NORTHFIELD BANCORP, INC. (Nasdaq:NFBK) (or the
“Company”), the holding company for Northfield Bank,
reported diluted earnings per common share of $0.34 and $0.64 for
the three and six months ended June 30, 2022, respectively, as
compared to $0.40 and $0.78 per diluted share for the three and six
months ended June 30, 2021, respectively. Net earnings for the
three and six months ended June 30, 2022, were down from the
comparative prior year periods primarily due to a benefit in the
provision for credit losses on loans in the prior year. Earnings
for the three and six months ended June 30, 2021, included a
benefit for credit losses of $3.7 million and $6.1 million,
respectively, reflecting continued improvement in the economic
forecast as well as an improvement in asset quality and a decline
in loan balances, as compared to a provision for credit loss of
$149,000 and $552,000, for the three and six months ended June 30,
2022. Earnings for the three and six months ended June 30, 2021,
also included a gain on sale of loans of $1.4 million, and earnings
for the six months ended June 30, 2021, included approximately $1.9
million of accretable income related to the payoffs of purchased
credit deteriorated (“PCD”) loans.
Commenting on the quarter, Steven M. Klein, the
Company’s Chairman, President and Chief Executive Officer stated,
“I’m pleased to announce Northfield has reported a strong quarter
of financial performance. Robust loan growth at higher interest
rates, maintaining our low cost of deposits, and prudently managing
expenses, with a focus on maintaining strong asset quality, has and
will continue to be key drivers to our long-term success.”
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 24, 2022, to stockholders
of record on August 10, 2022.”
Results of Operations
Comparison of Operating Results for the Six
Months Ended June 30, 2022 and 2021
Net income was $30.0 million and $38.5 million
for the six months ended June 30, 2022 and June 30, 2021,
respectively. Significant variances from the comparable prior year
period are as follows: a $1.9 million decrease in net interest
income, a $6.6 million increase in the provision for credit losses
on loans, a $5.1 million decrease in non-interest income, a $2.0
million decrease in non-interest expense, and a $3.1
million decrease in income tax expense.
Net interest income for the six months ended
June 30, 2022, decreased $1.9 million, or 2.4%, to $77.0
million, from $78.9 million for the six months ended June 30,
2021, primarily due to an eight basis point decrease in net
interest margin to 2.95% from 3.03% for the six months ended
June 30, 2021, partially offset by a $12.6 million, or 0.2%,
increase in the average balance of interest-earning assets. The
increase in the average balance of interest-earning assets was due
to increases in the average balance of other securities of $155.4
million and the average balance of loans outstanding of $9.6
million, partially offset by decreases in the average balance of
mortgage-backed securities of $122.6 million, the average balance
of Federal Home Loan Bank of New York (“FHLBNY”) stock of $6.7
million, and the average balance of interest-earning deposits in
financial institutions of $23.0 million.
The decrease in net interest margin was
primarily due to lower yields on interest-earning assets, due in
part to a $2.2 million decrease in accreted interest income related
to PCD loans, and a $1.7 million reduction in fees related to the
forgiveness of PPP loans, partially offset by the lower cost of
interest-bearing liabilities. Yields on interest-earning assets
decreased 19 basis points to 3.21% for the six months ended
June 30, 2022, from 3.40% for the six months ended
June 30, 2021. The cost of interest-bearing liabilities
decreased by 12 basis points to 0.36% for the six months ended
June 30, 2022, from 0.48% for the six months ended
June 30, 2021, primarily driven by lower cost of deposits and
a change in the composition of the deposit portfolio as the average
balance of transaction accounts increased and the average balance
of certificates of deposit decreased. The Company accreted interest
income related to PCD loans of $729,000 for the six months ended
June 30, 2022, as compared to $2.9 million for the six months
ended June 30, 2021. The higher accretable PCD interest income
in the prior year was primarily related to payoffs of PCD loans in
the first quarter of 2021. Fees recognized from PPP loans totaled
$1.1 million for the six months ended June 30, 2022, as
compared to $2.8 million for the six months ended June 30,
2021. Net interest income for the six months ended June 30,
2022, included loan prepayment income of $2.6 million as compared
to $2.2 million for the six months ended June 30, 2021.
The provision for credit losses on loans
increased by $6.6 million to a provision of $552,000 for the six
months ended June 30, 2022, compared to a benefit of $6.1
million for the six months ended June 30, 2021. The prior year
benefit for credit losses was primarily due to improvement in the
economic forecast and an improvement in asset quality as well as a
decline in loan balances. The current year provision for credit
losses is due to growth in the loan portfolio and a worsening
macroeconomic outlook, partially offset by an improvement in asset
quality and lower net charge-offs. At June 30, 2022, management,
utilizing judgement, qualitatively adjusted the forecast to account
for economic uncertainty that may not be captured in the third
party economic forecast scenarios utilized. Net charge-offs were
$494,000 for the six months ended June 30, 2022, as compared
to net charge-offs of $2.4 million for the six months ended
June 30, 2021, which related to PCD loans.
Non-interest income decreased by $5.1 million,
or 67.2%, to $2.5 million for the six months ended June 30,
2022, from $7.6 million for the six months ended June 30,
2021, due primarily to a decrease of $3.5 million in gains on
trading securities, net, a $1.4 million decrease in gains on sales
of loans, and a $342,000 decrease in net realized gains on
available-for-sale debt securities. For the six months ended
June 30, 2022, losses on trading securities were $2.4 million,
as compared to gains of $1.2 million for the six months ended
June 30, 2021. 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. The decrease in gains on sales of loans
is due to a $1.4 million gain realized on the sale of approximately
$126.3 million of multifamily loans in the second quarter of
2021.
Non-interest expense decreased $2.0 million, or
5.1%, to $37.4 million for the six months ended June 30, 2022,
compared to $39.4 million for the six months ended June 30,
2021. The decrease was primarily due to a $2.4 million decrease in
employee compensation and benefits. The decrease was due to a $3.5
million decrease in the mark to market of the Company's deferred
compensation plan expense, which as discussed above has no effect
on net income, as well as a decrease in medical benefit costs,
partially offset by an increase in salary expense related to annual
merit increases and an increase in equity award expense related to
new awards issued under the 2019 Equity Incentive Plan ( the “2019
EIP”) in the first quarter of 2022. Additionally, occupancy expense
decreased by $507,000, primarily related to lower snow removal
costs, and advertising expense decreased by $312,000. Partially
offsetting the decreases was an increase in professional fees of
$399,000 and an increase in other expense of $812,000, primarily
due to an increase in the reserve for unfunded commitments, as well
as an increase in other operating expenses.
The Company recorded income tax expense of $11.5
million for the six months ended June 30, 2022, compared to
$14.6 million for the six months ended June 30, 2021. The
effective tax rate for the six months ended June 30, 2022, was
27.6% compared to 27.5% for the six months ended June 30,
2021.
Comparison of Operating Results for the Three
Months Ended June 30, 2022 and 2021
Net income was $15.9 million and $19.8 million
for the quarters ended June 30, 2022 and June 30, 2021,
respectively. Significant variances from the comparable prior year
quarter are as follows: a $1.4 million increase in net
interest income, a $3.9 million increase in the provision for
credit losses on loans, a $4.2 million decrease in non-interest
income, a $1.2 million decrease in non-interest expense, and a
$1.5 million decrease in income tax expense.
Net interest income for the quarter ended
June 30, 2022, increased $1.4 million, or 3.6%, primarily
due to a seven basis point increase in net interest margin to 3.03%
from 2.96% for the quarter ended June 30, 2021, and an
increase in average interest-earning assets of $70.1 million, or
1.3%. The increase in the average balance of interest-earning
assets was primarily due to increases in the average balance of
other securities of $156.4 million and the average balance of loans
outstanding of $44.6 million, partially offset by decreases in the
average balance of mortgage-backed securities of $68.0 million, the
average balance of interest-earning deposits in financial
institutions of $55.8 million, and the average balance of FHLBNY
stock of $7.0 million. Partially offsetting the increase in net
interest income was a $1.1 million reduction in fees related to the
forgiveness of PPP loans in the current quarter as compared to the
quarter ended June 30, 2021.
The increase in net interest margin was
primarily due to a decrease in the cost of interest-bearing
liabilities which decreased by 12 basis points to 0.35% for the
quarter ended June 30, 2022, from 0.47% for the quarter ended
June 30, 2021, driven primarily by lower cost of deposits and
a change in the composition of the deposit portfolio as the average
balance of transaction accounts increased and the average balance
of certificates of deposit decreased. Partially offsetting this
decrease was a decrease in yields on interest-earning assets which
decreased by two basis points to 3.29% for the quarter ended
June 30, 2022, from 3.31% for the quarter ended June 30,
2021. Net interest income for the quarter ended June 30, 2022,
included loan prepayment income of $1.5 million, as compared to
$1.3 million for the quarter ended June 30, 2021. The Company
accreted interest income related to PCD loans of $339,000 for the
quarter ended June 30, 2022, as compared to $443,000 for
quarter ended June 30, 2021. Fees recognized from PPP loans
totaled $432,000 for the quarter ended June 30, 2022, as
compared to $1.6 million for the quarter ended June 30,
2021.
The provision for credit losses on loans
increased by $3.9 million to a provision of $149,000 for the
quarter ended June 30, 2022, from a benefit of $3.7 million
for the quarter ended June 30, 2021. The prior year benefit
for credit losses was primarily due to improvement in the economic
forecast and an improvement in asset quality as well as a decline
in loan balances. The current quarter provision for credit losses
is due to growth in the loan portfolio, higher net charge-offs, and
a worsening macroeconomic outlook, partially offset by an
improvement in asset quality. At June 30, 2022, management,
utilizing judgement, qualitatively adjusted the forecast to account
for economic uncertainty that may not be captured in the third
party economic forecast scenarios utilized. Net charge-offs were
$392,000 for the quarter ended June 30, 2022, compared to net
charge-offs of $3,000 for the quarter ended June 30, 2021.
Non-interest income decreased by $4.2 million,
or 84.4%, to $765,000 for the quarter ended June 30, 2022,
from $4.9 million for the quarter ended June 30, 2021,
primarily due to a $2.4 million decrease in gains on trading
securities, net, a $1.4 million decrease in gains on sales of
loans, and a $509,000 decrease in net realized gains on
available-for-sale debt securities. For the quarter ended
June 30, 2022, losses on trading securities, net, included
losses of $1.6 million related to the Company’s trading portfolio,
compared to gains of $807,000 in the comparative prior year
quarter. Gains and losses on trading securities have no effect on
net income since participants benefit from, and bear the full risk
of, changes in the trading securities market values.
Non-interest expense decreased by $1.2 million,
or 5.8%, to $18.7 million for the quarter ended June 30, 2022,
from $19.9 million for the quarter ended June 30, 2021. The
decrease was due primarily to a $1.4 million decrease in
compensation and employee benefits, attributable to a $2.4 million
decrease in the mark to market of the Company's deferred
compensation plan expense, which has no effect on net income,
partially offset by an increase in salary expense related to annual
merit increases and an increase in equity award expense related to
new awards issued under the 2019 EIP in the first quarter of 2022.
Additionally, occupancy expense decreased by $214,000 and
advertising expense decreased by $280,000. The decreases were
partially offset by increases of $397,000 in professional fees and
$370,000 in other expense, primarily related to an increase in the
reserve for unfunded commitments,
The Company recorded income tax expense of $6.1
million for the quarter ended June 30, 2022, compared to $7.6
million for the quarter ended June 30, 2021. The effective tax
rate for both quarters ended June 30, 2022, and June 30,
2021, was 27.8%.
Comparison of Operating Results for the Three
Months Ended June 30, 2022 and March 31, 2022
Net income was $15.9 million and $14.1 million
for the quarters ended June 30, 2022, and March 31, 2022,
respectively. Significant variances from the prior quarter are as
follows: a $3.2 million increase in net interest income, a $254,000
decrease in the provision for credit losses on loans, a $948,000
decrease in non-interest income, and a $771,000 increase in
income tax expense.
Net interest income for the quarter ended
June 30, 2022, increased by $3.2 million, or 8.7%, primarily
due to a 16 basis point increase in net interest margin to 3.03%
from 2.87% for the quarter ended March 31, 2022, and a $97.4
million, or 1.9%, 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 loans outstanding of $144.7 million, and the
average balance of other securities of $41.9 million, partially
offset by a decrease in the average balance of mortgage-backed
securities of $39.0 million interest-earning deposits in financial
institutions of $48.6 million, and the average balance of FHLBNY
stock of $1.5 million.
The increase in net interest margin was
primarily due to higher yields on interest-earning assets, which
increased by 16 basis points to 3.29% for the quarter ended
June 30, 2022, from 3.13% for the quarter ended March 31,
2022, reflective of the rising rate environment. The cost of
interest-bearing liabilities decreased by one basis point to 0.35%
for the quarter ended June 30, 2022, from 0.36% for the
quarter ended March 31, 2022. Net interest income for the
quarter ended June 30, 2022, included loan prepayment income
of $1.5 million as compared to $1.1 million for the quarter ended
March 31, 2022. The Company accreted interest income related
to PCD loans of $339,000 for the quarter ended June 30, 2022,
as compared to $391,000 for the quarter ended March 31, 2022.
Fees recognized from PPP loans totaled $432,000 and $701,000
respectively, for the quarters ended June 30, 2022, and
March 31, 2022.
The provision for credit losses on loans
decreased by $254,000 to a provision of $149,000 for the quarter
ended June 30, 2022, from a provision of $403,000 for the
quarter ended March 31, 2022. The decrease in the provision
was primarily due to an improvement in asset quality, partially
offset by loan growth, higher net charge-offs, and a worsening
macroeconomic outlook. Net charge-offs were $392,000 for the
quarter ended June 30, 2022, as compared to $102,000 for the
quarter ended March 31, 2022.
Non-interest income decreased by $948,000, or
55.3%, to $765,000 for the quarter ended June 30, 2022, from
$1.7 million for the quarter ended March 31, 2022. The
decrease was primarily due to an increase of $761,000 in losses on
trading securities, net, and a decrease of $264,000 in realized
gains on available-for-sale debt securities, net. For the quarter
ended June 30, 2022, losses on trading securities, net, were
$1.6 million, compared to losses of $802,000 for the quarter ended
March 31, 2022.
Non-interest expense remained stable at $18.7
million for both quarters ended June 30, 2022 and
March 31, 2022.
The Company recorded income tax expense of $6.1
million for the quarter ended June 30, 2022, compared to $5.3
million for the quarter ended March 31, 2022. The
effective tax rate for the quarter ended June 30, 2022 was
27.8%, compared to 27.4% for the quarter ended and March 31,
2022.
Financial Condition
Total assets increased by $216.6 million, or
4.0%, to $5.65 billion at June 30, 2022, from $5.43 billion at
December 31, 2021. The increase was primarily due to increases
in total loans of $307.6 million, or 8.1%, cash and cash
equivalents of $19.2 million, or 21.0%, and other assets of $9.9
million, or 26.7%, partially offset by a decrease in
available-for-sale debt securities of $121.4 million, or 10.0%.
As of June 30, 2022, we estimate that our
non-owner occupied commercial real estate concentration (as defined
by regulatory guidance) to total risk-based capital was
approximately 468.9%. 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, ability to pay dividends, and profitability.
Cash and cash equivalents increased by $19.2
million, or 21.0%, to $110.2 million at June 30, 2022, from
$91.1 million at December 31, 2021, primarily due to the
liquidity obtained from loans and securities paydowns as well as
growth in deposits. Balances fluctuate based on the timing of
receipt of security and loan repayments and the redeployment of
cash into higher-yielding assets such as loans and securities, or
the funding of deposit outflows or borrowing maturities.
Loans held-for-investment, net, increased by
$305.2 million, or 8.0%, to $4.11 billion at June 30,
2022 from $3.81 billion at December 31, 2021. The overall
increase was due to strong loan originations, and, to a lesser
extent, the purchase of two one-to-four family residential loan
pools of approximately $7.7 million. Multifamily loans increased
$252.9 million, or 10.0%, to $2.77 billion at June 30, 2022
from $2.52 billion at December 31, 2021, commercial real
estate loans increased $41.6 million, or 5.1%, to $850.2 million at
June 30, 2022 from $808.6 million at December 31, 2021,
home equity loans increased $27.9 million, or 25.4%, to $137.9
million at June 30, 2022 from $110.0 million at
December 31, 2021, commercial and industrial loans (excluding
PPP loans) increased $21.0 million, or 20.9%, to $121.5 million at
June 30, 2022 from $100.5 million at December 31, 2021,
and, one-to-four family residential loans increased $1.7 million,
or 0.9%. The increases were partially offset by decreases in
construction and land loans of $8.9 million, or 32.5%, to $18.6
million at June 30, 2022 from $27.5 million at
December 31, 2021, and PPP loans of $28.6 million, or 70.5%,
to $11.9 million at June 30, 2022 from $40.5 million at
December 31, 2021. Through June 30, 2022, 2,307 borrowers
have received PPP forgiveness payments totaling approximately
$217.8 million.
There were 24 PPP loans outstanding totaling
$11.9 million at June 30, 2022, compared to 377 loans
outstanding totaling $40.5 million at December 31, 2021. The PPP
provides for lender processing fees that range from 1% to 5% of the
final disbursement made to individual borrowers. As of
June 30, 2022, we have received loan processing fees of $9.5
million, of which $8.6 million has been recognized in earnings,
including $1.1 million recognized in the six months ended
June 30, 2022. The remaining unearned fees will be recognized
in income over the remaining term of the loans.
PCD loans totaled $13.1 million at June 30,
2022, and $15.8 million at December 31, 2021. Upon adoption of
the CECL accounting standard on January 1, 2021, the allowance for
credit losses related to PCD loans was recorded through a gross-up
that increased the amortized cost-basis of PCD loans by $6.8
million with a corresponding increase to the allowance for credit
losses. The decrease in the PCD loan balance at June 30, 2022
was due to PCD loans being sold and paid off during the period. 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 $339,000 and $729,000 attributable to PCD loans for the
three and six months ended June 30, 2022, respectively, as compared
to $443,000 and $2.9 million for the three and six months ended
June 30, 2021, respectively. The decrease in income accreted for
the six months ended June 30, 2022 is due to the payoff of PCD
loans in the prior year. PCD loans had an allowance for credit
losses of approximately $4.2 million at June 30, 2022. Loan
balances are summarized as follows (dollars in thousands):
|
June 30, 2022 |
|
March 31, 2022 |
|
December 31, 2021 |
Real estate loans: |
|
|
|
|
|
Multifamily |
$ |
2,771,002 |
|
$ |
2,568,784 |
|
$ |
2,518,065 |
Commercial mortgage |
|
850,186 |
|
|
852,803 |
|
|
808,597 |
One-to-four family residential mortgage |
|
185,376 |
|
|
186,007 |
|
|
183,665 |
Home equity and lines of credit |
|
137,868 |
|
|
125,156 |
|
|
109,956 |
Construction and land |
|
18,555 |
|
|
17,579 |
|
|
27,495 |
Total real estate loans |
|
3,962,987 |
|
|
3,750,329 |
|
|
3,647,778 |
Commercial and industrial
loans |
|
121,473 |
|
|
107,901 |
|
|
100,488 |
PPP loans |
|
11,949 |
|
|
24,349 |
|
|
40,517 |
Other loans |
|
2,312 |
|
|
1,938 |
|
|
2,015 |
Total commercial and industrial, PPP, and other loans |
|
135,734 |
|
|
134,188 |
|
|
143,020 |
Loans held-for-investment, net (excluding PCD) |
|
4,098,721 |
|
|
3,884,517 |
|
|
3,790,798 |
PCD loans |
|
13,136 |
|
|
14,064 |
|
|
15,819 |
Total loans held-for-investment, net |
$ |
4,111,857 |
|
$ |
3,898,581 |
|
$ |
3,806,617 |
|
|
|
|
|
|
|
|
|
The following tables detail multifamily real
estate originations for the six months ended June 30, 2022 and
2021 (dollars in thousands):
For the Six Months Ended June 30, 2022 |
MultifamilyOriginations |
|
Weighted AverageInterest Rate |
|
Weighted AverageLTV Ratio |
|
Weighted Average Months to NextRate Change or Maturity
forFixed Rate Loans |
|
(F)ixed or(V)ariable |
|
Amortization Term |
$ |
447,129 |
|
3.42% |
|
|
57% |
|
|
76 |
|
V |
|
25 to 30 Years |
|
1,200 |
|
3.75% |
|
|
18% |
|
|
180 |
|
F |
|
15 Years |
$ |
448,329 |
|
3.42% |
|
|
57% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Six Months Ended June 30, 2021 |
MultifamilyOriginations |
|
Weighted AverageInterest Rate |
|
Weighted AverageLTV Ratio |
|
Weighted Average Months to NextRate Change or Maturity
forFixed Rate Loans |
|
(F)ixed or(V)ariable |
|
Amortization Term |
$ |
385,363 |
|
3.12% |
|
|
62% |
|
|
74 |
|
V |
|
10 to 30 Years |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table details loan pools purchased
during the six months ended June 30, 2022 (dollars in
thousands):
For the Six Months Ended June 30, 2022 |
PurchaseAmount |
|
Loan Type |
|
WeightedAverageInterest
Rate(1) |
|
WeightedAverageLoan-to-Value Ratio |
|
Weighted Average Months to Next Rate Change or
Maturity forFixed Rate Loans |
|
(F)ixed or(V)ariable |
|
Amortization Term |
$ |
2,482 |
|
Residential |
|
2.80% |
|
|
54% |
|
|
278 |
|
F |
|
15 to 30 Years |
|
5,214 |
|
Residential |
|
3.05% |
|
|
59% |
|
|
303 |
|
F |
|
15 to 30 Years |
$ |
7,696 |
|
|
|
2.97% |
|
|
57% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Net of servicing fee retained by the
originating bank
The geographic locations of the properties
collateralizing the loans purchased in the table above are as
follows: 63.3% in New York and 36.7% in New Jersey.
The Company’s available-for-sale debt securities
portfolio decreased by $121.4 million, or 10.0%, to $1.09 billion
at June 30, 2022, from $1.21 billion at December 31,
2021. The decrease was primarily attributable to paydowns,
maturities, calls, and sales. At June 30, 2022, $821.2 million
of the portfolio consisted of residential mortgage-backed
securities issued or guaranteed by Fannie Mae, Freddie Mac, or
Ginnie Mae. In addition, the Company held $74.8 million in U.S.
Government agency securities, $190.8 million in corporate bonds,
all of which were considered investment grade at June 30,
2022, and $52,000 in municipal bonds.
Equity securities increased by $2.5 million to
$7.8 million at June 30, 2022, from $5.3 million at
December 31, 2021, due to an increase in our investment in a
Small Business Administration Loan Fund. This investment is
utilized by the Bank as part of its Community Reinvestment Act
program. Total liabilities increased $241.2 million, or
5.1%, to $4.93 billion at June 30, 2022, from $4.69 billion at
December 31, 2021. The increase was primarily attributable to
an increase in deposits of $248.7 million, the issuance of
subordinated debt, net of issuance costs, of $60.9 million, and an
increase in advance payments by borrowers for taxes and insurance
of $4.5 million, partially offset by a decrease in FHLB advances
and other borrowings of $74.7 million.
Deposits increased $248.7 million, or 6.0%, to
$4.42 billion at June 30, 2022, as compared to $4.17 billion
at December 31, 2021. The increase was attributable to
increases of $193.0 million in transaction accounts and $140.4
million in certificates of deposit, partially offset by decreases
of $16.8 million in savings accounts and $68.0 million in money
market accounts.
Deposit account balances are summarized as
follows (dollars in thousands):
|
June 30, 2022 |
|
March 31, 2022 |
|
December 31, 2021 |
Transaction: |
|
|
|
|
|
Non-interest bearing checking |
$ |
916,343 |
|
$ |
944,096 |
|
$ |
898,490 |
Negotiable orders of withdrawal and interest-bearing checking |
|
1,287,458 |
|
|
1,231,377 |
|
|
1,112,292 |
Total transaction |
|
2,203,801 |
|
|
2,175,473 |
|
|
2,010,782 |
Savings and money market: |
|
|
|
|
|
Savings |
|
1,149,976 |
|
|
1,168,110 |
|
|
1,166,761 |
Money market |
|
541,445 |
|
|
600,519 |
|
|
609,430 |
Total savings |
|
1,691,421 |
|
|
1,768,629 |
|
|
1,776,191 |
Certificates of deposit: |
|
|
|
|
|
Brokered deposits |
|
210,130 |
|
|
21,000 |
|
|
31,000 |
$250,000 and under |
|
253,556 |
|
|
276,518 |
|
|
286,580 |
Over $250,000 |
|
59,094 |
|
|
61,246 |
|
|
64,781 |
Total certificates of deposit |
|
522,780 |
|
|
358,764 |
|
|
382,361 |
Total deposits |
$ |
4,418,002 |
|
$ |
4,302,866 |
|
$ |
4,169,334 |
Included in the table above are business and municipal deposit
account balances as follows (dollars in thousands):
|
June 30, 2022 |
|
March 31, 2022 |
|
December 31, 2021 |
|
|
|
|
|
|
Business customers |
$ |
1,297,501 |
|
$ |
1,288,495 |
|
$ |
1,184,472 |
Municipal customers |
$ |
663,656 |
|
$ |
686,425 |
|
$ |
633,458 |
|
|
|
|
|
|
|
|
|
Borrowed funds decreased to $407.9 million at
June 30, 2022, from $421.8 million at December 31,
2021. The decrease in borrowings for the period was primarily
attributable to a decrease in FHLB and other borrowings of $49.7
million, and a decrease in securities sold under agreements to
repurchase of $25.0 million, partially offset by the issuance of
$62.0 million in aggregate principal amount of fixed to floating
subordinated notes (the “Notes”). The Notes are non-callable for
five years, have a stated maturity of June 30, 2032, and bear
interest at a fixed rate of 5.00% until June 30, 2027. From July
2027 to the maturity date or early redemption date, the interest
rate will reset quarterly to a level equal to the then current
three-month Secured Overnight Financing Rate plus 200 basis points.
Debt issuance costs totaled $1.1 million. Management utilizes
borrowings to mitigate interest rate risk, for short-term
liquidity, and to a lesser extent as part of leverage
strategies.
The following is a table of term borrowing maturities (excluding
overnight borrowings and subordinated debt) and the weighted
average rate by year at June 30, 2022 (dollars in
thousands):
Year |
|
Amount |
|
Weighted Average Rate |
2022 |
|
$45,000 |
|
2.05% |
2023 |
|
87,500 |
|
2.89% |
2024 |
|
50,000 |
|
2.47% |
2025 |
|
112,500 |
|
1.48% |
Thereafter |
|
45,000 |
|
1.45% |
|
|
$340,000 |
|
2.06% |
Total stockholders’ equity decreased by $24.6
million to $715.3 million at June 30, 2022, from $739.9
million at December 31, 2021. The decrease was attributable to
a $33.3 million decrease in accumulated other comprehensive income
associated with a decline in the estimated fair value of our debt
securities available-for-sale portfolio, $12.2 million in dividend
payments, and $11.0 million in stock repurchases, partially offset
by net income of $30.0 million for the six months ended
June 30, 2022, and a $1.9 million increase in equity award
activity. During the first quarter of 2022, the $54.2 million stock
repurchase program that was approved in March 2021, was completed
after reaching the purchase limit. On June 16, 2022, the Board of
Directors of the Company approved a new $45.0 million stock
repurchase program. During the six months ended June 30, 2022,
the Company repurchased 739,701 shares of its common stock
outstanding at an average price of $14.84 for a total of $11.0
million pursuant to the approved stock repurchase plans.
The Company continues to maintain adequate
liquidity and a strong capital position. 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 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, 2022 (dollars in thousands):
Cash and cash equivalents(1) |
|
$ |
92,991 |
Corporate bonds |
|
$ |
176,094 |
Multifamily loans(2) |
|
$ |
1,589,553 |
Mortgage-backed securities
(issued or guaranteed by the U.S. Government, Fannie Mae, or
Freddie Mac)(2) |
|
$ |
297,660 |
|
|
|
(1) Excludes $17.2 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, 2022, the Company
and the Bank's estimated CBLR ratios were 12.75% and 12.19%,
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, 2022,
March 31, 2022, and December 31, 2021 (dollars in
thousands):
|
June 30, 2022 |
|
March 31, 2022 |
|
December 31, 2021 |
Non-accrual loans: |
|
|
|
|
|
Held-for-investment |
|
|
|
|
|
Real estate loans: |
|
|
|
|
|
Multifamily |
$ |
4,022 |
|
|
$ |
1,853 |
|
|
$ |
1,882 |
|
Commercial |
|
5,330 |
|
|
|
5,380 |
|
|
|
5,117 |
|
One-to-four family residential |
|
304 |
|
|
|
312 |
|
|
|
314 |
|
Home equity and lines of credit |
|
332 |
|
|
|
279 |
|
|
|
281 |
|
Commercial and industrial |
|
275 |
|
|
|
278 |
|
|
|
28 |
|
Total non-accrual
loans |
|
10,263 |
|
|
|
8,102 |
|
|
|
7,622 |
|
Loans delinquent 90 days or
more and still accruing: |
|
|
|
|
|
Held-for-investment |
|
|
|
|
|
Real estate loans: |
|
|
|
|
|
Commercial |
|
27 |
|
|
|
37 |
|
|
|
147 |
|
One-to-four family residential |
|
160 |
|
|
|
6 |
|
|
|
165 |
|
PPP loans |
|
17 |
|
|
|
16 |
|
|
|
72 |
|
Other |
|
7 |
|
|
|
— |
|
|
|
— |
|
Total loans
held-for-investment delinquent 90 days or more and still
accruing |
|
211 |
|
|
|
59 |
|
|
|
384 |
|
Total non-performing
loans |
|
10,474 |
|
|
|
8,161 |
|
|
|
8,006 |
|
Other real estate owned |
|
— |
|
|
|
100 |
|
|
|
100 |
|
Total non-performing
assets |
$ |
10,474 |
|
|
$ |
8,261 |
|
|
$ |
8,106 |
|
Non-performing loans to total loans |
|
0.25 |
% |
|
|
0.21 |
% |
|
|
0.21 |
% |
Non-performing assets to total assets |
|
0.19 |
% |
|
|
0.15 |
% |
|
|
0.15 |
% |
Loans subject to
restructuring agreements and still accruing |
$ |
4,115 |
|
|
$ |
5,397 |
|
|
$ |
5,820 |
|
Accruing loans 30 to
89 days delinquent |
$ |
2,706 |
|
|
$ |
4,084 |
|
|
$ |
1,166 |
|
|
|
|
|
|
|
|
|
|
|
|
|
The increase in non-accrual loans was primarily
due to one $2.2 million multifamily loan placed on non-accrual
status during the current quarter. The loan is well secured with an
apartment building in Brooklyn, New York, containing eight
residential units and has a recent appraised value of $2.8
million.
Other Real Estate Owned
At June 30, 2022, the Company had no assets
acquired through foreclosure. As of March 31, 2022 and
December 31, 2021, other real estate owned was comprised of
one property located in New Jersey, which had a carrying value of
approximately $100,000, and which was sold during the second
quarter of 2022 for a small gain.
Accruing Loans 30 to 89 Days Delinquent
Loans 30 to 89 days delinquent and on accrual
status totaled $2.7 million, $4.1 million, and $1.2 million at
June 30, 2022, March 31, 2022, and December 31, 2021,
respectively. The following table sets forth delinquencies for
accruing loans by type and by amount at June 30, 2022, March
31, 2022, and December 31, 2021 (dollars in thousands):
|
June 30, 2022 |
|
March 31, 2022 |
|
December 31, 2021 |
Held-for-investment |
|
|
|
|
|
Real estate loans: |
|
|
|
|
|
Multifamily |
$ |
— |
|
$ |
2,804 |
|
$ |
— |
Commercial |
|
658 |
|
|
304 |
|
|
144 |
One-to-four family residential |
|
805 |
|
|
554 |
|
|
593 |
Home equity and lines of credit |
|
147 |
|
|
265 |
|
|
412 |
Commercial and industrial loans |
|
581 |
|
|
140 |
|
|
— |
PPP loans |
|
515 |
|
|
1 |
|
|
2 |
Other loans |
|
— |
|
|
16 |
|
|
15 |
Total delinquent accruing loans held-for-investment |
$ |
2,706 |
|
$ |
4,084 |
|
$ |
1,166 |
|
|
|
|
|
|
|
|
|
The decrease in delinquent multifamily loans is
primarily due to one loan with a balance of $2.2 million that was
transferred to non-accrual status in the current quarter. The loan
is well secured with an apartment building in Brooklyn, New York,
containing eight residential units and has a recent appraised value
of $2.8 million.
PCD Loans (Held-for-Investment)
Under the CECL standard, the Company will
continue to account 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 ($13.1 million at
June 30, 2022 and $15.8 million at December 31, 2021) as
accruing, even though they may be contractually past due. At
June 30, 2022, 0.5% of PCD loans were past due 30 to 89 days,
and 24.7% were past due 90 days or more, as compared to 10.5% and
19.2%, respectively, at December 31, 2021.
Other
During the fourth quarter of 2021, the Bank
downgraded a lending relationship with an outstanding principal
balance at December 31, 2021, of approximately $15.6 million to
substandard, which is comprised of two commercial real estate loans
with balances of $10.9 million, and a commercial line of credit
secured by all unencumbered business assets with a balance of $4.7
million. All draws on the line are at the discretion of the Bank.
The Bank has received paydowns of approximately $3.8 million on the
commercial line of credit, reducing the outstanding balance to
approximately $913,000 as of June 30, 2022. At June 30, 2022, the
aggregate balances of the loans was $11.6 million.
The commercial real estate loans are secured by
two commercial properties with a current appraised value of $19.2
million. The lending relationship was downgraded as a result of
legal matters against certain officers of the borrowing entities,
including certain individuals who are guarantors to the loans, and
the impact such legal matters may have on future operations of the
entities.
All loans under the lending relationship are
current as of July 27, 2022, and the entities continue to operate.
The Bank continues to evaluate the financial condition, operating
results and cash flows of the related entities and guarantors. At
June 30, 2022, approximately $1.4 million of the allowance for
credit losses has been designated to this lending relationship.
Based on information available, the loans have not been designated
as impaired and remain on accrual status. However, there can be no
assurances that one or more of the loans under the relationship
will not migrate to non-accrual status in the future or require the
establishment of additional loan losses reserves.
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, 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
regulatory fees 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 |
|
Six Months Ended |
|
June 30, |
|
March 31, |
|
June 30, |
|
2022 |
|
2021 |
|
2022 |
|
2022 |
|
2021 |
Selected Financial
Ratios: |
|
|
|
|
|
|
|
|
|
Performance
Ratios (1) |
|
|
|
|
|
|
|
|
|
Return on assets (ratio of net income to average total assets) |
1.14 |
% |
|
1.44 |
% |
|
1.04 |
% |
|
1.09 |
% |
|
1.40 |
% |
Return on equity (ratio of net
income to average equity) (7) (8) |
8.92 |
|
|
10.53 |
|
|
7.83 |
|
|
8.37 |
|
|
10.28 |
|
Average equity to average total
assets |
12.81 |
|
|
13.64 |
|
|
13.34 |
|
|
13.07 |
|
|
13.60 |
|
Interest rate spread |
2.94 |
|
|
2.84 |
|
|
2.77 |
|
|
2.85 |
|
|
2.92 |
|
Net interest margin |
3.03 |
|
|
2.96 |
|
|
2.87 |
|
|
2.95 |
|
|
3.03 |
|
Efficiency ratio (2) |
45.81 |
|
|
45.57 |
|
|
48.49 |
|
|
47.11 |
|
|
45.63 |
|
Non-interest expense to average
total assets |
1.35 |
|
|
1.44 |
|
|
1.38 |
|
|
1.36 |
|
|
1.43 |
|
Non-interest expense to average
total interest-earning assets |
1.41 |
|
|
1.52 |
|
|
1.46 |
|
|
1.44 |
|
|
1.52 |
|
Average interest-earning assets
to average interest-bearing liabilities |
138.40 |
|
|
134.73 |
|
|
139.03 |
|
|
138.71 |
|
|
133.49 |
|
Asset Quality
Ratios: |
|
|
|
|
|
|
|
|
|
Non-performing assets to total
assets |
0.19 |
|
|
0.17 |
|
|
0.15 |
|
|
0.19 |
|
|
0.17 |
|
Non-performing loans (3) to
total loans (4) |
0.25 |
|
|
0.23 |
|
|
0.21 |
|
|
0.25 |
|
|
0.23 |
|
Allowance for credit losses to
non-performing loans |
372.65 |
|
|
446.00 |
|
|
481.24 |
|
|
372.65 |
|
|
446.00 |
|
Allowance for credit losses to
total loans held-for-investment, net (5) (6) (7) |
0.95 |
|
|
1.03 |
|
|
1.01 |
|
|
0.95 |
|
|
1.03 |
|
(1) Annualized when 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. (6) Excluding PPP loans (which are
fully government guaranteed and do not carry any provision for
losses) of $11.9 million, $24.3 million, and $132.7 million at June
30, 2022, March 31, 2022, and June 30, 2021, respectively, the
allowance for credit losses to total loans held for investment,
net, totaled 0.95%, 1.01%, and 1.07%, respectively, at June 30,
2022, March 31, 2022, and June 30, 2021.(7) The Company adopted the
CECL accounting standard effective January 1, 2021, and recorded a
$10.4 million increase to its allowance for credit losses,
including reserves of $6.8 million related to PCD loans. (8) For
the year ended December 31, 2021, in connection with the adoption
of CECL, the Company recognized a cumulative effect adjustment that
reduced stockholders’ equity by $3.1 million, net of tax.
NORTHFIELD BANCORP,
INC.CONSOLIDATED BALANCE SHEETS(Dollars in thousands,
except share and per share amounts) (unaudited)
|
June 30, 2022 |
|
March 31, 2022 |
|
December 31, 2021 |
ASSETS: |
|
|
|
|
|
Cash and due from banks |
$ |
17,241 |
|
|
$ |
16,053 |
|
|
$ |
18,191 |
|
Interest-bearing deposits in
other financial institutions |
|
92,991 |
|
|
|
119,461 |
|
|
|
72,877 |
|
Total cash and cash
equivalents |
|
110,232 |
|
|
|
135,514 |
|
|
|
91,068 |
|
Trading securities |
|
10,401 |
|
|
|
12,156 |
|
|
|
13,461 |
|
Debt securities
available-for-sale, at estimated fair value |
|
1,086,868 |
|
|
|
1,154,277 |
|
|
|
1,208,237 |
|
Debt securities
held-to-maturity, at amortized cost |
|
5,201 |
|
|
|
5,243 |
|
|
|
5,283 |
|
Equity securities |
|
7,821 |
|
|
|
7,883 |
|
|
|
5,342 |
|
Loans held-for-sale |
|
2,346 |
|
|
|
— |
|
|
|
— |
|
Loans held-for-investment,
net |
|
4,111,857 |
|
|
|
3,898,581 |
|
|
|
3,806,617 |
|
Allowance for credit losses |
|
(39,031 |
) |
|
|
(39,274 |
) |
|
|
(38,973 |
) |
Net loans
held-for-investment |
|
4,072,826 |
|
|
|
3,859,307 |
|
|
|
3,767,644 |
|
Accrued interest
receivable |
|
14,948 |
|
|
|
14,591 |
|
|
|
14,572 |
|
Bank-owned life insurance |
|
166,185 |
|
|
|
165,336 |
|
|
|
164,500 |
|
Federal Home Loan Bank of New
York stock, at cost |
|
19,942 |
|
|
|
21,211 |
|
|
|
22,336 |
|
Operating lease right-of-use
assets |
|
36,595 |
|
|
|
32,813 |
|
|
|
33,943 |
|
Premises and equipment,
net |
|
25,766 |
|
|
|
25,356 |
|
|
|
25,937 |
|
Goodwill |
|
41,012 |
|
|
|
41,012 |
|
|
|
41,012 |
|
Other assets |
|
47,008 |
|
|
|
41,591 |
|
|
|
37,207 |
|
Total
assets |
$ |
5,647,151 |
|
|
$ |
5,516,290 |
|
|
$ |
5,430,542 |
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY: |
|
|
|
|
|
LIABILITIES: |
|
|
|
|
|
Deposits |
$ |
4,418,002 |
|
|
$ |
4,302,866 |
|
|
$ |
4,169,334 |
|
Securities sold under
agreements to repurchase |
|
25,000 |
|
|
|
50,000 |
|
|
|
50,000 |
|
Federal Home Loan Bank
advances and other borrowings |
|
322,016 |
|
|
|
347,877 |
|
|
|
371,755 |
|
Subordinated debentures, net
of issuance costs |
|
60,917 |
|
|
|
— |
|
|
|
— |
|
Lease liabilities |
|
42,298 |
|
|
|
38,610 |
|
|
|
39,851 |
|
Advance payments by borrowers
for taxes and insurance |
|
29,458 |
|
|
|
30,032 |
|
|
|
24,909 |
|
Accrued expenses and other
liabilities |
|
34,187 |
|
|
|
31,507 |
|
|
|
34,810 |
|
Total
liabilities |
|
4,931,878 |
|
|
|
4,800,892 |
|
|
|
4,690,659 |
|
|
|
|
|
|
|
STOCKHOLDERS’
EQUITY: |
|
|
|
|
|
Total stockholders’
equity |
|
715,273 |
|
|
|
715,398 |
|
|
|
739,883 |
|
Total liabilities and
stockholders’ equity |
$ |
5,647,151 |
|
|
$ |
5,516,290 |
|
|
$ |
5,430,542 |
|
|
|
|
|
|
|
Total shares outstanding |
|
48,684,875 |
|
|
|
48,910,192 |
|
|
|
49,266,733 |
|
Tangible book value per share
(1) |
$ |
13.84 |
|
|
$ |
13.78 |
|
|
$ |
14.18 |
|
(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 $347,000, $387,000, and $440,000 at June 30, 2022, March
31, 2022, and December 31, 2021, respectively, and are
included in other assets.
NORTHFIELD BANCORP,
INC.CONSOLIDATED STATEMENT 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, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2022 |
|
|
|
2021 |
|
Interest
income: |
|
|
|
|
|
|
|
|
|
Loans |
$ |
38,998 |
|
|
$ |
39,699 |
|
|
$ |
36,721 |
|
|
$ |
75,719 |
|
|
$ |
80,976 |
|
Mortgage-backed securities |
|
3,043 |
|
|
|
2,682 |
|
|
|
2,475 |
|
|
|
5,518 |
|
|
|
5,641 |
|
Other securities |
|
989 |
|
|
|
484 |
|
|
|
695 |
|
|
|
1,684 |
|
|
|
908 |
|
Federal Home Loan Bank of New York dividends |
|
260 |
|
|
|
336 |
|
|
|
245 |
|
|
|
505 |
|
|
|
706 |
|
Deposits in other financial institutions |
|
166 |
|
|
|
35 |
|
|
|
58 |
|
|
|
224 |
|
|
|
72 |
|
Total interest income |
|
43,456 |
|
|
|
43,236 |
|
|
|
40,194 |
|
|
|
83,650 |
|
|
|
88,303 |
|
Interest
expense: |
|
|
|
|
|
|
|
|
|
Deposits |
|
1,334 |
|
|
|
1,671 |
|
|
|
1,159 |
|
|
|
2,493 |
|
|
|
3,541 |
|
Borrowings |
|
1,918 |
|
|
|
2,878 |
|
|
|
2,166 |
|
|
|
4,084 |
|
|
|
5,899 |
|
Subordinated debt |
|
119 |
|
|
|
— |
|
|
|
— |
|
|
|
119 |
|
|
|
— |
|
Total interest expense |
|
3,371 |
|
|
|
4,549 |
|
|
|
3,325 |
|
|
|
6,696 |
|
|
|
9,440 |
|
Net interest income |
|
40,085 |
|
|
|
38,687 |
|
|
|
36,869 |
|
|
|
76,954 |
|
|
|
78,863 |
|
Provision/(benefit) for credit
losses |
|
149 |
|
|
|
(3,701 |
) |
|
|
403 |
|
|
|
552 |
|
|
|
(6,075 |
) |
Net interest income after
provision/(benefit) for credit losses |
|
39,936 |
|
|
|
42,388 |
|
|
|
36,466 |
|
|
|
76,402 |
|
|
|
84,938 |
|
Non-interest
income: |
|
|
|
|
|
|
|
|
|
Fees and service charges for customer services |
|
1,375 |
|
|
|
1,327 |
|
|
|
1,331 |
|
|
|
2,706 |
|
|
|
2,524 |
|
Income on bank-owned life insurance |
|
848 |
|
|
|
857 |
|
|
|
839 |
|
|
|
1,687 |
|
|
|
1,705 |
|
(Losses)/gains on available-for-sale debt securities, net |
|
— |
|
|
|
509 |
|
|
|
264 |
|
|
|
264 |
|
|
|
606 |
|
(Losses)/gains on trading securities, net |
|
(1,563 |
) |
|
|
807 |
|
|
|
(802 |
) |
|
|
(2,365 |
) |
|
|
1,171 |
|
Gain on sale of loans |
|
— |
|
|
|
1,401 |
|
|
|
— |
|
|
|
— |
|
|
|
1,401 |
|
Other |
|
105 |
|
|
|
15 |
|
|
|
81 |
|
|
|
186 |
|
|
|
145 |
|
Total non-interest income |
|
765 |
|
|
|
4,916 |
|
|
|
1,713 |
|
|
|
2,478 |
|
|
|
7,552 |
|
Non-interest
expense: |
|
|
|
|
|
|
|
|
|
Compensation and employee benefits |
|
9,418 |
|
|
|
10,806 |
|
|
|
9,507 |
|
|
|
18,925 |
|
|
|
21,338 |
|
Occupancy |
|
3,286 |
|
|
|
3,500 |
|
|
|
3,408 |
|
|
|
6,694 |
|
|
|
7,201 |
|
Furniture and equipment |
|
426 |
|
|
|
442 |
|
|
|
426 |
|
|
|
852 |
|
|
|
879 |
|
Data processing |
|
1,762 |
|
|
|
1,798 |
|
|
|
1,713 |
|
|
|
3,475 |
|
|
|
3,430 |
|
Professional fees |
|
1,229 |
|
|
|
832 |
|
|
|
908 |
|
|
|
2,137 |
|
|
|
1,738 |
|
Advertising |
|
404 |
|
|
|
684 |
|
|
|
433 |
|
|
|
837 |
|
|
|
1,149 |
|
Federal Deposit Insurance Corporation insurance |
|
355 |
|
|
|
346 |
|
|
|
357 |
|
|
|
712 |
|
|
|
721 |
|
Other |
|
1,833 |
|
|
|
1,463 |
|
|
|
1,957 |
|
|
|
3,790 |
|
|
|
2,978 |
|
Total non-interest
expense |
|
18,713 |
|
|
|
19,871 |
|
|
|
18,709 |
|
|
|
37,422 |
|
|
|
39,434 |
|
Income before income tax
expense |
|
21,988 |
|
|
|
27,433 |
|
|
|
19,470 |
|
|
|
41,458 |
|
|
|
53,056 |
|
Income tax
expense |
|
6,114 |
|
|
|
7,639 |
|
|
|
5,343 |
|
|
|
11,457 |
|
|
|
14,585 |
|
Net
income |
$ |
15,874 |
|
|
$ |
19,794 |
|
|
$ |
14,127 |
|
|
$ |
30,001 |
|
|
$ |
38,471 |
|
Net income per common
share: |
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.34 |
|
|
$ |
0.40 |
|
|
$ |
0.30 |
|
|
$ |
0.64 |
|
|
$ |
0.78 |
|
Diluted |
$ |
0.34 |
|
|
$ |
0.40 |
|
|
$ |
0.30 |
|
|
$ |
0.64 |
|
|
$ |
0.78 |
|
Basic average shares outstanding |
|
46,591,723 |
|
|
|
48,907,585 |
|
|
|
46,811,331 |
|
|
|
46,708,716 |
|
|
|
49,216,157 |
|
Diluted average shares outstanding |
|
46,638,113 |
|
|
|
49,307,661 |
|
|
|
47,088,375 |
|
|
|
46,870,433 |
|
|
|
49,468,808 |
|
NORTHFIELD BANCORP, INC.ANALYSIS
OF NET INTEREST INCOME(Dollars in thousands) (unaudited)
|
For the Three Months Ended |
|
June 30, 2022 |
|
March 31, 2022 |
|
June 30, 2021 |
|
Average OutstandingBalance |
|
Interest |
|
AverageYield/ Rate (1) |
|
AverageOutstandingBalance |
|
Interest |
|
AverageYield/Rate (1) |
|
AverageOutstandingBalance |
|
Interest |
|
AverageYield/Rate (1) |
Interest-earning
assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans (2) |
$ |
3,992,731 |
|
$ |
38,998 |
|
3.92 |
% |
|
$ |
3,848,053 |
|
$ |
36,721 |
|
3.87 |
% |
|
$ |
3,948,136 |
|
$ |
39,699 |
|
4.03 |
% |
Mortgage-backed securities (3) |
|
899,479 |
|
|
3,043 |
|
1.36 |
|
|
|
938,465 |
|
|
2,475 |
|
1.07 |
|
|
|
967,526 |
|
|
2,682 |
|
1.11 |
|
Other securities (3) |
|
297,859 |
|
|
989 |
|
1.33 |
|
|
|
255,980 |
|
|
695 |
|
1.10 |
|
|
|
141,475 |
|
|
484 |
|
1.37 |
|
Federal Home Loan Bank of New York stock |
|
20,689 |
|
|
260 |
|
5.04 |
|
|
|
22,198 |
|
|
245 |
|
4.48 |
|
|
|
27,703 |
|
|
336 |
|
4.86 |
|
Interest-earning deposits in financial institutions |
|
94,689 |
|
|
166 |
|
0.70 |
|
|
|
143,323 |
|
|
58 |
|
0.16 |
|
|
|
150,494 |
|
|
35 |
|
0.09 |
|
Total interest-earning assets |
|
5,305,447 |
|
|
43,456 |
|
3.29 |
|
|
|
5,208,019 |
|
|
40,194 |
|
3.13 |
|
|
|
5,235,334 |
|
|
43,236 |
|
3.31 |
|
Non-interest-earning
assets |
|
266,303 |
|
|
|
|
|
|
279,508 |
|
|
|
|
|
|
295,768 |
|
|
|
|
Total assets |
$ |
5,571,750 |
|
|
|
|
|
$ |
5,487,527 |
|
|
|
|
|
$ |
5,531,102 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings, NOW, and money market accounts |
$ |
3,007,929 |
|
|
599 |
|
0.08 |
% |
|
$ |
2,954,133 |
|
$ |
571 |
|
0.08 |
% |
|
$ |
2,754,346 |
|
$ |
845 |
|
0.12 |
% |
Certificates of deposit |
|
438,835 |
|
|
735 |
|
0.67 |
|
|
|
373,113 |
|
|
588 |
|
0.64 |
|
|
|
574,899 |
|
|
826 |
|
0.58 |
|
Total interest-bearing deposits |
|
3,446,764 |
|
|
1,334 |
|
0.16 |
|
|
|
3,327,246 |
|
|
1,159 |
|
0.14 |
|
|
|
3,329,245 |
|
|
1,671 |
|
0.20 |
|
Borrowed funds |
|
377,044 |
|
|
1,918 |
|
2.04 |
|
|
|
418,736 |
|
|
2,166 |
|
2.10 |
|
|
|
556,682 |
|
|
2,878 |
|
2.07 |
|
Subordinated debt |
|
9,527 |
|
|
119 |
|
5.01 |
|
|
|
— |
|
|
— |
|
— |
|
|
|
— |
|
|
— |
|
— |
|
Total interest-bearing liabilities |
|
3,833,335 |
|
|
3,371 |
|
0.35 |
|
|
|
3,745,982 |
|
|
3,325 |
|
0.36 |
|
|
|
3,885,927 |
|
|
4,549 |
|
0.47 |
|
Non-interest bearing
deposits |
|
918,980 |
|
|
|
|
|
|
909,787 |
|
|
|
|
|
|
795,613 |
|
|
|
|
Accrued expenses and other
liabilities |
|
105,525 |
|
|
|
|
|
|
99,802 |
|
|
|
|
|
|
95,274 |
|
|
|
|
Total liabilities |
|
4,857,840 |
|
|
|
|
|
|
4,755,571 |
|
|
|
|
|
|
4,776,814 |
|
|
|
|
Stockholders' equity |
|
713,910 |
|
|
|
|
|
|
731,956 |
|
|
|
|
|
|
754,288 |
|
|
|
|
Total liabilities and stockholders' equity |
$ |
5,571,750 |
|
|
|
|
|
$ |
5,487,527 |
|
|
|
|
|
$ |
5,531,102 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
|
$ |
40,085 |
|
|
|
|
|
$ |
36,869 |
|
|
|
|
|
$ |
38,687 |
|
|
Net interest rate spread
(4) |
|
|
|
|
2.94 |
% |
|
|
|
|
|
2.77 |
% |
|
|
|
|
|
2.84 |
% |
Net interest-earning assets
(5) |
$ |
1,472,112 |
|
|
|
|
|
$ |
1,462,037 |
|
|
|
|
|
$ |
1,349,407 |
|
|
|
|
Net interest margin (6) |
|
|
|
|
3.03 |
% |
|
|
|
|
|
2.87 |
% |
|
|
|
|
|
2.96 |
% |
Average interest-earning
assets to interest-bearing liabilities |
|
|
|
|
138.40 |
% |
|
|
|
|
|
139.03 |
% |
|
|
|
|
|
134.73 |
% |
(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, 2022 |
|
June 30, 2021 |
|
AverageOutstandingBalance |
|
Interest |
|
AverageYield/Rate (1) |
|
AverageOutstandingBalance |
|
Interest |
|
AverageYield/Rate (1) |
Interest-earning
assets: |
|
|
|
|
|
|
|
|
|
|
|
Loans (2) |
$ |
3,920,792 |
|
$ |
75,719 |
|
3.89 |
% |
|
$ |
3,911,215 |
|
$ |
80,976 |
|
4.18 |
% |
Mortgage-backed securities (3) |
|
918,864 |
|
|
5,518 |
|
1.21 |
|
|
|
1,041,493 |
|
|
5,641 |
|
1.09 |
|
Other securities (3) |
|
277,035 |
|
|
1,684 |
|
1.23 |
|
|
|
121,609 |
|
|
908 |
|
1.51 |
|
Federal Home Loan Bank of New York stock |
|
21,440 |
|
|
505 |
|
4.75 |
|
|
|
28,169 |
|
|
706 |
|
5.05 |
|
Interest-earning deposits in financial institutions |
|
118,872 |
|
|
224 |
|
0.38 |
|
|
|
141,899 |
|
|
72 |
|
0.10 |
|
Total interest-earning assets |
|
5,257,003 |
|
|
83,650 |
|
3.21 |
|
|
|
5,244,385 |
|
|
88,303 |
|
3.40 |
|
Non-interest-earning
assets |
|
272,869 |
|
|
|
|
|
|
303,183 |
|
|
|
|
Total assets |
$ |
5,529,872 |
|
|
|
|
|
$ |
5,547,568 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
liabilities: |
|
|
|
|
|
|
|
|
|
|
|
Savings, NOW, and money market accounts |
$ |
2,981,180 |
|
$ |
1,170 |
|
0.08 |
% |
|
$ |
2,761,541 |
|
$ |
1,777 |
|
0.13 |
% |
Certificates of deposit |
|
406,156 |
|
|
1,323 |
|
0.66 |
|
|
|
592,983 |
|
|
1,764 |
|
0.60 |
|
Total interest-bearing deposits |
|
3,387,336 |
|
|
2,493 |
|
0.15 |
|
|
|
3,354,524 |
|
|
3,541 |
|
0.21 |
|
Borrowed funds |
|
397,775 |
|
|
4,084 |
|
2.07 |
|
|
|
574,240 |
|
|
5,899 |
|
2.07 |
|
Subordinated debt |
|
4,790 |
|
|
119 |
|
5.01 |
|
|
|
— |
|
|
— |
|
— |
|
Total interest-bearing liabilities |
$ |
3,789,901 |
|
|
6,696 |
|
0.36 |
|
|
$ |
3,928,764 |
|
|
9,440 |
|
0.48 |
|
Non-interest bearing
deposits |
|
914,409 |
|
|
|
|
|
|
767,495 |
|
|
|
|
Accrued expenses and other
liabilities |
|
102,679 |
|
|
|
|
|
|
96,759 |
|
|
|
|
Total liabilities |
|
4,806,989 |
|
|
|
|
|
|
4,793,018 |
|
|
|
|
Stockholders' equity |
|
722,883 |
|
|
|
|
|
|
754,550 |
|
|
|
|
Total liabilities and stockholders' equity |
$ |
5,529,872 |
|
|
|
|
|
$ |
5,547,568 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
|
$ |
76,954 |
|
|
|
|
|
$ |
78,863 |
|
|
Net interest rate spread
(4) |
|
|
|
|
2.85 |
% |
|
|
|
|
|
2.92 |
% |
Net interest-earning assets
(5) |
$ |
1,467,102 |
|
|
|
|
|
$ |
1,315,621 |
|
|
|
|
Net interest margin (6) |
|
|
|
|
2.95 |
% |
|
|
|
|
|
3.03 |
% |
Average interest-earning
assets to interest-bearing liabilities |
|
|
|
|
138.71 |
% |
|
|
|
|
|
133.49 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
(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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