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Northfield Bancorp, Inc. Announces First Quarter 2019 Results - 10% Increase in Quarterly Cash Dividend - $37.2 Million Stock Repurchase Plan Approval

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NOTABLE ITEMS INCLUDE:

  • DILUTED EARNINGS PER SHARE OF $0.19 FOR THE FIRST QUARTER OF 2019, COMPARED TO

    • $0.21 diluted earnings per share for the fourth quarter of 2018, including $0.01 per diluted share of excess tax benefits related to the exercise or vesting of equity awards

    • $0.22 diluted earnings per share for the first quarter of 2018, including $0.02 per diluted share of excess tax benefits related to the exercise or vesting of equity awards

  • TOTAL ASSETS INCREASED $147.0 MILLION, OR 3.3%, WITH AN INCREASE IN SECURITIES OF $87.2 MILLION, OR 10.5%

  • ORIGINATED LOANS, NET, INCREASED $49.0 MILLION, OR 7.3% ANNUALIZED

  • DEPOSITS INCREASED $122.0 MILLION, OR 16.2% ANNUALIZED, EXCLUDING BROKERED

  • CASH DIVIDEND INCREASED 10%, TO $0.11 PER SHARE

WOODBRIDGE, N.J., April 24, 2019 (GLOBE NEWSWIRE) -- NORTHFIELD BANCORP, INC. (NFBK), the holding company for Northfield Bank, reported diluted earnings per common share of $0.19 for the three months ended March 31, 2019, compared to diluted earnings per common share of $0.21 for the three months ended December 31, 2018, and diluted earnings per common share of $0.22 for the three months ended March 31, 2018. Earnings for the three months ended December 31, 2018, and March 31, 2018, included excess tax benefits related to the exercise or vesting of equity awards of $514,000, or $0.01 per diluted share, and $869,000, or $0.02 per diluted share, respectively. There were no material excess tax benefits for the three months ended March 31, 2019.

Commenting on the quarter, Steven M. Klein, the Company's President and Chief Executive Officer, noted, “We reported strong financial results for the three months ended March 31, 2019, as we continued to successfully execute on our key strategic initiatives focused on prudent and disciplined loan and deposit growth, technology investment and implementation, team member training and development, and promotion of our brand.” Mr. Klein continued, “Our strong capital and risk management processes, combined with continued profitability, support the Company’s implementation of a $37.2 million stock repurchase plan and an increase to our quarterly cash dividend.”

Mr. Klein further noted, “I'm pleased to announce that the Board of Directors has declared a 10% increase to our cash dividend, to $0.11 per common share, payable on May 22, 2019, to stockholders of record on May 8, 2019.”

Results of Operations

Comparison of Operating Results for the Three Months Ended March 31, 2019 and 2018

Net income was $8.8 million and $10.4 million for the three months ended March 31, 2019, and March 31, 2018, respectively. Significant variances from the comparable prior year period are as follows: a $214,000 decrease in net interest income, a $909,000 increase in non-interest income, a $2.1 million increase in non-interest expense, and a $266,000 increase in income tax expense.

Net interest income for the three months ended March 31, 2019, decreased $214,000, or 0.8%, to $27.3 million, from $27.5 million for the three months ended March 31, 2018, as a 30 basis point decrease in our net interest margin to 2.63% more than offset a $390.1 million, or 10.2%, increase in our average interest-earning assets. The decrease in net interest margin was primarily due to the increased cost of our interest-bearing liabilities, which increased 49 basis points to 1.47% for the three months ended March 31, 2019, from 0.98% for the three months ended March 31, 2018. The increase in our average interest-earning assets was due to increases in average loans outstanding of $86.1 million, average mortgage-backed securities of $141.3 million, average other securities of $155.5 million, and average interest-earning deposits in financial institutions of $10.2 million, partially offset by a decrease in average Federal Home Loan Bank of New York (“FHLBNY”) stock of $3.1 million. Net interest income for the three months ended March 31, 2019, included loan prepayment income of $420,000 as compared to $628,000 for the three months ended March 31, 2018. Yields earned on interest-earning assets increased 11 basis points to 3.80% for the three months ended March 31, 2019, from 3.69% for the three months ended March 31, 2018, driven by higher yields in all asset classes.

The provision for loan losses remained relatively stable at $59,000 for the three months ended March 31, 2019, compared to $34,000 for the three months ended March 31, 2018, as an improvement in qualitative factors offset an increase in provision from loan growth. Net charge-offs for the three months ended March 31, 2019, were $70,000 compared to net charge-offs of $22,000 for the three months ended March 31, 2018.

Non-interest income increased $909,000, or 37.8%, to $3.3 million for the three months ended March 31, 2019, from $2.4 million for the three months ended March 31, 2018, primarily due to a $1.1 million increase in gains on securities transactions, net. For the three months ended March 31, 2019, securities gains, net, included gains of $1.1 million related to the Company’s trading portfolio, compared to gains of $106,000 in the comparative prior year period. The trading portfolio is utilized to fund the Company’s deferred compensation obligation to certain employees and directors of the Company's deferred compensation plan (the Plan). The participants of this Plan, at their election, defer a portion of their compensation. Gains and losses on trading securities have no effect on net income since participants benefit from, and bear the full risk of, changes in the trading securities market values. Therefore, the Company records an equal and offsetting amount in compensation expense, reflecting the change in the Company’s obligations under the Plan.

Non-interest expense increased $2.1 million, or 12.1%, to $19.2 million for the three months ended March 31, 2019, compared to $17.1 million for the three months ended March 31, 2018. This is due primarily to a $1.9 million increase in employee compensation and benefits, $1.0 million of which is related to the Company's deferred compensation plan which is described above and has no effect on net income, with the remainder attributable to increased costs associated with new hires related to branch openings and new lending personnel, merit increases effective January 1, 2019, and higher medical benefit costs.

The Company recorded income tax expense of $2.6 million for the three months ended March 31, 2019, compared to $2.3 million for the three months ended March 31, 2018. The effective tax rate for the three months ended March 31, 2019, was 22.9% compared to 18.3% for the three months ended March 31, 2018, the increase being primarily due to lower excess tax benefits related to the exercise or vesting of equity awards. Excess tax benefits were $93,000 and $869,000 for the quarters ended March 31, 2019, and March 31, 2018, respectively.

Comparison of Operating Results for the Three Months Ended March 31, 2019, and December 31, 2018

Net income was $8.8 million and $9.9 million for the three months ended March 31, 2019, and December 31, 2018, respectively. Significant variances from the prior quarter are as follows: a $674,000 decrease in net interest income, a $548,000 decrease in the provision for loan losses, a $2.7 million increase in non-interest income, a $3.4 million increase in non-interest expense, and a $296,000 increase in income tax expense.

Net interest income for the three months ended March 31, 2019, decreased $674,000, or 2.4%, as a nine basis point decrease in our net interest margin to 2.63% from 2.72% for the quarter ended December 31, 2018, more than offset a $117.1 million, or 2.9%, increase in our average interest-earning assets. In addition there were two fewer days in the current quarter as compared to the prior quarter, which also contributed to the decrease in net interest income. The decrease in net interest margin was primarily due to an increased cost of our interest-bearing liabilities, which increased 12 basis points to 1.47% for the current quarter as compared to 1.35% for the prior quarter. The increase in our average interest-earning assets was due primarily to increases in average loans outstanding of $20.0 million, average mortgage-backed securities of $39.2 million, average other securities of $14.0 million, and average interest-earning deposits in financial institutions of $45.3 million. Net interest income for the quarter ended March 31, 2019 included loan prepayment income of $420,000, as compared to $503,000 for the quarter ended December 31, 2018. Yields earned on interest-earning assets increased two basis points to 3.80% for the quarter ended March 31, 2019, from 3.78% for the quarter ended December 31, 2018.

The provision for loan losses decreased by $548,000 to $59,000 for the quarter ended March 31, 2019, from $607,000 for the quarter ended December 31, 2018, primarily due to lower net charge-offs. Net charge-offs were $70,000 for the quarter ended March 31, 2019, compared to net charge-offs of $797,000 for the quarter ended December 31, 2018.

Non-interest income increased $2.7 million to $3.3 million for the quarter ended March 31, 2019, from $640,000 for the quarter ended December 31, 2018. This increase was primarily due to an increase of $2.8 million in gains on securities transactions, net. Securities gains, net, during the quarter ended March 31, 2019, included gains of $1.1 million related to the Company’s trading portfolio, compared to losses of $1.6 million in the quarter ended December 31, 2018. As discussed above, the trading portfolio is utilized to fund the Company’s deferred compensation plan and gains and losses on trading securities have no effect on net income since participants benefit from, and bear the full risk of, changes in the trading securities market values.

Non-interest expense increased $3.4 million, or 21.7%, to $19.2 million for the quarter ended March 31, 2019, from $15.8 million for the quarter ended December 31, 2018, primarily due to a $3.9 million increase in employee compensation and benefits, $2.7 million of which is related to the Company's deferred compensation plan which as previously described has no effect on net income, with the remainder attributable to increased costs associated with merit increases effective January 1, 2019, and higher medical benefit costs in the current quarter as compared to the prior quarter. Partially offsetting the increase, were decreases of $221,000 in data processing costs and $200,000 in other non-interest expense.

The Company recorded income tax expense of $2.6 million for the quarter ended March 31, 2019, compared to $2.3 million for the quarter ended December 31, 2018. The effective tax rate for the quarter ended March 31, 2019 was 22.9% compared to 18.9% for the quarter ended December 31, 2018, the increase being primarily due to lower excess tax benefits. Excess tax benefits were $93,000 and $514,000 for the quarters ended March 31, 2019, and December 31, 2018, respectively.

Financial Condition

Total assets increased $147.0 million, or 3.3%, to $4.56 billion at March 31, 2019, from $4.41 billion at December 31, 2018. The increase was primarily due to increases in cash and cash equivalents of $8.1 million, or 10.4%, available-for sale debt securities of $86.2 million, or 10.7%, loans held-for-investment, net, of $10.7 million, or 0.3%, and the recording of our operating leased assets of $43.5 million from the adoption of Accounting Standards Update (ASU) No. 2016-02 Leases (Topic 842) on January 1, 2019, which requires us to recognize on the balance sheet right-of-use assets, which approximate the present value of our remaining lease payments.

As of March 31, 2019, we estimate that our non-owner occupied commercial real estate concentration (as defined by regulatory guidance issued in 2006) to total risk-based capital was approximately 414%. 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 our commercial real estate concentration risk, the Bank’s regulators could require us to implement additional policies and procedures or could require us to maintain higher levels of regulatory capital, which might adversely affect our loan originations, ability to pay dividends, and profitability.

Loans held-for-investment, net, increased $10.7 million to $3.26 billion at March 31, 2019, from $3.25 billion at December 31, 2018. Originated loans held-for-investment, net, totaled $2.73 billion at March 31, 2019, as compared to $2.68 billion at December 31, 2018. The increase was primarily due to an increase in multifamily real estate loans of $47.5 million, or 2.5%, to $1.98 billion at March 31, 2019, from $1.93 billion at December 31, 2018, partially offset by decreases in acquired loans of $37.0 million.

The following tables detail our multifamily real estate originations for the three months ended March 31, 2019 and 2018 (dollars in thousands):

For the Three Months Ended March 31, 2019

Multifamily
Originations

Weighted Average
Interest Rate

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

$

90,743

4.26%

57%

75

V

30 Years


For the Three Months Ended March 31, 2018

Multifamily
Originations

Weighted Average Interest Rate

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

$

57,471

3.72%

51%

80

V

30 Years

1,400

3.93%

44%

180

F

15 Years

$

58,871

3.72%

51%

Acquired loans decreased by $37.0 million to $509.1 million at March 31, 2019, from $546.2 million at December 31, 2018, primarily due to paydowns of one-to-four family residential and multifamily loans with weighted average interest rates (net of the servicing fee retained by the originating bank) of 3.53% and 2.85%, respectively.

PCI loans totaled $18.9 million at March 31, 2019, as compared to $20.1 million at December 31, 2018. The majority of the PCI loan balance consists of loans acquired as part of a Federal Deposit Insurance Corporation-assisted transaction. The Company accreted interest income of $1.0 million and $1.1 million attributable to PCI loans for the three months ended March 31, 2019, and March 31, 2018, respectively.

The Company’s available-for-sale debt securities portfolio increased by $86.2 million, or 10.7%, to $894.3 million at March 31, 2019, from $808.0 million at December 31, 2018. The increase was primarily attributable to purchases of mortgage-backed and corporate securities, partially offset by paydowns and sales. At March 31, 2019, $668.0 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 $225.9 million in corporate bonds, the majority of which were considered investment grade at March 31, 2019, and $274,000 in municipal bonds.

Total liabilities increased $134.0 million, or 3.6%, to $3.88 billion at March 31, 2019, from $3.74 billion at December 31, 2018. The increase was primarily attributable to an increase in deposits of $88.7 million and lease liabilities of $43.7 million, attributable to capitalization of our operating leases as a result of adoption of ASU No. 2016-02, effective January 1, 2019.

Deposits increased $88.7 million, or 2.7%, to $3.38 billion at March 31, 2019, as compared to $3.29 billion at December 31, 2018. The increase was attributable to increases of $56.9 million in transaction accounts and $84.4 million in savings accounts, partially offset by decreases of $20.1 million in money market accounts, and $32.5 million in certificates of deposit. Deposit account balances are summarized as follows (dollars in thousands):

March 31, 2019

December 31, 2018

Transaction:

Non-interest bearing checking

$

380,681

$

395,375

Negotiable orders of withdrawal

529,610

458,012

Total transaction

910,291

853,387

Savings and Money market:

Savings

678,712

594,290

Money market

721,810

741,939

Total savings

1,400,522

1,336,229

Certificates of deposit:

Brokered deposits

242,061

275,398

$250,000 and under

697,575

696,957

Over $250,000

124,756

124,541

Total certificates of deposit

1,064,392

1,096,896

Total deposits

$

3,375,205

$

3,286,512

Included in the table above are business and municipal deposit account balances as follows (dollars in thousands):

March 31, 2019

December 31, 2018

Business customers

$

474,866

$

468,166

Municipal customers

$

399,979

$

337,053

Borrowings and securities sold under agreements to repurchase increased modestly to $409.2 million at March 31, 2019, from $408.9 million at December 31, 2018. Management utilizes borrowings to mitigate interest rate risk, for short-term liquidity, and to a lesser extent as part of leverage strategies.

The following is a table of term borrowing maturities (excluding capitalized leases and overnight borrowings) and the weighted average rate by year at March 31, 2019 (dollars in thousands):

Year

Amount

Weighted Average Rate

2019

$98,502

1.48%

2020

90,000

1.65%

2021

70,000

1.80%

2022

45,000

2.29%

2023

87,500

2.89%

Thereafter

12,500

3.00%

$403,502

2.02%

Total stockholders’ equity increased by $13.0 million to $679.4 million at March 31, 2019, from $666.4 million at December 31, 2018. The increase was attributable to net income of $8.8 million for the three months ended March 31, 2019, a $2.7 million increase related to ESOP and equity award activity, and a $6.2 million decrease in unrealized losses on our debt securities available-for-sale portfolio, partially offset by dividend payments of $4.7 million.


Asset Quality

The following table details total originated and acquired (excluding PCI) non-accrual loans, non-performing loans, non-performing assets, troubled debt restructurings on which interest is accruing, and accruing loans 30 to 89 days delinquent at March 31, 2019 and December 31, 2018 (dollars in thousands):

March 31, 2019

December 31, 2018

Non-accrual loans:

Held-for-investment

Real estate loans:

Commercial

$

6,708

$

7,291

One-to-four family residential

1,059

1,129

Multifamily

456

566

Home equity and lines of credit

150

151

Commercial and industrial

55

25

Total non-accrual loans

8,428

9,162

Loans delinquent 90 days or more and still accruing:

Held-for-investment

Real estate loans:

One-to-four family residential

33

33

Total loans delinquent 90 days or more and still accruing

33

33

Total non-performing assets

$

8,461

$

9,195

Non-performing loans to total loans

0.26

%

0.28

%

Non-performing assets to total assets

0.19

%

0.21

%

Loans subject to restructuring agreements and still accruing

$

16,243

$

16,390

Accruing loans 30 to 89 days delinquent

$

8,652

$

8,562

Accruing Loans 30 to 89 Days Delinquent

Loans 30 to 89 days delinquent and on accrual status totaled $8.7 million and $8.6 million at March 31, 2019, and December 31, 2018, respectively. The following table sets forth delinquencies for accruing loans by type and by amount at March 31, 2019 and December 31, 2018 (dollars in thousands):

March 31, 2019

December 31, 2018

Held-for-investment

Real estate loans:

Commercial

$

4,272

$

2,377

One-to-four family residential

3,843

4,120

Multifamily

2,018

Construction and land

25

Home equity and lines of credit

362

Commercial and industrial loans

142

45

Other loans

8

2

Total delinquent accruing loans held-for-investment

$

8,652

$

8,562

PCI Loans (Held-for-Investment)

At March 31, 2019, 7.7% of PCI loans were past due 30 to 89 days, and 27.0% were past due 90 days or more, as compared to 10.0% and 23.3%, respectively, at December 31, 2018.

About Northfield Bank

Northfield Bank, founded in 1887, operates 40 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, competition among depository and other financial institutions, 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, if any, 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 to follow)

NORTHFIELD BANCORP, INC.
SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA
(Dollars in thousands, except per share amounts) (unaudited)

At or For the Three Months Ended

March 31,

December 31,

2019

2018

2018

Selected Financial Ratios:

Performance Ratios(1)

Return on assets (ratio of net income to average total assets) (7)

0.79%

1.04%

0.91%

Return on equity (ratio of net income to average equity) (7)

5.29

6.61

6.00

Average equity to average total assets

14.97

15.79

15.18

Interest rate spread

2.33

2.71

2.43

Net interest margin

2.63

2.93

2.72

Efficiency ratio(2)

62.67

57.18

55.08

Non-interest expense to average total assets

1.73

1.71

1.44

Non-interest expense to average total interest-earning assets

1.85

1.82

1.53

Average interest-earning assets to average interest-bearing liabilities

125.54

128.55

126.72

Asset Quality Ratios:

Non-performing assets to total assets

0.19

0.16

0.21

Non-performing loans(3) to total loans(4)

0.26

0.18

0.28

Allowance for loan losses to non-performing loans held-for-investment

324.85

463.05

299.06

Allowance for loan losses to originated loans held-for-investment, net(5)

0.97

1.04

0.99

Allowance for loan losses to total loans held-for-investment, net(6)

0.84

0.83

0.85


(1)

Annualized when appropriate.

(2)

The efficiency ratio represents non-interest expense divided by the sum of net interest income and non-interest income.

(3)

Non-performing loans consist of non-accruing loans and loans 90 days or more past due and still accruing (excluding PCI loans), and are included in total loans held-for-investment, net.

(4)

Includes originated loans held-for-investment, PCI loans, and acquired loans.

(5)

Excludes PCI loans and acquired loans held-for-investment, and related reserve balances.

(6)

Includes PCI and acquired loans held-for-investment.

(7)

The three months ended March 31, 2019, December 31, 2018, and March 31, 2018, include excess tax benefits of $93,000, $514,000, and $869,000, respectively, related to the exercise or vesting of equity awards. Excess tax benefits will fluctuate based on the Company's stock price and timing of employee stock option exercises and vesting of other share-based awards.

NORTHFIELD BANCORP, INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except share and per share amounts) (unaudited)

March 31, 2019

December 31, 2018

ASSETS:

Cash and due from banks

$

14,166

$

15,147

Interest-bearing deposits in other financial institutions

71,659

62,615

Total cash and cash equivalents

85,825

77,762

Trading securities

9,759

8,968

Debt securities available-for-sale, at estimated fair value

894,272

808,031

Debt securities held-to-maturity, at amortized cost

9,448

9,505

Equity securities

1,465

1,280

Originated loans held-for-investment, net

2,727,852

2,678,877

Loans acquired

509,116

546,150

Purchased credit-impaired (PCI) loans held-for-investment

18,892

20,143

Loans held-for-investment, net

3,255,860

3,245,170

Allowance for loan losses

(27,486

)

(27,497

)

Net loans held-for-investment

3,228,374

3,217,673

Accrued interest receivable

13,205

12,959

Bank owned life insurance

155,031

154,135

Federal Home Loan Bank of New York stock, at cost

22,517

22,517

Operating lease right-of-use assets

43,500

Premises and equipment, net

25,211

25,605

Goodwill

38,411

38,411

Other assets

28,429

31,586

Total assets

$

4,555,447

$

4,408,432

LIABILITIES AND STOCKHOLDERS’ EQUITY:

Deposits

$

3,375,205

$

3,286,512

Federal Home Loan Bank advances and other borrowings

409,244

408,891

Lease liabilities

47,414

3,763

Advance payments by borrowers for taxes and insurance

20,723

18,007

Accrued expenses and other liabilities

23,421

24,820

Total liabilities

3,876,007

3,741,993

Total stockholders’ equity

679,440

666,439

Total liabilities and stockholders’ equity

$

4,555,447

$

4,408,432

Total shares outstanding

49,773,796

49,635,673

Tangible book value per share (1)

$

12.86

$

12.63


(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 $966,000 and $1.0 million at March 31, 2019, and December 31, 2018, 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

March 31,

December 31

2019

2018

2018

Interest income:

Loans

$

32,590

$

30,787

$

32,905

Mortgage-backed securities

4,074

2,726

3,718

Other securities

1,865

502

1,685

Federal Home Loan Bank of New York dividends

402

414

443

Deposits in other financial institutions

535

253

197

Total interest income

39,466

34,682

38,948

Interest expense:

Deposits

10,247

5,211

8,887

Borrowings

1,889

1,927

2,057

Total interest expense

12,136

7,138

10,944

Net interest income

27,330

27,544

28,004

Provision for loan losses

59

34

607

Net interest income after provision for loan losses

27,271

27,510

27,397

Non-interest income:

Fees and service charges for customer services

1,140

1,214

1,275

Income on bank owned life insurance

896

954

918

Gains/(losses) on securities, net

1,241

161

(1,593

)

Other

37

76

40

Total non-interest income

3,314

2,405

640

Non-interest expense:

Compensation and employee benefits

11,020

9,117

7,121

Occupancy

3,282

3,096

3,035

Furniture and equipment

259

256

257

Data processing

1,263

1,224

1,484

Professional fees

747

763

924

Advertising

764

611

911

FDIC insurance

277

297

253

Other

1,592

1,762

1,792

Total non-interest expense

19,204

17,126

15,777

Income before income tax expense

11,381

12,789

12,260

Income tax expense

2,610

2,344

2,314

Net income

$

8,771

$

10,445

$

9,946

Net income per common share:

Basic

$

0.19

$

0.23

$

0.21

Diluted

$

0.19

$

0.22

$

0.21

Basic average shares outstanding

46,940,903

45,780,027

46,698,667

Diluted average shares outstanding

47,288,160

46,999,775

47,013,958

NORTHFIELD BANCORP, INC.
ANALYSIS OF NET INTEREST INCOME
(Dollars in thousands) (unaudited)

For the Three Months Ended

March 31, 2019

December 31, 2018

March 31, 2018

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)

$

3,218,277

$

32,590

4.11

%

$

3,198,288

$

32,905

4.08

%

$

3,132,162

$

30,787

3.99

%

Mortgage-backed securities (3)

627,377

4,074

2.63

588,201

3,718

2.51

486,045

2,726

2.27

Other securities (3)

246,802

1,865

3.06

232,777

1,685

2.87

91,268

502

2.23

Federal Home Loan Bank of New York stock

21,729

402

7.50

23,128

443

7.60

24,820

414

6.76

Interest-earning deposits in financial institutions

92,538

535

2.34

47,190

197

1.66

82,341

253

1.25

Total interest-earning assets

4,206,723

39,466

3.80

4,089,584

38,948

3.78

3,816,636

34,682

3.69

Non-interest-earning assets

286,313

243,019

243,054

Total assets

$

4,493,036

$

4,332,603

$

4,059,690

Interest-bearing liabilities:

Savings, NOW, and money market accounts

$

1,857,654

$

4,794

1.05

%

$

1,767,276

$

3,907

0.88

%

$

1,682,346

$

2,143

0.52

%

Certificates of deposit

1,101,865

5,453

2.01

1,037,437

4,980

1.90

821,860

3,068

1.51

Total interest-bearing deposits

2,959,519

10,247

1.40

2,804,713

8,887

1.26

2,504,206

5,211

0.84

Borrowed funds

391,365

1,889

1.96

422,422

2,057

1.93

464,750

1,927

1.68

Total interest-bearing liabilities

3,350,884

12,136

1.47

3,227,135

10,944

1.35

2,968,956

7,138

0.98

Non-interest bearing deposits

379,642

397,022

404,990

Accrued expenses and other liabilities

90,012

50,820

44,608

Total liabilities

3,820,538

3,674,977

3,418,554

Stockholders' equity

672,498

657,626

641,136

Total liabilities and stockholders' equity

$

4,493,036

$

4,332,603

$

4,059,690

Net interest income

$

27,330

$

28,004

$

27,544

Net interest rate spread (4)

2.33

%

2.43

%

2.71

%

Net interest-earning assets (5)

$

855,839

$

862,449

$

847,680

Net interest margin (6)

2.63

%

2.72

%

2.93

%

Average interest-earning assets to interest-bearing liabilities

125.54

%

126.72

%

128.55

%


(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. Jacobs
Chief Financial Officer
Tel: (732) 499-7200 ext. 2519