NORTHFIELD BANCORP, INC. (Nasdaq:NFBK), the
holding company for Northfield Bank, reported net income of $14.1
million, or $0.31, per diluted share for the quarter ended
December 31, 2022, as compared to $17.0 million, or $0.37, per
diluted share for the quarter ended September 30, 2022, and
$16.1 million, or $0.34 per diluted share for the quarter ended
December 31, 2021. For the year ended December 31, 2022,
net income totaled $61.1 million, or $1.32 per diluted share,
compared to $70.7 million, or $1.45 per diluted share, for the year
ended December 31, 2021. The decrease in net income for the
quarter ended December 31, 2022, as compared to the trailing
quarter, was primarily due to a decrease in net interest income,
attributable to increased interest expense and lower loan
prepayment income. The decrease in net income for the quarter ended
December 31, 2022, as compared to the quarter ended December 31,
2021, was primarily due to an increase in the provision for credit
losses on loans, a decrease in PPP fee income, and a decrease in
non-interest income. The decrease in net income for the year ended
December 31, 2022, as compared to the prior year was primarily
due to a benefit for credit losses on loans in the prior year of
$6.2 million, compared to a provision for credit losses on loans in
the current year of $4.5 million.
Commenting on the quarter and year, Steven M.
Klein, the Company’s Chairman, President and Chief Executive
Officer stated, “Throughout 2022, we executed on our strategic plan
to deploy our strong capital base through prudent loan growth and
diversification, building core deposits focused on low cost
transaction accounts, and stock repurchases. In the fourth quarter,
earnings were affected, in part, by lower loan prepayment income
and increased costs on interest-bearing liabilities due to higher
market interest rates.” Mr. Klein continued, “We remain committed
to serving our communities and deploying our capital prudently in
an environment of rising interest rates and economic
uncertainty.”
Mr. Klein also stated, “I’m pleased to announce
that we have enhanced our non-sufficient funds program for consumer
checking accounts that, among other things, eliminates fees for
unpaid returned items. Enhancements to our non-sufficient funds
program is effective February 1, 2023, and complements our Bank On
Certified Convenience Checking Account, which provides access to a
safe and affordable critical banking service.”
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 22, 2023, to
stockholders of record on February 8, 2023.”
Results of Operations
Comparison of Operating Results for the Years
Ended December 31, 2022 and 2021
Net income was $61.1 million and $70.7 million
for the years ended December 31, 2022 and December 31,
2021, respectively. Significant variances from the prior year are
as follows: a $2.7 million increase in net interest income, a $10.7
million increase in the provision for credit losses on loans, a
$6.5 million decrease in non-interest income, a $2.2 million
decrease in non-interest expense, and a $2.7 million decrease in
income tax expense.
Net interest income for the year ended
December 31, 2022, increased $2.7 million, or 1.7%, to $158.3
million, from $155.6 million for the year ended December 31,
2021, primarily due to a $155.3 million, or 3.0%, increase in
average interest-earning assets, partially offset by a four basis
point decrease in net interest margin to 2.97% from 3.01%. The
increase in average interest-earning assets was primarily due to
increases in average loans outstanding of $214.9 million, and
average other securities of $133.9 million. The increases were
partially offset by decreases in average mortgage-backed securities
of $111.6 million, average Federal Home Loan Bank of New York
(“FHLBNY”) stock of $2.9 million, and average interest-earning
deposits in financial institutions of $79.1 million. Partially
offsetting the increase in net interest income was a $4.3 million
reduction in fees related to the forgiveness of PPP loans for the
year ended December 31, 2022, as compared to the year ended
December 31, 2021.
The decrease in net interest margin was
primarily due to the cost of interest-bearing liabilities
increasing faster than the repricing of interest-earning assets.
The cost of interest-bearing liabilities increased by 11 basis
points to 0.55% for the year ended December 31, 2022, from
0.44% for the year ended December 31, 2021, driven by both
higher cost of deposits and borrowed funds, reflective of the
rising rate environment. The increase in the cost of borrowings was
also due in part to the issuance of $60.9 million of subordinated
notes (net of issuance costs) in June 2022. The increase in the
cost of interest-bearing liabilities was partially offset by an
increase in yields on interest-earning assets which increased four
basis points to 3.37% for the year ended December 31, 2022,
from 3.33% for the year ended December 31, 2021. The Company
accreted interest income related to PCD loans of $1.5 million for
the year ended December 31, 2022, as compared to $3.7 million
for the year ended December 31, 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 $1.3 million for the year ended
December 31, 2022, as compared to $5.6 million for the year
ended December 31, 2021. Net interest income for the year
ended December 31, 2022, included loan prepayment income of
$4.5 million as compared to $5.1 million for the year ended
December 31, 2021.
The provision for credit losses on loans
increased by $10.7 million to a provision of $4.5 million for the
year ended December 31, 2022, compared to a benefit of $6.2
million for the year ended December 31, 2021. The prior year
benefit for credit losses was primarily due to the improvement in
the economic forecast as a result of the post-pandemic recovery and
an improvement in asset quality. The current year provision for
credit losses is primarily due to loan growth and a declining
macroeconomic forecast, partially offset by an improvement in asset
quality and lower net charge-offs. At December 31, 2022, management
qualitatively adjusted the economic forecast to account for
uncertainty inherent in the third-party economic forecast scenarios
utilized. Net charge-offs were $838,000 for the year ended
December 31, 2022, as compared to net charge-offs of $2.8
million for the year ended December 31, 2021, which related to
PCD loans. Partially offsetting the increase in the provision for
credit losses on loans was a decrease in the provision for unfunded
commitments of $1.4 million attributable to a decrease in the
pipeline of loans approved and awaiting closing, which is a
component of other non-interest expense.
Non-interest income decreased $6.5 million, or
44.8%, to $8.0 million for the year ended December 31, 2022,
from $14.5 million for the year ended December 31, 2021, due
primarily to a decrease of $3.9 million in gains on trading
securities, net, a $948,000 decrease in gains on sales of loans, a
$689,000 decrease in income on bank-owned life insurance
attributable to fewer policies in 2022, and a $1.2 million decrease
in net realized gains on available-for-sale debt securities. For
the year ended December 31, 2022, losses on trading securities
were $2.2 million, as compared to gains of $1.7 million for the
year ended December 31, 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 was 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, as compared to a
$453,000 gain realized on the sale of five SBA loans totaling
approximately $5.8 million in 2022. Partially offsetting the
decreases was an increase of $311,000 in fees and service charges
for customer services.
Non-interest expense decreased $2.2 million, or
2.8%, to $76.9 million for the year ended December 31, 2022,
compared to $79.2 million for the year ended December 31,
2021. The decrease was primarily due to a $1.7 million decrease in
employee compensation and benefits, a $1.4 million decrease in
credit loss expense for off-balance sheet credit exposures, and a
$715,000 decrease in occupancy expense. The decrease in employee
compensation and benefits was due to a $3.9 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 in
the first quarter of 2022. The decrease in credit loss expense for
off-balance sheet credit exposures was due to a benefit of $1.1
million recorded in the year ended December 31, 2022, compared
to a provision of $307,000 for the prior year, attributed to a
decrease in the pipeline of loans approved and awaiting closing.
The decrease in occupancy expense was primarily related to lower
property maintenance costs and depreciation expense. Partially
offsetting the decreases were increases in data processing costs of
$631,000, attributable to increased customer accounts and a higher
number of transactions, professional fees of $250,000, related to
higher recruitment, consulting and outsourcing fees, and other
expense of $871,000, primarily related to higher charitable
contributions and other operating expenses.
The Company recorded income tax expense of $23.7
million for the year ended December 31, 2022, compared to
$26.5 million for the year ended December 31, 2021, with the
decrease due to lower taxable income. The effective tax rate for
the year ended December 31, 2022, was 28.0%, compared to 27.3%
for the year ended December 31, 2021.
Comparison of Operating Results for the Three
Months Ended December 31, 2022 and 2021
Net income was $14.1 million and $16.1 million
for the quarters ended December 31, 2022, and
December 31, 2021, respectively. Significant variances from
the comparable prior year quarter are as follows: a
$972,000 increase in net interest income, a $1.2 million
increase in the provision for credit losses on loans, a $1.1
million decrease in non-interest income, a $966,000 increase
in non-interest expense, and a $272,000 decrease in income tax
expense.
Net interest income for the quarter ended
December 31, 2022, increased $972,000, or 2.5%, primarily due
to an increase in average interest-earning assets of $269.7
million, or 5.3%, partially offset by a seven basis point decrease
in net interest margin to 2.89% from 2.96% for the quarter ended
December 31, 2021. The increase in the average balance of
interest-earning assets was primarily due to increases in the
average balance of loans outstanding of $437.1 million, the average
balance of other securities of $90.0 million, and the average
balance of FHLBNY stock of $2.3 million, partially offset by
decreases in the average balance of mortgage-backed securities of
$111.2 million and the average balance of interest-earning deposits
in financial institutions of $148.4 million. Partially offsetting
the increase in net interest income was a $1.1 million reduction in
fees related to the forgiveness of PPP loans and a $1.7 million
reduction in loan prepayment income in the current quarter as
compared to the quarter ended December 31, 2021.
The decrease in net interest margin was
primarily due to the cost of interest-bearing liabilities
increasing faster than the repricing of interest-earning assets.
The cost of interest-bearing liabilities increased by 58 basis
points to 0.95% for the quarter ended December 31, 2022, from
0.37% for the quarter ended December 31, 2021, driven by an
increase in the costs of deposits and borrowed funds, reflecting
the rising rate environment, and the issuance of $60.9 million of
subordinated notes (net of issuance costs) in June 2022. Partially
offsetting the increase in the cost of interest-bearing liabilities
was an increase in yields on interest-earning assets which
increased by 35 basis points to 3.58% for the quarter ended
December 31, 2022, from 3.23% for the quarter ended
December 31, 2021. Net interest income for the quarter ended
December 31, 2022, included loan prepayment income of
$287,000, as compared to $2.0 million for the quarter ended
December 31, 2021. The Company accreted interest income
related to PCD loans of $355,000 for the quarter ended
December 31, 2022, as compared to $324,000 for quarter ended
December 31, 2021. Fees recognized from PPP loans totaled
$152,000 for the quarter ended December 31, 2022, as compared
to $1.3 million for the quarter ended December 31, 2021.
The provision for credit losses on loans
increased by $1.2 million to a provision of $1.2 million for the
quarter ended December 31, 2022, from a provision of $39,000
for the quarter ended December 31, 2021. The increase in the
provision for credit losses for the current quarter, as compared to
the comparable prior year quarter, was primarily the result of loan
growth, a declining macroeconomic outlook and higher net
charge-offs, partially offset by an improvement in asset quality.
At December 31, 2022, management qualitatively adjusted the
economic forecast to account for uncertainty inherent in the third
party economic forecast scenarios utilized. Net charge-offs were
$493,000 for the quarter ended December 31, 2022, compared to
net recoveries of $73,000 for the quarter ended December 31,
2021.
Non-interest income decreased by $1.1 million,
or 24.7%, to $3.2 million for the quarter ended December 31,
2022, from $4.3 million for the quarter ended December 31,
2021, primarily due to a $670,000 decrease in income on bank-owned
life insurance, attributable to fewer policies in the current year,
and a $504,000 decrease in net realized gains on available-for-sale
debt securities. Partially offsetting these decreases was an
increase in gains on sales of loans of $180,000.
Non-interest expense increased by $966,000, or
4.7%, to $21.7 million for the quarter ended December 31,
2022, from $20.7 million for the quarter ended December 31,
2021. The increase was due primarily to a $247,000 increase in
compensation and employee benefits, a $277,000 increase in data
processing costs, a $269,000 increase in advertising expense due to
the timing of certain campaigns, and a $420,000 increase in credit
loss expense for off-balance sheet credit exposures. The increase
in compensation and employee benefits expense was attributable to
increases in salary expense due to annual merit increases and an
increase in equity award expense related to new awards issued in
the first quarter of 2022, partially offset by lower medical
benefit expense. The increase in data processing expense is
attributable to increased customer accounts and a higher number of
transactions. The increase in credit loss expense for off-balance
sheet credit exposures was primarily due to a provision of $199,000
recorded for the quarter ended December 31, 2022, compared to a
benefit of $221,000 recorded for the comparable prior year quarter.
The increases were partially offset by a decrease of $226,000 in
professional fees.
The Company recorded income tax expense of $5.5
million for the quarter ended December 31, 2022, compared to
$5.8 million for the quarter ended December 31, 2021, with the
decrease due to lower taxable income. The effective tax rate for
the quarter ended December 31, 2022, was 28.1% compared to
26.5% for quarter ended December 31, 2021.
Comparison of Operating Results for the Three
Months Ended December 31, 2022 and September 30, 2022
Net income was $14.1 million and $17.0 million
for the quarters ended December 31, 2022, and
September 30, 2022, respectively. Significant variances from
the prior quarter are as follows: a $2.7 million decrease in net
interest income, a $1.5 million decrease in the provision for
credit losses on loans, a $933,000 increase in non-interest income,
a $3.8 million increase in non-interest expense, and a $1.2
million decrease in income tax expense.
Net interest income for the quarter ended
December 31, 2022, decreased by $2.7 million, or 6.4%,
primarily due to a 19 basis point decrease in net interest margin
to 2.89% from 3.08% for the quarter ended September 30, 2022,
and a $13.0 million, or 0.2%, decrease in the average balance of
interest-earning assets. The decrease in the average balance of
interest-earning assets was primarily due to decreases in the
average balance of mortgage-backed securities of $48.3 million and
the average balance of other securities of $2.4 million. The
decreases were partially offset by increases in the average balance
of loans outstanding of $33.1 million, the average balance of
FHLBNY stock of $2.0 million, and the average balance of
interest-earning deposits in financial institutions of $2.6
million. Net interest income was impacted by lower loan prepayment
income of $1.3 million in the current quarter as compared to the
trailing quarter.
The decrease in net interest margin was
primarily due to the increase in the cost of interest-bearing
liabilities outpacing the increase in yields on interest-earning
assets. The cost of interest-bearing liabilities increased by 42
basis point to 0.95% for the quarter ended December 31, 2022,
from 0.53% for the quarter ended September 30, 2022, driven by
both higher cost of deposits and borrowed funds, reflective of the
rising rate environment, and was partially offset by higher yields
on interest-earning assets, which increased by 12 basis points to
3.58% for the quarter ended December 31, 2022, from 3.46% for
the quarter ended September 30, 2022. Net interest income for
the quarter ended December 31, 2022, included loan prepayment
income of $287,000 as compared to $1.6 million for the quarter
ended September 30, 2022. The Company accreted interest income
related to PCD loans of $355,000 for the quarter ended
December 31, 2022, as compared to $368,000 for the quarter
ended September 30, 2022. Fees recognized from PPP loans
totaled $152,000 and $144,000 respectively, for the quarters ended
December 31, 2022, and September 30, 2022.
The provision for credit losses on loans
decreased by $1.5 million to a provision of $1.2 million for the
quarter ended December 31, 2022, from a provision of $2.7
million for the quarter ended September 30, 2022. The decrease
in the provision was primarily due to slower loan growth, partially
offset by a declining macroeconomic outlook and higher net
charge-offs. Net charge-offs were $493,000 for the quarter ended
December 31, 2022, as compared to net recoveries of $149,000
for the quarter ended September 30, 2022.
Non-interest income increased by $933,000, or
40.8%, to $3.2 million for the quarter ended December 31,
2022, from $2.3 million for the quarter ended September 30,
2022. The increase was primarily due to a $1.0 million increase in
gains on trading securities, net. For the quarter ended
December 31, 2022, gains on trading securities, net, were
$585,000 compared to losses of $426,000 for the quarter ended
September 30, 2022.
Non-interest expense increased by $3.8 million,
or 21.2%, to $21.7 million for the quarter ended December 31,
2022, from $17.9 million for the quarter ended September 30,
2022. The increase was primarily due to a $1.5 million increase in
compensation and employee benefits, a $2.1 million increase in
credit loss expense for off-balance sheet credit exposures, and a
$482,000 increase in advertising expense attributable to the timing
of certain campaigns. The increase in compensation and employee
benefits was primarily due to a $1.0 million increase in the mark
to market of the Company's deferred compensation plan expense which
as previously discussed has no impact on net income, and higher
salary expense. The increase in credit loss expense for off-balance
sheet credit exposures was due to a provision of $199,000 recorded
for the quarter ended December 31, 2022, compared to a benefit
of $1.9 million recorded for the quarter ended September 30,
2022, the benefit in the trailing quarter being attributable to a
decrease in the pipeline of loans approved and awaiting closing.
Partially offsetting the increases, was a decrease in other
operating expense of $238,000.
The Company recorded income tax expense of $5.5
million for the quarter ended December 31, 2022, compared to
$6.7 million for the quarter ended September 30,
2022. The effective tax rate for the quarter ended
December 31, 2022, was 28.1% compared to 28.4% for the quarter
ended September 30, 2022.
Financial Condition
Total assets increased $170.8 million, or 3.1%,
to $5.60 billion at December 31, 2022, from $5.43 billion at
December 31, 2021. The increase was primarily due to increases
in total loans of $437.1 million, or 11.5%, other assets of $17.2
million, or 46.3%, and FHLBNY stock of $8.0 million, or 36.0%,
partially offset by decreases in available-for sale debt securities
of $256.1 million, or 21.2%, and cash and cash equivalents of $45.3
million, or 49.7%.
As of December 31, 2022, we estimate that
our non-owner occupied commercial real estate concentration (as
defined by regulatory guidance) to total risk-based capital was
approximately 455.8%. 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 decreased by $45.3
million, or 49.7%, to $45.8 million at December 31, 2022, from
$91.1 million at December 31, 2021. The decrease was due to a
decrease in deposits, as well as an increase in net loans
held-for-investment. 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 receivable increased by $437.1 million to
$4.24 billion at December 31, 2022, from $3.81 billion at
December 31, 2021. The overall increase was due to strong loan
originations. Multifamily loans increased $306.5 million, or 12.2%,
to $2.82 billion at December 31, 2022 from $2.52 billion at
December 31, 2021, commercial real estate loans increased
$90.7 million, or 11.2%, to $899.2 million at December 31,
2022 from $808.6 million at December 31, 2021, home equity
loans increased $42.6 million, or 38.7%, to $152.6 million at
December 31, 2022 from $110.0 million at December 31, 2021,
and commercial and industrial loans (excluding PPP loans) increased
$49.1 million, or 48.8%, to $149.6 million at December 31,
2022 from $100.5 million at December 31, 2021. The increases
were partially offset by decreases in one-to-four family
residential loans of $9.7 million, or 5.3%, to $173.9 million at
December 31, 2022 from $183.7 million at December 31,
2021, construction and land loans of $2.6 million, or 9.3%, to
$24.9 million at December 31, 2022 from $27.5 million at
December 31, 2021, and PPP loans of $35.4 million, or 87.3%,
to $5.1 million at December 31, 2022 from $40.5 million at
December 31, 2021. Through December 31, 2022, 2,322
borrowers have received PPP forgiveness payments totaling
approximately $225.4 million.
PCD loans totaled $11.5 million at
December 31, 2022, and $15.8 million at December 31,
2021. The decrease in the PCD loan balance at December 31,
2022 was due to PCD loans being sold and paid off during the year.
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 $355,000 and $1.5 million attributable to PCD loans
for the quarter and year ended December 31, 2022,
respectively, as compared to $324,000 and $3.7 million for the
quarter and year ended December 31, 2021, respectively. The
decrease in income accreted for the year ended December 31,
2022, was due to the payoff of PCD loans in the prior year. PCD
loans had an allowance for credit losses of approximately $3.9
million and $4.7 million, respectively, at December 31, 2022
and December 31, 2021.
Loan balances are summarized as follows (dollars
in thousands):
|
|
December 31, 2022 |
|
September 30, 2022 |
|
December 31, 2021 |
Real estate loans: |
|
|
|
|
|
|
Multifamily |
|
$ |
2,824,579 |
|
$ |
2,856,322 |
|
$ |
2,518,065 |
Commercial mortgage |
|
|
899,249 |
|
|
889,390 |
|
|
808,597 |
One-to-four family residential mortgage |
|
|
173,946 |
|
|
176,251 |
|
|
183,665 |
Home equity and lines of credit |
|
|
152,555 |
|
|
146,546 |
|
|
109,956 |
Construction and land |
|
|
24,932 |
|
|
21,668 |
|
|
27,495 |
Total real estate loans |
|
|
4,075,261 |
|
|
4,090,177 |
|
|
3,647,778 |
Commercial and industrial
loans |
|
|
149,557 |
|
|
136,366 |
|
|
100,488 |
PPP loans |
|
|
5,143 |
|
|
5,507 |
|
|
40,517 |
Other loans |
|
|
2,230 |
|
|
2,158 |
|
|
2,015 |
Total commercial and industrial, PPP, and other loans |
|
|
156,930 |
|
|
144,031 |
|
|
143,020 |
Loans held-for-investment, net (excluding PCD) |
|
|
4,232,191 |
|
|
4,234,208 |
|
|
3,790,798 |
PCD loans |
|
|
11,502 |
|
|
11,973 |
|
|
15,819 |
Total loans held-for-investment, net |
|
$ |
4,243,693 |
|
$ |
4,246,181 |
|
$ |
3,806,617 |
The following tables detail multifamily real
estate originations for the years ended December 31, 2022 and
2021 (dollars in thousands):
For the Year Ended December 31, 2022 |
Multifamily Originations |
|
Weighted Average Interest Rate |
|
Weighted Average LTV Ratio |
|
Weighted Average Months to Next Rate Change or Maturity for
Fixed Rate Loans |
|
(F)ixed or (V)ariable |
|
Amortization Term |
$ |
645,827 |
|
3.67 |
% |
|
57 |
% |
|
75 |
|
V |
|
25 to 30 Years |
|
1,200 |
|
3.75 |
% |
|
18 |
% |
|
181 |
|
F |
|
15 Years |
$ |
647,027 |
|
3.67 |
% |
|
57 |
% |
|
|
|
|
|
|
For the Year Ended December 31, 2021 |
Multifamily Originations |
|
Weighted Average Interest Rate |
|
Weighted Average LTV Ratio |
|
Weighted Average Months to Next Rate Change or Maturity for
Fixed Rate Loans |
|
(F)ixed or (V)ariable |
|
Amortization Term |
$ |
744,565 |
|
3.14 |
% |
|
62 |
% |
|
76 |
|
V |
|
10 to 30 Years |
Included within the tables above were $5.3
million and $200.1 million of multifamily loans originated in the
quarters ended December 31, 2022 and December 31, 2021,
respectively, at a weighted average rate of 5.60% and 3.16%,
respectively.
The following table details loan pools purchased
during the year ended December 31, 2022 (dollars in
thousands):
For the Year Ended December 31, 2022 |
Purchase Amount |
|
Loan Type |
|
Weighted Average Interest
Rate(1) |
|
Weighted Average Loan-to-Value Ratio |
|
Weighted Average Months to Next Rate Change or Maturity for
Fixed 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 |
|
2,487 |
|
Residential |
|
5.68 |
% |
|
79 |
% |
|
358 |
|
F |
|
30 Years |
$ |
10,183 |
|
|
|
3.63 |
% |
|
63 |
% |
|
|
|
|
|
|
(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: 76.1% in New York and 23.9% in New Jersey.
The Company’s available-for-sale debt securities
portfolio decreased by $256.1 million, or 21.2%, to $952.2 million
at December 31, 2022, from $1.21 billion at December 31,
2021. The decrease was primarily attributable to paydowns,
maturities, calls, and sales, as well as a $70.2 million increase
in net unrealized losses due to an increase in market interest
rates. At December 31, 2022, $697.3 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 $182.7 million in corporate bonds, all of which
were considered investment grade at December 31, 2022, $72.1
million in U.S. Government agency securities, and $21,000 in
municipal bonds.
Equity securities increased by $5.1 million to
$10.4 million at December 31, 2022, from $5.3 million at
December 31, 2021, primarily 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 $209.2 million, or
4.5%, to $4.90 billion at December 31, 2022, from $4.69
billion at December 31, 2021. The increase was primarily
attributable to an increase in FHLB advances and other borrowings
of $187.1 million, the issuance of subordinated debt, net of
issuance costs, of $60.9 million, an increase in advance payments
by borrowers for taxes and insurance of $1.1 million and an
increase in accrued expenses and other liabilities of $4.2 million.
The increases were partially offset by decreases in deposits of
$19.1 million and securities sold under agreements to repurchase of
$25,000.
Deposits decreased $19.1 million, or 0.46%, to
$4.15 billion at December 31, 2022, as compared to $4.17
billion at December 31, 2021. The decrease was attributable to
decreases of $25.8 million in transaction accounts, $249.6 million
in savings accounts, and $101.4 million in money market accounts,
partially offset by an increase of $357.7 million in certificates
of deposit, primarily brokered deposits. The decrease in deposits
is the result of competitive pricing pressures as market rates
continue to increase.
Deposit account balances are summarized as
follows (dollars in thousands):
|
December 31, 2022 |
|
September 30, 2022 |
|
December 31, 2021 |
Transaction: |
|
|
|
|
|
Non-interest bearing checking |
$ |
852,660 |
|
$ |
902,659 |
|
$ |
898,490 |
Negotiable orders of withdrawal and interest-bearing checking |
|
1,132,290 |
|
|
1,256,257 |
|
|
1,112,292 |
Total transaction |
|
1,984,950 |
|
|
2,158,916 |
|
|
2,010,782 |
Savings and money market: |
|
|
|
|
|
Savings |
|
917,180 |
|
|
1,040,841 |
|
|
1,166,761 |
Money market |
|
508,067 |
|
|
527,910 |
|
|
609,430 |
Total savings |
|
1,425,247 |
|
|
1,568,751 |
|
|
1,776,191 |
Certificates of deposit: |
|
|
|
|
|
Brokered deposits |
|
390,035 |
|
|
309,922 |
|
|
31,000 |
$250,000 and under |
|
293,200 |
|
|
308,563 |
|
|
286,580 |
Over $250,000 |
|
56,787 |
|
|
58,007 |
|
|
64,781 |
Total certificates of deposit |
|
740,022 |
|
|
676,492 |
|
|
382,361 |
Total deposits |
$ |
4,150,219 |
|
$ |
4,404,159 |
|
$ |
4,169,334 |
Included in the table above are business and municipal deposit
account balances as follows (dollars in thousands):
|
December 31, 2022 |
|
September 30, 2022 |
|
December 31, 2021 |
|
|
|
|
|
|
Business customers |
$ |
1,146,803 |
|
$ |
1,224,602 |
|
$ |
1,184,472 |
Municipal customers |
$ |
604,717 |
|
$ |
699,891 |
|
$ |
633,458 |
|
|
|
|
|
|
|
|
|
Borrowed funds increased to $644.9 million at
December 31, 2022, from $421.8 million at December 31,
2021. The increase in borrowings for the period was due to an
increase in FHLB and other borrowings of $187.1 million and 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. Partially
offsetting the increases was a decrease in securities sold under
agreements to repurchase of $25.0 million. Management utilizes
borrowings to mitigate interest rate risk, for short-term
liquidity, and to a lesser extent from time to time, as part of
leverage strategies.
The following is a table of term borrowing
maturities (excluding overnight borrowings and subordinated debt)
and the weighted average rate by year at December 31, 2022
(dollars in thousands):
Year |
|
Amount |
|
Weighted Average Rate |
2023 |
|
$87,500 |
|
2.89% |
2024 |
|
50,000 |
|
2.47% |
2025 |
|
112,500 |
|
1.48% |
2026 |
|
20,000 |
|
3.48% |
2027 |
|
125,000 |
|
2.79% |
|
|
$395,000 |
|
2.43% |
|
|
|
|
|
Total stockholders’ equity decreased by $38.5
million to $701.4 million at December 31, 2022, from $739.9
million at December 31, 2021. The decrease was attributable to
a $50.4 million decrease in accumulated other comprehensive income
associated with a decline in the estimated fair value of our debt
securities available-for-sale portfolio, $24.1 million in dividend
payments, and $30.8 million in stock repurchases, partially offset
by net income of $61.1 million for year ended December 31,
2022, and a $5.7 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 upon
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 year ended December 31, 2022,
the Company repurchased approximately 2.1 million of its common
stock outstanding at an average price of $14.72 for a total of
$30.8 million pursuant to the approved stock repurchase plans. As
of December 31, 2022, the Company had approximately $22.4
million in remaining capacity under its current repurchase
program.
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
December 31, 2022 (dollars in thousands):
Cash and cash
equivalents(1) |
$ |
31,269 |
Corporate bonds(2) |
$ |
168,032 |
Multifamily loans(2) |
$ |
1,573,615 |
Mortgage-backed securities
(issued or guaranteed by the U.S. Government, Fannie Mae, or
Freddie Mac)(2) |
$ |
191,821 |
|
|
(1) Excludes $14.5 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, 2022, the
Company and the Bank's estimated CBLR ratios were 12.65% and
12.68%, 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,
2022, September 30, 2022, and December 31, 2021 (dollars in
thousands):
|
December 31, 2022 |
|
September 30, 2022 |
|
December 31, 2021 |
Non-accrual loans: |
|
|
|
|
|
Held-for-investment |
|
|
|
|
|
Real estate loans: |
|
|
|
|
|
Multifamily |
$ |
3,285 |
|
|
$ |
3,697 |
|
|
$ |
1,882 |
|
Commercial |
|
5,184 |
|
|
|
5,211 |
|
|
|
5,117 |
|
One-to-four family residential |
|
118 |
|
|
|
126 |
|
|
|
314 |
|
Home equity and lines of credit |
|
262 |
|
|
|
267 |
|
|
|
281 |
|
Commercial and industrial |
|
964 |
|
|
|
524 |
|
|
|
28 |
|
Total non-accrual
loans |
|
9,813 |
|
|
|
9,825 |
|
|
|
7,622 |
|
Loans delinquent 90 days or
more and still accruing: |
|
|
|
|
|
Held-for-investment |
|
|
|
|
|
Real estate loans: |
|
|
|
|
|
Multifamily |
$ |
233 |
|
|
$ |
— |
|
|
$ |
— |
|
Commercial |
|
8 |
|
|
|
18 |
|
|
|
147 |
|
One-to-four family residential |
|
155 |
|
|
|
6 |
|
|
|
165 |
|
PPP loans |
|
24 |
|
|
|
23 |
|
|
|
72 |
|
Other |
|
5 |
|
|
|
7 |
|
|
|
— |
|
Total loans
held-for-investment delinquent 90 days or more and still
accruing |
|
425 |
|
|
|
54 |
|
|
|
384 |
|
Total non-performing
loans |
|
10,238 |
|
|
|
9,879 |
|
|
|
8,006 |
|
Other real estate owned |
|
— |
|
|
|
— |
|
|
|
100 |
|
Total non-performing
assets |
$ |
10,238 |
|
|
$ |
9,879 |
|
|
$ |
8,106 |
|
Non-performing loans to total
loans |
|
0.24 |
% |
|
|
0.23 |
% |
|
|
0.21 |
% |
Non-performing assets to total
assets |
|
0.18 |
% |
|
|
0.17 |
% |
|
|
0.15 |
% |
Loans subject to
restructuring agreements and still accruing |
$ |
3,751 |
|
|
$ |
4,084 |
|
|
$ |
5,820 |
|
Accruing loans 30-89
days delinquent |
$ |
3,644 |
|
|
$ |
2,980 |
|
|
$ |
1,166 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Real Estate Owned
At December 31, 2022 and September 30,
2022, the Company had no assets acquired through foreclosure. As of
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 $3.6 million, $3.0 million, and $1.2 million at
December 31, 2022, September 30, 2022, and December 31,
2021, respectively. The following table sets forth delinquencies
for accruing loans by type and by amount at December 31, 2022,
September 30, 2022, and December 31, 2021 (dollars in
thousands):
|
December 31, 2022 |
|
September 30, 2022 |
|
December 31, 2021 |
Held-for-investment |
|
|
|
|
|
Real estate loans: |
|
|
|
|
|
Multifamily |
$ |
189 |
|
$ |
725 |
|
$ |
— |
Commercial |
|
900 |
|
|
366 |
|
|
144 |
One-to-four family residential |
|
672 |
|
|
606 |
|
|
593 |
Home equity and lines of credit |
|
830 |
|
|
599 |
|
|
412 |
Commercial and industrial loans |
|
1,048 |
|
|
684 |
|
|
— |
PPP loans |
|
— |
|
|
— |
|
|
2 |
Other loans |
|
5 |
|
|
— |
|
|
15 |
Total delinquent accruing loans held-for-investment |
$ |
3,644 |
|
$ |
2,980 |
|
$ |
1,166 |
PCD Loans (Held-for-Investment)
The Company accounts for PCD loans at estimated
fair value using discounted expected future cash flows deemed to be
collectible on the date acquired. Based on its detailed review of
PCD loans and experience in loan workouts, management believes it
has a reasonable expectation about the amount and timing of future
cash flows and accordingly has classified PCD loans ($11.5 million
at December 31, 2022 and $15.8 million at December 31,
2021) as accruing, even though they may be contractually past due.
At December 31, 2022, 6.8% of PCD loans were past due 30 to 89
days, and 23.0% were past due 90 days or more, as compared to 10.5%
and 19.2%, respectively, at December 31, 2021.
About Northfield Bank
Northfield Bank, founded in 1887, operates 38
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, the
effects of the COVID-19 or any other 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
reduction of 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 or reduce the fair value of
financial instruments, 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.
Company Contact:William R. JacobsChief Financial
OfficerTel: (732) 499-7200 ext. 2519
(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, |
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2022 |
|
|
2021 |
|
Selected Financial
Ratios: |
|
|
|
|
|
|
|
|
|
Performance
Ratios (1) |
|
|
|
|
|
|
|
|
|
Return on assets (ratio of net
income to average total assets) |
0.99 |
% |
|
1.18 |
% |
|
1.19 |
% |
|
1.09 |
% |
|
1.29 |
% |
Return on equity (ratio of net
income to average equity) (7) (8) |
8.07 |
|
|
8.64 |
|
|
9.45 |
|
|
8.57 |
|
|
9.42 |
|
Average equity to average
total assets |
12.31 |
|
|
13.63 |
|
|
12.56 |
|
|
12.75 |
|
|
13.69 |
|
Interest rate spread |
2.63 |
|
|
2.86 |
|
|
2.93 |
|
|
2.82 |
|
|
2.89 |
|
Net interest margin |
2.89 |
|
|
2.96 |
|
|
3.08 |
|
|
2.97 |
|
|
3.01 |
|
Efficiency ratio (2) |
50.88 |
|
|
48.52 |
|
|
40.34 |
|
|
46.27 |
|
|
46.54 |
|
Non-interest expense to
average total assets |
1.52 |
|
|
1.51 |
|
|
1.25 |
|
|
1.38 |
|
|
1.44 |
|
Non-interest expense to
average total interest-earning assets |
1.59 |
|
|
1.60 |
|
|
1.31 |
|
|
1.44 |
|
|
1.53 |
|
Average interest-earning
assets to average interest-bearing liabilities |
136.68 |
|
|
138.48 |
|
|
137.26 |
|
|
137.82 |
|
|
135.63 |
|
Asset Quality
Ratios: |
|
|
|
|
|
|
|
|
|
Non-performing assets to total
assets |
0.18 |
|
|
0.15 |
|
|
0.17 |
|
|
0.18 |
|
|
0.15 |
|
Non-performing loans (3) to
total loans (4) |
0.24 |
|
|
0.21 |
|
|
0.23 |
|
|
0.24 |
|
|
0.21 |
|
Allowance for credit losses to
non-performing loans |
416.26 |
|
|
486.80 |
|
|
423.96 |
|
|
416.26 |
|
|
486.80 |
|
Allowance for credit losses to
total loans held-for-investment, net (5) (6) (7) |
1.00 |
|
|
1.02 |
|
|
0.99 |
|
|
1.00 |
|
|
1.02 |
|
(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.(6) Excluding PPP loans (which are
fully government guaranteed and do not carry any provision for
losses) of $5.1 million, $5.5 million, and $40.5 million at
December 31, 2022, September 30, 2022, and December 31, 2021,
respectively, the allowance for credit losses to total loans held
for investment, net, totaled 1.01%, 0.99%, and 1.03% respectively,
at December 31, 2022, September 30, 2022, and December 31, 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)
|
December 31, 2022 |
|
September 30, 2022 |
|
December 31, 2021 |
ASSETS: |
|
|
|
|
|
Cash and due from banks |
$ |
14,530 |
|
|
$ |
13,882 |
|
|
$ |
18,191 |
|
Interest-bearing deposits in
other financial institutions |
|
31,269 |
|
|
|
56,783 |
|
|
|
72,877 |
|
Total cash and cash
equivalents |
|
45,799 |
|
|
|
70,665 |
|
|
|
91,068 |
|
Trading securities |
|
10,751 |
|
|
|
10,074 |
|
|
|
13,461 |
|
Debt securities
available-for-sale, at estimated fair value |
|
952,173 |
|
|
|
1,002,231 |
|
|
|
1,208,237 |
|
Debt securities
held-to-maturity, at amortized cost |
|
10,760 |
|
|
|
4,572 |
|
|
|
5,283 |
|
Equity securities |
|
10,443 |
|
|
|
8,571 |
|
|
|
5,342 |
|
Loans held-for-sale |
|
— |
|
|
|
504 |
|
|
|
— |
|
Loans held-for-investment,
net |
|
4,243,693 |
|
|
|
4,246,181 |
|
|
|
3,806,617 |
|
Allowance for credit losses |
|
(42,617 |
) |
|
|
(41,883 |
) |
|
|
(38,973 |
) |
Net loans
held-for-investment |
|
4,201,076 |
|
|
|
4,204,298 |
|
|
|
3,767,644 |
|
Accrued interest
receivable |
|
17,426 |
|
|
|
16,075 |
|
|
|
14,572 |
|
Bank-owned life insurance |
|
167,912 |
|
|
|
167,046 |
|
|
|
164,500 |
|
Federal Home Loan Bank of New
York stock, at cost |
|
30,382 |
|
|
|
22,417 |
|
|
|
22,336 |
|
Operating lease right-of-use
assets |
|
34,288 |
|
|
|
35,446 |
|
|
|
33,943 |
|
Premises and equipment,
net |
|
24,844 |
|
|
|
25,382 |
|
|
|
25,937 |
|
Goodwill |
|
41,012 |
|
|
|
41,012 |
|
|
|
41,012 |
|
Other assets |
|
54,427 |
|
|
|
61,302 |
|
|
|
37,207 |
|
Total
assets |
$ |
5,601,293 |
|
|
$ |
5,669,595 |
|
|
$ |
5,430,542 |
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY: |
|
|
|
|
|
LIABILITIES: |
|
|
|
|
|
Deposits |
$ |
4,150,219 |
|
|
$ |
4,404,159 |
|
|
$ |
4,169,334 |
|
Securities sold under
agreements to repurchase |
|
25,000 |
|
|
|
25,000 |
|
|
|
50,000 |
|
Federal Home Loan Bank
advances and other borrowings |
|
558,859 |
|
|
|
382,678 |
|
|
|
371,755 |
|
Subordinated debentures, net
of issuance costs |
|
60,996 |
|
|
|
60,940 |
|
|
|
— |
|
Lease liabilities |
|
39,790 |
|
|
|
41,051 |
|
|
|
39,851 |
|
Advance payments by borrowers
for taxes and insurance |
|
25,995 |
|
|
|
26,137 |
|
|
|
24,909 |
|
Accrued expenses and other
liabilities |
|
39,044 |
|
|
|
36,328 |
|
|
|
34,810 |
|
Total
liabilities |
|
4,899,903 |
|
|
|
4,976,293 |
|
|
|
4,690,659 |
|
|
|
|
|
|
|
STOCKHOLDERS’
EQUITY: |
|
|
|
|
|
Total stockholders’
equity |
|
701,390 |
|
|
|
693,302 |
|
|
|
739,883 |
|
Total liabilities and
stockholders’ equity |
$ |
5,601,293 |
|
|
$ |
5,669,595 |
|
|
$ |
5,430,542 |
|
|
|
|
|
|
|
Total shares outstanding |
|
47,442,488 |
|
|
|
47,888,376 |
|
|
|
49,266,733 |
|
Tangible book value per
share(1) |
$ |
13.91 |
|
|
$ |
13.61 |
|
|
$ |
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 $266,000, $310,000, and $440,000 at December 31, 2022,
September 30, 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)
|
Three Months Ended |
|
Years Ended |
|
December 31, |
|
September 30, |
|
December 31, |
|
|
2022 |
|
|
2021 |
|
|
|
2022 |
|
|
|
2022 |
|
|
|
2021 |
|
Interest
income: |
|
|
|
|
|
|
|
|
|
Loans |
$ |
42,881 |
|
$ |
38,702 |
|
|
$ |
42,311 |
|
|
$ |
160,911 |
|
|
$ |
158,217 |
|
Mortgage-backed securities |
|
3,659 |
|
|
2,261 |
|
|
|
3,284 |
|
|
|
12,461 |
|
|
|
10,640 |
|
Other securities |
|
1,440 |
|
|
563 |
|
|
|
1,201 |
|
|
|
4,325 |
|
|
|
1,965 |
|
Federal Home Loan Bank of New York dividends |
|
386 |
|
|
255 |
|
|
|
283 |
|
|
|
1,174 |
|
|
|
1,279 |
|
Deposits in other financial institutions |
|
394 |
|
|
68 |
|
|
|
199 |
|
|
|
817 |
|
|
|
197 |
|
Total interest income |
|
48,760 |
|
|
41,849 |
|
|
|
47,278 |
|
|
|
179,688 |
|
|
|
172,298 |
|
Interest
expense: |
|
|
|
|
|
|
|
|
|
Deposits |
|
5,675 |
|
|
1,246 |
|
|
|
2,121 |
|
|
|
10,289 |
|
|
|
6,207 |
|
Borrowings |
|
2,908 |
|
|
2,234 |
|
|
|
2,304 |
|
|
|
9,296 |
|
|
|
10,442 |
|
Subordinated debt |
|
836 |
|
|
— |
|
|
|
842 |
|
|
|
1,797 |
|
|
|
— |
|
Total interest expense |
|
9,419 |
|
|
3,480 |
|
|
|
5,267 |
|
|
|
21,382 |
|
|
|
16,649 |
|
Net interest income |
|
39,341 |
|
|
38,369 |
|
|
|
42,011 |
|
|
|
158,306 |
|
|
|
155,649 |
|
Provision/(benefit) for credit
losses |
|
1,227 |
|
|
39 |
|
|
|
2,703 |
|
|
|
4,482 |
|
|
|
(6,184 |
) |
Net interest income after
provision/(benefit) for credit losses |
|
38,114 |
|
|
38,330 |
|
|
|
39,308 |
|
|
|
153,824 |
|
|
|
161,833 |
|
Non-interest
income: |
|
|
|
|
|
|
|
|
|
Fees and service charges for customer services |
|
1,499 |
|
|
1,500 |
|
|
|
1,500 |
|
|
|
5,705 |
|
|
|
5,394 |
|
Income on bank-owned life insurance |
|
866 |
|
|
1,536 |
|
|
|
861 |
|
|
|
3,414 |
|
|
|
4,103 |
|
Gains on available-for-sale debt securities, net |
|
15 |
|
|
519 |
|
|
|
— |
|
|
|
279 |
|
|
|
1,495 |
|
Gains/(losses) on trading securities, net |
|
585 |
|
|
607 |
|
|
|
(426 |
) |
|
|
(2,206 |
) |
|
|
1,703 |
|
Gain on sale of loans |
|
180 |
|
|
— |
|
|
|
273 |
|
|
|
453 |
|
|
|
1,401 |
|
Other |
|
74 |
|
|
111 |
|
|
|
78 |
|
|
|
338 |
|
|
|
357 |
|
Total non-interest income |
|
3,219 |
|
|
4,273 |
|
|
|
2,286 |
|
|
|
7,983 |
|
|
|
14,453 |
|
Non-interest
expense: |
|
|
|
|
|
|
|
|
|
Compensation and employee benefits |
|
12,252 |
|
|
12,005 |
|
|
|
10,784 |
|
|
|
41,961 |
|
|
|
43,677 |
|
Occupancy |
|
3,200 |
|
|
3,330 |
|
|
|
3,347 |
|
|
|
13,241 |
|
|
|
13,956 |
|
Furniture and equipment |
|
440 |
|
|
427 |
|
|
|
438 |
|
|
|
1,730 |
|
|
|
1,737 |
|
Data processing |
|
2,093 |
|
|
1,816 |
|
|
|
1,847 |
|
|
|
7,415 |
|
|
|
6,784 |
|
Professional fees |
|
806 |
|
|
1,032 |
|
|
|
903 |
|
|
|
3,846 |
|
|
|
3,596 |
|
Advertising |
|
902 |
|
|
633 |
|
|
|
420 |
|
|
|
2,159 |
|
|
|
2,358 |
|
Federal Deposit Insurance Corporation insurance |
|
339 |
|
|
308 |
|
|
|
356 |
|
|
|
1,407 |
|
|
|
1,365 |
|
Credit loss expense/(benefit) for off-balance sheet exposures |
|
199 |
|
|
(221 |
) |
|
|
(1,888 |
) |
|
|
(1,061 |
) |
|
|
307 |
|
Other |
|
1,425 |
|
|
1,360 |
|
|
|
1,663 |
|
|
|
6,250 |
|
|
|
5,379 |
|
Total non-interest
expense |
|
21,656 |
|
|
20,690 |
|
|
|
17,870 |
|
|
|
76,948 |
|
|
|
79,159 |
|
Income before income tax
expense |
|
19,677 |
|
|
21,913 |
|
|
|
23,724 |
|
|
|
84,859 |
|
|
|
97,127 |
|
Income tax
expense |
|
5,538 |
|
|
5,810 |
|
|
|
6,745 |
|
|
|
23,740 |
|
|
|
26,473 |
|
Net
income |
$ |
14,139 |
|
$ |
16,103 |
|
|
$ |
16,979 |
|
|
$ |
61,119 |
|
|
$ |
70,654 |
|
Net income per common
share: |
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.31 |
|
$ |
0.34 |
|
|
$ |
0.37 |
|
|
$ |
1.32 |
|
|
$ |
1.46 |
|
Diluted |
$ |
0.31 |
|
$ |
0.34 |
|
|
$ |
0.37 |
|
|
$ |
1.32 |
|
|
$ |
1.45 |
|
Basic average shares outstanding |
|
45,486,423 |
|
|
47,212,839 |
|
|
|
46,047,104 |
|
|
|
46,234,122 |
|
|
|
48,416,495 |
|
Diluted average shares outstanding |
|
45,789,419 |
|
|
47,667,987 |
|
|
|
46,236,662 |
|
|
|
46,438,119 |
|
|
|
48,754,263 |
|
NORTHFIELD BANCORP, INC.ANALYSIS
OF NET INTEREST INCOME(Dollars in thousands) (unaudited)
|
For the Three Months Ended |
|
December 31, 2022 |
|
September 30, 2022 |
|
December 31, 2021 |
|
Average Outstanding Balance |
|
Interest |
|
Average Yield/ Rate (1) |
|
Average Outstanding Balance |
|
Interest |
|
Average Yield/ Rate (1) |
|
Average Outstanding Balance |
|
Interest |
|
Average Yield/ Rate (1) |
Interest-earning
assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans (2) |
$ |
4,247,576 |
|
$ |
42,881 |
|
4.01 |
% |
|
$ |
4,214,438 |
|
$ |
42,311 |
|
3.98 |
% |
|
$ |
3,810,502 |
|
$ |
38,702 |
|
4.03 |
% |
Mortgage-backed securities (3) |
|
785,676 |
|
|
3,659 |
|
1.85 |
|
|
|
833,975 |
|
|
3,284 |
|
1.56 |
|
|
|
896,912 |
|
|
2,261 |
|
1.00 |
|
Other securities (3) |
|
292,413 |
|
|
1,440 |
|
1.95 |
|
|
|
294,786 |
|
|
1,201 |
|
1.62 |
|
|
|
202,453 |
|
|
563 |
|
1.10 |
|
Federal Home Loan Bank of New York stock |
|
24,609 |
|
|
386 |
|
6.22 |
|
|
|
22,641 |
|
|
283 |
|
4.96 |
|
|
|
22,336 |
|
|
255 |
|
4.53 |
|
Interest-earning deposits in financial institutions |
|
53,920 |
|
|
394 |
|
2.90 |
|
|
|
51,364 |
|
|
199 |
|
1.54 |
|
|
|
202,295 |
|
|
68 |
|
0.13 |
|
Total interest-earning assets |
|
5,404,194 |
|
|
48,760 |
|
3.58 |
|
|
|
5,417,204 |
|
|
47,278 |
|
3.46 |
|
|
|
5,134,498 |
|
|
41,849 |
|
3.23 |
|
Non-interest-earning
assets |
|
237,074 |
|
|
|
|
|
|
257,177 |
|
|
|
|
|
|
292,366 |
|
|
|
|
Total assets |
$ |
5,641,268 |
|
|
|
|
|
$ |
5,674,381 |
|
|
|
|
|
$ |
5,426,864 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings, NOW, and money market accounts |
$ |
2,708,942 |
|
$ |
1,739 |
|
0.25 |
% |
|
$ |
2,923,600 |
|
$ |
701 |
|
0.10 |
% |
|
$ |
2,891,982 |
|
$ |
583 |
|
0.08 |
% |
Certificates of deposit |
|
732,006 |
|
|
3,936 |
|
2.13 |
|
|
|
554,018 |
|
|
1,420 |
|
1.02 |
|
|
|
394,148 |
|
|
663 |
|
0.67 |
|
Total interest-bearing deposits |
|
3,440,948 |
|
|
5,675 |
|
0.65 |
|
|
|
3,477,618 |
|
|
2,121 |
|
0.24 |
|
|
|
3,286,130 |
|
|
1,246 |
|
0.15 |
|
Borrowed funds |
|
451,049 |
|
|
2,908 |
|
2.56 |
|
|
|
407,668 |
|
|
2,304 |
|
2.24 |
|
|
|
421,746 |
|
|
2,234 |
|
2.10 |
|
Subordinated debt |
|
61,947 |
|
|
836 |
|
5.35 |
|
|
|
61,283 |
|
|
842 |
|
5.45 |
|
|
|
— |
|
|
— |
|
— |
|
Total interest-bearing liabilities |
|
3,953,944 |
|
|
9,419 |
|
0.95 |
|
|
|
3,946,569 |
|
|
5,267 |
|
0.53 |
|
|
|
3,707,876 |
|
|
3,480 |
|
0.37 |
|
Non-interest bearing
deposits |
|
890,633 |
|
|
|
|
|
|
911,183 |
|
|
|
|
|
|
879,689 |
|
|
|
|
Accrued expenses and other
liabilities |
|
102,012 |
|
|
|
|
|
|
103,853 |
|
|
|
|
|
|
99,707 |
|
|
|
|
Total liabilities |
|
4,946,589 |
|
|
|
|
|
|
4,961,605 |
|
|
|
|
|
|
4,687,272 |
|
|
|
|
Stockholders' equity |
|
694,679 |
|
|
|
|
|
|
712,776 |
|
|
|
|
|
|
739,592 |
|
|
|
|
Total liabilities and stockholders' equity |
$ |
5,641,268 |
|
|
|
|
|
$ |
5,674,381 |
|
|
|
|
|
$ |
5,426,864 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
|
$ |
39,341 |
|
|
|
|
|
$ |
42,011 |
|
|
|
|
|
$ |
38,369 |
|
|
Net interest rate spread
(4) |
|
|
|
|
2.63 |
% |
|
|
|
|
|
2.93 |
% |
|
|
|
|
|
2.86 |
% |
Net interest-earning assets
(5) |
$ |
1,450,250 |
|
|
|
|
|
$ |
1,470,635 |
|
|
|
|
|
$ |
1,426,622 |
|
|
|
|
Net interest margin (6) |
|
|
|
|
2.89 |
% |
|
|
|
|
|
3.08 |
% |
|
|
|
|
|
2.96 |
% |
Average interest-earning
assets to interest-bearing liabilities |
|
|
|
|
136.68 |
% |
|
|
|
|
|
137.26 |
% |
|
|
|
|
|
138.48 |
% |
(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, 2022 |
|
December 31, 2021 |
|
Average Outstanding Balance |
|
Interest |
|
Average Yield/ Rate |
|
Average Outstanding Balance |
|
Interest |
|
Average Yield/ Rate (1) |
Interest-earning
assets: |
|
|
|
|
|
|
|
|
|
|
|
Loans (1) |
$ |
4,077,175 |
|
$ |
160,911 |
|
3.95 |
% |
|
$ |
3,862,243 |
|
$ |
158,217 |
|
4.10 |
% |
Mortgage-backed securities (2) |
|
863,897 |
|
|
12,461 |
|
1.44 |
|
|
|
975,518 |
|
|
10,640 |
|
1.09 |
|
Other securities (2) |
|
285,385 |
|
|
4,325 |
|
1.52 |
|
|
|
151,495 |
|
|
1,965 |
|
1.30 |
|
Federal Home Loan Bank of New York stock |
|
22,541 |
|
|
1,174 |
|
5.21 |
|
|
|
25,420 |
|
|
1,279 |
|
5.03 |
|
Interest-earning deposits in financial institutions |
|
85,485 |
|
|
817 |
|
0.96 |
|
|
|
164,553 |
|
|
197 |
|
0.12 |
|
Total interest-earning assets |
|
5,334,483 |
|
|
179,688 |
|
3.37 |
|
|
|
5,179,229 |
|
|
172,298 |
|
3.33 |
|
Non-interest-earning
assets |
|
259,891 |
|
|
|
|
|
|
299,664 |
|
|
|
|
Total assets |
$ |
5,594,374 |
|
|
|
|
|
$ |
5,478,893 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
liabilities: |
|
|
|
|
|
|
|
|
|
|
|
Savings, NOW, and money market accounts |
$ |
2,898,048 |
|
$ |
3,610 |
|
0.12 |
% |
|
$ |
2,811,552 |
|
$ |
3,031 |
|
0.11 |
% |
Certificates of deposit |
|
525,557 |
|
|
6,679 |
|
1.27 |
|
|
|
505,472 |
|
|
3,176 |
|
0.63 |
|
Total interest-bearing deposits |
|
3,423,605 |
|
|
10,289 |
|
0.30 |
|
|
|
3,317,024 |
|
|
6,207 |
|
0.19 |
|
Borrowed funds |
|
413,697 |
|
|
9,296 |
|
2.25 |
|
|
|
501,523 |
|
|
10,442 |
|
2.08 |
|
Subordinated debt |
|
33,436 |
|
|
1,797 |
|
5.37 |
|
|
|
— |
|
|
— |
|
— |
|
Total interest-bearing liabilities |
$ |
3,870,738 |
|
|
21,382 |
|
0.55 |
|
|
$ |
3,818,547 |
|
|
16,649 |
|
0.44 |
|
Non-interest bearing
deposits |
|
907,603 |
|
|
|
|
|
|
812,805 |
|
|
|
|
Accrued expenses and other
liabilities |
|
102,807 |
|
|
|
|
|
|
97,385 |
|
|
|
|
Total liabilities |
|
4,881,148 |
|
|
|
|
|
|
4,728,737 |
|
|
|
|
Stockholders' equity |
|
713,226 |
|
|
|
|
|
|
750,156 |
|
|
|
|
Total liabilities and stockholders' equity |
$ |
5,594,374 |
|
|
|
|
|
$ |
5,478,893 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
|
$ |
158,306 |
|
|
|
|
|
$ |
155,649 |
|
|
Net interest rate spread
(3) |
|
|
|
|
2.82 |
% |
|
|
|
|
|
2.89 |
% |
Net interest-earning assets
(4) |
$ |
1,463,745 |
|
|
|
|
|
$ |
1,360,682 |
|
|
|
|
Net interest margin (5) |
|
|
|
|
2.97 |
% |
|
|
|
|
|
3.01 |
% |
Average interest-earning
assets to interest-bearing liabilities |
|
|
|
|
137.82 |
% |
|
|
|
|
|
135.63 |
% |
(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.
Northfield Bancorp (NASDAQ:NFBK)
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Northfield Bancorp (NASDAQ:NFBK)
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