion at
December 31, 2022. The decrease was primarily attributable to
a decrease in total deposits of $385.8 million, partially offset by
an increase in FHLB advances and other borrowings of $339.7
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 $385.8 million, or 9.3%, to
$3.76 billion at June 30, 2023, as compared to $4.15 billion
at December 31, 2022. Brokered deposits decreased by $218.6
million, or 56.0%. Deposits, excluding brokered deposits, decreased
$167.2 million, or 4.4%. The decrease in deposits, excluding
brokered deposits, was attributable to decreases of $114.5 million
in transaction accounts and $198.6 million in money market
accounts. These decreases were partially offset by increases of
$132.8 million in time deposits and $13.0 million in savings
accounts. Estimated uninsured deposits (excluding fully
collateralized uninsured governmental deposits of $617.4 million)
were approximately $827.8 million, or 22%, of total deposits as of
June 30, 2023.
Deposit account balances are summarized as
follows (dollars in thousands):
|
June 30, 2023 |
|
March 31, 2023 |
|
December 31, 2022 |
Transaction: |
|
|
|
|
|
Non-interest bearing checking |
$ |
754,498 |
|
$ |
804,784 |
|
$ |
852,660 |
Negotiable orders of withdrawal and interest-bearing checking |
|
1,116,000 |
|
|
1,109,364 |
|
|
1,132,290 |
Total transaction |
|
1,870,498 |
|
|
1,914,148 |
|
|
1,984,950 |
Savings and money market: |
|
|
|
|
|
Savings |
|
930,198 |
|
|
926,541 |
|
|
917,180 |
Money market |
|
309,475 |
|
|
398,730 |
|
|
508,067 |
Total savings |
|
1,239,673 |
|
|
1,325,271 |
|
|
1,425,247 |
Certificates of deposit: |
|
|
|
|
|
Brokered deposits |
|
171,448 |
|
|
152,049 |
|
|
390,035 |
$250,000 and under |
|
420,518 |
|
|
327,341 |
|
|
293,200 |
Over $250,000 |
|
62,266 |
|
|
128,688 |
|
|
56,787 |
Total certificates of deposit |
|
654,232 |
|
|
608,078 |
|
|
740,022 |
Total deposits |
$ |
3,764,403 |
|
$ |
3,847,497 |
|
$ |
4,150,219 |
Included in the table above are business and municipal deposit
account balances as follows (dollars in thousands):
|
June 30, 2023 |
|
March 31, 2023 |
|
December 31, 2022 |
|
|
|
|
|
|
Business customers |
$ |
993,298 |
|
$ |
1,071,469 |
|
$ |
1,146,803 |
Municipal (governmental)
customers |
$ |
595,322 |
|
$ |
609,662 |
|
$ |
604,717 |
Borrowed funds increased to $984.6 million at
June 30, 2023, from $644.9 million at December 31, 2022.
The increase in borrowings for the period was due to an increase in
FHLB and FRB borrowings of $339.7 million, including $134.5 million
of 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. During the six months ended
June 30, 2023, the Company increased borrowings to pay off
higher-rate brokered certificates of deposit, and, to a lesser
extent, fund deposit outflows of non-brokered deposits.
The following table sets forth borrowing maturities (excluding
overnight borrowings and subordinated debt) and the weighted
average rate by year at June 30, 2023 (dollars in
thousands):
Year |
|
Amount (1) |
|
Weighted Average Rate |
2023 |
|
$65,000 |
|
3.88% |
2024 |
|
194,500 |
|
3.98% |
2025 |
|
182,500 |
|
2.59% |
2026 |
|
148,000 |
|
4.36% |
2027 |
|
173,000 |
|
3.19% |
Thereafter |
|
154,288 |
|
3.96% |
|
|
$917,288 |
|
3.61% |
|
|
|
|
|
(1) Borrowings maturing in 2023 and 2024 include $40.0
million and $94.5 million, respectively, of FRB borrowings that can
be repaid without any penalty. |
|
Total stockholders’ equity decreased by $14.7
million to $686.6 million at June 30, 2023, from $701.4
million at December 31, 2022. The decrease was attributable to
$29.3 million in stock repurchases and $11.7 million in dividend
payments, partially offset by net income of $21.3 million for the
six months ended June 30, 2023, a $3.3 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 $1.7 million increase in equity
award activity. During the six months ended June 30, 2023, the
Company repurchased approximately 2.4 million of its common stock
outstanding at an average price of $12.42 for a total of $29.3
million pursuant to approved stock repurchase plans. As of
June 30, 2023, the Company had approximately $3.2 million in
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 had the following primary sources of liquidity at
June 30, 2023 (dollars in thousands):
Cash and cash equivalents(1) |
|
$ |
75,274 |
Corporate bonds(2) |
|
$ |
102,555 |
Multifamily loans(2) |
|
$ |
1,124,293 |
Mortgage-backed securities
(issued or guaranteed by the U.S. Government, Fannie Mae, or
Freddie Mac)(2) |
|
$ |
72,704 |
|
|
|
(1) Excludes $13.9
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, 2023, the Company
and the Bank's estimated CBLR ratios were 12.46% and 12.54%,
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 loans, non-performing assets,
troubled debt restructurings on which interest is accruing, and
accruing loans 30 to 89 days delinquent at June 30, 2023,
March 31, 2023, and December 31, 2022 (dollars in
thousands):
|
June 30, 2023 |
|
March 31, 2023 |
|
December 31, 2022 |
Non-accrual loans: |
|
|
|
|
|
Held-for-investment |
|
|
|
|
|
Real estate loans: |
|
|
|
|
|
Multifamily |
$ |
3,223 |
|
|
$ |
3,258 |
|
|
$ |
3,285 |
|
Commercial |
|
5,393 |
|
|
|
5,188 |
|
|
|
5,184 |
|
One-to-four family residential |
|
109 |
|
|
|
113 |
|
|
|
118 |
|
Home equity and lines of credit |
|
100 |
|
|
|
78 |
|
|
|
262 |
|
Commercial and industrial |
|
1,275 |
|
|
|
532 |
|
|
|
964 |
|
Other |
|
10 |
|
|
|
— |
|
|
|
— |
|
Total non-accrual
loans |
|
10,110 |
|
|
|
9,169 |
|
|
|
9,813 |
|
Loans delinquent 90 days or
more and still accruing: |
|
|
|
|
|
Held-for-investment |
|
|
|
|
|
Real estate loans: |
|
|
|
|
|
Multifamily |
|
218 |
|
|
|
225 |
|
|
|
233 |
|
Commercial |
|
— |
|
|
|
— |
|
|
|
8 |
|
One-to-four family residential |
|
6 |
|
|
|
6 |
|
|
|
155 |
|
PPP loans |
|
— |
|
|
|
— |
|
|
|
24 |
|
Other |
|
— |
|
|
|
— |
|
|
|
5 |
|
Total loans
held-for-investment delinquent 90 days or more and still
accruing |
|
224 |
|
|
|
231 |
|
|
|
425 |
|
Total non-performing
loans |
|
10,334 |
|
|
|
9,400 |
|
|
|
10,238 |
|
Other real estate owned |
|
— |
|
|
|
70 |
|
|
|
— |
|
Total non-performing
assets |
$ |
10,334 |
|
|
$ |
9,470 |
|
|
$ |
10,238 |
|
Non-performing loans to total loans |
|
0.24 |
% |
|
|
0.22 |
% |
|
|
0.24 |
% |
Non-performing assets to total assets |
|
0.19 |
% |
|
|
0.17 |
% |
|
|
0.18 |
% |
Loans subject to
restructuring agreements and still accruing (1) |
$ |
— |
|
|
$ |
— |
|
|
$ |
3,751 |
|
Accruing loans 30 to
89 days delinquent |
$ |
4,076 |
|
|
$ |
4,073 |
|
|
$ |
3,644 |
|
|
|
|
|
|
|
(1) With the adoption of Accounting Standards Update (“ASU”)
2022-02, Financial Instruments - Credit Losses (Topic 326) Troubled
Debt Restructurings and Vintage Disclosures (“ASU 2022-02”),
effective January 1, 2023, TDR accounting has been eliminated. |
|
The increase in non-accrual loans during the
quarter ended June 30, 2023, was primarily due to an increase in
small business unsecured commercial and industrial loans being
placed on non-accrual status.
Other Real Estate Owned
At June 30, 2023 and December 31,
2022, the Company had no assets acquired through foreclosure. At
March 31, 2023, other real estate owned was comprised of one
property located in New Jersey, which had a carrying value of
approximately $70,000, and which was sold during the second quarter
of 2023 for a small loss.
Accruing Loans 30 to 89 Days Delinquent
Loans 30 to 89 days delinquent and on accrual
status totaled $4.1 million, $4.1 million, and $3.6 million at
June 30, 2023, March 31, 2023, and December 31,
2022, respectively. The following table sets forth delinquencies
for accruing loans by type and by amount at June 30, 2023,
March 31, 2023 and December 31, 2022 (dollars in
thousands):
|
June 30, 2023 |
|
March 31, 2023 |
|
December 31, 2022 |
Held-for-investment |
|
|
|
|
|
Real estate loans: |
|
|
|
|
|
Multifamily |
$ |
— |
|
$ |
185 |
|
$ |
189 |
Commercial |
|
803 |
|
|
804 |
|
|
900 |
One-to-four family residential |
|
567 |
|
|
567 |
|
|
672 |
Home equity and lines of credit |
|
256 |
|
|
665 |
|
|
830 |
Commercial and industrial loans |
|
2,450 |
|
|
1,842 |
|
|
1,048 |
Other loans |
|
— |
|
|
10 |
|
|
5 |
Total delinquent accruing loans held-for-investment |
$ |
4,076 |
|
$ |
4,073 |
|
$ |
3,644 |
The increase in the commercial and industrial
loan delinquencies was primarily due to an increase in
delinquencies in unsecured small business loans. Unsecured small
business loans totaled $41.4 million, $39.6 million, and $43.3
million at June 30, 2023, March 31, 2023 and
December 31, 2022, respectively. Management continues to
monitor the small business unsecured commercial and industrial loan
portfolio.
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 ($11.5 million
at June 30, 2023 and December 31, 2022, respectively) as
accruing, even though they may be contractually past due. At
June 30, 2023, 5.2% of PCD loans were past due 30 to 89 days,
and 29.7% were past due 90 days or more, as compared to 6.8% and
23.0%, respectively, at December 31, 2022.
About Northfield Bank
Northfield Bank, founded in 1887, operates 38
full-service banking 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,
including any potential recessionary conditions, changes in
liquidity, including the size and composition of our deposit
portfolio, including the percentage of uninsured deposits in the
portfolio, the effects of the COVID-19 pandemic, including the
effects of the steps taken to address the pandemic and their impact
on the Company’s market and employees, competition among depository
and other financial institutions, including with respect to
overdraft and other fees, 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 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, 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 theSix Months Ended |
|
June 30, |
|
March |
|
June 30, |
|
2023 |
|
2022 |
|
2023 |
|
2023 |
|
2022 |
Selected Financial
Ratios: |
|
|
|
|
|
|
|
|
|
Performance Ratios
(1) |
|
|
|
|
|
|
|
|
|
Return on assets (ratio of net income to average total assets) |
0.69 |
% |
|
1.14 |
% |
|
0.84 |
% |
|
0.77 |
% |
|
1.09 |
% |
Return on equity (ratio of net
income to average equity) |
5.52 |
|
|
8.92 |
|
|
6.82 |
|
|
6.16 |
|
|
8.37 |
|
Average equity to average total
assets |
12.44 |
|
|
12.81 |
|
|
12.39 |
|
|
12.42 |
|
|
13.07 |
|
Interest rate spread |
1.83 |
|
|
2.94 |
|
|
2.23 |
|
|
2.02 |
|
|
2.85 |
|
Net interest margin |
2.34 |
|
|
3.03 |
|
|
2.63 |
|
|
2.48 |
|
|
2.95 |
|
Efficiency ratio (2) |
61.14 |
|
|
45.81 |
|
|
55.27 |
|
|
58.03 |
|
|
47.11 |
|
Non-interest expense to average
total assets |
1.49 |
|
|
1.35 |
|
|
1.52 |
|
|
1.51 |
|
|
1.36 |
|
Non-interest expense to average
total interest-earning assets |
1.56 |
|
|
1.41 |
|
|
1.59 |
|
|
1.58 |
|
|
1.44 |
|
Average interest-earning assets
to average interest-bearing liabilities |
133.31 |
|
|
138.40 |
|
|
135.51 |
|
|
134.39 |
|
|
138.71 |
|
Asset Quality
Ratios: |
|
|
|
|
|
|
|
|
|
Non-performing assets to total
assets |
0.19 |
|
|
0.19 |
|
|
0.17 |
|
|
0.19 |
|
|
0.19 |
|
Non-performing loans (3) to
total loans (4) |
0.24 |
|
|
0.25 |
|
|
0.22 |
|
|
0.24 |
|
|
0.25 |
|
Allowance for credit losses to
non-performing loans |
398.24 |
|
|
372.65 |
|
|
440.81 |
|
|
398.24 |
|
|
372.65 |
|
Allowance for credit losses to
total loans held-for-investment, net (5) |
0.96 |
|
|
0.95 |
|
|
0.98 |
|
|
0.96 |
|
|
0.95 |
|
(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, 2023 |
|
March 31, 2023 |
|
December 31, 2022 |
ASSETS: |
|
|
|
|
|
Cash and due from banks |
$ |
13,853 |
|
|
$ |
14,490 |
|
|
$ |
14,530 |
|
Interest-bearing deposits in
other financial institutions |
|
75,274 |
|
|
|
144,462 |
|
|
|
31,269 |
|
Total cash and cash
equivalents |
|
89,127 |
|
|
|
158,952 |
|
|
|
45,799 |
|
Trading securities |
|
11,731 |
|
|
|
11,129 |
|
|
|
10,751 |
|
Debt securities
available-for-sale, at estimated fair value |
|
802,257 |
|
|
|
896,948 |
|
|
|
952,173 |
|
Debt securities
held-to-maturity, at amortized cost |
|
10,316 |
|
|
|
10,378 |
|
|
|
10,760 |
|
Equity securities |
|
10,653 |
|
|
|
10,443 |
|
|
|
10,443 |
|
Loans held-for-sale |
|
977 |
|
|
|
— |
|
|
|
— |
|
Loans held-for-investment,
net |
|
4,274,042 |
|
|
|
4,241,931 |
|
|
|
4,243,693 |
|
Allowance for credit losses |
|
(41,154 |
) |
|
|
(41,436 |
) |
|
|
(42,617 |
) |
Net loans
held-for-investment |
|
4,232,888 |
|
|
|
4,200,495 |
|
|
|
4,201,076 |
|
Accrued interest
receivable |
|
17,721 |
|
|
|
17,196 |
|
|
|
17,426 |
|
Bank-owned life insurance |
|
169,671 |
|
|
|
168,782 |
|
|
|
167,912 |
|
Federal Home Loan Bank of New
York stock, at cost |
|
40,376 |
|
|
|
41,117 |
|
|
|
30,382 |
|
Operating lease right-of-use
assets |
|
32,010 |
|
|
|
33,120 |
|
|
|
34,288 |
|
Premises and equipment,
net |
|
24,573 |
|
|
|
24,674 |
|
|
|
24,844 |
|
Goodwill |
|
41,012 |
|
|
|
41,012 |
|
|
|
41,012 |
|
Other assets |
|
57,503 |
|
|
|
48,927 |
|
|
|
54,427 |
|
Total
assets |
$ |
5,540,815 |
|
|
$ |
5,663,173 |
|
|
$ |
5,601,293 |
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY: |
|
|
|
|
|
LIABILITIES: |
|
|
|
|
|
Deposits |
$ |
3,764,403 |
|
|
$ |
3,847,497 |
|
|
$ |
4,150,219 |
|
Securities sold under
agreements to repurchase |
|
25,000 |
|
|
|
25,000 |
|
|
|
25,000 |
|
Federal Home Loan Bank
advances and other borrowings |
|
898,535 |
|
|
|
923,983 |
|
|
|
558,859 |
|
Subordinated debentures, net
of issuance costs |
|
61,108 |
|
|
|
61,052 |
|
|
|
60,996 |
|
Lease liabilities |
|
37,274 |
|
|
|
38,509 |
|
|
|
39,790 |
|
Advance payments by borrowers
for taxes and insurance |
|
29,117 |
|
|
|
30,847 |
|
|
|
25,995 |
|
Accrued expenses and other
liabilities |
|
38,737 |
|
|
|
38,119 |
|
|
|
39,044 |
|
Total
liabilities |
|
4,854,174 |
|
|
|
4,965,007 |
|
|
|
4,899,903 |
|
|
|
|
|
|
|
STOCKHOLDERS’
EQUITY: |
|
|
|
|
|
Total stockholders’
equity |
|
686,641 |
|
|
|
698,166 |
|
|
|
701,390 |
|
Total liabilities and
stockholders’ equity |
$ |
5,540,815 |
|
|
$ |
5,663,173 |
|
|
$ |
5,601,293 |
|
|
|
|
|
|
|
Total shares outstanding |
|
45,243,673 |
|
|
|
46,530,167 |
|
|
|
47,442,488 |
|
Tangible book value per share
(1) |
$ |
14.27 |
|
|
$ |
14.12 |
|
|
$ |
13.91 |
|
(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 $216,000,
$247,000, and $266,000 at June 30, 2023, March 31,
2023 and December 31, 2022, 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, |
|
2023 |
|
2022 |
|
2023 |
|
2023 |
|
2022 |
Interest
income: |
|
|
|
|
|
|
|
|
|
Loans |
$ |
45,300 |
|
|
$ |
38,998 |
|
|
$ |
43,707 |
|
$ |
89,007 |
|
|
$ |
75,719 |
|
Mortgage-backed securities |
|
3,714 |
|
|
|
3,043 |
|
|
|
3,792 |
|
|
7,506 |
|
|
|
5,518 |
|
Other securities |
|
1,113 |
|
|
|
989 |
|
|
|
1,385 |
|
|
2,498 |
|
|
|
1,684 |
|
Federal Home Loan Bank of New York dividends |
|
727 |
|
|
|
260 |
|
|
|
465 |
|
|
1,192 |
|
|
|
505 |
|
Deposits in other financial institutions |
|
816 |
|
|
|
166 |
|
|
|
578 |
|
|
1,394 |
|
|
|
224 |
|
Total interest income |
|
51,670 |
|
|
|
43,456 |
|
|
|
49,927 |
|
|
101,597 |
|
|
|
83,650 |
|
Interest
expense: |
|
|
|
|
|
|
|
|
|
Deposits |
|
10,483 |
|
|
|
1,334 |
|
|
|
7,821 |
|
|
18,304 |
|
|
|
2,493 |
|
Borrowings |
|
9,198 |
|
|
|
1,918 |
|
|
|
6,391 |
|
|
15,589 |
|
|
|
4,084 |
|
Subordinated debt |
|
828 |
|
|
|
119 |
|
|
|
819 |
|
|
1,647 |
|
|
|
119 |
|
Total interest expense |
|
20,509 |
|
|
|
3,371 |
|
|
|
15,031 |
|
|
35,540 |
|
|
|
6,696 |
|
Net interest income |
|
31,161 |
|
|
|
40,085 |
|
|
|
34,896 |
|
|
66,057 |
|
|
|
76,954 |
|
Provision for credit
losses |
|
30 |
|
|
|
149 |
|
|
|
864 |
|
|
894 |
|
|
|
552 |
|
Net interest income after
provision for credit losses |
|
31,131 |
|
|
|
39,936 |
|
|
|
34,032 |
|
|
65,163 |
|
|
|
76,402 |
|
Non-interest
income: |
|
|
|
|
|
|
|
|
|
Fees and service charges for customer services |
|
1,309 |
|
|
|
1,375 |
|
|
|
1,380 |
|
|
2,689 |
|
|
|
2,706 |
|
Income on bank-owned life insurance |
|
889 |
|
|
|
848 |
|
|
|
870 |
|
|
1,759 |
|
|
|
1,687 |
|
(Losses)/gains on available-for-sale debt securities, net |
|
(18 |
) |
|
|
— |
|
|
|
1 |
|
|
(17 |
) |
|
|
264 |
|
Gains/(losses) on trading securities, net |
|
506 |
|
|
|
(1,563 |
) |
|
|
512 |
|
|
1,018 |
|
|
|
(2,365 |
) |
Gain on sale of loans |
|
35 |
|
|
|
— |
|
|
|
— |
|
|
35 |
|
|
|
— |
|
Other |
|
95 |
|
|
|
105 |
|
|
|
569 |
|
|
664 |
|
|
|
186 |
|
Total non-interest income |
|
2,816 |
|
|
|
765 |
|
|
|
3,332 |
|
|
6,148 |
|
|
|
2,478 |
|
Non-interest
expense: |
|
|
|
|
|
|
|
|
|
Compensation and employee benefits |
|
12,353 |
|
|
|
9,418 |
|
|
|
11,037 |
|
|
23,390 |
|
|
|
18,925 |
|
Occupancy |
|
3,244 |
|
|
|
3,286 |
|
|
|
3,372 |
|
|
6,616 |
|
|
|
6,694 |
|
Furniture and equipment |
|
460 |
|
|
|
426 |
|
|
|
454 |
|
|
914 |
|
|
|
852 |
|
Data processing |
|
2,071 |
|
|
|
1,762 |
|
|
|
2,243 |
|
|
4,314 |
|
|
|
3,475 |
|
Professional fees |
|
768 |
|
|
|
1,229 |
|
|
|
971 |
|
|
1,739 |
|
|
|
2,137 |
|
Advertising |
|
573 |
|
|
|
404 |
|
|
|
847 |
|
|
1,420 |
|
|
|
837 |
|
Federal Deposit Insurance Corporation insurance |
|
568 |
|
|
|
355 |
|
|
|
604 |
|
|
1,172 |
|
|
|
712 |
|
Credit loss (benefit)/expense for off-balance sheet exposures |
|
(661 |
) |
|
|
349 |
|
|
|
111 |
|
|
(550 |
) |
|
|
628 |
|
Other |
|
1,399 |
|
|
|
1,484 |
|
|
|
1,489 |
|
|
2,888 |
|
|
|
3,162 |
|
Total non-interest
expense |
|
20,775 |
|
|
|
18,713 |
|
|
|
21,128 |
|
|
41,903 |
|
|
|
37,422 |
|
Income before income tax
expense |
|
13,172 |
|
|
|
21,988 |
|
|
|
16,236 |
|
|
29,408 |
|
|
|
41,458 |
|
Income tax
expense |
|
3,613 |
|
|
|
6,114 |
|
|
|
4,529 |
|
|
8,142 |
|
|
|
11,457 |
|
Net
income |
$ |
9,559 |
|
|
$ |
15,874 |
|
|
$ |
11,707 |
|
$ |
21,266 |
|
|
$ |
30,001 |
|
Net income per common
share: |
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.22 |
|
|
$ |
0.34 |
|
|
$ |
0.26 |
|
$ |
0.48 |
|
|
$ |
0.64 |
|
Diluted |
$ |
0.22 |
|
|
$ |
0.34 |
|
|
$ |
0.26 |
|
$ |
0.48 |
|
|
$ |
0.64 |
|
Basic average shares outstanding |
|
43,914,110 |
|
|
|
46,591,723 |
|
|
|
44,784,228 |
|
|
44,346,881 |
|
|
|
46,708,716 |
|
Diluted average shares outstanding |
|
43,952,939 |
|
|
|
46,638,113 |
|
|
|
44,928,905 |
|
|
44,438,633 |
|
|
|
46,870,433 |
|
|
NORTHFIELD BANCORP, INC.ANALYSIS OF NET INTEREST
INCOME(Dollars in thousands) (unaudited) |
|
|
For the Three Months Ended |
|
June 30, 2023 |
|
March 31, 2023 |
|
June 30, 2022 |
|
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) |
$ |
4,284,871 |
|
$ |
45,300 |
|
4.24 |
% |
|
$ |
4,244,772 |
|
$ |
43,707 |
|
4.18 |
% |
|
$ |
3,992,731 |
|
$ |
38,998 |
|
3.92 |
% |
Mortgage-backed securities (3) |
|
703,415 |
|
|
3,714 |
|
2.12 |
|
|
|
746,735 |
|
|
3,792 |
|
2.06 |
|
|
|
899,479 |
|
|
3,043 |
|
1.36 |
|
Other securities (3) |
|
239,273 |
|
|
1,113 |
|
1.87 |
|
|
|
275,957 |
|
|
1,385 |
|
2.04 |
|
|
|
297,859 |
|
|
989 |
|
1.33 |
|
Federal Home Loan Bank of New York stock |
|
43,901 |
|
|
727 |
|
6.64 |
|
|
|
38,066 |
|
|
465 |
|
4.95 |
|
|
|
20,689 |
|
|
260 |
|
5.04 |
|
Interest-earning deposits in financial institutions |
|
67,822 |
|
|
816 |
|
4.83 |
|
|
|
77,269 |
|
|
578 |
|
3.03 |
|
|
|
94,689 |
|
|
166 |
|
0.70 |
|
Total interest-earning assets |
|
5,339,282 |
|
|
51,670 |
|
3.88 |
|
|
|
5,382,799 |
|
|
49,927 |
|
3.76 |
|
|
|
5,305,447 |
|
|
43,456 |
|
3.29 |
|
Non-interest-earning
assets |
|
244,567 |
|
|
|
|
|
|
239,984 |
|
|
|
|
|
|
266,303 |
|
|
|
|
Total assets |
$ |
5,583,849 |
|
|
|
|
|
$ |
5,622,783 |
|
|
|
|
|
$ |
5,571,750 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings, NOW, and money market accounts |
$ |
2,399,631 |
|
|
6,486 |
|
1.08 |
% |
|
$ |
2,523,620 |
|
$ |
3,843 |
|
0.62 |
% |
|
$ |
3,007,929 |
|
$ |
599 |
|
0.08 |
% |
Certificates of deposit |
|
540,984 |
|
|
3,997 |
|
2.96 |
|
|
|
624,762 |
|
|
3,978 |
|
2.58 |
|
|
|
438,835 |
|
|
735 |
|
0.67 |
|
Total interest-bearing deposits |
|
2,940,615 |
|
|
10,483 |
|
1.43 |
|
|
|
3,148,382 |
|
|
7,821 |
|
1.01 |
|
|
|
3,446,764 |
|
|
1,334 |
|
0.16 |
|
Borrowed funds |
|
1,003,611 |
|
|
9,198 |
|
3.68 |
|
|
|
762,928 |
|
|
6,391 |
|
3.40 |
|
|
|
377,044 |
|
|
1,918 |
|
2.04 |
|
Subordinated debt |
|
61,071 |
|
|
828 |
|
5.44 |
|
|
|
61,015 |
|
|
819 |
|
5.44 |
|
|
|
9,527 |
|
|
119 |
|
5.01 |
|
Total interest-bearing liabilities |
|
4,005,297 |
|
|
20,509 |
|
2.05 |
|
|
|
3,972,325 |
|
|
15,031 |
|
1.53 |
|
|
|
3,833,335 |
|
|
3,371 |
|
0.35 |
|
Non-interest bearing
deposits |
|
780,806 |
|
|
|
|
|
|
848,098 |
|
|
|
|
|
|
918,980 |
|
|
|
|
Accrued expenses and other
liabilities |
|
102,846 |
|
|
|
|
|
|
105,685 |
|
|
|
|
|
|
105,525 |
|
|
|
|
Total liabilities |
|
4,888,949 |
|
|
|
|
|
|
4,926,108 |
|
|
|
|
|
|
4,857,840 |
|
|
|
|
Stockholders' equity |
|
694,900 |
|
|
|
|
|
|
696,675 |
|
|
|
|
|
|
713,910 |
|
|
|
|
Total liabilities and stockholders' equity |
$ |
5,583,849 |
|
|
|
|
|
$ |
5,622,783 |
|
|
|
|
|
$ |
5,571,750 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
|
$ |
31,161 |
|
|
|
|
|
$ |
34,896 |
|
|
|
|
|
$ |
40,085 |
|
|
Net interest rate spread
(4) |
|
|
|
|
1.83 |
% |
|
|
|
|
|
2.23 |
% |
|
|
|
|
|
2.94 |
% |
Net interest-earning assets
(5) |
$ |
1,333,985 |
|
|
|
|
|
$ |
1,410,474 |
|
|
|
|
|
$ |
1,472,112 |
|
|
|
|
Net interest margin (6) |
|
|
|
|
2.34 |
% |
|
|
|
|
|
2.63 |
% |
|
|
|
|
|
3.03 |
% |
Average interest-earning
assets to interest-bearing liabilities |
|
|
|
|
133.31 |
% |
|
|
|
|
|
135.51 |
% |
|
|
|
|
|
138.40 |
% |
(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, 2023 |
|
June 30, 2022 |
|
Average Outstanding Balance |
|
Interest |
|
Average Yield/ Rate (1) |
|
Average Outstanding Balance |
|
Interest |
|
Average Yield/ Rate (1) |
Interest-earning
assets: |
|
|
|
|
|
|
|
|
|
|
|
Loans (2) |
$ |
4,264,932 |
|
$ |
89,007 |
|
4.21 |
% |
|
$ |
3,920,792 |
|
$ |
75,719 |
|
3.89 |
% |
Mortgage-backed securities (3) |
|
724,955 |
|
|
7,506 |
|
2.09 |
|
|
|
918,864 |
|
|
5,518 |
|
1.21 |
|
Other securities (3) |
|
257,514 |
|
|
2,498 |
|
1.96 |
|
|
|
277,035 |
|
|
1,684 |
|
1.23 |
|
Federal Home Loan Bank of New York stock |
|
41,000 |
|
|
1,192 |
|
5.86 |
|
|
|
21,440 |
|
|
505 |
|
4.75 |
|
Interest-earning deposits in financial institutions |
|
72,519 |
|
|
1,394 |
|
3.88 |
|
|
|
118,872 |
|
|
224 |
|
0.38 |
|
Total interest-earning assets |
|
5,360,920 |
|
|
101,597 |
|
3.82 |
|
|
|
5,257,003 |
|
|
83,650 |
|
3.21 |
|
Non-interest-earning
assets |
|
242,288 |
|
|
|
|
|
|
272,869 |
|
|
|
|
Total assets |
$ |
5,603,208 |
|
|
|
|
|
$ |
5,529,872 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
liabilities: |
|
|
|
|
|
|
|
|
|
|
|
Savings, NOW, and money market accounts |
$ |
2,461,283 |
|
$ |
10,329 |
|
0.85 |
% |
|
$ |
2,981,180 |
|
$ |
1,170 |
|
0.08 |
% |
Certificates of deposit |
|
582,642 |
|
|
7,975 |
|
2.76 |
|
|
|
406,156 |
|
|
1,323 |
|
0.66 |
|
Total interest-bearing deposits |
|
3,043,925 |
|
|
18,304 |
|
1.21 |
|
|
|
3,387,336 |
|
|
2,493 |
|
0.15 |
|
Borrowed funds |
|
883,934 |
|
|
15,589 |
|
3.56 |
|
|
|
397,775 |
|
|
4,084 |
|
2.07 |
|
Subordinated debt |
|
61,183 |
|
|
1,647 |
|
5.43 |
|
|
|
4,790 |
|
|
119 |
|
5.01 |
|
Total interest-bearing liabilities |
$ |
3,989,042 |
|
|
35,540 |
|
1.80 |
|
|
$ |
3,789,901 |
|
|
6,696 |
|
0.36 |
|
Non-interest bearing
deposits |
|
814,266 |
|
|
|
|
|
|
914,409 |
|
|
|
|
Accrued expenses and other
liabilities |
|
104,118 |
|
|
|
|
|
|
102,679 |
|
|
|
|
Total liabilities |
|
4,907,426 |
|
|
|
|
|
|
4,806,989 |
|
|
|
|
Stockholders' equity |
|
695,782 |
|
|
|
|
|
|
722,883 |
|
|
|
|
Total liabilities and stockholders' equity |
$ |
5,603,208 |
|
|
|
|
|
$ |
5,529,872 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
|
$ |
66,057 |
|
|
|
|
|
$ |
76,954 |
|
|
Net interest rate spread
(4) |
|
|
|
|
2.02 |
% |
|
|
|
|
|
2.85 |
% |
Net interest-earning assets
(5) |
$ |
1,371,878 |
|
|
|
|
|
$ |
1,467,102 |
|
|
|
|
Net interest margin (6) |
|
|
|
|
2.48 |
% |
|
|
|
|
|
2.95 |
% |
Average interest-earning
assets to interest-bearing liabilities |
|
|
|
|
134.39 |
% |
|
|
|
|
|
138.71 |
% |
(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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