NORTHFIELD BANCORP, INC. (The “Company”)
(Nasdaq:NFBK), the holding company for Northfield
Bank, reported net income of $8.2 million, or $0.19 per diluted
share, for the quarter ended December 31, 2023, as compared to
$8.2 million, or $0.19 per diluted share, for the quarter ended
September 30, 2023, and $14.1 million, or $0.31 per diluted
share, for the quarter ended December 31, 2022. For the year
ended December 31, 2023, net income totaled $37.7 million, or
$0.86 per diluted share, compared to $61.1 million, or $1.32 per
diluted share, for the year ended December 31, 2022. The
decrease in net income for both the quarter and year ended
December 31, 2023, compared to the comparable prior year
periods, was primarily the result of a decrease in net interest
income, primarily attributable to a decrease in lower-cost deposits
as well as higher funding costs.
Commenting on the quarter and year, Steven M.
Klein, the Company’s Chairman, President and Chief Executive
Officer stated, “The Northfield team remained focused on building
long-term stockholder value in a challenging operating environment.
Relationship banking, fueled by growth in core deposits, commercial
lending, and strong asset quality, coupled with disciplined expense
management continues to deliver solid financial results.” Mr. Klein
also noted, “Northfield’s financial results continue to fund the
efficient repurchase of common stock and prudently build upon our
strong capital and liquidity, positioning us to take advantage of
future opportunities to deploy capital.”
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 February 21, 2024, to
stockholders of record on February 7, 2024.”
Results of Operations
Comparison of Operating Results for the Years
Ended December 31, 2023 and 2022
Net income was $37.7 million and $61.1 million
for the years ended December 31, 2023 and December 31,
2022, respectively. Significant variances from the prior year are
as follows: a $33.6 million decrease in net interest income, a $3.1
million decrease in the provision for credit losses on loans, a
$3.9 million increase in non-interest income, a $6.5 million
increase in non-interest expense, and a $9.6 million decrease in
income tax expense.
Net interest income for the year ended
December 31, 2023, decreased $33.6 million, or 21.2%, to
$124.7 million, from $158.3 million for the year ended
December 31, 2022. The decrease in net interest income was
primarily attributable to an increase in the cost of
interest-bearing liabilities due to the increase in market interest
rates (as further discussed below) including a $62.7 million
increase in interest expense on deposits, borrowings and
subordinated debt which was partially offset by a $29.1 million
increase in interest income. The increase in interest expense on
deposits, borrowings and subordinated debt was largely driven by
the impact of rising market interest rates and a $120.2 million, or
3.1%, increase in the average balance of interest-bearing
liabilities, including increases of $481.5 million and $27.7
million, in the average balance of borrowed funds and subordinated
debt, respectively, partially offset by a $389.1 million decrease
in the average balance of interest-bearing deposits. The increase
in interest income was primarily due to a 56 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, partially offset by a $26.3 million, or
0.5%, decrease in the average balance of interest-earning assets.
The decrease in the average balance of interest-earning assets was
due to decreases in the average balance of mortgage-backed
securities of $181.5 million and the average balance of other
securities of $46.7 million, partially offset by increases in the
average balance of loans outstanding of $171.2 million, the average
balance of Federal Home Loan Bank of New York (“FHLBNY”) stock of
$18.1 million, and the average balance of interest-earning deposits
in financial institutions of $12.5 million.
Net interest margin decreased by 62 basis points
to 2.35% for the year ended December 31, 2023 from 2.97% for
the year ended December 31, 2022. The decrease in net interest
margin was primarily due to interest-bearing liabilities repricing
faster than interest-earning assets. The cost of interest-bearing
liabilities increased by 156 basis points to 2.11% for the year
ended December 31, 2023, from 0.55% for the year ended
December 31, 2022, driven primarily by a 133 basis point
increase in the cost of borrowings from 2.25% to 3.58% and a 131
basis point increase in the cost of interest-bearing deposits from
0.30% to 1.61% for the year ended December 31, 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 the yield on interest-earning
assets, which increased 56 basis points to 3.93% for the year ended
December 31, 2023, from 3.37% for the year ended
December 31, 2022, primarily due to an increase in yields on
loans from 3.95% to 4.28%, or 33 basis points. The Company accreted
interest income related to PCD loans of $1.3 million for the year
ended December 31, 2023, as compared to $1.5 million for the
year ended December 31, 2022. Fees recognized from Paycheck
Protection Program (“PPP”) loans totaled $31,000 for the year ended
December 31, 2023, as compared to $1.3 million for the year
ended December 31, 2022. Net interest income for the year
ended December 31, 2023, included loan prepayment income of
$1.6 million as compared to $4.5 million for the year ended
December 31, 2022.
The provision for credit losses on loans
decreased by $3.1 million to a provision of $1.4 million for the
year ended December 31, 2023, compared to $4.5 million for the
year ended December 31, 2022, primarily due to slower loan
growth, a decrease in reserves related to non-economic qualitative
loss factors in the multifamily and commercial real estate
portfolios, and a decrease in reserves related to the PCD
portfolio, attributable to improved cash flows and a decrease in
PCD loan balances. In addition, there was an improvement in the
macroeconomic outlook. The decreases were partially offset by
higher net charge-offs and higher reserves for downgraded
commercial and industrial loans. Net charge-offs were $6.4 million
for the year ended December 31, 2023, as compared to net
charge-offs of $838,000 for the year ended December 31, 2022,
due to $6.2 million in 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 $37.4 million at December 31,
2023.
Non-interest income increased $3.9 million, or
49.0%, to $11.9 million for the year ended December 31, 2023,
from $8.0 million for the year ended December 31, 2022, due
primarily to a $3.9 million increase in mark to market gains on
trading securities, net. For the year ended December 31, 2023,
gains on trading securities were $1.7 million, as compared to
losses of $2.2 million for the year ended December 31, 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 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 $6.5 million, or
8.4%, to $83.5 million for the year ended December 31, 2023,
compared to $76.9 million for the year ended December 31,
2022. The increase was primarily due to a $4.5 million increase in
employee compensation and benefits, primarily attributable to a
$3.9 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 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 $723,000, 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. FDIC insurance expense increased by
$924,000 due to higher assessment rates. There was a $506,000
decrease in the credit loss benefit for off-balance sheet credit
exposures due to a benefit of $555,000 recorded during the year
ended December 31, 2023, compared to a benefit of $1.1 million
for the prior year, attributed to a larger decrease in the pipeline
of loans committed and awaiting closing in the prior year as
compared to the current year. Partially offsetting the increases
was a $440,000 decrease in professional fees attributable to higher
recruitment, consulting, and outsourcing fees in the prior
year.
The Company recorded income tax expense of $14.1
million for the year ended December 31, 2023, compared to
$23.7 million for the year ended December 31, 2022, with the
decrease due to lower taxable income. The effective tax rate for
the year ended December 31, 2023, was 27.2%, compared to 28.0%
for the year ended December 31, 2022.
Comparison of Operating Results for the Three
Months Ended December 31, 2023 and 2022
Net income was $8.2 million and $14.1 million
for the quarters ended December 31, 2023, and
December 31, 2022, respectively. Significant variances from
the comparable prior year quarter are as follows: a $10.4
million decrease in net interest income, a $956,000 decrease
in the provision for credit losses on loans, a $408,000 increase in
non-interest income, a $676,000 decrease in non-interest
expense, and a $2.5 million decrease in income tax
expense.
Net interest income for the quarter ended
December 31, 2023, decreased $10.4 million, or 26.5%, to $28.9
million, from $39.3 million for the quarter ended December 31,
2022. The decrease in net interest income was attributable to a
$16.1 million increase in interest expense on deposits and
borrowings, partially offset by a $5.7 million increase in interest
income. The increase in interest expense on deposits and borrowings
was largely driven by an increase in the cost of funds (as
discussed further below) due to the rising rate environment and, to
a lesser extent, a $70.3 million, or 1.8%, increase in the average
balance of interest-bearing liabilities, including an increase of
$420.9 million in the average balance of borrowed funds, partially
offset by a $350.6 million decrease in the average balance of
interest-bearing deposits. The increase in interest income was
primarily due to a 52 basis point increase in the yield on
interest-earning assets due to the rising rate environment,
partially offset by a decrease in the average balance of interest
earning assets of $128.8 million, or 2.4%. The decrease in the
average balance of interest-earning assets was due to decreases in
the average balance of mortgage-backed securities of $165.3
million, the average balance of other securities of $61.3 million,
and the average balance of loans outstanding of $36.2 million,
partially offset by increases in the average balance of FHLBNY
stock of $14.9 million, and the average balance of interest-earning
deposits in financial institutions of $119.1 million.
Net interest margin decreased by 72 basis points
to 2.17% for the quarter ended December 31, 2023 from 2.89%
for the quarter ended December 31, 2022, primarily due to
interest-bearing liabilities repricing faster than interest-earning
assets. The cost of interest-bearing liabilities increased by 157
basis points to 2.52% for the quarter ended December 31, 2023,
from 0.95% for the quarter ended December 31, 2022, driven
primarily by a 102 basis point increase in the cost of borrowings
from 2.56% to 3.58%, and a 151 basis point increase in the cost of
interest-bearing deposits from 0.65% to 2.16%. 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 52 basis points to 4.10% for the quarter ended December 31,
2023, from 3.58% for the quarter ended December 31, 2022,
primarily due to higher yields on loans from 4.01% to 4.37%, or 36
basis points. Net interest income for the quarter ended
December 31, 2023, included loan prepayment income of
$253,000, as compared to $287,000 for the quarter ended
December 31, 2022. The Company accreted interest income
related to PCD loans of $330,000 for the quarter ended
December 31, 2023, as compared to $355,000 for quarter ended
December 31, 2022.
The provision for credit losses on loans
decreased by $956,000 to a provision of $271,000 for the quarter
ended December 31, 2023, from a provision of $1.2 million for
the quarter ended December 31, 2022. The decrease was
primarily due to slower loan growth, a decrease in reserves related
to non-economic qualitative loss factors in the multifamily and
commercial real estate portfolios, and a decrease in reserves
related to the PCD portfolio, attributable to improved cash flows
and a decrease in PCD loan balances. Additionally, there was an
improvement in the macroeconomic outlook. The decreases were
partially offset by higher net charge-offs, and an increase in
reserves for downgraded commercial and industrial loans. Net
charge-offs were $1.2 million for the quarter ended
December 31, 2023, compared to net charge-offs of $493,000 for
the quarter ended December 31, 2022, primarily due to $992,000
in charge-offs on small business unsecured commercial and
industrial loans.
Non-interest income increased by $408,000, or
12.7%, to $3.6 million for the quarter ended December 31,
2023, from $3.2 million for the quarter ended December 31,
2022, primarily due to a $413,000 increase in gains on trading
securities. For the quarter ended December 31, 2023, gains on
trading securities, net, were $998,000, compared to gains of
$585,000 in the comparable prior year quarter. As discussed above,
gains and losses on trading securities have no effect on net income
since participants of the Plan, which the trading securities
portfolio is utilized to fund, benefit from, and bear the full risk
of, changes in the trading securities market values.
Non-interest expense decreased by $676,000, or
3.1%, to $21.0 million for the quarter ended December 31,
2023, from $21.7 million for the quarter ended December 31,
2022. The decrease was primarily due to a $565,000 decrease in
advertising expense due to the timing of certain campaigns and a
$364,000 decrease in the credit loss (benefit)/expense for
off-balance sheet exposures, which was due to a benefit of $165,000
recorded during the quarter ended December 31, 2023, compared
to an expense of $199,000 recorded in the prior year quarter. The
benefit in the current year quarter was attributable to a decrease
in the pipeline of loans committed and awaiting closing. Partially
offsetting these decreases was an increase of $229,000 in FDIC
insurance expense due to a higher assessment rate in the current
quarter.
The Company recorded income tax expense of $3.1
million for the quarter ended December 31, 2023, compared to
$5.5 million for the quarter ended December 31, 2022, with the
decrease due to lower taxable income. The effective tax rate for
the quarter ended December 31, 2023, was 27.2% compared to
28.1% for quarter ended December 31, 2022.
Comparison of Operating Results for the Three
Months Ended December 31, 2023 and September 30, 2023
Net income remained level at $8.2 million for
the quarters ended December 31, 2023, and September 30,
2023. Significant variances from the prior quarter are as follows:
a $774,000 decrease in net interest income, a $1.5 million increase
in non-interest income, a $413,000 increase in non-interest
expense, and a $195,000 increase in income tax expense.
Net interest income for the quarter ended
December 31, 2023, decreased by $774,000, or 2.6%, to $28.9
million, from $29.7 million for the quarter ended
September 30, 2023. The decrease in net interest income was
primarily attributable to a $2.5 million increase in interest
expense on deposits and borrowings, partially offset by a $1.7
million increase in interest income. The increase in interest
expense on deposits and borrowings was primarily due to an increase
in the cost of funds (as discussed further below) and a $63.1
million, or 1.6%, increase in the average balance of
interest-bearing liabilities driven by a $130.2 million, or 4.4%,
increase in the average balance of interest-bearing deposits,
partially offset by a decrease of $67.1 million, or 6.7%, in the
average balance of borrowed funds. The increase in interest income
was primarily due to a 10 basis point increase in the yield on
interest-earning assets and a $38.2 million, or 0.7%, increase in
the average balance of interest-earning assets. The increase in the
average balance of interest-earning assets was primarily due to
increases in the average balance of interest-bearing deposits in
financial institutions of $100.0 million and in the average balance
of other securities of $21.8 million. The increases were partially
offset by decreases in the average balance of loans outstanding of
$41.4 million, the average balance of mortgage-backed securities of
$40.4 million, and the average balance of FHLBNY stock of $1.8
million.
Net interest margin decreased by eight basis
points to 2.17% from 2.25% for the quarter ended September 30,
2023, 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 21
basis point to 2.52% for the quarter ended December 31, 2023,
from 2.31% for the quarter ended September 30, 2023, driven
primarily by higher cost of deposits, which was partially offset by
higher yields on interest-earning assets, which increased by 10
basis points to 4.10% for the quarter ended December 31, 2023,
from 4.00% for the quarter ended September 30, 2023. Net
interest income for the quarter ended December 31, 2023,
included loan prepayment income of $253,000 as compared to $183,000
for the quarter ended September 30, 2023. The Company accreted
interest income related to PCD loans of $330,000 for the quarter
ended December 31, 2023, as compared to $325,000 for the
quarter ended September 30, 2023.
The provision for credit losses on loans
increased by $83,000 to a provision of $271,000 for the quarter
ended December 31, 2023, from a provision of $188,000 for the
quarter ended September 30, 2023. The increase in the
provision was primarily attributable to an increase in reserves for
downgraded commercial and industrial and home equity loans,
partially offset by an improvement in the macroeconomic outlook and
lower net charge-offs. Net charge-offs were $1.2 million for the
quarter ended December 31, 2023, as compared to net
charge-offs of $2.9 million for the quarter ended
September 30, 2023.
Non-interest income increased by $1.5 million,
or 71.0%, to $3.6 million for the quarter ended December 31,
2023, from $2.1 million for the quarter ended September 30,
2023. The increase was primarily due to a $1.3 million increase in
gains on trading securities, net. For the quarter ended
December 31, 2023, gains on trading securities, net, were
$998,000 compared to losses of $295,000 for the quarter ended
September 30, 2023.
Non-interest expense increased by $413,000, or
2.0%, to $21.0 million for the quarter ended December 31,
2023, from $20.6 million for the quarter ended September 30,
2023. The increase was primarily due to a $1.3 million increase in
compensation and employee benefits, which included a $1.3 million
increase related to the mark to market of the Company's deferred
compensation plan expense, which as previously discussed has no
effect on net income. Partially offsetting the increase was a
decrease of $325,000 in credit loss (benefit)/expense for
off-balance sheet exposures due to a benefit of $165,000 recorded
during the quarter ended December 31, 2023, compared to a
provision of $160,000 for the quarter ended September 30,
2023, attributed to a decrease in the pipeline of loans committed
and awaiting closing in the prior quarter as compared to the
current quarter, a decrease of $189,000 in occupancy expense, and a
decrease of $164,000 in data processing.
The Company recorded income tax expense of $3.1
million for the quarter ended December 31, 2023, compared to
$2.9 million for the quarter ended September 30,
2023. The effective tax rate for the quarter ended
December 31, 2023, was 27.2% compared to 26.0% for the quarter
ended September 30, 2023.
Financial Condition
Total assets decreased by $2.9 million, or 0.1%,
to $5.60 billion at December 31, 2023 compared to
December 31, 2022. The decrease was primarily due to a
decrease in available-for-sale debt securities of $156.7 million,
or 16.5%, and a decrease in loans receivable of $40.0 million, or
0.9%, partially offset by increases in cash and cash equivalents of
$183.7 million, or 401.1%, and FHLBNY stock of $9.3 million, or
30.6%.
Cash and cash equivalents increased by $183.7
million, or 401.1%, to $229.5 million at December 31, 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 and proceeds from the
maturity and calls of available-for-sale securities. 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. During 2023, management believed it was
prudent to increase balance sheet liquidity given general market
volatility and uncertainty.
Loans held for investment, net, decreased by
$40.0 million to $4.20 billion at December 31, 2023, from
$4.24 billion at December 31, 2022, primarily due to a
decrease in multifamily loans, partially offset by an increase in
commercial real estate loans. The Company continues to focus on the
credit needs of its customers, and to a lesser extent, the
development of new business notwithstanding the uncertain economic
environment. Multifamily loans decreased $73.6 million, or 2.6%, to
$2.75 billion at December 31, 2023 from $2.82 billion at
December 31, 2022, one-to-four family residential loans
decreased $13.1 million, or 7.5%, to $160.8 million at
December 31, 2023 from $173.9 million at December 31,
2022, and commercial and industrial loans decreased $568,000, or
0.4%, to $155.3 million at December 31, 2023 from $154.7
million at December 31, 2022. Partially offsetting these
decreases were increases in commercial real estate loans of $30.3
million, or 3.4%, to $929.6 million at December 31, 2023 from
$899.2 million at December 31, 2022, home equity loans of
$11.0 million, or 7.2%, to $163.5 million at December 31, 2023
from $152.6 million at December 31, 2022, and construction and
land loans of $6.0 million, or 24.2%, to $31.0 million at
December 31, 2023 from $24.9 million at December 31,
2022.
As of December 31, 2023, 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”) 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.
At December 31, 2023, office-related loans
represented $208.6 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 46% were owner-occupied. The geographic
locations of the properties collateralizing our office-related
loans are as follows: 54.2% in New York and 45.8% in New Jersey. At
December 31, 2023, 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.
PCD loans totaled $9.9 million and $11.5 million
at December 31, 2023 and December 31, 2022, respectively,
with the decrease being primarily due to one loan with a balance of
approximately $950,000 which was sold during the quarter ended
December 31, 2023. 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 $330,000 and $1.3 million attributable to PCD
loans for the quarter and year ended December 31, 2023,
respectively, as compared to $355,000 and $1.5 million for the
quarter and year ended December 31, 2022, respectively. PCD
loans had an allowance for credit losses of approximately $3.1
million at December 31, 2023.
Loan balances are summarized as follows (dollars
in thousands):
|
December 31, 2023 |
|
September 30, 2023 |
|
December 31, 2022 |
Real estate loans: |
|
|
|
|
|
Multifamily |
$ |
2,750,996 |
|
|
$ |
2,782,141 |
|
|
$ |
2,824,579 |
|
Commercial mortgage |
|
929,595 |
|
|
|
932,987 |
|
|
|
899,249 |
|
One-to-four family residential mortgage |
|
160,824 |
|
|
|
164,525 |
|
|
|
173,946 |
|
Home equity and lines of credit |
|
163,520 |
|
|
|
160,798 |
|
|
|
152,555 |
|
Construction and land |
|
30,967 |
|
|
|
32,290 |
|
|
|
24,932 |
|
Total real estate loans |
|
4,035,902 |
|
|
|
4,072,741 |
|
|
|
4,075,261 |
|
Commercial and industrial
loans |
|
154,984 |
|
|
|
144,463 |
|
|
|
149,557 |
|
PPP loans |
|
284 |
|
|
|
325 |
|
|
|
5,143 |
|
Other loans |
|
2,585 |
|
|
|
2,074 |
|
|
|
2,230 |
|
Total commercial and industrial, PPP, and other loans |
|
157,853 |
|
|
|
146,862 |
|
|
|
156,930 |
|
Loans held-for-investment, net (excluding PCD) |
|
4,193,755 |
|
|
|
4,219,603 |
|
|
|
4,232,191 |
|
PCD loans |
|
9,899 |
|
|
|
10,371 |
|
|
|
11,502 |
|
Total loans held-for-investment, net |
$ |
4,203,654 |
|
|
$ |
4,229,974 |
|
|
$ |
4,243,693 |
|
|
|
|
|
|
|
The Company’s available-for-sale debt securities
portfolio decreased by $156.7 million, or 16.5%, to $795.5 million
at December 31, 2023, from $952.2 million at December 31,
2022. The decrease was primarily attributable to paydowns,
maturities, and calls. At December 31, 2023, $550.6 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 $73.9 million in U.S. Government agency
securities, $44.4 million in U.S. Treasuries, $125.8 million in
corporate bonds, substantially all of which were considered
investment grade, and $763,000 in municipal bonds at
December 31, 2023. Gross unrealized losses, net of tax, on
available-for-sale debt securities and held-to-maturity securities
approximated $32.5 million and $279,000, respectively, at
December 31, 2023, and $48.6 million and $332,000,
respectively, at December 31, 2022.
Equity securities were $10.6 million at
December 31, 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 remained at $4.90 billion at
both December 31, 2023 and December 31, 2022, as the
decrease in total deposits of $271.8 million was largely offset by
an increase in FHLB advances and other borrowings of $275.6
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 $271.8 million, or 6.55%, to
$3.88 billion at December 31, 2023, as compared to $4.15
billion at December 31, 2022. Brokered deposits decreased by
$290.0 million, or 74.4%. Deposits, excluding brokered deposits,
increased $18.3 million, or 0.5%. The increase in deposits,
excluding brokered deposits, was attributable to increases of
$223.7 million in time deposits and $8.6 million in savings
accounts, partially offset by decreases of $58.1 million in
transaction accounts and $155.9 million in money market accounts.
Estimated uninsured deposits (excluding fully collateralized
uninsured governmental deposits of $791.7 million) were
approximately $869.9 million, or 22.4%, of total deposits as of
December 31, 2023, as compared to estimated uninsured deposits
(excluding fully collateralized uninsured governmental deposits of
$661.1 million) of approximately $899.5 million, or 24.5%, of total
deposits as of September 30, 2023.
Deposit account balances are summarized as
follows (dollars in thousands):
|
December 31, 2023 |
|
September 30, 2023 |
|
December 31, 2022 |
Transaction: |
|
|
|
|
|
Non-interest bearing checking |
$ |
694,903 |
|
|
$ |
727,605 |
|
|
$ |
852,660 |
|
Negotiable orders of withdrawal and interest-bearing checking |
|
1,231,943 |
|
|
|
1,150,647 |
|
|
|
1,132,290 |
|
Total transaction |
|
1,926,846 |
|
|
|
1,878,252 |
|
|
|
1,984,950 |
|
Savings and money market: |
|
|
|
|
|
Savings |
|
925,744 |
|
|
|
956,009 |
|
|
|
917,180 |
|
Money market |
|
302,122 |
|
|
|
303,510 |
|
|
|
508,067 |
|
Brokered money market |
|
50,000 |
|
|
|
— |
|
|
|
— |
|
Total savings |
|
1,277,866 |
|
|
|
1,259,519 |
|
|
|
1,425,247 |
|
Certificates of deposit: |
|
|
|
|
|
Brokered deposits |
|
50,000 |
|
|
|
— |
|
|
|
390,035 |
|
$250,000 and under |
|
525,454 |
|
|
|
461,220 |
|
|
|
293,200 |
|
Over $250,000 |
|
98,269 |
|
|
|
69,522 |
|
|
|
56,787 |
|
Total certificates of deposit |
|
673,723 |
|
|
|
530,742 |
|
|
|
740,022 |
|
Total deposits |
$ |
3,878,435 |
|
|
$ |
3,668,513 |
|
|
$ |
4,150,219 |
|
Included in the table above are business and municipal deposit
account balances as follows (dollars in thousands):
|
December 31, 2023 |
|
September 30, 2023 |
|
December 31, 2022 |
|
|
|
|
|
|
Business customers |
$ |
893,296 |
|
|
$ |
988,612 |
|
|
$ |
1,146,803 |
|
Municipal customers |
$ |
768,556 |
|
|
$ |
638,881 |
|
|
$ |
604,717 |
|
Borrowed funds increased to $920.5 million at
December 31, 2023, from $644.9 million at December 31,
2022. The increase in borrowings for the period was primarily
due to an increase in FHLB and FRB borrowings of $275.4 million,
including $94.5 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 year ended December 31, 2023,
the Company increased borrowings to pay off higher-rate brokered
certificates of deposit.
The following is a table of term borrowing
maturities (excluding overnight borrowings and subordinated debt)
and the weighted average rate by year at December 31, 2023
(dollars in thousands):
Year |
|
Amount (1) |
|
Weighted Average Rate |
2024 |
|
$195,265 |
|
3.96% |
2025 |
|
182,500 |
|
2.59% |
2026 |
|
148,000 |
|
4.36% |
2027 |
|
173,000 |
|
3.19% |
2028 |
|
154,288 |
|
3.96% |
|
|
$853,053 |
|
3.58% |
|
|
|
|
|
(1) Borrowings maturing in 2024 include $94.5
million of FRB borrowings that can be repaid without any
penalty.
Total stockholders’ equity decreased by $1.9
million to $699.4 million at December 31, 2023, from $701.4
million at December 31, 2022. The decrease was attributable to
$36.9 million in stock repurchases and $22.8 million in dividend
payments, partially offset by net income of $37.7 million for the
year ended December 31, 2023, a $15.9 million reduction in
accumulated other comprehensive loss due to an increase in the fair
value of our debt securities available-for-sale portfolio, and a
$4.2 million increase in equity award activity. On November 7,
2023, the Board of Directors of the Company approved a new $7.5
million stock repurchase program. During the year ended
December 31, 2023, the Company repurchased approximately 3.1
million of its common stock outstanding at an average price of
$11.99 for a total of $36.9 million pursuant to the approved stock
repurchase plans. As of December 31, 2023, the Company had
approximately $3.1 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
December 31, 2023 (dollars in thousands):
Cash and cash equivalents(1) |
$ |
215,617 |
Corporate bonds(2) |
$ |
110,914 |
Multifamily loans(2) |
$ |
930,990 |
Mortgage-backed securities
(issued or guaranteed by the U.S. Government, Fannie Mae, or
Freddie Mac)(2) |
$ |
382,787 |
|
|
(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 December 31, 2023, the
Company and the Bank's estimated CBLR ratios were 12.58% and
12.80%, respectively, which exceeded the minimum requirement to be
considered well-capitalized of 9.0%.
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 December 31,
2023, September 30, 2023, and December 31, 2022 (dollars
in thousands):
|
December 31, 2023 |
|
September 30, 2023 |
|
December 31, 2022 |
Non-accrual loans: |
|
|
|
|
|
Held-for-investment |
|
|
|
|
|
Real estate loans: |
|
|
|
|
|
Multifamily |
$ |
2,709 |
|
|
$ |
3,073 |
|
|
$ |
3,285 |
|
Commercial |
|
6,491 |
|
|
|
5,435 |
|
|
|
5,184 |
|
One-to-four family residential |
|
104 |
|
|
|
106 |
|
|
|
118 |
|
Home equity and lines of credit |
|
499 |
|
|
|
98 |
|
|
|
262 |
|
Commercial and industrial |
|
305 |
|
|
|
848 |
|
|
|
964 |
|
Other |
|
7 |
|
|
|
10 |
|
|
|
— |
|
Total non-accrual
loans |
|
10,115 |
|
|
|
9,570 |
|
|
|
9,813 |
|
Loans delinquent 90 days or
more and still accruing: |
|
|
|
|
|
Held-for-investment |
|
|
|
|
|
Real estate loans: |
|
|
|
|
|
Multifamily |
$ |
201 |
|
|
$ |
209 |
|
|
$ |
233 |
|
Commercial |
|
— |
|
|
|
114 |
|
|
|
8 |
|
One-to-four family residential |
|
406 |
|
|
|
139 |
|
|
|
155 |
|
Home equity and lines of credit |
|
711 |
|
|
|
115 |
|
|
|
— |
|
Commercial and industrial |
|
— |
|
|
|
15 |
|
|
|
— |
|
PPP loans |
|
— |
|
|
|
— |
|
|
|
24 |
|
Other |
|
— |
|
|
|
— |
|
|
|
5 |
|
Total loans
held-for-investment delinquent 90 days or more and still
accruing |
|
1,318 |
|
|
|
592 |
|
|
|
425 |
|
Total non-performing
assets |
$ |
11,433 |
|
|
$ |
10,162 |
|
|
$ |
10,238 |
|
Non-performing loans to total
loans |
|
0.27 |
% |
|
|
0.24 |
% |
|
|
0.24 |
% |
Non-performing assets to total
assets |
|
0.20 |
% |
|
|
0.19 |
% |
|
|
0.18 |
% |
Loans subject to
restructuring agreements and still accruing(1) |
$ |
— |
|
|
$ |
— |
|
|
$ |
3,751 |
|
Accruing loans 30-89
days delinquent |
$ |
8,683 |
|
|
$ |
8,105 |
|
|
$ |
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.
Accruing Loans 30 to 89 Days Delinquent
Loans 30 to 89 days delinquent and on accrual
status totaled $8.7 million, $8.1 million, and $3.6 million at
December 31, 2023, September 30, 2023, and
December 31, 2022, respectively. The following table sets
forth delinquencies for accruing loans by type and by amount at
December 31, 2023, September 30, 2023, and
December 31, 2022 (dollars in thousands):
|
December 31, 2023 |
|
September 30, 2023 |
|
December 31, 2022 |
Held-for-investment |
|
|
|
|
|
Real estate loans: |
|
|
|
|
|
Multifamily |
$ |
740 |
|
|
$ |
178 |
|
|
$ |
189 |
|
Commercial |
|
1,010 |
|
|
|
1,892 |
|
|
|
900 |
|
One-to-four family residential |
|
3,339 |
|
|
|
2,708 |
|
|
|
672 |
|
Home equity and lines of credit |
|
817 |
|
|
|
1,206 |
|
|
|
830 |
|
Commercial and industrial loans |
|
2,767 |
|
|
|
2,117 |
|
|
|
1,048 |
|
Other loans |
|
10 |
|
|
|
4 |
|
|
|
5 |
|
Total delinquent accruing loans held-for-investment |
$ |
8,683 |
|
|
$ |
8,105 |
|
|
$ |
3,644 |
|
The increase in the commercial and industrial
loan delinquencies from December 31, 2022 was primarily due to an
increase in delinquencies in unsecured small business loans.
Unsecured small business loans totaled $37.4 million, $39.1
million, and $43.3 million at December 31, 2023,
September 30, 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 ($9.9 million
at December 31, 2023 and $11.5 million at December 31,
2022) as accruing, even though they may be contractually past due.
At December 31, 2023, 2.9% of PCD loans were past due 30 to 89
days, and 27.1% 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 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, including any potential recessionary
conditions, 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, a potential government
shutdown, 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, 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 |
|
At or For the Three Months Ended |
|
Year Ended |
|
December 31, |
|
September 30, |
|
December 31, |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2023 |
|
|
|
2022 |
|
Selected Financial
Ratios: |
|
|
|
|
|
|
|
|
|
Performance
Ratios(1) |
|
|
|
|
|
|
|
|
|
Return on assets (ratio of net
income to average total assets) |
|
0.59 |
% |
|
|
0.99 |
% |
|
|
0.59 |
% |
|
|
0.68 |
% |
|
|
1.09 |
% |
Return on equity (ratio of net
income to average equity) |
|
4.75 |
|
|
|
8.07 |
|
|
|
4.74 |
|
|
|
5.45 |
|
|
|
8.57 |
|
Average equity to average total
assets |
|
12.42 |
|
|
|
12.31 |
|
|
|
12.49 |
|
|
|
12.44 |
|
|
|
12.75 |
|
Interest rate spread |
|
1.58 |
|
|
|
2.63 |
|
|
|
1.69 |
|
|
|
1.82 |
|
|
|
2.82 |
|
Net interest margin |
|
2.17 |
|
|
|
2.89 |
|
|
|
2.25 |
|
|
|
2.35 |
|
|
|
2.97 |
|
Efficiency ratio(2) |
|
64.46 |
|
|
|
50.88 |
|
|
|
64.65 |
|
|
|
61.11 |
|
|
|
46.27 |
|
Non-interest expense to average
total assets |
|
1.51 |
|
|
|
1.52 |
|
|
|
1.49 |
|
|
|
1.50 |
|
|
|
1.38 |
|
Non-interest expense to average
total interest-earning assets |
|
1.58 |
|
|
|
1.59 |
|
|
|
1.56 |
|
|
|
1.57 |
|
|
|
1.44 |
|
Average interest-earning assets
to average interest-bearing liabilities |
|
131.09 |
|
|
|
136.68 |
|
|
|
132.21 |
|
|
|
133.01 |
|
|
|
137.82 |
|
Asset Quality
Ratios: |
|
|
|
|
|
|
|
|
|
Non-performing assets to total
assets |
|
0.20 |
|
|
|
0.18 |
|
|
|
0.19 |
|
|
|
0.20 |
|
|
|
0.18 |
|
Non-performing loans(3)to
total loans(4) |
|
0.27 |
|
|
|
0.24 |
|
|
|
0.24 |
|
|
|
0.27 |
|
|
|
0.24 |
|
Allowance for credit losses to
non-performing loans |
|
328.30 |
|
|
|
416.26 |
|
|
|
378.67 |
|
|
|
328.30 |
|
|
|
416.26 |
|
Allowance for credit losses to
total loans held-for-investment, net(5) |
|
0.89 |
|
|
|
1.00 |
|
|
|
0.91 |
|
|
|
0.89 |
|
|
|
1.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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) |
|
|
December 31, 2023 |
|
September 30, 2023 |
|
December 31, 2022 |
ASSETS: |
|
|
|
|
|
Cash and due from banks |
$ |
13,889 |
|
|
$ |
13,258 |
|
|
$ |
14,530 |
|
Interest-bearing deposits in
other financial institutions |
|
215,617 |
|
|
|
67,298 |
|
|
|
31,269 |
|
Total cash and cash
equivalents |
|
229,506 |
|
|
|
80,556 |
|
|
|
45,799 |
|
Trading securities |
|
12,549 |
|
|
|
11,504 |
|
|
|
10,751 |
|
Debt securities
available-for-sale, at estimated fair value |
|
795,464 |
|
|
|
743,699 |
|
|
|
952,173 |
|
Debt securities
held-to-maturity, at amortized cost |
|
9,866 |
|
|
|
10,114 |
|
|
|
10,760 |
|
Equity securities |
|
10,629 |
|
|
|
10,628 |
|
|
|
10,443 |
|
Loans held-for-sale |
|
— |
|
|
|
950 |
|
|
|
— |
|
Loans held-for-investment,
net |
|
4,203,654 |
|
|
|
4,229,974 |
|
|
|
4,243,693 |
|
Allowance for credit losses |
|
(37,535 |
) |
|
|
(38,480 |
) |
|
|
(42,617 |
) |
Net loans
held-for-investment |
|
4,166,119 |
|
|
|
4,191,494 |
|
|
|
4,201,076 |
|
Accrued interest
receivable |
|
18,491 |
|
|
|
17,355 |
|
|
|
17,426 |
|
Bank-owned life insurance |
|
171,543 |
|
|
|
170,591 |
|
|
|
167,912 |
|
Federal Home Loan Bank of New
York stock, at cost |
|
39,667 |
|
|
|
41,165 |
|
|
|
30,382 |
|
Operating lease right-of-use
assets |
|
30,202 |
|
|
|
31,407 |
|
|
|
34,288 |
|
Premises and equipment,
net |
|
24,771 |
|
|
|
24,154 |
|
|
|
24,844 |
|
Goodwill |
|
41,012 |
|
|
|
41,012 |
|
|
|
41,012 |
|
Other assets |
|
48,577 |
|
|
|
62,455 |
|
|
|
54,427 |
|
Total
assets |
$ |
5,598,396 |
|
|
$ |
5,437,084 |
|
|
$ |
5,601,293 |
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY: |
|
|
|
|
|
LIABILITIES: |
|
|
|
|
|
Deposits |
$ |
3,878,435 |
|
|
$ |
3,668,513 |
|
|
$ |
4,150,219 |
|
Securities sold under
agreements to repurchase |
|
25,000 |
|
|
|
25,000 |
|
|
|
25,000 |
|
Federal Home Loan Bank
advances and other borrowings |
|
834,272 |
|
|
|
893,973 |
|
|
|
558,859 |
|
Subordinated debentures, net
of issuance costs |
|
61,219 |
|
|
|
61,163 |
|
|
|
60,996 |
|
Lease liabilities |
|
35,205 |
|
|
|
36,535 |
|
|
|
39,790 |
|
Advance payments by borrowers
for taxes and insurance |
|
25,102 |
|
|
|
25,968 |
|
|
|
25,995 |
|
Accrued expenses and other
liabilities |
|
39,718 |
|
|
|
41,857 |
|
|
|
39,044 |
|
Total
liabilities |
|
4,898,951 |
|
|
|
4,753,009 |
|
|
|
4,899,903 |
|
|
|
|
|
|
|
STOCKHOLDERS’
EQUITY: |
|
|
|
|
|
Total stockholders’
equity |
|
699,445 |
|
|
|
684,075 |
|
|
|
701,390 |
|
Total liabilities and
stockholders’ equity |
$ |
5,598,396 |
|
|
$ |
5,437,084 |
|
|
$ |
5,601,293 |
|
|
|
|
|
|
|
Total shares outstanding |
|
44,524,929 |
|
|
|
44,956,118 |
|
|
|
47,442,488 |
|
Tangible book value per
share(1) |
$ |
14.78 |
|
|
$ |
14.30 |
|
|
$ |
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 $154, $185, and $266 at December 31, 2023,
September 30, 2023, and December 31, 2022, respectively,
and are included in other assets.
NORTHFIELD BANCORP, INC.CONSOLIDATED STATEMENT OF
INCOME(Dollars in thousands, except share and per share
amounts) (unaudited) |
|
|
Three Months Ended |
|
Years Ended |
|
December 31, |
|
September 30, |
|
December 31, |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2023 |
|
|
|
2022 |
|
Interest
income: |
|
|
|
|
|
|
|
|
|
Loans |
$ |
46,418 |
|
|
$ |
42,881 |
|
|
$ |
46,213 |
|
|
$ |
181,638 |
|
|
$ |
160,911 |
|
Mortgage-backed securities |
|
3,538 |
|
|
|
3,659 |
|
|
|
3,664 |
|
|
|
14,708 |
|
|
|
12,461 |
|
Other securities |
|
1,494 |
|
|
|
1,440 |
|
|
|
1,095 |
|
|
|
5,087 |
|
|
|
4,325 |
|
Federal Home Loan Bank of New York dividends |
|
988 |
|
|
|
386 |
|
|
|
933 |
|
|
|
3,113 |
|
|
|
1,174 |
|
Deposits in other financial institutions |
|
2,024 |
|
|
|
394 |
|
|
|
831 |
|
|
|
4,249 |
|
|
|
817 |
|
Total interest income |
|
54,462 |
|
|
|
48,760 |
|
|
|
52,736 |
|
|
|
208,795 |
|
|
|
179,688 |
|
Interest
expense: |
|
|
|
|
|
|
|
|
|
Deposits |
|
16,835 |
|
|
|
5,675 |
|
|
|
13,614 |
|
|
|
48,753 |
|
|
|
10,289 |
|
Borrowings |
|
7,873 |
|
|
|
2,908 |
|
|
|
8,593 |
|
|
|
32,055 |
|
|
|
9,296 |
|
Subordinated debt |
|
836 |
|
|
|
836 |
|
|
|
837 |
|
|
|
3,320 |
|
|
|
1,797 |
|
Total interest expense |
|
25,544 |
|
|
|
9,419 |
|
|
|
23,044 |
|
|
|
84,128 |
|
|
|
21,382 |
|
Net interest income |
|
28,918 |
|
|
|
39,341 |
|
|
|
29,692 |
|
|
|
124,667 |
|
|
|
158,306 |
|
Provision for credit
losses |
|
271 |
|
|
|
1,227 |
|
|
|
188 |
|
|
|
1,353 |
|
|
|
4,482 |
|
Net interest income after
provision for credit losses |
|
28,647 |
|
|
|
38,114 |
|
|
|
29,504 |
|
|
|
123,314 |
|
|
|
153,824 |
|
Non-interest
income: |
|
|
|
|
|
|
|
|
|
Fees and service charges for customer services |
|
1,473 |
|
|
|
1,499 |
|
|
|
1,317 |
|
|
|
5,479 |
|
|
|
5,705 |
|
Income on bank-owned life insurance |
|
952 |
|
|
|
866 |
|
|
|
920 |
|
|
|
3,631 |
|
|
|
3,414 |
|
Gains/(losses) on available-for-sale debt securities, net |
|
— |
|
|
|
15 |
|
|
|
— |
|
|
|
(17 |
) |
|
|
279 |
|
Gains/(losses) on trading securities, net |
|
998 |
|
|
|
585 |
|
|
|
(295 |
) |
|
|
1,721 |
|
|
|
(2,206 |
) |
Gain on sale of loans |
|
— |
|
|
|
180 |
|
|
|
99 |
|
|
|
134 |
|
|
|
453 |
|
Other |
|
204 |
|
|
|
74 |
|
|
|
80 |
|
|
|
948 |
|
|
|
338 |
|
Total non-interest income |
|
3,627 |
|
|
|
3,219 |
|
|
|
2,121 |
|
|
|
11,896 |
|
|
|
7,983 |
|
Non-interest
expense: |
|
|
|
|
|
|
|
|
|
Compensation and employee benefits |
|
12,186 |
|
|
|
12,252 |
|
|
|
10,920 |
|
|
|
46,496 |
|
|
|
41,961 |
|
Occupancy |
|
3,227 |
|
|
|
3,200 |
|
|
|
3,416 |
|
|
|
13,259 |
|
|
|
13,241 |
|
Furniture and equipment |
|
475 |
|
|
|
440 |
|
|
|
479 |
|
|
|
1,868 |
|
|
|
1,730 |
|
Data processing |
|
1,830 |
|
|
|
2,093 |
|
|
|
1,994 |
|
|
|
8,138 |
|
|
|
7,415 |
|
Professional fees |
|
784 |
|
|
|
806 |
|
|
|
883 |
|
|
|
3,406 |
|
|
|
3,846 |
|
Advertising |
|
337 |
|
|
|
902 |
|
|
|
414 |
|
|
|
2,171 |
|
|
|
2,159 |
|
Federal Deposit Insurance Corporation insurance |
|
568 |
|
|
|
339 |
|
|
|
591 |
|
|
|
2,331 |
|
|
|
1,407 |
|
Credit loss (benefit)/expense for off-balance sheet exposures |
|
(165 |
) |
|
|
199 |
|
|
|
160 |
|
|
|
(555 |
) |
|
|
(1,061 |
) |
Other |
|
1,738 |
|
|
|
1,425 |
|
|
|
1,710 |
|
|
|
6,336 |
|
|
|
6,250 |
|
Total non-interest
expense |
|
20,980 |
|
|
|
21,656 |
|
|
|
20,567 |
|
|
|
83,450 |
|
|
|
76,948 |
|
Income before income tax
expense |
|
11,294 |
|
|
|
19,677 |
|
|
|
11,058 |
|
|
|
51,760 |
|
|
|
84,859 |
|
Income tax
expense |
|
3,072 |
|
|
|
5,538 |
|
|
|
2,877 |
|
|
|
14,091 |
|
|
|
23,740 |
|
Net
income |
$ |
8,222 |
|
|
$ |
14,139 |
|
|
$ |
8,181 |
|
|
$ |
37,669 |
|
|
$ |
61,119 |
|
Net income per common
share: |
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.19 |
|
|
$ |
0.31 |
|
|
$ |
0.19 |
|
|
$ |
0.86 |
|
|
$ |
1.32 |
|
Diluted |
$ |
0.19 |
|
|
$ |
0.31 |
|
|
$ |
0.19 |
|
|
$ |
0.86 |
|
|
$ |
1.32 |
|
Basic average shares outstanding |
|
42,704,541 |
|
|
|
45,486,423 |
|
|
|
42,866,246 |
|
|
|
43,560,844 |
|
|
|
46,234,122 |
|
Diluted average shares outstanding |
|
42,780,195 |
|
|
|
45,789,419 |
|
|
|
42,918,174 |
|
|
|
43,638,616 |
|
|
|
46,438,119 |
|
NORTHFIELD BANCORP, INC.ANALYSIS OF NET INTEREST
INCOME(Dollars in thousands) (unaudited) |
|
|
For the Three Months Ended |
|
December 31, 2023 |
|
September 30, 2023 |
|
December 31, 2022 |
|
AverageOutstandingBalance |
|
Interest |
|
Average Yield/Rate(1) |
|
AverageOutstandingBalance |
|
Interest |
|
Average Yield/ Rate(1) |
|
AverageOutstandingBalance |
|
Interest |
|
Average Yield/Rate(1) |
Interest-earning
assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans(2) |
$ |
4,211,344 |
|
$ |
46,418 |
|
|
4.37 |
% |
|
$ |
4,252,752 |
|
$ |
46,213 |
|
|
4.31 |
% |
|
$ |
4,247,576 |
|
$ |
42,881 |
|
|
4.01 |
% |
Mortgage-backed securities(3) |
|
620,384 |
|
|
3,538 |
|
|
2.26 |
|
|
|
660,753 |
|
|
3,664 |
|
|
2.20 |
|
|
|
785,676 |
|
|
3,659 |
|
|
1.85 |
|
Other securities(3) |
|
231,133 |
|
|
1,494 |
|
|
2.56 |
|
|
|
209,341 |
|
|
1,095 |
|
|
2.08 |
|
|
|
292,413 |
|
|
1,440 |
|
|
1.95 |
|
Federal Home Loan Bank of New York stock |
|
39,470 |
|
|
988 |
|
|
9.93 |
|
|
|
41,278 |
|
|
933 |
|
|
8.97 |
|
|
|
24,609 |
|
|
386 |
|
|
6.22 |
|
Interest-earning deposits in financial institutions |
|
173,026 |
|
|
2,024 |
|
|
4.64 |
|
|
|
73,005 |
|
|
831 |
|
|
4.52 |
|
|
|
53,920 |
|
|
394 |
|
|
2.90 |
|
Total interest-earning assets |
|
5,275,357 |
|
|
54,462 |
|
|
4.10 |
|
|
|
5,237,129 |
|
|
52,736 |
|
|
4.00 |
|
|
|
5,404,194 |
|
|
48,760 |
|
|
3.58 |
|
Non-interest-earning
assets |
|
255,155 |
|
|
|
|
|
|
248,315 |
|
|
|
|
|
|
237,074 |
|
|
|
|
Total assets |
$ |
5,530,512 |
|
|
|
|
|
$ |
5,485,444 |
|
|
|
|
|
$ |
5,641,268 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings, NOW, and money market accounts |
$ |
2,522,964 |
|
$ |
11,214 |
|
|
1.76 |
% |
|
$ |
2,408,218 |
|
$ |
8,865 |
|
|
1.46 |
% |
|
$ |
2,708,942 |
|
$ |
1,739 |
|
|
0.25 |
% |
Certificates of deposit |
|
567,356 |
|
|
5,621 |
|
|
3.93 |
|
|
|
551,904 |
|
|
4,749 |
|
|
3.41 |
|
|
|
732,006 |
|
|
3,936 |
|
|
2.13 |
|
Total interest-bearing deposits |
|
3,090,320 |
|
|
16,835 |
|
|
2.16 |
|
|
|
2,960,122 |
|
|
13,614 |
|
|
1.82 |
|
|
|
3,440,948 |
|
|
5,675 |
|
|
0.65 |
|
Borrowed funds |
|
872,756 |
|
|
7,873 |
|
|
3.58 |
|
|
|
939,922 |
|
|
8,593 |
|
|
3.63 |
|
|
|
451,049 |
|
|
2,908 |
|
|
2.56 |
|
Subordinated debt |
|
61,183 |
|
|
836 |
|
|
5.42 |
|
|
|
61,127 |
|
|
837 |
|
|
5.43 |
|
|
|
61,947 |
|
|
836 |
|
|
5.35 |
|
Total interest-bearing liabilities |
|
4,024,259 |
|
|
25,544 |
|
|
2.52 |
|
|
|
3,961,171 |
|
|
23,044 |
|
|
2.31 |
|
|
|
3,953,944 |
|
|
9,419 |
|
|
0.95 |
|
Non-interest bearing
deposits |
|
717,372 |
|
|
|
|
|
|
739,266 |
|
|
|
|
|
|
890,633 |
|
|
|
|
Accrued expenses and other
liabilities |
|
101,964 |
|
|
|
|
|
|
100,103 |
|
|
|
|
|
|
102,012 |
|
|
|
|
Total liabilities |
|
4,843,595 |
|
|
|
|
|
|
4,800,540 |
|
|
|
|
|
|
4,946,589 |
|
|
|
|
Stockholders' equity |
|
686,917 |
|
|
|
|
|
|
684,904 |
|
|
|
|
|
|
694,679 |
|
|
|
|
Total liabilities and stockholders' equity |
$ |
5,530,512 |
|
|
|
|
|
$ |
5,485,444 |
|
|
|
|
|
$ |
5,641,268 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
|
$ |
28,918 |
|
|
|
|
|
$ |
29,692 |
|
|
|
|
|
$ |
39,341 |
|
|
Net interest rate
spread(4) |
|
|
|
|
|
1.58 |
% |
|
|
|
|
|
|
1.69 |
% |
|
|
|
|
|
|
2.63 |
% |
Net interest-earning
assets(5) |
$ |
1,251,098 |
|
|
|
|
|
$ |
1,275,958 |
|
|
|
|
|
$ |
1,450,250 |
|
|
|
|
Net interest margin(6) |
|
|
|
|
|
2.17 |
% |
|
|
|
|
|
|
2.25 |
% |
|
|
|
|
|
|
2.89 |
% |
Average interest-earning
assets to interest-bearing liabilities |
|
|
|
|
|
131.09 |
% |
|
|
|
|
|
|
132.21 |
% |
|
|
|
|
|
|
136.68 |
% |
(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 Years Ended |
|
December 31, 2023 |
|
December 31, 2022 |
|
AverageOutstandingBalance |
|
Interest |
|
Average Yield/Rate |
|
AverageOutstandingBalance |
|
Interest |
|
Average Yield/Rate(1) |
Interest-earning
assets: |
|
|
|
|
|
|
|
|
|
|
|
Loans(1) |
$ |
4,248,355 |
|
$ |
181,638 |
|
|
4.28 |
% |
|
$ |
4,077,175 |
|
$ |
160,911 |
|
|
3.95 |
% |
Mortgage-backed securities(2) |
|
682,416 |
|
|
14,708 |
|
|
2.16 |
|
|
|
863,897 |
|
|
12,461 |
|
|
1.44 |
|
Other securities(2) |
|
238,722 |
|
|
5,087 |
|
|
2.13 |
|
|
|
285,385 |
|
|
4,325 |
|
|
1.52 |
|
Federal Home Loan Bank of New York stock |
|
40,684 |
|
|
3,113 |
|
|
7.65 |
|
|
|
22,541 |
|
|
1,174 |
|
|
5.21 |
|
Interest-earning deposits in financial institutions |
|
97,975 |
|
|
4,249 |
|
|
4.34 |
|
|
|
85,485 |
|
|
817 |
|
|
0.96 |
|
Total interest-earning assets |
|
5,308,152 |
|
|
208,795 |
|
|
3.93 |
|
|
|
5,334,483 |
|
|
179,688 |
|
|
3.37 |
|
Non-interest-earning
assets |
|
247,050 |
|
|
|
|
|
|
259,891 |
|
|
|
|
Total assets |
$ |
5,555,202 |
|
|
|
|
|
$ |
5,594,374 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
liabilities: |
|
|
|
|
|
|
|
|
|
|
|
Savings, NOW, and money market accounts |
$ |
2,463,455 |
|
$ |
30,408 |
|
|
1.23 |
% |
|
$ |
2,898,048 |
|
$ |
3,610 |
|
|
0.12 |
% |
Certificates of deposit |
|
571,041 |
|
|
18,345 |
|
|
3.21 |
|
|
|
525,557 |
|
|
6,679 |
|
|
1.27 |
|
Total interest-bearing deposits |
|
3,034,496 |
|
|
48,753 |
|
|
1.61 |
|
|
|
3,423,605 |
|
|
10,289 |
|
|
0.30 |
|
Borrowed funds |
|
895,229 |
|
|
32,055 |
|
|
3.58 |
|
|
|
413,697 |
|
|
9,296 |
|
|
2.25 |
|
Subordinated debt |
|
61,169 |
|
|
3,320 |
|
|
5.43 |
|
|
|
33,436 |
|
|
1,797 |
|
|
5.37 |
|
Total interest-bearing liabilities |
$ |
3,990,894 |
|
|
84,128 |
|
|
2.11 |
|
|
$ |
3,870,738 |
|
|
21,382 |
|
|
0.55 |
|
Non-interest bearing
deposits |
|
770,939 |
|
|
|
|
|
|
907,603 |
|
|
|
|
Accrued expenses and other
liabilities |
|
102,563 |
|
|
|
|
|
|
102,807 |
|
|
|
|
Total liabilities |
|
4,864,396 |
|
|
|
|
|
|
4,881,148 |
|
|
|
|
Stockholders' equity |
|
690,806 |
|
|
|
|
|
|
713,226 |
|
|
|
|
Total liabilities and stockholders' equity |
$ |
5,555,202 |
|
|
|
|
|
$ |
5,594,374 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
|
$ |
124,667 |
|
|
|
|
|
$ |
158,306 |
|
|
Net interest rate
spread(3) |
|
|
|
|
|
1.82 |
% |
|
|
|
|
|
|
2.82 |
% |
Net interest-earning
assets(4) |
$ |
1,317,258 |
|
|
|
|
|
$ |
1,463,745 |
|
|
|
|
Net interest margin(5) |
|
|
|
|
|
2.35 |
% |
|
|
|
|
|
|
2.97 |
% |
Average interest-earning
assets to interest-bearing liabilities |
|
|
|
|
|
133.01 |
% |
|
|
|
|
|
|
137.82 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes non-accruing loans.(2) Securities
available-for-sale and other securities are reported at amortized
cost.(3) 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.(4) Net
interest-earning assets represent total interest-earning assets
less total interest-bearing liabilities.(5) 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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