NORTHFIELD BANCORP, INC. (Nasdaq:NFBK) (the
“Company”), the holding company for Northfield Bank,
reported net income of $8.2 million, or $0.19 per diluted share for
the three months ended September 30, 2023, compared to $9.6
million, or $0.22 per diluted share, for the three months ended
June 30, 2023, and $17.0 million, or $0.37 per diluted share,
for the three months ended September 30, 2022. For the nine months
ended September 30, 2023, net income totaled $29.4 million, or
$0.67 per diluted share (including severance cost of $440,000, or
$0.01 per share), compared to $47.0 million, or $1.01 per diluted
share, for the nine months ended September 30, 2022. The decrease
in net income for both the three and nine months ended September
30, 2023, compared to the trailing quarter and comparable prior
year periods, was primarily the result of a decrease in net
interest income, which was negatively impacted by higher funding
costs.
Commenting on the quarter, Steven M. Klein, the
Company’s Chairman, President and Chief Executive Officer stated,
“The Northfield team continues to successfully manage through a
challenging operating environment, and executing on our strategy of
delivering Locally Grown Banking to the communities we serve. The
Northfield team remained focused on building deposit and loan
relationships, maintaining strong asset quality, and managing
expenses, including our cost of funding, as our assets reprice in a
higher interest rate environment.” Mr. Klein continued, “For the
third quarter, net interest margin compression slowed significantly
while we maintained our operating cost disciplines and strong asset
quality. While significant market risks and uncertainties remain,
we will continue to prudently manage our strong capital and
liquidity and focus on the communities we serve.”
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 November 22, 2023, to
stockholders of record on November 8, 2023.”
Results of Operations
Comparison of Operating Results for the Nine
Months Ended September 30, 2023 and 2022
Net income was $29.4 million and $47.0 million
for the nine months ended September 30, 2023 and
September 30, 2022, respectively. Significant variances from
the comparable prior year period are as follows: a $23.2 million
decrease in net interest income, a $2.2 million decrease in the
provision for credit losses on loans, a $3.5 million increase in
non-interest income, a $7.2 million increase in non-interest
expense, and a $7.2 million decrease in income tax
expense.
Net interest income for the nine months ended
September 30, 2023, decreased $23.2 million, or 19.5%, to
$95.7 million, from $119.0 million for the nine months ended
September 30, 2022. The decrease in net interest income was
primarily attributable to an increase in the cost of
interest-bearing liabilities due to the increase in market interest
rates (as further discussed below) including a $46.6 million
increase in interest expense on deposits, borrowings and
subordinated debt which was partially offset by a $23.3 million
increase in interest income. The increase in interest expense on
deposits, borrowings and subordinated debt was largely driven by
the impact of rising market interest rates and a $137.0 million, or
3.6%, increase in the average balance of interest-bearing
liabilities, including increases of $501.7 million and $37.3
million, in average borrowed funds and subordinated debt,
respectively, partially offset by a $402.1 million decrease in
average interest-bearing deposits. The increase in interest income
was primarily due to an $8.2 million, or 0.2%, increase in the
average balance of interest-earning assets coupled with a 58 basis
point increase in yields on interest-earning assets due to the
rising rate environment and a greater percentage of assets
consisting of higher-yielding loans. The increase in the average
balance of interest-earning assets was due to increases in the
average balance of loans outstanding of $241.1 million and the
average balance of Federal Home Loan Bank of New York (“FHLBNY”)
stock of $19.2 million, partially offset by decreases in the
average balance of mortgage-backed securities of $186.9 million,
the average balance of other securities of $41.7 million, and the
average balance of interest-earning deposits in financial
institutions of $23.4 million.
Net interest margin decreased by 58 basis point
to 2.41% from 2.99% for the nine months ended September 30,
2022. The decrease in net interest margin was primarily due to the
cost of interest-bearing liabilities increasing faster than the
repricing of interest-earning assets. The cost of interest-bearing
liabilities increased by 155 basis points to 1.97% for the nine
months ended September 30, 2023, from 0.42% for the nine
months ended September 30, 2022, driven primarily by a 145
basis point increase in the cost of borrowings from 2.13% to 3.58%
and a 124 basis point increase in the cost of interest-bearing
deposits from 0.18% to 1.42% for the nine months ended
September 30, 2023, due to rising market interest rates and a
shift in the composition of the deposit portfolio towards
higher-costing certificates of deposit. The increase in the cost of
interest-bearing liabilities was partially offset by an increase in
the yield on interest-earning assets, which increased 58 basis
points to 3.88% for the nine months ended September 30, 2023,
from 3.30% for the nine months ended September 30, 2022,
primarily due to an increase in yields on loans from 3.93% to
4.24%, or 31 basis points. The Company accreted interest income
related to purchased credit-deteriorated (“PCD”) loans of $1.0
million for the nine months ended September 30, 2023, as
compared to $1.1 million for the nine months ended
September 30, 2022. Fees recognized from Paycheck Protection
Program (“PPP”) loans totaled $30,000 for the nine months ended
September 30, 2023, as compared to $1.3 million for the nine
months ended September 30, 2022. Net interest income for the
nine months ended September 30, 2023, included loan prepayment
income of $1.3 million as compared to $4.2 million for the nine
months ended September 30, 2022.
The provision for credit losses on loans
decreased by $2.2 million to $1.1 million for the nine months ended
September 30, 2023, compared to $3.3 million for the nine
months ended September 30, 2022, primarily due to a decrease
in loan balances, a decrease in reserves related to non-economic
qualitative loss factors in the multifamily and commercial real
estate portfolios, and a decrease in reserves related to the PCD
portfolio, attributable to improved cash flows. The decreases were
partially offset by a worsening macroeconomic outlook, higher net
charge-offs, and higher reserves for downgraded commercial and
industrial loans. Net charge-offs were $5.2 million for the nine
months ended September 30, 2023, as compared to net
charge-offs of $345,000 for the nine months ended
September 30, 2022, due to $5.2 million in net charge-offs on
small business unsecured commercial and industrial loans.
Management continues to monitor the small business unsecured
commercial and industrial loan portfolio, which totaled $39.1
million at September 30, 2023.
Non-interest income increased by $3.5 million,
or 73.6%, to $8.3 million for the nine months ended
September 30, 2023, from $4.8 million for the nine months
ended September 30, 2022, due primarily to a $3.5 million
increase in mark to market gains on trading securities, net. For
the nine months ended September 30, 2023, gains on trading
securities were $723,000, as compared to losses of $2.8 million for
the nine months ended September 30, 2022. The trading
portfolio is utilized to fund the Company’s deferred compensation
obligation to certain employees and directors of the Company's
deferred compensation plan (the “Plan”). The participants of this
Plan, at their election, defer a portion of their compensation.
Gains and losses on trading securities have a minimal effect on net
income since participants benefit from, and bear the full risk of,
changes in the trading securities market values. Therefore, the
Company records an equal and offsetting amount in compensation
expense, reflecting the change in the Company’s obligations under
the Plan.
Non-interest expense increased $7.2 million, or
13.0%, to $62.5 million for the nine months ended
September 30, 2023, compared to $55.3 million for the nine
months ended September 30, 2022. The increase was primarily
due to a $4.6 million increase in employee compensation and
benefits, primarily attributable to a $3.5 million increase in the
mark to market of the Company's deferred compensation plan expense,
which as discussed above has no effect on net income, coupled with
an increase in equity award expense related to awards issued in the
first quarter of 2023, annual merit increases, and severance
expense of $440,000, partially offset by a decrease in the accrual
for incentive compensation. During the second quarter of 2023, due
to economic conditions, the Company implemented a workforce
reduction plan which included modest layoffs and the elimination
of, and/or not filling, certain open positions. The annual
estimated cost savings of this plan is $1.4 million, pre-tax. Data
processing expense increased by $986,000, due to continued
investments in technology, increased transaction costs related to
an increase in the number of customer accounts and related volume
of transactions, and higher pricing effective January 2023.
Advertising expense increased by $577,000 due to the timing of
certain programs and new promotions on deposit products. FDIC
insurance expense increased by $695,000 due to higher assessment
rates. There was an $870,000 decrease in credit loss
expense/(benefit) for off-balance sheet credit exposures due to a
benefit of $390,000 recorded during the nine months ended
September 30, 2023, compared to a benefit of $1.3 million for
the prior year period, attributed to a larger decrease in the
pipeline of loans committed and awaiting closing in the prior year
as compared to the current year. Partially offsetting the increases
was a $418,000 decrease in professional fees attributable to higher
recruitment, consulting and outsourcing fees in the prior year.
The Company recorded income tax expense of $11.0
million for the nine months ended September 30, 2023, compared
to $18.2 million for the nine months ended September 30, 2022,
with the decrease due to lower taxable income. The effective tax
rate for the nine months ended September 30, 2023, was 27.2%
compared to 27.9% for the nine months ended September 30,
2022.
Comparison of Operating Results for the Three
Months Ended September 30, 2023 and 2022
Net income was $8.2 million and $17.0 million
for the quarters ended September 30, 2023 and
September 30, 2022, respectively. Significant variances from
the comparable prior year quarter are as follows: a $12.3
million decrease in net interest income, a $2.5 million
decrease in the provision for credit losses on loans, a $165,000
decrease in non-interest income, a $2.7 million increase in
non-interest expense, and a $3.9 million decrease in income
tax expense.
Net interest income for the quarter ended
September 30, 2023, decreased $12.3 million, or 29.3%, to
$29.7 million, from $42.0 million for the quarter ended
September 30, 2022. The decrease in net interest income was
attributable to a $17.8 million increase in interest expense on
deposits and borrowings, partially offset by a $5.5 million
increase in interest income. The increase in interest expense on
deposits and borrowings was largely driven by an increase in the
cost of funds (as discussed further below) due to the rising rate
environment and, to a lesser extent, a $14.6 million, or 0.4%,
increase in the average balance of interest-bearing liabilities,
including an increase of $532.3 million in average borrowed funds,
partially offset by a $517.5 million decrease in average
interest-bearing deposits. The increase in interest income was
primarily due to a 54 basis point increase in the yield on
interest-earning assets due to the rising rate environment and a
greater percentage of assets consisting of higher-yielding loans,
partially offset by a decrease in the average balance of interest
earning assets of $180.1 million, or 3.3%. The decrease in the
average balance of interest-earning assets was due to decreases in
the average balance of mortgage-backed securities of $173.2 million
and the average balance of other securities of $85.4 million,
partially offset by increases in the average balance of loans
outstanding of $38.3 million, the average balance of FHLBNY stock
of $18.6 million, and the average balance of interest-earning
deposits in financial institutions of $21.6 million.
Net interest margin decreased by 83 basis points
to 2.25% for the quarter ended September 30, 2023, from 3.08%
for the quarter ended September 30, 2022, primarily due to the
cost of interest-bearing liabilities increasing faster than the
repricing of interest-earning assets. The cost of interest-bearing
liabilities increased by 178 basis points to 2.31% for the quarter
ended September 30, 2023, from 0.53% for the quarter ended
September 30, 2022, driven primarily by a 139 basis point
increase in the cost of borrowings from 2.24% to 3.63%, and a 158
basis point increase in the cost of interest-bearing deposits from
0.24% to 1.82%. The increase in the cost of interest-bearing
liabilities was partially offset by an increase in the yield on
interest-earning assets which increased by 54 basis points to 4.00%
for the quarter ended September 30, 2023, from 3.46% for the
quarter ended September 30, 2022, primarily due to higher
yields on loans from 3.98% to 4.31%, or 33 basis points. Net
interest income for the quarter ended September 30, 2023,
included loan prepayment income of $183,000, as compared to $1.6
million for the quarter ended September 30, 2022. The Company
accreted interest income related to PCD loans of $325,000 for the
quarter ended September 30, 2023, as compared to $368,000 for
quarter ended September 30, 2022.
The provision for credit losses on loans
decreased by $2.5 million to a provision of $188,000 for the
quarter ended September 30, 2023, from a provision of $2.7
million for the quarter ended September 30, 2022. The decrease
was primarily due to a decrease in loan balances, a decrease in
reserves related to non-economic qualitative loss factors in the
multifamily and commercial real estate portfolios, and a decrease
in reserves related to the PCD portfolio, attributable to improved
cash flows. The decreases were partially offset by a worsening
macroeconomic outlook, higher net charge-offs, and an increase in
reserves for downgraded commercial and industrial loans. Net
charge-offs were $2.9 million for the quarter ended
September 30, 2023, compared to net recoveries of $149,000 for
the quarter ended September 30, 2022, due to $2.9 million in
net charge-offs on small business unsecured commercial and
industrial loans.
Non-interest income decreased by $165,000, or
7.2%, to $2.1 million for the quarter ended September 30,
2023, from $2.3 million for the quarter ended September 30,
2022, primarily due to a $183,000 decrease in fees and service
charges for customers, primarily related to lower overdraft fees,
and a $174,000 decrease in gains on sales of loans, partially
offset by a $131,000 decrease in losses on trading securities. The
decrease in gains on sales of loans was due to a $99,000 gain
realized on the sale of one SBA loan totaling $974,000 in the third
quarter of 2023 as compared to a $273,000 gain realized on the sale
of two SBA loans totaling $2.5 million in the third quarter of
2022. For the quarter ended September 30, 2023, losses on
trading securities, net, were $295,000, compared to losses of
$426,000 in the quarter ended September 30, 2022. Gains and
losses on trading securities have a minimal effect on net income
since participants benefit from, and bear the full risk of, changes
in the trading securities market values.
Non-interest expense increased by $2.7 million,
or 15.1%, to $20.6 million for the quarter ended September 30,
2023, from $17.9 million for the quarter ended September 30,
2022. The increase was primarily due to a $2.0 million increase in
the credit loss expense/(benefit) for off-balance sheet exposures
which was due to $160,000 of expense recorded during the quarter
ended September 30, 2023, compared to a benefit of $1.9
million recorded in the prior year quarter. The benefit in the
prior year quarter attributable to a decrease in the pipeline of
loans committed and awaiting closing. Additionally, there was a
$136,000 increase in compensation and employee benefits, a $147,000
increase in data processing expense due to continued investments in
technology, and a $235,000 increase in FDIC insurance expense due
to higher assessments.
The Company recorded income tax expense of $2.9
million for the quarter ended September 30, 2023, compared to
$6.7 million for the quarter ended September 30, 2022, with
the decrease due to lower taxable income. The effective tax rate
for the quarter ended September 30, 2023 was 26.0%, compared
to 28.4% for the quarter ended September 30, 2022.
Comparison of Operating Results for the Three
Months Ended September 30, 2023 and June 30, 2023
Net income was $8.2 million and $9.6 million for
the quarters ended September 30, 2023, and June 30, 2023,
respectively. Significant variances from the prior quarter are as
follows: a $1.5 million decrease in net interest income, a $158,000
increase in the provision for credit losses on loans, a $695,000
decrease in non-interest income, a $208,000 decrease in
non-interest expense and a $736,000 decrease in income tax
expense.
Net interest income for the quarter ended
September 30, 2023, decreased by $1.5 million, or 4.7%, to
$29.7 million, from $31.2 million for the quarter ended
June 30, 2023. The decrease in net interest income was
primarily attributable to a $2.5 million increase in interest
expense on deposits and borrowings, partially offset by a $1.1
million increase in interest income. The increase in interest
expense on deposits and borrowings was primarily due to an increase
in the cost of funds (as discussed further below), partially offset
by a $44.1 million, or 1.1%, decrease in the average balance of
interest-bearing liabilities, including a decrease of $63.7 million
in average borrowed funds, partially offset by a $19.5 million
increase in average interest-bearing deposits. The increase in
interest income was primarily due to an 11 basis point increase in
the yield on interest-earning assets, partially offset by a $102.2
million, or 1.9%, decrease in the average balance of
interest-earning assets. The decrease in the average balance of
interest-earning assets was due to decreases in the average balance
of loans outstanding of $32.1 million, the average balance of
mortgage-backed securities of $42.7 million, the average balance of
other securities of $29.9 million, and the average balance of
FHLBNY stock of $2.6 million, partially offset by an increase in
the average balance of interest-earning deposits in financial
institutions of $5.2 million.
Net interest margin decreased by nine basis
points to 2.25% from 2.34% for the quarter ended June 30,
2023, primarily due to the increase in the cost of interest-bearing
liabilities outpacing the increase in yields on interest-earning
assets. The cost of interest-bearing liabilities increased by 26
basis point to 2.31% for the quarter ended September 30, 2023,
from 2.05% for the quarter ended June 30, 2023, driven by both
higher costs of deposits and borrowed funds, which was partially
offset by higher yields on interest-earning assets, which increased
by 12 basis points to 4.00% for the quarter ended
September 30, 2023, from 3.88% for the quarter ended
June 30, 2023. Net interest income for the quarter ended
September 30, 2023, included loan prepayment income of
$183,000 as compared to $194,000 for the quarter ended
June 30, 2023. The Company accreted interest income related to
PCD loans of $325,000 for the quarter ended September 30,
2023, as compared to $337,000 for the quarter ended June 30,
2023.
The provision for credit losses on loans
increased by $158,000 to $188,000 for the quarter ended
September 30, 2023, from $30,000 for the quarter ended
June 30, 2023. The increase in the provision was primarily
attributable to higher net charge-offs, partially offset by a
decrease in loan balances and a decrease in reserves related to the
PCD portfolio, attributable to improved cash flows. Net charge-offs
were $2.9 million for the quarter ended September 30, 2023, as
compared to net charge-offs of $313,000 for the quarter ended
June 30, 2023, due to $2.9 million in net charge-offs on small
business unsecured commercial and industrial loans.
Non-interest income decreased by $695,000, or
24.7%, to $2.1 million for the quarter ended September 30,
2023, from $2.8 million for the quarter ended June 30, 2023.
The decrease was primarily due to an $801,000 decrease in gains on
sales of trading securities, net. For the quarter ended
September 30, 2023, losses on trading securities, net, were
$295,000, compared to gains of $506,000 for the quarter ended
June 30, 2023. Gains and losses on trading securities have a
minimal effect on net income since participants benefit from, and
bear the full risk of, changes in the trading securities market
values.
Non-interest expense decreased by $208,000, or 1.0%, to $20.6
million for the quarter ended September 30, 2023, from $20.8
million for the quarter ended June 30, 2023. The decrease was
primarily due to a $1.4 million decrease in compensation and
employee benefits, which included an $801,000 decrease related to
the mark to market of the Company's deferred compensation plan
expense, which as previously discussed has no effect on net income,
severance expense of $440,000 in the quarter ended June 30,
2023, and a decrease in the accrual for incentive compensation,
partially offset by higher medical benefit expense. Partially
offsetting the decrease was an increase of $821,000 in credit loss
expense/(benefit) for off-balance sheet exposures due to a
provision of $160,000 recorded during the quarter ended
September 30, 2023, compared to a benefit of $661,000 for the
quarter ended June 30, 2023, attributed to a larger decrease
in the pipeline of loans committed and awaiting closing in the
prior quarter as compared to the current quarter, and an increase
of $311,000 in other operating expense.
The Company recorded income tax expense of $2.9
million for the quarter ended September 30, 2023, compared to
$3.6 million for the quarter ended June 30, 2023 with the
decrease due to lower taxable income. The effective tax rate for
the quarter ended September 30, 2023 was 26.0%, compared to
27.4% for the quarter ended and June 30, 2023.
Financial Condition
Total assets decreased by $164.2 million, or
2.9%, to $5.44 billion at September 30, 2023, from $5.60
billion at December 31, 2022. The decrease was primarily due
to a decrease in available-for-sale debt securities of $208.5
million, or 21.9%, and loans receivable of $12.8 million, or 0.3%,
partially offset by increases in cash and cash equivalents of $34.8
million, or 75.9%, FHLBNY stock of $10.8 million, or 35.5%, and
other assets of $8.0 million, or 14.8%.
As of September 30, 2023, non-owner
occupied commercial real estate loans (as defined by regulatory
guidance) to total risk-based capital was estimated at
approximately 459%. Management believes that Northfield Bank (the
“Bank”) has implemented appropriate risk management practices
including risk assessments, board-approved underwriting policies
and related procedures, which include monitoring Bank portfolio
performance, performing market analysis (economic and real estate),
and stressing of the Bank’s commercial real estate portfolio under
severe, adverse economic conditions. Although management believes
the Bank has implemented appropriate policies and procedures to
manage its commercial real estate concentration risk, the Bank’s
regulators could require it to implement additional policies and
procedures or could require it to maintain higher levels of
regulatory capital, which might adversely affect its loan
originations, the Company's ability to pay dividends, and overall
profitability.
Cash and cash equivalents increased by $34.8 million, or 75.9%,
to $80.6 million at September 30, 2023, from $45.8 million at
December 31, 2022, primarily due to an increase in Federal
Reserve Bank of New York (“FRB”) balances driven by excess cash
from borrowings and proceeds from the maturity and calls of
available for sale securities. Balances fluctuate based on the
timing of receipt of security and loan repayments and the
redeployment of cash into higher-yielding assets such as loans and
securities, or the funding of deposit outflows or borrowing
maturities. During the first quarter of 2023, management believed
it was prudent to increase balance sheet liquidity given general
market volatility and uncertainty.
Loans held-for-investment, net, decreased by
$13.7 million, or 0.3%, to $4.23 billion at September 30, 2023
from $4.24 billion at December 31, 2022, primarily due to a
decrease in multifamily loans, partially offset by an increase in
commercial real estate loans. The Company continues to focus on the
credit needs of its customers, and to a lesser extent, the
development of new business notwithstanding the uncertain economic
environment. Multifamily loans decreased $42.4 million, or 1.5%, to
$2.78 billion at September 30, 2023 from $2.82 billion at
December 31, 2022, one-to-four family residential loans
decreased $9.4 million, or 5.4%, to $164.5 million at
September 30, 2023 from $173.9 million at
December 31, 2022, and commercial and industrial loans
decreased $9.9 million, or 6.4%, to $144.8 million at
September 30, 2023 from $154.7 million at December 31,
2022. Partially offsetting these decreases were increases in
commercial real estate loans of $33.7 million, or 3.8%, to
$933.0 million at September 30, 2023 from
$899.2 million at December 31, 2022, home equity loans of
$8.2 million, or 5.4%, to $160.8 million at
September 30, 2023 from $152.6 million at
December 31, 2022, and construction and land loans of
$7.4 million, or 29.5%, to $32.3 million at
September 30, 2023 from $24.9 million at
December 31, 2022.
At September 30, 2023, office-related loans
represented $210.8 million, or approximately 5% of our total loan
portfolio, with an average balance of $1.7 million (although we
have originated these type of loans in amounts substantially
greater than this average) and a weighted average loan-to-value
ratio of 58%. Approximately 46% were owner-occupied. The geographic
locations of the properties collateralizing our office-related
loans are as follows: 53.6% in New York and 46.4% in New Jersey. At
September 30, 2023, our largest office-related loan had a
principal balance of $86.0 million (with a net active principal
balance for the Bank of $28.7 million as we have a 33.3%
participation interest), was secured by an office facility located
in Staten Island, New York, and was performing in accordance with
its original contractual terms.
PCD loans totaled $10.4 million and $11.5
million at September 30, 2023 and December 31, 2022,
respectively, and the decrease was primarily due to one loan
with a balance of approximately $950,000 transferred to loans
held-for-sale at September 30, 2023. The majority of the remaining
PCD loan balance consists of loans acquired as part of a Federal
Deposit Insurance Corporation-assisted transaction. The Company
accreted interest income of $325,000 and $1.0 million attributable
to PCD loans for the three and nine months ended September 30,
2023, respectively, as compared to $368,000 and $1.1 million for
the three and nine months ended September 30, 2022, respectively.
PCD loans had an allowance for credit losses of approximately $3.1
million at September 30, 2023.
Loan balances are summarized as follows (dollars
in thousands):
|
September 30, 2023 |
|
June 30, 2023 |
|
December 31, 2022 |
Real estate loans: |
|
|
|
|
|
Multifamily |
$ |
2,782,141 |
|
$ |
2,814,809 |
|
$ |
2,824,579 |
Commercial mortgage |
|
932,987 |
|
|
942,980 |
|
|
899,249 |
One-to-four family residential mortgage |
|
164,525 |
|
|
170,767 |
|
|
173,946 |
Home equity and lines of credit |
|
160,798 |
|
|
158,517 |
|
|
152,555 |
Construction and land |
|
32,290 |
|
|
29,444 |
|
|
24,932 |
Total real estate loans |
|
4,072,741 |
|
|
4,116,517 |
|
|
4,075,261 |
Commercial and industrial
loans |
|
144,463 |
|
|
142,948 |
|
|
149,557 |
PPP loans |
|
325 |
|
|
366 |
|
|
5,143 |
Other loans |
|
2,074 |
|
|
2,663 |
|
|
2,230 |
Total commercial and industrial, PPP, and other loans |
|
146,862 |
|
|
145,977 |
|
|
156,930 |
Loans held-for-investment, net (excluding PCD) |
|
4,219,603 |
|
|
4,262,494 |
|
|
4,232,191 |
PCD loans |
|
10,371 |
|
|
11,548 |
|
|
11,502 |
Total loans held-for-investment, net |
$ |
4,229,974 |
|
$ |
4,274,042 |
|
$ |
4,243,693 |
The Company’s available-for-sale debt securities
portfolio decreased by $208.5 million, or 21.9%, to $743.7 million
at September 30, 2023, from $952.2 million at
December 31, 2022. The decrease was primarily attributable to
paydowns, maturities and calls. At September 30, 2023, $568.6
million of the portfolio consisted of residential mortgage-backed
securities issued or guaranteed by Fannie Mae, Freddie Mac, or
Ginnie Mae. In addition, the Company held $72.3 million in U.S.
Government agency securities, $102.0 million in corporate bonds,
substantially all of which were considered investment grade, and
$763,000 in municipal bonds at September 30, 2023. Unrealized
losses, net of tax, on available-for-sale debt securities and
held-to-maturity securities approximated $48.2 million and
$535,000, respectively, at September 30, 2023, and $48.6
million and $332,000, respectively, at December 31, 2022.
Equity securities were $10.6 million at
September 30, 2023 and $10.4 million at December 31,
2022. Equity securities are primarily comprised of an investment in
a Small Business Administration Loan Fund. This investment is
utilized by the Bank as part of its Community Reinvestment Act
program.
Total liabilities decreased $146.9 million, or
3.0%, to $4.75 billion at September 30, 2023, from $4.90
billion at December 31, 2022. The decrease was primarily
attributable to a decrease in total deposits of $481.7 million,
partially offset by an increase in FHLB advances and other
borrowings of $335.1 million. The Company routinely utilizes
brokered deposits and borrowed funds to manage interest rate risk,
the cost of interest bearing liabilities, and funding needs related
to loan originations and deposit activity.
Deposits decreased $481.7 million, or 11.6%, to
$3.67 billion at September 30, 2023, as compared to $4.15
billion at December 31, 2022. Brokered deposits decreased by
$390.0 million, or 100.0%. Deposits, excluding brokered deposits,
decreased $91.7 million, or 2.4%. The decrease in deposits,
excluding brokered deposits, was attributable to decreases of
$106.7 million in transaction accounts and $204.6 million in money
market accounts. These decreases were partially offset by increases
of $180.8 million in time deposits and $38.8 million in savings
accounts. Estimated uninsured deposits (excluding fully
collateralized uninsured governmental deposits of $661.1 million)
were approximately $899.5 million, or 24.5%, of total deposits as
of September 30, 2023, as compared to estimated uninsured
deposits (excluding fully collateralized uninsured governmental
deposits of $617.4 million) of approximately $827.8 million, or
22%, of total deposits as of June 30, 2023.
Deposit account balances are summarized as
follows (dollars in thousands):
|
September 30, 2023 |
|
June 30, 2023 |
|
December 31, 2022 |
Transaction: |
|
|
|
|
|
Non-interest bearing checking |
$ |
727,605 |
|
$ |
754,498 |
|
$ |
852,660 |
Negotiable orders of withdrawal and interest-bearing checking |
|
1,150,647 |
|
|
1,116,000 |
|
|
1,132,290 |
Total transaction |
|
1,878,252 |
|
|
1,870,498 |
|
|
1,984,950 |
Savings and money market: |
|
|
|
|
|
Savings |
|
956,009 |
|
|
930,198 |
|
|
917,180 |
Money market |
|
303,510 |
|
|
309,475 |
|
|
508,067 |
Total savings |
|
1,259,519 |
|
|
1,239,673 |
|
|
1,425,247 |
Certificates of deposit: |
|
|
|
|
|
Brokered deposits |
|
— |
|
|
171,448 |
|
|
390,035 |
$250,000 and under |
|
461,220 |
|
|
420,518 |
|
|
293,200 |
Over $250,000 |
|
69,522 |
|
|
62,266 |
|
|
56,787 |
Total certificates of deposit |
|
530,742 |
|
|
654,232 |
|
|
740,022 |
Total deposits |
$ |
3,668,513 |
|
$ |
3,764,403 |
|
$ |
4,150,219 |
Included in the table above are business and municipal deposit
account balances as follows (dollars in thousands):
|
September 30, 2023 |
|
June 30, 2023 |
|
December 31, 2022 |
|
|
|
|
|
|
Business customers |
$ |
988,612 |
|
$ |
993,298 |
|
$ |
1,146,803 |
Municipal (governmental)
customers |
$ |
638,881 |
|
$ |
595,322 |
|
$ |
604,717 |
Borrowed funds increased to $980.1 million at
September 30, 2023, from $644.9 million at December 31,
2022. The increase in borrowings for the period was due to an
increase in FHLB and FRB borrowings of $335.1 million, including
$114.5 million of borrowings under the Federal Reserve Bank Term
Funding Program which included favorable terms and conditions as
compared to FHLB advances. Management utilizes borrowings to
mitigate interest rate risk, for short-term liquidity, and to a
lesser extent from time to time, as part of leverage strategies.
During the nine months ended September 30, 2023, the Company
increased borrowings to pay off higher-rate brokered certificates
of deposit, and, to a lesser extent, fund deposit outflows of
non-brokered deposits.
The following table sets forth borrowing maturities (excluding
overnight borrowings and subordinated debt) and the weighted
average rate by year at September 30, 2023 (dollars in
thousands):
Year |
|
Amount(1) |
|
Weighted Average Rate |
2023 |
|
$20,000 |
|
4.38% |
2024 |
|
195,265 |
|
3.96% |
2025 |
|
182,500 |
|
2.59% |
2026 |
|
148,000 |
|
4.36% |
2027 |
|
173,000 |
|
3.19% |
Thereafter |
|
154,288 |
|
3.96% |
|
|
$873,053 |
|
3.60% |
|
|
|
|
|
(1) Borrowings maturing in 2023 and 2024 include $20.0
million and $94.5 million, respectively, of FRB borrowings that can
be repaid without any penalty.
Total stockholders’ equity decreased by $17.3
million to $684.1 million at September 30, 2023, from $701.4
million at December 31, 2022. The decrease was attributable to
$32.4 million in stock repurchases and $17.3 million in dividend
payments, partially offset by net income of $29.4 million for the
nine months ended September 30, 2023, a $348,000 increase in
accumulated other comprehensive income associated with an increase
in the estimated fair value of our debt securities
available-for-sale portfolio, and a $2.6 million increase in equity
award activity. During the nine months ended September 30,
2023, the Company repurchased approximately 2.6 million of its
common stock outstanding at an average price of $12.27 for a total
of $32.4 million pursuant to approved stock repurchase plans. As of
September 30, 2023, the Company had no remaining capacity
under its current repurchase program.
The Company's most liquid assets are cash and
cash equivalents, corporate bonds, and unpledged mortgage-related
securities issued or guaranteed by the U.S. Government, Fannie Mae,
or Freddie Mac, that we can either borrow against or sell. We also
have the ability to surrender bank-owned life insurance contracts.
The surrender of these contracts would subject the Company to
income taxes and penalties for increases in the cash surrender
values over the original premium payments. We also have the ability
to obtain additional funding from the FHLB and Federal Reserve Bank
of New York utilizing unencumbered and unpledged securities and
multifamily loans. The Company expects to have sufficient funds
available to meet current commitments in the normal course of
business.
The Company had the following primary sources of liquidity at
September 30, 2023 (dollars in thousands):
Cash and cash equivalents(1) |
|
$ |
67,298 |
Corporate bonds(2) |
|
$ |
90,318 |
Multifamily loans(2) |
|
$ |
1,185,250 |
Mortgage-backed securities
(issued or guaranteed by the U.S. Government, Fannie Mae, or
Freddie Mac)(2) |
|
$ |
120,943 |
|
|
|
(1) Excludes $13.3 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 September 30, 2023, the
Company and the Bank's estimated CBLR ratios were 12.69% and
12.94%, 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 September 30,
2023, June 30, 2023, and December 31, 2022 (dollars in
thousands):
|
September 30, 2023 |
|
June 30, 2023 |
|
December 31, 2022 |
Non-accrual loans: |
|
|
|
|
|
Held-for-investment |
|
|
|
|
|
Real estate loans: |
|
|
|
|
|
Multifamily |
$ |
3,073 |
|
|
$ |
3,223 |
|
|
$ |
3,285 |
|
Commercial |
|
5,435 |
|
|
|
5,393 |
|
|
|
5,184 |
|
One-to-four family residential |
|
106 |
|
|
|
109 |
|
|
|
118 |
|
Home equity and lines of credit |
|
98 |
|
|
|
100 |
|
|
|
262 |
|
Commercial and industrial |
|
848 |
|
|
|
1,275 |
|
|
|
964 |
|
Other |
|
10 |
|
|
|
10 |
|
|
|
— |
|
Total non-accrual
loans |
|
9,570 |
|
|
|
10,110 |
|
|
|
9,813 |
|
Loans delinquent 90 days or
more and still accruing: |
|
|
|
|
|
Held-for-investment |
|
|
|
|
|
Real estate loans: |
|
|
|
|
|
Multifamily |
|
209 |
|
|
|
218 |
|
|
|
233 |
|
Commercial |
|
114 |
|
|
|
— |
|
|
|
8 |
|
One-to-four family residential |
|
139 |
|
|
|
6 |
|
|
|
155 |
|
Home equity and lines of credit |
|
115 |
|
|
|
— |
|
|
|
— |
|
Commercial and industrial |
|
15 |
|
|
|
— |
|
|
|
— |
|
PPP loans |
|
— |
|
|
|
— |
|
|
|
24 |
|
Other |
|
— |
|
|
|
— |
|
|
|
5 |
|
Total loans
held-for-investment delinquent 90 days or more and still
accruing |
|
592 |
|
|
|
224 |
|
|
|
425 |
|
Total non-performing
assets |
$ |
10,162 |
|
|
$ |
10,334 |
|
|
$ |
10,238 |
|
Non-performing loans to total loans |
|
0.24 |
% |
|
|
0.24 |
% |
|
|
0.24 |
% |
Non-performing assets to total assets |
|
0.19 |
% |
|
|
0.19 |
% |
|
|
0.18 |
% |
Loans subject to
restructuring agreements and still accruing(1) |
$ |
— |
|
|
$ |
— |
|
|
$ |
3,751 |
|
Accruing loans 30 to
89 days delinquent |
$ |
8,105 |
|
|
$ |
4,076 |
|
|
$ |
3,644 |
|
|
|
|
|
|
|
(1) With the adoption of Accounting Standards
Update (“ASU”) 2022-02, Financial Instruments - Credit Losses
(Topic 326) Troubled Debt Restructurings and Vintage Disclosures
(“ASU 2022-02”), effective January 1, 2023, TDR accounting has been
eliminated.
Accruing Loans 30 to 89 Days Delinquent
Loans 30 to 89 days delinquent and on accrual
status totaled $8.1 million, $4.1 million, and $3.6 million at
September 30, 2023, June 30, 2023, and December 31,
2022, respectively. The following table sets forth delinquencies
for accruing loans by type and by amount at September 30,
2023, June 30, 2023 and December 31, 2022 (dollars in
thousands):
|
September 30, 2023 |
|
June 30, 2023 |
|
December 31, 2022 |
Held-for-investment |
|
|
|
|
|
Real estate loans: |
|
|
|
|
|
Multifamily |
$ |
178 |
|
$ |
— |
|
$ |
189 |
Commercial |
|
1,892 |
|
|
803 |
|
|
900 |
One-to-four family residential |
|
2,708 |
|
|
567 |
|
|
672 |
Home equity and lines of credit |
|
1,206 |
|
|
256 |
|
|
830 |
Commercial and industrial loans |
|
2,117 |
|
|
2,450 |
|
|
1,048 |
Other loans |
|
4 |
|
|
— |
|
|
5 |
Total delinquent accruing loans held-for-investment |
$ |
8,105 |
|
$ |
4,076 |
|
$ |
3,644 |
|
|
|
|
|
|
|
|
|
The increase in delinquent commercial loans is
primarily due to one loan with a balance of $1.1 million that
became delinquent during the current quarter. The loan is
well-secured by property in Staten Island, New York, with an
appraised value of $4.2 million. The majority of the loans past due
in the one-to-four family residential and home equity and lines of
credit portfolios were due to loans past due 30 days at September
30, 2023 (current as of June 30, 2023), and became current
subsequent to the quarter end, therefore management does not
believe the recent increase in delinquencies in these portfolios is
an indicator of credit deterioration. The increase in the
commercial and industrial loan delinquencies from December 31, 2022
was primarily due to an increase in delinquencies in unsecured
small business loans. Unsecured small business loans totaled $39.1
million, $41.4 million, and $43.3 million at September 30,
2023, June 30, 2023 and December 31, 2022, respectively.
Management continues to monitor the small business unsecured
commercial and industrial loan portfolio.
PCD Loans (Held-for-Investment)
The Company accounts for PCD loans at estimated
fair value using discounted expected future cash flows deemed to be
collectible on the date acquired. Based on its detailed review of
PCD loans and experience in loan workouts, management believes it
has a reasonable expectation about the amount and timing of future
cash flows and accordingly has classified PCD loans ($10.4 million
at September 30, 2023 and $11.5 million at December 31,
2022, respectively) as accruing, even though they may be
contractually past due. At September 30, 2023, 3.5% of
PCD loans were past due 30 to 89 days, and 28.2% were past due 90
days or more, as compared to 6.8% and 23.0%, respectively, at
December 31, 2022.
About Northfield Bank
Northfield Bank, founded in 1887, operates 38
full-service banking offices in Staten Island and Brooklyn, New
York, and Hunterdon, Middlesex, Mercer, and Union counties, New
Jersey. For more information about Northfield Bank, please visit
www.eNorthfield.com.
Forward-Looking Statements:
This release may contain certain "forward looking statements"
within the meaning of the Private Securities Litigation Reform Act
of 1995, and may be identified by the use of such words as "may,"
"believe," "expect," "anticipate," "should," "plan," "estimate,"
"predict," "continue," and "potential" or the negative of these
terms or other comparable terminology. Examples of
forward-looking statements include, but are not limited to,
estimates with respect to the financial condition, results of
operations and business of Northfield Bancorp, Inc. Any or all
of the forward-looking statements in this release and in any other
public statements made by Northfield Bancorp, Inc. may turn out to
be wrong. They can be affected by inaccurate assumptions
Northfield Bancorp, Inc. might make or by known or unknown risks
and uncertainties as described in our SEC filings, including, but
not limited to, those related to general economic conditions,
particularly in the market areas in which the Company operates,
including any potential recessionary conditions, changes in
liquidity, including the size and composition of our deposit
portfolio and the percentage of uninsured deposits in the
portfolio, the effects of the COVID-19 pandemic, including the
effects of the steps taken to address the pandemic and their impact
on the Company’s market and employees, competition among depository
and other financial institutions, including with respect to
overdraft and other fees, changes in laws or government regulations
or policies affecting financial institutions, including changes in
the monetary policies of the U.S. Treasury and the Board of
Governors of the Federal Reserve System, a potential government
shutdown, changes in the value of our goodwill or other intangible
assets, changes in regulatory fees, assessments and capital
requirements, inflation and changes in the interest rate
environment that reduce our margins, reduce the fair value of
financial instruments or reduce our ability to originate loans, the
effects of war, conflict, and acts of terrorism, our ability to
successfully integrate acquired entities, and adverse changes in
the securities markets. Consequently, no forward-looking statement
can be guaranteed. Northfield Bancorp, Inc. does not intend to
update any of the forward-looking statements after the date of this
release, or conform these statements to actual events.
(Tables follow)
NORTHFIELD BANCORP, INC.SELECTED CONSOLIDATED
FINANCIAL AND OTHER DATA(Dollars in thousands, except per share
amounts) (unaudited) |
|
|
|
|
|
|
|
At or For the |
|
At or For the Three Months Ended |
|
Nine Months Ended |
|
September 30, |
|
June 30, |
|
September 30, |
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2023 |
|
|
2022 |
|
Selected Financial
Ratios: |
|
|
|
|
|
|
|
|
|
Performance
Ratios(1) |
|
|
|
|
|
|
|
|
|
Return on assets (ratio of net
income to average total assets) |
0.59 |
% |
|
1.19 |
% |
|
0.69 |
% |
|
0.71 |
% |
|
1.13 |
% |
Return on equity (ratio of net
income to average equity) |
4.74 |
|
|
9.45 |
|
|
5.52 |
|
|
5.69 |
|
|
8.73 |
|
Average equity to average total
assets |
12.49 |
|
|
12.56 |
|
|
12.44 |
|
|
12.44 |
|
|
12.90 |
|
Interest rate spread |
1.69 |
|
|
2.93 |
|
|
1.83 |
|
|
1.91 |
|
|
2.88 |
|
Net interest margin |
2.25 |
|
|
3.08 |
|
|
2.34 |
|
|
2.41 |
|
|
2.99 |
|
Efficiency ratio(2) |
64.65 |
|
|
40.34 |
|
|
61.14 |
|
|
60.06 |
|
|
44.69 |
|
Non-interest expense to average
total assets |
1.49 |
|
|
1.25 |
|
|
1.49 |
|
|
1.50 |
|
|
1.33 |
|
Non-interest expense to average
total interest-earning assets |
1.56 |
|
|
1.31 |
|
|
1.56 |
|
|
1.57 |
|
|
1.39 |
|
Average interest-earning assets
to average interest-bearing liabilities |
132.21 |
|
|
137.26 |
|
|
133.31 |
|
|
133.66 |
|
|
138.21 |
|
Asset Quality
Ratios: |
|
|
|
|
|
|
|
|
|
Non-performing assets to total
assets |
0.19 |
|
|
0.17 |
|
|
0.19 |
|
|
0.19 |
|
|
0.17 |
|
Non-performing loans(3)to
total loans(4) |
0.24 |
|
|
0.23 |
|
|
0.24 |
|
|
0.24 |
|
|
0.23 |
|
Allowance for credit losses to
non-performing loans |
378.67 |
|
|
423.96 |
|
|
398.24 |
|
|
378.67 |
|
|
423.96 |
|
Allowance for credit losses to
total loans held-for-investment, net(5) |
0.91 |
|
|
0.99 |
|
|
0.96 |
|
|
0.91 |
|
|
0.99 |
|
(1) Annualized where appropriate. (2) The efficiency ratio
represents non-interest expense divided by the sum of net interest
income and non-interest income.(3) Non-performing loans consist of
non-accruing loans and loans 90 days or more past due and still
accruing (excluding PCD loans), and are included in total loans
held-for-investment, net.(4) Includes originated loans
held-for-investment, PCD loans, acquired loans and loans
held-for-sale.(5) Includes originated loans held-for-investment,
PCD loans, and acquired loans.
NORTHFIELD BANCORP, INC.CONSOLIDATED BALANCE
SHEETS(Dollars in thousands, except share and per share amounts)
(unaudited) |
|
September 30, 2023 |
|
June 30, 2023 |
|
December 31, 2022 |
ASSETS: |
|
|
|
|
|
Cash and due from banks |
$ |
13,258 |
|
|
$ |
13,853 |
|
|
$ |
14,530 |
|
Interest-bearing deposits in
other financial institutions |
|
67,298 |
|
|
|
75,274 |
|
|
|
31,269 |
|
Total cash and cash
equivalents |
|
80,556 |
|
|
|
89,127 |
|
|
|
45,799 |
|
Trading securities |
|
11,504 |
|
|
|
11,731 |
|
|
|
10,751 |
|
Debt securities
available-for-sale, at estimated fair value |
|
743,699 |
|
|
|
802,257 |
|
|
|
952,173 |
|
Debt securities
held-to-maturity, at amortized cost |
|
10,114 |
|
|
|
10,316 |
|
|
|
10,760 |
|
Equity securities |
|
10,628 |
|
|
|
10,653 |
|
|
|
10,443 |
|
Loans held-for-sale |
|
950 |
|
|
|
977 |
|
|
|
— |
|
Loans held-for-investment,
net |
|
4,229,974 |
|
|
|
4,274,042 |
|
|
|
4,243,693 |
|
Allowance for credit losses |
|
(38,480 |
) |
|
|
(41,154 |
) |
|
|
(42,617 |
) |
Net loans
held-for-investment |
|
4,191,494 |
|
|
|
4,232,888 |
|
|
|
4,201,076 |
|
Accrued interest
receivable |
|
17,355 |
|
|
|
17,721 |
|
|
|
17,426 |
|
Bank-owned life insurance |
|
170,591 |
|
|
|
169,671 |
|
|
|
167,912 |
|
Federal Home Loan Bank of New
York stock, at cost |
|
41,165 |
|
|
|
40,376 |
|
|
|
30,382 |
|
Operating lease right-of-use
assets |
|
31,407 |
|
|
|
32,010 |
|
|
|
34,288 |
|
Premises and equipment,
net |
|
24,154 |
|
|
|
24,573 |
|
|
|
24,844 |
|
Goodwill |
|
41,012 |
|
|
|
41,012 |
|
|
|
41,012 |
|
Other assets |
|
62,455 |
|
|
|
57,503 |
|
|
|
54,427 |
|
Total
assets |
$ |
5,437,084 |
|
|
$ |
5,540,815 |
|
|
$ |
5,601,293 |
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY: |
|
|
|
|
|
LIABILITIES: |
|
|
|
|
|
Deposits |
$ |
3,668,513 |
|
|
$ |
3,764,403 |
|
|
$ |
4,150,219 |
|
Securities sold under
agreements to repurchase |
|
25,000 |
|
|
|
25,000 |
|
|
|
25,000 |
|
Federal Home Loan Bank
advances and other borrowings |
|
893,973 |
|
|
|
898,535 |
|
|
|
558,859 |
|
Subordinated debentures, net
of issuance costs |
|
61,163 |
|
|
|
61,108 |
|
|
|
60,996 |
|
Lease liabilities |
|
36,535 |
|
|
|
37,274 |
|
|
|
39,790 |
|
Advance payments by borrowers
for taxes and insurance |
|
25,968 |
|
|
|
29,117 |
|
|
|
25,995 |
|
Accrued expenses and other
liabilities |
|
41,857 |
|
|
|
38,737 |
|
|
|
39,044 |
|
Total
liabilities |
|
4,753,009 |
|
|
|
4,854,174 |
|
|
|
4,899,903 |
|
|
|
|
|
|
|
STOCKHOLDERS’
EQUITY: |
|
|
|
|
|
Total stockholders’
equity |
|
684,075 |
|
|
|
686,641 |
|
|
|
701,390 |
|
Total liabilities and
stockholders’ equity |
$ |
5,437,084 |
|
|
$ |
5,540,815 |
|
|
$ |
5,601,293 |
|
|
|
|
|
|
|
Total shares outstanding |
|
44,956,118 |
|
|
|
45,243,673 |
|
|
|
47,442,488 |
|
Tangible book value per
share(1) |
$ |
14.30 |
|
|
$ |
14.27 |
|
|
$ |
13.91 |
|
(1) Tangible book value per share is calculated
based on total stockholders' equity, excluding intangible assets
(goodwill and core deposit intangibles), divided by total shares
outstanding as of the balance sheet date. Core deposit intangibles
were $185,000, $216,000, and $266,000 at September 30, 2023,
June 30, 2023 and December 31, 2022, respectively, and
are included in other assets.
NORTHFIELD BANCORP, INC.CONSOLIDATED STATEMENTS OF
INCOME(Dollars in thousands, except share and per share
amounts) (unaudited) |
|
For the Three Months Ended |
|
For the Nine Months Ended |
|
September 30, |
|
June 30, |
|
September 30, |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2023 |
|
|
|
2022 |
|
Interest
income: |
|
|
|
|
|
|
|
|
|
Loans |
$ |
46,213 |
|
|
$ |
42,311 |
|
|
$ |
45,300 |
|
|
$ |
135,220 |
|
|
$ |
118,030 |
|
Mortgage-backed securities |
|
3,664 |
|
|
|
3,284 |
|
|
|
3,714 |
|
|
|
11,170 |
|
|
|
8,802 |
|
Other securities |
|
1,095 |
|
|
|
1,201 |
|
|
|
1,113 |
|
|
|
3,593 |
|
|
|
2,885 |
|
Federal Home Loan Bank of New York dividends |
|
933 |
|
|
|
283 |
|
|
|
727 |
|
|
|
2,125 |
|
|
|
788 |
|
Deposits in other financial institutions |
|
831 |
|
|
|
199 |
|
|
|
816 |
|
|
|
2,225 |
|
|
|
423 |
|
Total interest income |
|
52,736 |
|
|
|
47,278 |
|
|
|
51,670 |
|
|
|
154,333 |
|
|
|
130,928 |
|
Interest
expense: |
|
|
|
|
|
|
|
|
|
Deposits |
|
13,614 |
|
|
|
2,121 |
|
|
|
10,483 |
|
|
|
31,918 |
|
|
|
4,614 |
|
Borrowings |
|
8,593 |
|
|
|
2,304 |
|
|
|
9,198 |
|
|
|
24,182 |
|
|
|
6,388 |
|
Subordinated debt |
|
837 |
|
|
|
842 |
|
|
|
828 |
|
|
|
2,484 |
|
|
|
961 |
|
Total interest expense |
|
23,044 |
|
|
|
5,267 |
|
|
|
20,509 |
|
|
|
58,584 |
|
|
|
11,963 |
|
Net interest income |
|
29,692 |
|
|
|
42,011 |
|
|
|
31,161 |
|
|
|
95,749 |
|
|
|
118,965 |
|
Provision for credit
losses |
|
188 |
|
|
|
2,703 |
|
|
|
30 |
|
|
|
1,082 |
|
|
|
3,255 |
|
Net interest income after
provision for credit losses |
|
29,504 |
|
|
|
39,308 |
|
|
|
31,131 |
|
|
|
94,667 |
|
|
|
115,710 |
|
Non-interest
income: |
|
|
|
|
|
|
|
|
|
Fees and service charges for customer services |
|
1,317 |
|
|
|
1,500 |
|
|
|
1,309 |
|
|
|
4,006 |
|
|
|
4,206 |
|
Income on bank-owned life insurance |
|
920 |
|
|
|
861 |
|
|
|
889 |
|
|
|
2,679 |
|
|
|
2,548 |
|
(Losses)/gains on available-for-sale debt securities, net |
|
— |
|
|
|
— |
|
|
|
(18 |
) |
|
|
(17 |
) |
|
|
264 |
|
(Losses)/gains on trading securities, net |
|
(295 |
) |
|
|
(426 |
) |
|
|
506 |
|
|
|
723 |
|
|
|
(2,791 |
) |
Gain on sale of loans |
|
99 |
|
|
|
273 |
|
|
|
35 |
|
|
|
134 |
|
|
|
273 |
|
Other |
|
80 |
|
|
|
78 |
|
|
|
95 |
|
|
|
744 |
|
|
|
264 |
|
Total non-interest income |
|
2,121 |
|
|
|
2,286 |
|
|
|
2,816 |
|
|
|
8,269 |
|
|
|
4,764 |
|
Non-interest
expense: |
|
|
|
|
|
|
|
|
|
Compensation and employee benefits |
|
10,920 |
|
|
|
10,784 |
|
|
|
12,353 |
|
|
|
34,310 |
|
|
|
29,709 |
|
Occupancy |
|
3,416 |
|
|
|
3,347 |
|
|
|
3,244 |
|
|
|
10,032 |
|
|
|
10,041 |
|
Furniture and equipment |
|
479 |
|
|
|
438 |
|
|
|
460 |
|
|
|
1,393 |
|
|
|
1,290 |
|
Data processing |
|
1,994 |
|
|
|
1,847 |
|
|
|
2,071 |
|
|
|
6,308 |
|
|
|
5,322 |
|
Professional fees |
|
883 |
|
|
|
903 |
|
|
|
768 |
|
|
|
2,622 |
|
|
|
3,040 |
|
Advertising |
|
414 |
|
|
|
420 |
|
|
|
573 |
|
|
|
1,834 |
|
|
|
1,257 |
|
Federal Deposit Insurance Corporation insurance |
|
591 |
|
|
|
356 |
|
|
|
568 |
|
|
|
1,763 |
|
|
|
1,068 |
|
Credit loss expense/(benefit) for off-balance sheet exposures |
|
160 |
|
|
|
(1,888 |
) |
|
|
(661 |
) |
|
|
(390 |
) |
|
|
(1,260 |
) |
Other |
|
1,710 |
|
|
|
1,663 |
|
|
|
1,399 |
|
|
|
4,598 |
|
|
|
4,825 |
|
Total non-interest
expense |
|
20,567 |
|
|
|
17,870 |
|
|
|
20,775 |
|
|
|
62,470 |
|
|
|
55,292 |
|
Income before income tax
expense |
|
11,058 |
|
|
|
23,724 |
|
|
|
13,172 |
|
|
|
40,466 |
|
|
|
65,182 |
|
Income tax
expense |
|
2,877 |
|
|
|
6,745 |
|
|
|
3,613 |
|
|
|
11,019 |
|
|
|
18,202 |
|
Net
income |
$ |
8,181 |
|
|
$ |
16,979 |
|
|
$ |
9,559 |
|
|
$ |
29,447 |
|
|
$ |
46,980 |
|
Net income per common
share: |
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.19 |
|
|
$ |
0.37 |
|
|
$ |
0.22 |
|
|
$ |
0.67 |
|
|
$ |
1.01 |
|
Diluted |
$ |
0.19 |
|
|
$ |
0.37 |
|
|
$ |
0.22 |
|
|
$ |
0.67 |
|
|
$ |
1.01 |
|
Basic average shares outstanding |
|
42,866,246 |
|
|
|
46,047,104 |
|
|
|
43,914,110 |
|
|
|
43,848,873 |
|
|
|
46,486,086 |
|
Diluted average shares outstanding |
|
42,918,174 |
|
|
|
46,236,662 |
|
|
|
43,952,939 |
|
|
|
43,927,350 |
|
|
|
46,657,084 |
|
NORTHFIELD BANCORP, INC.ANALYSIS OF NET INTEREST
INCOME(Dollars in thousands) (unaudited) |
|
For the Three Months Ended |
|
September 30, 2023 |
|
June 30, 2023 |
|
September 30, 2022 |
|
Average Outstanding Balance |
|
Interest |
|
Average Yield/ Rate(1) |
|
Average Outstanding Balance |
|
Interest |
|
Average Yield/ Rate(1) |
|
Average Outstanding Balance |
|
Interest |
|
Average Yield/ Rate(1) |
Interest-earning
assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans(2) |
$ |
4,252,752 |
|
$ |
46,213 |
|
4.31 |
% |
|
$ |
4,284,871 |
|
$ |
45,300 |
|
4.24 |
% |
|
$ |
4,214,438 |
|
$ |
42,311 |
|
3.98 |
% |
Mortgage-backed securities(3) |
|
660,753 |
|
|
3,664 |
|
2.20 |
|
|
|
703,415 |
|
|
3,714 |
|
2.12 |
|
|
|
833,975 |
|
|
3,284 |
|
1.56 |
|
Other securities(3) |
|
209,341 |
|
|
1,095 |
|
2.08 |
|
|
|
239,273 |
|
|
1,113 |
|
1.87 |
|
|
|
294,786 |
|
|
1,201 |
|
1.62 |
|
Federal Home Loan Bank of New York stock |
|
41,278 |
|
|
933 |
|
8.97 |
|
|
|
43,901 |
|
|
727 |
|
6.64 |
|
|
|
22,641 |
|
|
283 |
|
4.96 |
|
Interest-earning deposits in financial institutions |
|
73,005 |
|
|
831 |
|
4.52 |
|
|
|
67,822 |
|
|
816 |
|
4.83 |
|
|
|
51,364 |
|
|
199 |
|
1.54 |
|
Total interest-earning assets |
|
5,237,129 |
|
|
52,736 |
|
4.00 |
|
|
|
5,339,282 |
|
|
51,670 |
|
3.88 |
|
|
|
5,417,204 |
|
|
47,278 |
|
3.46 |
|
Non-interest-earning
assets |
|
248,315 |
|
|
|
|
|
|
244,567 |
|
|
|
|
|
|
257,177 |
|
|
|
|
Total assets |
$ |
5,485,444 |
|
|
|
|
|
$ |
5,583,849 |
|
|
|
|
|
$ |
5,674,381 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings, NOW, and money market accounts |
$ |
2,408,218 |
|
$ |
8,865 |
|
1.46 |
% |
|
$ |
2,399,631 |
|
$ |
6,486 |
|
1.08 |
% |
|
$ |
2,923,600 |
|
$ |
701 |
|
0.10 |
% |
Certificates of deposit |
|
551,904 |
|
|
4,749 |
|
3.41 |
|
|
|
540,984 |
|
|
3,997 |
|
2.96 |
|
|
|
554,018 |
|
|
1,420 |
|
1.02 |
|
Total interest-bearing deposits |
|
2,960,122 |
|
|
13,614 |
|
1.82 |
|
|
|
2,940,615 |
|
|
10,483 |
|
1.43 |
|
|
|
3,477,618 |
|
|
2,121 |
|
0.24 |
|
Borrowed funds |
|
939,922 |
|
|
8,593 |
|
3.63 |
|
|
|
1,003,611 |
|
|
9,198 |
|
3.68 |
|
|
|
407,668 |
|
|
2,304 |
|
2.24 |
|
Subordinated debt |
|
61,127 |
|
|
837 |
|
5.43 |
|
|
|
61,071 |
|
|
828 |
|
5.44 |
|
|
|
61,283 |
|
|
842 |
|
5.45 |
|
Total interest-bearing liabilities |
|
3,961,171 |
|
|
23,044 |
|
2.31 |
|
|
|
4,005,297 |
|
|
20,509 |
|
2.05 |
|
|
|
3,946,569 |
|
|
5,267 |
|
0.53 |
|
Non-interest bearing
deposits |
|
739,266 |
|
|
|
|
|
|
780,806 |
|
|
|
|
|
|
911,183 |
|
|
|
|
Accrued expenses and other
liabilities |
|
100,103 |
|
|
|
|
|
|
102,846 |
|
|
|
|
|
|
103,853 |
|
|
|
|
Total liabilities |
|
4,800,540 |
|
|
|
|
|
|
4,888,949 |
|
|
|
|
|
|
4,961,605 |
|
|
|
|
Stockholders' equity |
|
684,904 |
|
|
|
|
|
|
694,900 |
|
|
|
|
|
|
712,776 |
|
|
|
|
Total liabilities and stockholders' equity |
$ |
5,485,444 |
|
|
|
|
|
$ |
5,583,849 |
|
|
|
|
|
$ |
5,674,381 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
|
$ |
29,692 |
|
|
|
|
|
$ |
31,161 |
|
|
|
|
|
$ |
42,011 |
|
|
Net interest rate
spread(4) |
|
|
|
|
1.69 |
% |
|
|
|
|
|
1.83 |
% |
|
|
|
|
|
2.93 |
% |
Net interest-earning
assets(5) |
$ |
1,275,958 |
|
|
|
|
|
$ |
1,333,985 |
|
|
|
|
|
$ |
1,470,635 |
|
|
|
|
Net interest margin(6) |
|
|
|
|
2.25 |
% |
|
|
|
|
|
2.34 |
% |
|
|
|
|
|
3.08 |
% |
Average interest-earning
assets to interest-bearing liabilities |
|
|
|
|
132.21 |
% |
|
|
|
|
|
133.31 |
% |
|
|
|
|
|
137.26 |
% |
(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 Nine Months Ended |
|
September 30, 2023 |
|
September 30, 2022 |
|
Average Outstanding Balance |
|
Interest |
|
Average Yield/ Rate(1) |
|
Average Outstanding Balance |
|
Interest |
|
Average Yield/ Rate(1) |
Interest-earning
assets: |
|
|
|
|
|
|
|
|
|
|
|
Loans(2) |
$ |
4,260,827 |
|
$ |
135,220 |
|
4.24 |
% |
|
$ |
4,019,750 |
|
$ |
118,030 |
|
3.93 |
% |
Mortgage-backed securities(3) |
|
703,320 |
|
|
11,170 |
|
2.12 |
|
|
|
890,257 |
|
|
8,802 |
|
1.32 |
|
Other securities(3) |
|
241,280 |
|
|
3,593 |
|
1.99 |
|
|
|
283,017 |
|
|
2,885 |
|
1.36 |
|
Federal Home Loan Bank of New York stock |
|
41,093 |
|
|
2,125 |
|
6.91 |
|
|
|
21,845 |
|
|
788 |
|
4.82 |
|
Interest-earning deposits in financial institutions |
|
72,683 |
|
|
2,225 |
|
4.09 |
|
|
|
96,122 |
|
|
423 |
|
0.59 |
|
Total interest-earning assets |
|
5,319,203 |
|
|
154,333 |
|
3.88 |
|
|
|
5,310,991 |
|
|
130,928 |
|
3.30 |
|
Non-interest-earning
assets |
|
244,319 |
|
|
|
|
|
|
267,581 |
|
|
|
|
Total assets |
$ |
5,563,522 |
|
|
|
|
|
$ |
5,578,572 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
liabilities: |
|
|
|
|
|
|
|
|
|
|
|
Savings, NOW, and money market accounts |
$ |
2,443,400 |
|
$ |
19,194 |
|
1.05 |
% |
|
$ |
2,961,776 |
|
$ |
1,871 |
|
0.08 |
% |
Certificates of deposit |
|
572,283 |
|
|
12,724 |
|
2.97 |
|
|
|
455,985 |
|
|
2,743 |
|
0.80 |
|
Total interest-bearing deposits |
|
3,015,683 |
|
|
31,918 |
|
1.42 |
|
|
|
3,417,761 |
|
|
4,614 |
|
0.18 |
|
Borrowed funds |
|
902,802 |
|
|
24,182 |
|
3.58 |
|
|
|
401,109 |
|
|
6,388 |
|
2.13 |
|
Subordinated debt |
|
61,164 |
|
|
2,484 |
|
5.43 |
|
|
|
23,828 |
|
|
961 |
|
5.39 |
|
Total interest-bearing liabilities |
$ |
3,979,649 |
|
|
58,584 |
|
1.97 |
|
|
$ |
3,842,698 |
|
|
11,963 |
|
0.42 |
|
Non-interest bearing
deposits |
|
788,991 |
|
|
|
|
|
|
913,322 |
|
|
|
|
Accrued expenses and other
liabilities |
|
102,765 |
|
|
|
|
|
|
103,075 |
|
|
|
|
Total liabilities |
|
4,871,405 |
|
|
|
|
|
|
4,859,095 |
|
|
|
|
Stockholders' equity |
|
692,117 |
|
|
|
|
|
|
719,477 |
|
|
|
|
Total liabilities and stockholders' equity |
$ |
5,563,522 |
|
|
|
|
|
$ |
5,578,572 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
|
$ |
95,749 |
|
|
|
|
|
$ |
118,965 |
|
|
Net interest rate
spread(4) |
|
|
|
|
1.91 |
% |
|
|
|
|
|
2.88 |
% |
Net interest-earning
assets(5) |
$ |
1,339,554 |
|
|
|
|
|
$ |
1,468,293 |
|
|
|
|
Net interest margin(6) |
|
|
|
|
2.41 |
% |
|
|
|
|
|
2.99 |
% |
Average interest-earning
assets to interest-bearing liabilities |
|
|
|
|
133.66 |
% |
|
|
|
|
|
138.21 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
(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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