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Northfield Bancorp, Inc. Announces Second Quarter 2022 Results

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Northfield Bancorp, Inc.
Northfield Bancorp, Inc.

Notable Items for the Quarter Include:

  • DILUTED EARNINGS PER SHARE WERE $0.34 FOR THE CURRENT QUARTER AS COMPARED TO $0.30 FOR THE TRAILING QUARTER, AND $0.40 FOR THE SECOND QUARTER OF 2021.

  • NET INTEREST MARGIN INCREASED BY 16 BASIS POINTS TO 3.03% COMPARED TO 2.87% FOR THE TRAILING QUARTER, AND BY SEVEN BASIS POINTS COMPARED TO 2.96% FOR THE SECOND QUARTER OF 2021.

  • LOANS HELD-FOR-INVESTMENT, EXCLUDING PAYCHECK PROTECTION PROGRAM (“PPP”) LOANS, INCREASED $225.7 MILLION, OR 23.3% ANNUALIZED, DURING THE QUARTER. CREDIT QUALITY REMAINS STRONG WITH NON-PERFORMING LOANS TO TOTAL LOANS AT 0.25%.

  • TOTAL TRANSACTION DEPOSITS INCREASED $28.3 MILLION, OR 5.2% ANNUALIZED, DURING THE QUARTER. TRANSACTION ACCOUNTS REPRESENT 50% OF TOTAL DEPOSITS AT QUARTER END.

  • ISSUED $62.0 MILLION OF SUBORDINATED DEBT AT AN INITIAL FIXED RATE OF 5.0% FOR THE FIRST FIVE YEARS.

  • BOARD OF DIRECTORS APPROVED A $45.0 MILLION STOCK REPURCHASE PROGRAM. THE COMPANY REPURCHASED 211,579 SHARES FOR A COST OF $2.7 MILLION THROUGH JUNE 30, 2022.

  • CASH DIVIDEND DECLARED OF $0.13 PER SHARE OF COMMON STOCK, PAYABLE AUGUST 24, 2022, TO STOCKHOLDERS OF RECORD AS OF AUGUST 10, 2022.

WOODBRIDGE, N.J., July 27, 2022 (GLOBE NEWSWIRE) -- NORTHFIELD BANCORP, INC. (Nasdaq:NFBK) (or the “Company”), the holding company for Northfield Bank, reported diluted earnings per common share of $0.34 and $0.64 for the three and six months ended June 30, 2022, respectively, as compared to $0.40 and $0.78 per diluted share for the three and six months ended June 30, 2021, respectively. Net earnings for the three and six months ended June 30, 2022, were down from the comparative prior year periods primarily due to a benefit in the provision for credit losses on loans in the prior year. Earnings for the three and six months ended June 30, 2021, included a benefit for credit losses of $3.7 million and $6.1 million, respectively, reflecting continued improvement in the economic forecast as well as an improvement in asset quality and a decline in loan balances, as compared to a provision for credit loss of $149,000 and $552,000, for the three and six months ended June 30, 2022. Earnings for the three and six months ended June 30, 2021, also included a gain on sale of loans of $1.4 million, and earnings for the six months ended June 30, 2021, included approximately $1.9 million of accretable income related to the payoffs of purchased credit deteriorated (“PCD”) loans.

Commenting on the quarter, Steven M. Klein, the Company’s Chairman, President and Chief Executive Officer stated, “I’m pleased to announce Northfield has reported a strong quarter of financial performance. Robust loan growth at higher interest rates, maintaining our low cost of deposits, and prudently managing expenses, with a focus on maintaining strong asset quality, has and will continue to be key drivers to our long-term success.”

Mr. Klein further noted, “I am pleased to announce that the Board of Directors has declared a cash dividend of $0.13 per common share, payable August 24, 2022, to stockholders of record on August 10, 2022.”

Results of Operations

Comparison of Operating Results for the Six Months Ended June 30, 2022 and 2021

Net income was $30.0 million and $38.5 million for the six months ended June 30, 2022 and June 30, 2021, respectively. Significant variances from the comparable prior year period are as follows: a $1.9 million decrease in net interest income, a $6.6 million increase in the provision for credit losses on loans, a $5.1 million decrease in non-interest income, a $2.0 million decrease in non-interest expense, and a $3.1 million decrease in income tax expense.

Net interest income for the six months ended June 30, 2022, decreased $1.9 million, or 2.4%, to $77.0 million, from $78.9 million for the six months ended June 30, 2021, primarily due to an eight basis point decrease in net interest margin to 2.95% from 3.03% for the six months ended June 30, 2021, partially offset by a $12.6 million, or 0.2%, increase in the average balance of interest-earning assets. The increase in the average balance of interest-earning assets was due to increases in the average balance of other securities of $155.4 million and the average balance of loans outstanding of $9.6 million, partially offset by decreases in the average balance of mortgage-backed securities of $122.6 million, the average balance of Federal Home Loan Bank of New York (“FHLBNY”) stock of $6.7 million, and the average balance of interest-earning deposits in financial institutions of $23.0 million.

The decrease in net interest margin was primarily due to lower yields on interest-earning assets, due in part to a $2.2 million decrease in accreted interest income related to PCD loans, and a $1.7 million reduction in fees related to the forgiveness of PPP loans, partially offset by the lower cost of interest-bearing liabilities. Yields on interest-earning assets decreased 19 basis points to 3.21% for the six months ended June 30, 2022, from 3.40% for the six months ended June 30, 2021. The cost of interest-bearing liabilities decreased by 12 basis points to 0.36% for the six months ended June 30, 2022, from 0.48% for the six months ended June 30, 2021, primarily driven by lower cost of deposits and a change in the composition of the deposit portfolio as the average balance of transaction accounts increased and the average balance of certificates of deposit decreased. The Company accreted interest income related to PCD loans of $729,000 for the six months ended June 30, 2022, as compared to $2.9 million for the six months ended June 30, 2021. The higher accretable PCD interest income in the prior year was primarily related to payoffs of PCD loans in the first quarter of 2021. Fees recognized from PPP loans totaled $1.1 million for the six months ended June 30, 2022, as compared to $2.8 million for the six months ended June 30, 2021. Net interest income for the six months ended June 30, 2022, included loan prepayment income of $2.6 million as compared to $2.2 million for the six months ended June 30, 2021.

The provision for credit losses on loans increased by $6.6 million to a provision of $552,000 for the six months ended June 30, 2022, compared to a benefit of $6.1 million for the six months ended June 30, 2021. The prior year benefit for credit losses was primarily due to improvement in the economic forecast and an improvement in asset quality as well as a decline in loan balances. The current year provision for credit losses is due to growth in the loan portfolio and a worsening macroeconomic outlook, partially offset by an improvement in asset quality and lower net charge-offs. At June 30, 2022, management, utilizing judgement, qualitatively adjusted the forecast to account for economic uncertainty that may not be captured in the third party economic forecast scenarios utilized. Net charge-offs were $494,000 for the six months ended June 30, 2022, as compared to net charge-offs of $2.4 million for the six months ended June 30, 2021, which related to PCD loans.

Non-interest income decreased by $5.1 million, or 67.2%, to $2.5 million for the six months ended June 30, 2022, from $7.6 million for the six months ended June 30, 2021, due primarily to a decrease of $3.5 million in gains on trading securities, net, a $1.4 million decrease in gains on sales of loans, and a $342,000 decrease in net realized gains on available-for-sale debt securities. For the six months ended June 30, 2022, losses on trading securities were $2.4 million, as compared to gains of $1.2 million for the six months ended June 30, 2021. The trading portfolio is utilized to fund the Company’s deferred compensation obligation to certain employees and directors of the Company's deferred compensation plan (the “Plan”). The participants of this Plan, at their election, defer a portion of their compensation. Gains and losses on trading securities have no effect on net income since participants benefit from, and bear the full risk of, changes in the trading securities market values. Therefore, the Company records an equal and offsetting amount in compensation expense, reflecting the change in the Company’s obligations under the Plan. The decrease in gains on sales of loans is due to a $1.4 million gain realized on the sale of approximately $126.3 million of multifamily loans in the second quarter of 2021.

Non-interest expense decreased $2.0 million, or 5.1%, to $37.4 million for the six months ended June 30, 2022, compared to $39.4 million for the six months ended June 30, 2021. The decrease was primarily due to a $2.4 million decrease in employee compensation and benefits. The decrease was due to a $3.5 million decrease in the mark to market of the Company's deferred compensation plan expense, which as discussed above has no effect on net income, as well as a decrease in medical benefit costs, partially offset by an increase in salary expense related to annual merit increases and an increase in equity award expense related to new awards issued under the 2019 Equity Incentive Plan ( the “2019 EIP”) in the first quarter of 2022. Additionally, occupancy expense decreased by $507,000, primarily related to lower snow removal costs, and advertising expense decreased by $312,000. Partially offsetting the decreases was an increase in professional fees of $399,000 and an increase in other expense of $812,000, primarily due to an increase in the reserve for unfunded commitments, as well as an increase in other operating expenses.

The Company recorded income tax expense of $11.5 million for the six months ended June 30, 2022, compared to $14.6 million for the six months ended June 30, 2021. The effective tax rate for the six months ended June 30, 2022, was 27.6% compared to 27.5% for the six months ended June 30, 2021.

Comparison of Operating Results for the Three Months Ended June 30, 2022 and 2021

Net income was $15.9 million and $19.8 million for the quarters ended June 30, 2022 and June 30, 2021, respectively. Significant variances from the comparable prior year quarter are as follows: a $1.4 million increase in net interest income, a $3.9 million increase in the provision for credit losses on loans, a $4.2 million decrease in non-interest income, a $1.2 million decrease in non-interest expense, and a $1.5 million decrease in income tax expense.

Net interest income for the quarter ended June 30, 2022, increased $1.4 million, or 3.6%, primarily due to a seven basis point increase in net interest margin to 3.03% from 2.96% for the quarter ended June 30, 2021, and an increase in average interest-earning assets of $70.1 million, or 1.3%. The increase in the average balance of interest-earning assets was primarily due to increases in the average balance of other securities of $156.4 million and the average balance of loans outstanding of $44.6 million, partially offset by decreases in the average balance of mortgage-backed securities of $68.0 million, the average balance of interest-earning deposits in financial institutions of $55.8 million, and the average balance of FHLBNY stock of $7.0 million. Partially offsetting the increase in net interest income was a $1.1 million reduction in fees related to the forgiveness of PPP loans in the current quarter as compared to the quarter ended June 30, 2021.

The increase in net interest margin was primarily due to a decrease in the cost of interest-bearing liabilities which decreased by 12 basis points to 0.35% for the quarter ended June 30, 2022, from 0.47% for the quarter ended June 30, 2021, driven primarily by lower cost of deposits and a change in the composition of the deposit portfolio as the average balance of transaction accounts increased and the average balance of certificates of deposit decreased. Partially offsetting this decrease was a decrease in yields on interest-earning assets which decreased by two basis points to 3.29% for the quarter ended June 30, 2022, from 3.31% for the quarter ended June 30, 2021. Net interest income for the quarter ended June 30, 2022, included loan prepayment income of $1.5 million, as compared to $1.3 million for the quarter ended June 30, 2021. The Company accreted interest income related to PCD loans of $339,000 for the quarter ended June 30, 2022, as compared to $443,000 for quarter ended June 30, 2021. Fees recognized from PPP loans totaled $432,000 for the quarter ended June 30, 2022, as compared to $1.6 million for the quarter ended June 30, 2021.

The provision for credit losses on loans increased by $3.9 million to a provision of $149,000 for the quarter ended June 30, 2022, from a benefit of $3.7 million for the quarter ended June 30, 2021. The prior year benefit for credit losses was primarily due to improvement in the economic forecast and an improvement in asset quality as well as a decline in loan balances. The current quarter provision for credit losses is due to growth in the loan portfolio, higher net charge-offs, and a worsening macroeconomic outlook, partially offset by an improvement in asset quality. At June 30, 2022, management, utilizing judgement, qualitatively adjusted the forecast to account for economic uncertainty that may not be captured in the third party economic forecast scenarios utilized. Net charge-offs were $392,000 for the quarter ended June 30, 2022, compared to net charge-offs of $3,000 for the quarter ended June 30, 2021.

Non-interest income decreased by $4.2 million, or 84.4%, to $765,000 for the quarter ended June 30, 2022, from $4.9 million for the quarter ended June 30, 2021, primarily due to a $2.4 million decrease in gains on trading securities, net, a $1.4 million decrease in gains on sales of loans, and a $509,000 decrease in net realized gains on available-for-sale debt securities. For the quarter ended June 30, 2022, losses on trading securities, net, included losses of $1.6 million related to the Company’s trading portfolio, compared to gains of $807,000 in the comparative prior year quarter. Gains and losses on trading securities have no effect on net income since participants benefit from, and bear the full risk of, changes in the trading securities market values.

Non-interest expense decreased by $1.2 million, or 5.8%, to $18.7 million for the quarter ended June 30, 2022, from $19.9 million for the quarter ended June 30, 2021. The decrease was due primarily to a $1.4 million decrease in compensation and employee benefits, attributable to a $2.4 million decrease in the mark to market of the Company's deferred compensation plan expense, which has no effect on net income, partially offset by an increase in salary expense related to annual merit increases and an increase in equity award expense related to new awards issued under the 2019 EIP in the first quarter of 2022. Additionally, occupancy expense decreased by $214,000 and advertising expense decreased by $280,000. The decreases were partially offset by increases of $397,000 in professional fees and $370,000 in other expense, primarily related to an increase in the reserve for unfunded commitments,

The Company recorded income tax expense of $6.1 million for the quarter ended June 30, 2022, compared to $7.6 million for the quarter ended June 30, 2021. The effective tax rate for both quarters ended June 30, 2022, and June 30, 2021, was 27.8%.

Comparison of Operating Results for the Three Months Ended June 30, 2022 and March 31, 2022

Net income was $15.9 million and $14.1 million for the quarters ended June 30, 2022, and March 31, 2022, respectively. Significant variances from the prior quarter are as follows: a $3.2 million increase in net interest income, a $254,000 decrease in the provision for credit losses on loans, a $948,000 decrease in non-interest income, and a $771,000 increase in income tax expense.

Net interest income for the quarter ended June 30, 2022, increased by $3.2 million, or 8.7%, primarily due to a 16 basis point increase in net interest margin to 3.03% from 2.87% for the quarter ended March 31, 2022, and a $97.4 million, or 1.9%, increase in the average balance of interest-earning assets. The increase in the average balance of interest-earning assets was primarily due to increases in the average balance of loans outstanding of $144.7 million, and the average balance of other securities of $41.9 million, partially offset by a decrease in the average balance of mortgage-backed securities of $39.0 million interest-earning deposits in financial institutions of $48.6 million, and the average balance of FHLBNY stock of $1.5 million.

The increase in net interest margin was primarily due to higher yields on interest-earning assets, which increased by 16 basis points to 3.29% for the quarter ended June 30, 2022, from 3.13% for the quarter ended March 31, 2022, reflective of the rising rate environment. The cost of interest-bearing liabilities decreased by one basis point to 0.35% for the quarter ended June 30, 2022, from 0.36% for the quarter ended March 31, 2022. Net interest income for the quarter ended June 30, 2022, included loan prepayment income of $1.5 million as compared to $1.1 million for the quarter ended March 31, 2022. The Company accreted interest income related to PCD loans of $339,000 for the quarter ended June 30, 2022, as compared to $391,000 for the quarter ended March 31, 2022. Fees recognized from PPP loans totaled $432,000 and $701,000 respectively, for the quarters ended June 30, 2022, and March 31, 2022.

The provision for credit losses on loans decreased by $254,000 to a provision of $149,000 for the quarter ended June 30, 2022, from a provision of $403,000 for the quarter ended March 31, 2022. The decrease in the provision was primarily due to an improvement in asset quality, partially offset by loan growth, higher net charge-offs, and a worsening macroeconomic outlook. Net charge-offs were $392,000 for the quarter ended June 30, 2022, as compared to $102,000 for the quarter ended March 31, 2022.

Non-interest income decreased by $948,000, or 55.3%, to $765,000 for the quarter ended June 30, 2022, from $1.7 million for the quarter ended March 31, 2022. The decrease was primarily due to an increase of $761,000 in losses on trading securities, net, and a decrease of $264,000 in realized gains on available-for-sale debt securities, net. For the quarter ended June 30, 2022, losses on trading securities, net, were $1.6 million, compared to losses of $802,000 for the quarter ended March 31, 2022.

Non-interest expense remained stable at $18.7 million for both quarters ended June 30, 2022 and March 31, 2022.

The Company recorded income tax expense of $6.1 million for the quarter ended June 30, 2022, compared to $5.3 million for the quarter ended March 31, 2022. The effective tax rate for the quarter ended June 30, 2022 was 27.8%, compared to 27.4% for the quarter ended and March 31, 2022.

Financial Condition

Total assets increased by $216.6 million, or 4.0%, to $5.65 billion at June 30, 2022, from $5.43 billion at December 31, 2021. The increase was primarily due to increases in total loans of $307.6 million, or 8.1%, cash and cash equivalents of $19.2 million, or 21.0%, and other assets of $9.9 million, or 26.7%, partially offset by a decrease in available-for-sale debt securities of $121.4 million, or 10.0%.

As of June 30, 2022, we estimate that our non-owner occupied commercial real estate concentration (as defined by regulatory guidance) to total risk-based capital was approximately 468.9%. Management believes that Northfield Bank (the “Bank”) has implemented appropriate risk management practices including risk assessments, board-approved underwriting policies and related procedures, which include monitoring Bank portfolio performance, performing market analysis (economic and real estate), and stressing of the Bank’s commercial real estate portfolio under severe, adverse economic conditions. Although management believes the Bank has implemented appropriate policies and procedures to manage its commercial real estate concentration risk, the Bank’s regulators could require it to implement additional policies and procedures or could require it to maintain higher levels of regulatory capital, which might adversely affect its loan originations, ability to pay dividends, and profitability.

Cash and cash equivalents increased by $19.2 million, or 21.0%, to $110.2 million at June 30, 2022, from $91.1 million at December 31, 2021, primarily due to the liquidity obtained from loans and securities paydowns as well as growth in deposits. Balances fluctuate based on the timing of receipt of security and loan repayments and the redeployment of cash into higher-yielding assets such as loans and securities, or the funding of deposit outflows or borrowing maturities.

Loans held-for-investment, net, increased by $305.2 million, or 8.0%, to $4.11 billion at June 30, 2022 from $3.81 billion at December 31, 2021. The overall increase was due to strong loan originations, and, to a lesser extent, the purchase of two one-to-four family residential loan pools of approximately $7.7 million. Multifamily loans increased $252.9 million, or 10.0%, to $2.77 billion at June 30, 2022 from $2.52 billion at December 31, 2021, commercial real estate loans increased $41.6 million, or 5.1%, to $850.2 million at June 30, 2022 from $808.6 million at December 31, 2021, home equity loans increased $27.9 million, or 25.4%, to $137.9 million at June 30, 2022 from $110.0 million at December 31, 2021, commercial and industrial loans (excluding PPP loans) increased $21.0 million, or 20.9%, to $121.5 million at June 30, 2022 from $100.5 million at December 31, 2021, and, one-to-four family residential loans increased $1.7 million, or 0.9%. The increases were partially offset by decreases in construction and land loans of $8.9 million, or 32.5%, to $18.6 million at June 30, 2022 from $27.5 million at December 31, 2021, and PPP loans of $28.6 million, or 70.5%, to $11.9 million at June 30, 2022 from $40.5 million at December 31, 2021. Through June 30, 2022, 2,307 borrowers have received PPP forgiveness payments totaling approximately $217.8 million.

There were 24 PPP loans outstanding totaling $11.9 million at June 30, 2022, compared to 377 loans outstanding totaling $40.5 million at December 31, 2021. The PPP provides for lender processing fees that range from 1% to 5% of the final disbursement made to individual borrowers. As of June 30, 2022, we have received loan processing fees of $9.5 million, of which $8.6 million has been recognized in earnings, including $1.1 million recognized in the six months ended June 30, 2022. The remaining unearned fees will be recognized in income over the remaining term of the loans.

PCD loans totaled $13.1 million at June 30, 2022, and $15.8 million at December 31, 2021. Upon adoption of the CECL accounting standard on January 1, 2021, the allowance for credit losses related to PCD loans was recorded through a gross-up that increased the amortized cost-basis of PCD loans by $6.8 million with a corresponding increase to the allowance for credit losses. The decrease in the PCD loan balance at June 30, 2022 was due to PCD loans being sold and paid off during the period. The majority of the remaining PCD loan balance consists of loans acquired as part of a Federal Deposit Insurance Corporation-assisted transaction. The Company accreted interest income of $339,000 and $729,000 attributable to PCD loans for the three and six months ended June 30, 2022, respectively, as compared to $443,000 and $2.9 million for the three and six months ended June 30, 2021, respectively. The decrease in income accreted for the six months ended June 30, 2022 is due to the payoff of PCD loans in the prior year. PCD loans had an allowance for credit losses of approximately $4.2 million at June 30, 2022.
Loan balances are summarized as follows (dollars in thousands):

 

June 30, 2022

 

March 31, 2022

 

December 31, 2021

Real estate loans:

 

 

 

 

 

Multifamily

$

2,771,002

 

$

2,568,784

 

$

2,518,065

Commercial mortgage

 

850,186

 

 

852,803

 

 

808,597

One-to-four family residential mortgage

 

185,376

 

 

186,007

 

 

183,665

Home equity and lines of credit

 

137,868

 

 

125,156

 

 

109,956

Construction and land

 

18,555

 

 

17,579

 

 

27,495

Total real estate loans

 

3,962,987

 

 

3,750,329

 

 

3,647,778

Commercial and industrial loans

 

121,473

 

 

107,901

 

 

100,488

PPP loans

 

11,949

 

 

24,349

 

 

40,517

Other loans

 

2,312

 

 

1,938

 

 

2,015

Total commercial and industrial, PPP, and other loans

 

135,734

 

 

134,188

 

 

143,020

Loans held-for-investment, net (excluding PCD)

 

4,098,721

 

 

3,884,517

 

 

3,790,798

PCD loans

 

13,136

 

 

14,064

 

 

15,819

Total loans held-for-investment, net

$

4,111,857

 

$

3,898,581

 

$

3,806,617

 

 

 

 

 

 

 

 

 

The following tables detail multifamily real estate originations for the six months ended June 30, 2022 and 2021 (dollars in thousands):

For the Six Months Ended June 30, 2022

Multifamily
Originations

 

Weighted Average
Interest Rate

 

Weighted Average
LTV Ratio

 

Weighted Average Months to Next
Rate Change or Maturity for
Fixed Rate Loans

 

(F)ixed or
(V)ariable

 

Amortization Term

$

447,129

 

3.42%

 

 

57%

 

 

76

 

V

 

25 to 30 Years

 

1,200

 

3.75%

 

 

18%

 

 

180

 

F

 

15 Years

$

448,329

 

3.42%

 

 

57%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


For the Six Months Ended June 30, 2021

Multifamily
Originations

 

Weighted Average
Interest Rate

 

Weighted Average
LTV Ratio

 

Weighted Average Months to Next
Rate Change or Maturity for
Fixed Rate Loans

 

(F)ixed or
(V)ariable

 

Amortization Term

$

385,363

 

3.12%

 

 

62%

 

 

74

 

V

 

10 to 30 Years

 

 

 

 

 

 

 

 

 

 

 

 

 

 


The following table details loan pools purchased during the six months ended June 30, 2022 (dollars in thousands):

For the Six Months Ended June 30, 2022

Purchase
Amount

 

Loan Type

 

Weighted
Average
Interest Rate
(1)

 

Weighted
Average
Loan-to-Value Ratio

 

Weighted Average Months
to Next Rate Change or
Maturity for
Fixed Rate Loans

 

(F)ixed or
(V)ariable

 

Amortization Term

$

2,482

 

Residential

 

2.80%

 

 

54%

 

 

278

 

F

 

15 to 30 Years

 

5,214

 

Residential

 

3.05%

 

 

59%

 

 

303

 

F

 

15 to 30 Years

$

7,696

 

 

 

2.97%

 

 

57%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Net of servicing fee retained by the originating bank

The geographic locations of the properties collateralizing the loans purchased in the table above are as follows: 63.3% in New York and 36.7% in New Jersey.

The Company’s available-for-sale debt securities portfolio decreased by $121.4 million, or 10.0%, to $1.09 billion at June 30, 2022, from $1.21 billion at December 31, 2021. The decrease was primarily attributable to paydowns, maturities, calls, and sales. At June 30, 2022, $821.2 million of the portfolio consisted of residential mortgage-backed securities issued or guaranteed by Fannie Mae, Freddie Mac, or Ginnie Mae. In addition, the Company held $74.8 million in U.S. Government agency securities, $190.8 million in corporate bonds, all of which were considered investment grade at June 30, 2022, and $52,000 in municipal bonds.

Equity securities increased by $2.5 million to $7.8 million at June 30, 2022, from $5.3 million at December 31, 2021, due to an increase in our investment in a Small Business Administration Loan Fund. This investment is utilized by the Bank as part of its Community Reinvestment Act program.
  
Total liabilities increased $241.2 million, or 5.1%, to $4.93 billion at June 30, 2022, from $4.69 billion at December 31, 2021. The increase was primarily attributable to an increase in deposits of $248.7 million, the issuance of subordinated debt, net of issuance costs, of $60.9 million, and an increase in advance payments by borrowers for taxes and insurance of $4.5 million, partially offset by a decrease in FHLB advances and other borrowings of $74.7 million.

Deposits increased $248.7 million, or 6.0%, to $4.42 billion at June 30, 2022, as compared to $4.17 billion at December 31, 2021. The increase was attributable to increases of $193.0 million in transaction accounts and $140.4 million in certificates of deposit, partially offset by decreases of $16.8 million in savings accounts and $68.0 million in money market accounts.

Deposit account balances are summarized as follows (dollars in thousands):

 

June 30, 2022

 

March 31, 2022

 

December 31, 2021

Transaction:

 

 

 

 

 

Non-interest bearing checking

$

916,343

 

$

944,096

 

$

898,490

Negotiable orders of withdrawal and interest-bearing checking

 

1,287,458

 

 

1,231,377

 

 

1,112,292

Total transaction

 

2,203,801

 

 

2,175,473

 

 

2,010,782

Savings and money market:

 

 

 

 

 

Savings

 

1,149,976

 

 

1,168,110

 

 

1,166,761

Money market

 

541,445

 

 

600,519

 

 

609,430

Total savings

 

1,691,421

 

 

1,768,629

 

 

1,776,191

Certificates of deposit:

 

 

 

 

 

Brokered deposits

 

210,130

 

 

21,000

 

 

31,000

$250,000 and under

 

253,556

 

 

276,518

 

 

286,580

Over $250,000

 

59,094

 

 

61,246

 

 

64,781

Total certificates of deposit

 

522,780

 

 

358,764

 

 

382,361

Total deposits

$

4,418,002

 

$

4,302,866

 

$

4,169,334


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

 

June 30, 2022

 

March 31, 2022

 

December 31, 2021

 

 

 

 

 

 

Business customers

$

1,297,501

 

$

1,288,495

 

$

1,184,472

Municipal customers

$

663,656

 

$

686,425

 

$

633,458

 

 

 

 

 

 

 

 

 

Borrowed funds decreased to $407.9 million at June 30, 2022, from $421.8 million at December 31, 2021. The decrease in borrowings for the period was primarily attributable to a decrease in FHLB and other borrowings of $49.7 million, and a decrease in securities sold under agreements to repurchase of $25.0 million, partially offset by the issuance of $62.0 million in aggregate principal amount of fixed to floating subordinated notes (the “Notes”). The Notes are non-callable for five years, have a stated maturity of June 30, 2032, and bear interest at a fixed rate of 5.00% until June 30, 2027. From July 2027 to the maturity date or early redemption date, the interest rate will reset quarterly to a level equal to the then current three-month Secured Overnight Financing Rate plus 200 basis points. Debt issuance costs totaled $1.1 million. Management utilizes borrowings to mitigate interest rate risk, for short-term liquidity, and to a lesser extent as part of leverage strategies.

The following is a table of term borrowing maturities (excluding overnight borrowings and subordinated debt) and the weighted average rate by year at June 30, 2022 (dollars in thousands):

Year

 

Amount

 

Weighted Average Rate

2022

 

$45,000

 

2.05%

2023

 

87,500

 

2.89%

2024

 

50,000

 

2.47%

2025

 

112,500

 

1.48%

Thereafter

 

45,000

 

1.45%

 

 

$340,000

 

2.06%


Total stockholders’ equity decreased by $24.6 million to $715.3 million at June 30, 2022, from $739.9 million at December 31, 2021. The decrease was attributable to a $33.3 million decrease in accumulated other comprehensive income associated with a decline in the estimated fair value of our debt securities available-for-sale portfolio, $12.2 million in dividend payments, and $11.0 million in stock repurchases, partially offset by net income of $30.0 million for the six months ended June 30, 2022, and a $1.9 million increase in equity award activity. During the first quarter of 2022, the $54.2 million stock repurchase program that was approved in March 2021, was completed after reaching the purchase limit. On June 16, 2022, the Board of Directors of the Company approved a new $45.0 million stock repurchase program. During the six months ended June 30, 2022, the Company repurchased 739,701 shares of its common stock outstanding at an average price of $14.84 for a total of $11.0 million pursuant to the approved stock repurchase plans.

The Company continues to maintain adequate liquidity and a strong capital position. The Company's most liquid assets are cash and cash equivalents, corporate bonds, and unpledged mortgage-related securities issued or guaranteed by the U.S. Government, Fannie Mae, or Freddie Mac, that we can either borrow against or sell. We also have the ability to surrender bank-owned life insurance contracts. The surrender of these contracts would subject the Company to income taxes and penalties for increases in the cash surrender values over the original premium payments. We also have the ability to obtain additional funding from the FHLB and Federal Reserve Bank utilizing unencumbered and unpledged securities and multifamily loans. The Company expects to have sufficient funds available to meet current commitments in the normal course of business.

The Company had the following primary sources of liquidity at June 30, 2022 (dollars in thousands):

Cash and cash equivalents(1)

 

$

92,991

Corporate bonds

 

$

176,094

Multifamily loans(2)

 

$

1,589,553

Mortgage-backed securities (issued or guaranteed by the U.S. Government, Fannie Mae, or Freddie Mac)(2)

 

$

297,660

 

 

 

(1) Excludes $17.2 million of cash at Northfield Bank.
(2) Represents estimated remaining borrowing potential.

The Company and the Bank utilize the Community Bank Leverage Ratio (“CBLR”) framework. The CBLR replaces the risk-based and leverage capital requirements in the generally applicable capital rules. At June 30, 2022, the Company and the Bank's estimated CBLR ratios were 12.75% and 12.19%, respectively, which exceeded the minimum requirement to be considered well-capitalized of 9%.

Asset Quality

The following table details total non-accrual loans (excluding PCD), non-performing loans, non-performing assets, troubled debt restructurings on which interest is accruing, and accruing loans 30 to 89 days delinquent at June 30, 2022, March 31, 2022, and December 31, 2021 (dollars in thousands):

 

June 30, 2022

 

March 31, 2022

 

December 31, 2021

Non-accrual loans:

 

 

 

 

 

Held-for-investment

 

 

 

 

 

Real estate loans:

 

 

 

 

 

Multifamily

$

4,022

 

 

$

1,853

 

 

$

1,882

 

Commercial

 

5,330

 

 

 

5,380

 

 

 

5,117

 

One-to-four family residential

 

304

 

 

 

312

 

 

 

314

 

Home equity and lines of credit

 

332

 

 

 

279

 

 

 

281

 

Commercial and industrial

 

275

 

 

 

278

 

 

 

28

 

Total non-accrual loans

 

10,263

 

 

 

8,102

 

 

 

7,622

 

Loans delinquent 90 days or more and still accruing:

 

 

 

 

 

Held-for-investment

 

 

 

 

 

Real estate loans:

 

 

 

 

 

Commercial

 

27

 

 

 

37

 

 

 

147

 

One-to-four family residential

 

160

 

 

 

6

 

 

 

165

 

PPP loans

 

17

 

 

 

16

 

 

 

72

 

Other

 

7

 

 

 

 

 

 

 

Total loans held-for-investment delinquent 90 days or more and still accruing

 

211

 

 

 

59

 

 

 

384

 

Total non-performing loans

 

10,474

 

 

 

8,161

 

 

 

8,006

 

Other real estate owned

 

 

 

 

100

 

 

 

100

 

Total non-performing assets

$

10,474

 

 

$

8,261

 

 

$

8,106

 

Non-performing loans to total loans

 

0.25

%

 

 

0.21

%

 

 

0.21

%

Non-performing assets to total assets

 

0.19

%

 

 

0.15

%

 

 

0.15

%

Loans subject to restructuring agreements and still accruing

$

4,115

 

 

$

5,397

 

 

$

5,820

 

Accruing loans 30 to 89 days delinquent

$

2,706

 

 

$

4,084

 

 

$

1,166

 

 

 

 

 

 

 

 

 

 

 

 

 

The increase in non-accrual loans was primarily due to one $2.2 million multifamily loan placed on non-accrual status during the current quarter. The loan is well secured with an apartment building in Brooklyn, New York, containing eight residential units and has a recent appraised value of $2.8 million.

Other Real Estate Owned

At June 30, 2022, the Company had no assets acquired through foreclosure. As of March 31, 2022 and December 31, 2021, other real estate owned was comprised of one property located in New Jersey, which had a carrying value of approximately $100,000, and which was sold during the second quarter of 2022 for a small gain.

Accruing Loans 30 to 89 Days Delinquent

Loans 30 to 89 days delinquent and on accrual status totaled $2.7 million, $4.1 million, and $1.2 million at June 30, 2022, March 31, 2022, and December 31, 2021, respectively. The following table sets forth delinquencies for accruing loans by type and by amount at June 30, 2022, March 31, 2022, and December 31, 2021 (dollars in thousands):

 

June 30, 2022

 

March 31, 2022

 

December 31, 2021

Held-for-investment

 

 

 

 

 

Real estate loans:

 

 

 

 

 

Multifamily

$

 

$

2,804

 

$

Commercial

 

658

 

 

304

 

 

144

One-to-four family residential

 

805

 

 

554

 

 

593

Home equity and lines of credit

 

147

 

 

265

 

 

412

Commercial and industrial loans

 

581

 

 

140

 

 

PPP loans

 

515

 

 

1

 

 

2

Other loans

 

 

 

16

 

 

15

Total delinquent accruing loans held-for-investment

$

2,706

 

$

4,084

 

$

1,166

 

 

 

 

 

 

 

 

 

The decrease in delinquent multifamily loans is primarily due to one loan with a balance of $2.2 million that was transferred to non-accrual status in the current quarter. The loan is well secured with an apartment building in Brooklyn, New York, containing eight residential units and has a recent appraised value of $2.8 million.

PCD Loans (Held-for-Investment)

Under the CECL standard, the Company will continue to account for PCD loans at estimated fair value using discounted expected future cash flows deemed to be collectible on the date acquired. Based on its detailed review of PCD loans and experience in loan workouts, management believes it has a reasonable expectation about the amount and timing of future cash flows and accordingly has classified PCD loans ($13.1 million at June 30, 2022 and $15.8 million at December 31, 2021) as accruing, even though they may be contractually past due. At June 30, 2022, 0.5% of PCD loans were past due 30 to 89 days, and 24.7% were past due 90 days or more, as compared to 10.5% and 19.2%, respectively, at December 31, 2021.

Other

During the fourth quarter of 2021, the Bank downgraded a lending relationship with an outstanding principal balance at December 31, 2021, of approximately $15.6 million to substandard, which is comprised of two commercial real estate loans with balances of $10.9 million, and a commercial line of credit secured by all unencumbered business assets with a balance of $4.7 million. All draws on the line are at the discretion of the Bank. The Bank has received paydowns of approximately $3.8 million on the commercial line of credit, reducing the outstanding balance to approximately $913,000 as of June 30, 2022. At June 30, 2022, the aggregate balances of the loans was $11.6 million.

The commercial real estate loans are secured by two commercial properties with a current appraised value of $19.2 million. The lending relationship was downgraded as a result of legal matters against certain officers of the borrowing entities, including certain individuals who are guarantors to the loans, and the impact such legal matters may have on future operations of the entities.

All loans under the lending relationship are current as of July 27, 2022, and the entities continue to operate. The Bank continues to evaluate the financial condition, operating results and cash flows of the related entities and guarantors. At June 30, 2022, approximately $1.4 million of the allowance for credit losses has been designated to this lending relationship. Based on information available, the loans have not been designated as impaired and remain on accrual status. However, there can be no assurances that one or more of the loans under the relationship will not migrate to non-accrual status in the future or require the establishment of additional loan losses reserves.

About Northfield Bank

Northfield Bank, founded in 1887, operates 38 full-service banking in Staten Island and Brooklyn, New York, and Hunterdon, Middlesex, Mercer, and Union counties, New Jersey. For more information about Northfield Bank, please visit www.eNorthfield.com.

Forward-Looking Statements: This release may contain certain "forward looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, and may be identified by the use of such words as "may," "believe," "expect," "anticipate," "should," "plan," "estimate," "predict," "continue," and "potential" or the negative of these terms or other comparable terminology. Examples of forward-looking statements include, but are not limited to, estimates with respect to the financial condition, results of operations and business of Northfield Bancorp, Inc. Any or all of the forward-looking statements in this release and in any other public statements made by Northfield Bancorp, Inc. may turn out to be wrong. They can be affected by inaccurate assumptions Northfield Bancorp, Inc. might make or by known or unknown risks and uncertainties as described in our SEC filings, including, but not limited to, those related to general economic conditions, particularly in the market areas in which the Company operates, the effects of the COVID-19 pandemic, including the effects of the steps taken to address the pandemic and their impact on the Company’s market and employees, competition among depository and other financial institutions, including with respect to overdraft and other fees, changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory fees and capital requirements, inflation and changes in the interest rate environment that reduce our margins, reduce the fair value of financial instruments or reduce our ability to originate loans, the effects of war, conflict, and acts of terrorism, our ability to successfully integrate acquired entities, and adverse changes in the securities markets. Consequently, no forward-looking statement can be guaranteed. Northfield Bancorp, Inc. does not intend to update any of the forward-looking statements after the date of this release, or conform these statements to actual events.

(Tables follow)

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

 

 

 

 

 

 

 

At or For the

 

At or For the Three Months Ended

 

Six Months Ended

 

June 30,

 

March 31,

 

June 30,

 

2022

 

2021

 

2022

 

2022

 

2021

Selected Financial Ratios:

 

 

 

 

 

 

 

 

 

Performance Ratios (1)

 

 

 

 

 

 

 

 

 

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

1.14

%

 

1.44

%

 

1.04

%

 

1.09

%

 

1.40

%

Return on equity (ratio of net income to average equity) (7) (8)

8.92

 

 

10.53

 

 

7.83

 

 

8.37

 

 

10.28

 

Average equity to average total assets

12.81

 

 

13.64

 

 

13.34

 

 

13.07

 

 

13.60

 

Interest rate spread

2.94

 

 

2.84

 

 

2.77

 

 

2.85

 

 

2.92

 

Net interest margin

3.03

 

 

2.96

 

 

2.87

 

 

2.95

 

 

3.03

 

Efficiency ratio (2)

45.81

 

 

45.57

 

 

48.49

 

 

47.11

 

 

45.63

 

Non-interest expense to average total assets

1.35

 

 

1.44

 

 

1.38

 

 

1.36

 

 

1.43

 

Non-interest expense to average total interest-earning assets

1.41

 

 

1.52

 

 

1.46

 

 

1.44

 

 

1.52

 

Average interest-earning assets to average interest-bearing liabilities

138.40

 

 

134.73

 

 

139.03

 

 

138.71

 

 

133.49

 

Asset Quality Ratios:

 

 

 

 

 

 

 

 

 

Non-performing assets to total assets

0.19

 

 

0.17

 

 

0.15

 

 

0.19

 

 

0.17

 

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

0.25

 

 

0.23

 

 

0.21

 

 

0.25

 

 

0.23

 

Allowance for credit losses to non-performing loans

372.65

 

 

446.00

 

 

481.24

 

 

372.65

 

 

446.00

 

Allowance for credit losses to total loans held-for-investment, net (5) (6) (7)

0.95

 

 

1.03

 

 

1.01

 

 

0.95

 

 

1.03

 

(1) Annualized when appropriate. 
(2) The efficiency ratio represents non-interest expense divided by the sum of net interest income and non-interest income.
(3) Non-performing loans consist of non-accruing loans and loans 90 days or more past due and still accruing (excluding PCD loans), and are included in total loans held-for-investment, net.
(4) Includes originated loans held-for-investment, PCD loans, acquired loans and loans held-for-sale.
(5) Includes originated loans held-for-investment, PCD loans, and acquired loans.
(6) Excluding PPP loans (which are fully government guaranteed and do not carry any provision for losses) of $11.9 million, $24.3 million, and $132.7 million at June 30, 2022, March 31, 2022, and June 30, 2021, respectively, the allowance for credit losses to total loans held for investment, net, totaled 0.95%, 1.01%, and 1.07%, respectively, at June 30, 2022, March 31, 2022, and June 30, 2021.
(7) The Company adopted the CECL accounting standard effective January 1, 2021, and recorded a $10.4 million increase to its allowance for credit losses, including reserves of $6.8 million related to PCD loans.
(8) For the year ended December 31, 2021, in connection with the adoption of CECL, the Company recognized a cumulative effect adjustment that reduced stockholders’ equity by $3.1 million, net of tax.


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

 

June 30, 2022

 

March 31, 2022

 

December 31, 2021

ASSETS:

 

 

 

 

 

Cash and due from banks

$

17,241

 

 

$

16,053

 

 

$

18,191

 

Interest-bearing deposits in other financial institutions

 

92,991

 

 

 

119,461

 

 

 

72,877

 

Total cash and cash equivalents

 

110,232

 

 

 

135,514

 

 

 

91,068

 

Trading securities

 

10,401

 

 

 

12,156

 

 

 

13,461

 

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

 

1,086,868

 

 

 

1,154,277

 

 

 

1,208,237

 

Debt securities held-to-maturity, at amortized cost

 

5,201

 

 

 

5,243

 

 

 

5,283

 

Equity securities

 

7,821

 

 

 

7,883

 

 

 

5,342

 

Loans held-for-sale

 

2,346

 

 

 

 

 

 

 

Loans held-for-investment, net

 

4,111,857

 

 

 

3,898,581

 

 

 

3,806,617

 

Allowance for credit losses

 

(39,031

)

 

 

(39,274

)

 

 

(38,973

)

Net loans held-for-investment

 

4,072,826

 

 

 

3,859,307

 

 

 

3,767,644

 

Accrued interest receivable

 

14,948

 

 

 

14,591

 

 

 

14,572

 

Bank-owned life insurance

 

166,185

 

 

 

165,336

 

 

 

164,500

 

Federal Home Loan Bank of New York stock, at cost

 

19,942

 

 

 

21,211

 

 

 

22,336

 

Operating lease right-of-use assets

 

36,595

 

 

 

32,813

 

 

 

33,943

 

Premises and equipment, net

 

25,766

 

 

 

25,356

 

 

 

25,937

 

Goodwill

 

41,012

 

 

 

41,012

 

 

 

41,012

 

Other assets

 

47,008

 

 

 

41,591

 

 

 

37,207

 

Total assets

$

5,647,151

 

 

$

5,516,290

 

 

$

5,430,542

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY:

 

 

 

 

 

LIABILITIES:

 

 

 

 

 

Deposits

$

4,418,002

 

 

$

4,302,866

 

 

$

4,169,334

 

Securities sold under agreements to repurchase

 

25,000

 

 

 

50,000

 

 

 

50,000

 

Federal Home Loan Bank advances and other borrowings

 

322,016

 

 

 

347,877

 

 

 

371,755

 

Subordinated debentures, net of issuance costs

 

60,917

 

 

 

 

 

 

 

Lease liabilities

 

42,298

 

 

 

38,610

 

 

 

39,851

 

Advance payments by borrowers for taxes and insurance

 

29,458

 

 

 

30,032

 

 

 

24,909

 

Accrued expenses and other liabilities

 

34,187

 

 

 

31,507

 

 

 

34,810

 

Total liabilities

 

4,931,878

 

 

 

4,800,892

 

 

 

4,690,659

 

 

 

 

 

 

 

STOCKHOLDERS’ EQUITY:

 

 

 

 

 

Total stockholders’ equity

 

715,273

 

 

 

715,398

 

 

 

739,883

 

Total liabilities and stockholders’ equity

$

5,647,151

 

 

$

5,516,290

 

 

$

5,430,542

 

 

 

 

 

 

 

Total shares outstanding

 

48,684,875

 

 

 

48,910,192

 

 

 

49,266,733

 

Tangible book value per share (1)

$

13.84

 

 

$

13.78

 

 

$

14.18

 

(1) Tangible book value per share is calculated based on total stockholders' equity, excluding intangible assets (goodwill and core deposit intangibles), divided by total shares outstanding as of the balance sheet date. Core deposit intangibles were $347,000, $387,000, and $440,000 at June 30, 2022, March 31, 2022, and December 31, 2021, respectively, and are included in other assets.


NORTHFIELD BANCORP, INC.
CONSOLIDATED STATEMENT OF INCOME
(Dollars in thousands, except share and per share amounts) (unaudited)

 

For the Three Months Ended

 

For the Six Months Ended

 

June 30,

 

March 31,

 

June 30,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2022

 

 

 

2021

 

Interest income:

 

 

 

 

 

 

 

 

 

Loans

$

38,998

 

 

$

39,699

 

 

$

36,721

 

 

$

75,719

 

 

$

80,976

 

Mortgage-backed securities

 

3,043

 

 

 

2,682

 

 

 

2,475

 

 

 

5,518

 

 

 

5,641

 

Other securities

 

989

 

 

 

484

 

 

 

695

 

 

 

1,684

 

 

 

908

 

Federal Home Loan Bank of New York dividends

 

260

 

 

 

336

 

 

 

245

 

 

 

505

 

 

 

706

 

Deposits in other financial institutions

 

166

 

 

 

35

 

 

 

58

 

 

 

224

 

 

 

72

 

Total interest income

 

43,456

 

 

 

43,236

 

 

 

40,194

 

 

 

83,650

 

 

 

88,303

 

Interest expense:

 

 

 

 

 

 

 

 

 

Deposits

 

1,334

 

 

 

1,671

 

 

 

1,159

 

 

 

2,493

 

 

 

3,541

 

Borrowings

 

1,918

 

 

 

2,878

 

 

 

2,166

 

 

 

4,084

 

 

 

5,899

 

Subordinated debt

 

119

 

 

 

 

 

 

 

 

 

119

 

 

 

 

Total interest expense

 

3,371

 

 

 

4,549

 

 

 

3,325

 

 

 

6,696

 

 

 

9,440

 

Net interest income

 

40,085

 

 

 

38,687

 

 

 

36,869

 

 

 

76,954

 

 

 

78,863

 

Provision/(benefit) for credit losses

 

149

 

 

 

(3,701

)

 

 

403

 

 

 

552

 

 

 

(6,075

)

Net interest income after provision/(benefit) for credit losses

 

39,936

 

 

 

42,388

 

 

 

36,466

 

 

 

76,402

 

 

 

84,938

 

Non-interest income:

 

 

 

 

 

 

 

 

 

Fees and service charges for customer services

 

1,375

 

 

 

1,327

 

 

 

1,331

 

 

 

2,706

 

 

 

2,524

 

Income on bank-owned life insurance

 

848

 

 

 

857

 

 

 

839

 

 

 

1,687

 

 

 

1,705

 

(Losses)/gains on available-for-sale debt securities, net

 

 

 

 

509

 

 

 

264

 

 

 

264

 

 

 

606

 

(Losses)/gains on trading securities, net

 

(1,563

)

 

 

807

 

 

 

(802

)

 

 

(2,365

)

 

 

1,171

 

Gain on sale of loans

 

 

 

 

1,401

 

 

 

 

 

 

 

 

 

1,401

 

Other

 

105

 

 

 

15

 

 

 

81

 

 

 

186

 

 

 

145

 

Total non-interest income

 

765

 

 

 

4,916

 

 

 

1,713

 

 

 

2,478

 

 

 

7,552

 

Non-interest expense:

 

 

 

 

 

 

 

 

 

Compensation and employee benefits

 

9,418

 

 

 

10,806

 

 

 

9,507

 

 

 

18,925

 

 

 

21,338

 

Occupancy

 

3,286

 

 

 

3,500

 

 

 

3,408

 

 

 

6,694

 

 

 

7,201

 

Furniture and equipment

 

426

 

 

 

442

 

 

 

426

 

 

 

852

 

 

 

879

 

Data processing

 

1,762

 

 

 

1,798

 

 

 

1,713

 

 

 

3,475

 

 

 

3,430

 

Professional fees

 

1,229

 

 

 

832

 

 

 

908

 

 

 

2,137

 

 

 

1,738

 

Advertising

 

404

 

 

 

684

 

 

 

433

 

 

 

837

 

 

 

1,149

 

Federal Deposit Insurance Corporation insurance

 

355

 

 

 

346

 

 

 

357

 

 

 

712

 

 

 

721

 

Other

 

1,833

 

 

 

1,463

 

 

 

1,957

 

 

 

3,790

 

 

 

2,978

 

Total non-interest expense

 

18,713

 

 

 

19,871

 

 

 

18,709

 

 

 

37,422

 

 

 

39,434

 

Income before income tax expense

 

21,988

 

 

 

27,433

 

 

 

19,470

 

 

 

41,458

 

 

 

53,056

 

Income tax expense

 

6,114

 

 

 

7,639

 

 

 

5,343

 

 

 

11,457

 

 

 

14,585

 

Net income

$

15,874

 

 

$

19,794

 

 

$

14,127

 

 

$

30,001

 

 

$

38,471

 

Net income per common share:

 

 

 

 

 

 

 

 

 

Basic

$

0.34

 

 

$

0.40

 

 

$

0.30

 

 

$

0.64

 

 

$

0.78

 

Diluted

$

0.34

 

 

$

0.40

 

 

$

0.30

 

 

$

0.64

 

 

$

0.78

 

Basic average shares outstanding

 

46,591,723

 

 

 

48,907,585

 

 

 

46,811,331

 

 

 

46,708,716

 

 

 

49,216,157

 

Diluted average shares outstanding

 

46,638,113

 

 

 

49,307,661

 

 

 

47,088,375

 

 

 

46,870,433

 

 

 

49,468,808

 


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

 

For the Three Months Ended

 

June 30, 2022

 

March 31, 2022

 

June 30, 2021

 

Average
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)

$

3,992,731

 

$

38,998

 

3.92

%

 

$

3,848,053

 

$

36,721

 

3.87

%

 

$

3,948,136

 

$

39,699

 

4.03

%

Mortgage-backed securities (3)

 

899,479

 

 

3,043

 

1.36

 

 

 

938,465

 

 

2,475

 

1.07

 

 

 

967,526

 

 

2,682

 

1.11

 

Other securities (3)

 

297,859

 

 

989

 

1.33

 

 

 

255,980

 

 

695

 

1.10

 

 

 

141,475

 

 

484

 

1.37

 

Federal Home Loan Bank of New York stock

 

20,689

 

 

260

 

5.04

 

 

 

22,198

 

 

245

 

4.48

 

 

 

27,703

 

 

336

 

4.86

 

Interest-earning deposits in financial institutions

 

94,689

 

 

166

 

0.70

 

 

 

143,323

 

 

58

 

0.16

 

 

 

150,494

 

 

35

 

0.09

 

Total interest-earning assets

 

5,305,447

 

 

43,456

 

3.29

 

 

 

5,208,019

 

 

40,194

 

3.13

 

 

 

5,235,334

 

 

43,236

 

3.31

 

Non-interest-earning assets

 

266,303

 

 

 

 

 

 

279,508

 

 

 

 

 

 

295,768

 

 

 

 

Total assets

$

5,571,750

 

 

 

 

 

$

5,487,527

 

 

 

 

 

$

5,531,102

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Savings, NOW, and money market accounts

$

3,007,929

 

 

599

 

0.08

%

 

$

2,954,133

 

$

571

 

0.08

%

 

$

2,754,346

 

$

845

 

0.12

%

Certificates of deposit

 

438,835

 

 

735

 

0.67

 

 

 

373,113

 

 

588

 

0.64

 

 

 

574,899

 

 

826

 

0.58

 

Total interest-bearing deposits

 

3,446,764

 

 

1,334

 

0.16

 

 

 

3,327,246

 

 

1,159

 

0.14

 

 

 

3,329,245

 

 

1,671

 

0.20

 

Borrowed funds

 

377,044

 

 

1,918

 

2.04

 

 

 

418,736

 

 

2,166

 

2.10

 

 

 

556,682

 

 

2,878

 

2.07

 

Subordinated debt

 

9,527

 

 

119

 

5.01

 

 

 

 

 

 

 

 

 

 

 

 

 

Total interest-bearing liabilities

 

3,833,335

 

 

3,371

 

0.35

 

 

 

3,745,982

 

 

3,325

 

0.36

 

 

 

3,885,927

 

 

4,549

 

0.47

 

Non-interest bearing deposits

 

918,980

 

 

 

 

 

 

909,787

 

 

 

 

 

 

795,613

 

 

 

 

Accrued expenses and other liabilities

 

105,525

 

 

 

 

 

 

99,802

 

 

 

 

 

 

95,274

 

 

 

 

Total liabilities

 

4,857,840

 

 

 

 

 

 

4,755,571

 

 

 

 

 

 

4,776,814

 

 

 

 

Stockholders' equity

 

713,910

 

 

 

 

 

 

731,956

 

 

 

 

 

 

754,288

 

 

 

 

Total liabilities and stockholders' equity

$

5,571,750

 

 

 

 

 

$

5,487,527

 

 

 

 

 

$

5,531,102

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

 

$

40,085

 

 

 

 

 

$

36,869

 

 

 

 

 

$

38,687

 

 

Net interest rate spread (4)

 

 

 

 

2.94

%

 

 

 

 

 

2.77

%

 

 

 

 

 

2.84

%

Net interest-earning assets (5)

$

1,472,112

 

 

 

 

 

$

1,462,037

 

 

 

 

 

$

1,349,407

 

 

 

 

Net interest margin (6)

 

 

 

 

3.03

%

 

 

 

 

 

2.87

%

 

 

 

 

 

2.96

%

Average interest-earning assets to interest-bearing liabilities

 

 

 

 

138.40

%

 

 

 

 

 

139.03

%

 

 

 

 

 

134.73

%

(1) Average yields and rates are annualized.
(2) Includes non-accruing loans.
(3) Securities available-for-sale and other securities are reported at amortized cost.
(4) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities.
(5) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.
(6) Net interest margin represents net interest income divided by average total interest-earning assets.


 

For the Six Months Ended

 

June 30, 2022

 

June 30, 2021

 

Average
Outstanding
Balance

 

Interest

 

Average
Yield/
Rate
(1)

 

Average
Outstanding
Balance

 

Interest

 

Average
Yield/
Rate
(1)

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

Loans (2)

$

3,920,792

 

$

75,719

 

3.89

%

 

$

3,911,215

 

$

80,976

 

4.18

%

Mortgage-backed securities (3)

 

918,864

 

 

5,518

 

1.21

 

 

 

1,041,493

 

 

5,641

 

1.09

 

Other securities (3)

 

277,035

 

 

1,684

 

1.23

 

 

 

121,609

 

 

908

 

1.51

 

Federal Home Loan Bank of New York stock

 

21,440

 

 

505

 

4.75

 

 

 

28,169

 

 

706

 

5.05

 

Interest-earning deposits in financial institutions

 

118,872

 

 

224

 

0.38

 

 

 

141,899

 

 

72

 

0.10

 

Total interest-earning assets

 

5,257,003

 

 

83,650

 

3.21

 

 

 

5,244,385

 

 

88,303

 

3.40

 

Non-interest-earning assets

 

272,869

 

 

 

 

 

 

303,183

 

 

 

 

Total assets

$

5,529,872

 

 

 

 

 

$

5,547,568

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

Savings, NOW, and money market accounts

$

2,981,180

 

$

1,170

 

0.08

%

 

$

2,761,541

 

$

1,777

 

0.13

%

Certificates of deposit

 

406,156

 

 

1,323

 

0.66

 

 

 

592,983

 

 

1,764

 

0.60

 

Total interest-bearing deposits

 

3,387,336

 

 

2,493

 

0.15

 

 

 

3,354,524

 

 

3,541

 

0.21

 

Borrowed funds

 

397,775

 

 

4,084

 

2.07

 

 

 

574,240

 

 

5,899

 

2.07

 

Subordinated debt

 

4,790

 

 

119

 

5.01

 

 

 

 

 

 

 

Total interest-bearing liabilities

$

3,789,901

 

 

6,696

 

0.36

 

 

$

3,928,764

 

 

9,440

 

0.48

 

Non-interest bearing deposits

 

914,409

 

 

 

 

 

 

767,495

 

 

 

 

Accrued expenses and other liabilities

 

102,679

 

 

 

 

 

 

96,759

 

 

 

 

Total liabilities

 

4,806,989

 

 

 

 

 

 

4,793,018

 

 

 

 

Stockholders' equity

 

722,883

 

 

 

 

 

 

754,550

 

 

 

 

Total liabilities and stockholders' equity

$

5,529,872

 

 

 

 

 

$

5,547,568

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

 

$

76,954

 

 

 

 

 

$

78,863

 

 

Net interest rate spread (4)

 

 

 

 

2.85

%

 

 

 

 

 

2.92

%

Net interest-earning assets (5)

$

1,467,102

 

 

 

 

 

$

1,315,621

 

 

 

 

Net interest margin (6)

 

 

 

 

2.95

%

 

 

 

 

 

3.03

%

Average interest-earning assets to interest-bearing liabilities

 

 

 

 

138.71

%

 

 

 

 

 

133.49

%

 

 

 

 

 

 

 

 

 

 

 

 

(1) Average yields and rates are annualized.
(2) Includes non-accruing loans.
(3) Securities available-for-sale and other securities are reported at amortized cost.
(4) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities.
(5) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.
(6) Net interest margin represents net interest income divided by average total interest-earning assets.

Company Contact:
William R. Jacobs
Chief Financial Officer
Tel: (732) 499-7200 ext. 2519