NORTHFIELD BANCORP, INC. (Nasdaq:NFBK) (or the
“Company”), the holding company for Northfield Bank,
reported net income of $17.0 million, or $0.37, per diluted share
for the three months ended September 30, 2022, as compared to $15.9
million, or $0.34 per diluted share for the three months ended
June 30, 2022, and $16.1 million, or $0.33 per diluted share
for the three months ended September 30, 2021. For the nine months
ended September 30, 2022, net income totaled $47.0 million, or
$1.01 per diluted share, compared to $54.6 million, or $1.11 per
diluted share, for the nine months ended September 30, 2021. The
increase in net income for the current quarter as compared to the
trailing and comparable prior year quarters was primarily due to an
increase in net interest income, reflective of net interest margin
expansion and loan growth. The decrease in net income for the nine
months ended September 30, 2022, as compared to the prior year
period was primarily due to a benefit for credit losses on loans in
the prior year of $6.2 million, compared to a provision for credit
losses on loans in the current year of $3.3 million.
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 in all strategic
categories, actively managing liquidity and our cost of deposits,
prudently focused on expenses, and maintaining strong underwriting
standards to maintain asset quality, will continue to be key
drivers to our long-term success.” Mr. Klein noted further, “While
the economic landscape remains unclear into this year end and
beyond, presenting uncertainties and challenges related to loan and
deposit growth, interest rates, and operating costs, I remain
confident that our team and organization will continue to service
our communities and other stakeholders for 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 November 23, 2022, to
stockholders of record on November 9, 2022.”
Results of Operations
Comparison of Operating Results for the Nine
Months Ended September 30, 2022 and 2021
Net income was $47.0 million and $54.6 million
for the nine months ended September 30, 2022 and
September 30, 2021, respectively. Significant variances from
the comparable prior year period are as follows: a $1.7 million
increase in net interest income, a $9.5 million increase in the
provision for credit losses on loans, a $5.4 million decrease in
non-interest income, a $3.2 million decrease in non-interest
expense, and a $2.5 million decrease in income tax
expense.
Net interest income for the nine months ended
September 30, 2022, increased $1.7 million, or 1.4%, to $119.0
million, from $117.3 million for the nine months ended
September 30, 2021, as the $116.7 million, or 2.2%, increase
in the average balance of interest-earning assets was partially
offset by the three basis point decrease in net interest margin to
2.99% from 3.02% for the nine months ended September 30, 2021.
The increase in the average balance of interest-earning assets was
due to increases in the average balance of loans outstanding of
$140.1 million and the average balance of other securities of
$148.7 million, partially offset by decreases in the average
balance of mortgage-backed securities of $111.8 million, the
average balance of Federal Home Loan Bank of New York (“FHLBNY”)
stock of $4.6 million, and the average balance of interest-earning
deposits in financial institutions of $55.7 million.
The decrease in net interest margin was
primarily due to lower yields on interest-earning assets, due in
part to a $2.3 million decrease in accreted interest income related
to PCD loans, and a $3.0 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 six basis points to 3.30% for the nine months ended
September 30, 2022, from 3.36% for the nine months ended
September 30, 2021. The cost of interest-bearing liabilities
decreased by four basis points to 0.42% for the nine months ended
September 30, 2022, from 0.46% for the nine months ended
September 30, 2021, primarily driven by lower cost of
deposits, partially offset by an increase in the cost of
borrowings, primarily due to the issuance of $60.9 million of
subordinated notes (net of issuance costs) in June 2022. The
Company accreted interest income related to PCD loans of $1.1
million for the nine months ended September 30, 2022, as
compared to $3.4 million for the nine months ended
September 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
$1.3 million for the nine months ended September 30, 2022, as
compared to $4.3 million for the nine months ended
September 30, 2021. Net interest income for the nine months
ended September 30, 2022, included loan prepayment income of
$4.2 million as compared to $3.1 million for the nine months ended
September 30, 2021.
The provision for credit losses on loans
increased by $9.5 million to a provision of $3.3 million for the
nine months ended September 30, 2022, compared to a benefit of
$6.2 million for the nine months ended September 30, 2021. The
prior year benefit for credit losses was primarily due to an
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 primarily due to loan growth and a
declining macroeconomic outlook, partially offset by an improvement
in asset quality and lower net charge-offs. At September 30,
2022, management qualitatively adjusted the economic forecast to
account for uncertainty inherent in the third-party economic
forecast scenarios utilized. Net charge-offs were $345,000 for the
nine months ended September 30, 2022, as compared to net
charge-offs of $2.9 million for the nine months ended
September 30, 2021, which related to PCD loans. Partially
offsetting the increase in the provision for credit losses on loans
was a decrease in the provision for unfunded commitments of $1.8
million attributable to a decrease in the pipeline of loans
approved and awaiting closing, which flows through other
non-interest expense.
Non-interest income decreased by $5.4 million,
or 53.2%, to $4.8 million for the nine months ended
September 30, 2022, from $10.2 million for the nine months
ended September 30, 2021, due primarily to a decrease of $3.9
million in gains on trading securities, net, a $1.1 million
decrease in gains on sales of loans, and a $712,000 decrease in net
realized gains on available-for-sale debt securities. For the nine
months ended September 30, 2022, losses on trading securities
were $2.8 million, as compared to gains of $1.1 million for the
nine months ended September 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 was due to a $1.4 million
gain realized on the sale of approximately $126.3 million of
multifamily loans in the second quarter of 2021, as compared to a
$273,000 gain realized on the sale of two SBA loans totaling
approximately $2.5 million in the third quarter of 2022. Partially
offsetting the decreases was an increase of $312,000 in fees and
service charges for customer services.
Non-interest expense decreased $3.2 million, or
5.4%, to $55.3 million for the nine months ended September 30,
2022, compared to $58.5 million for the nine months ended
September 30, 2021. The decrease was primarily due to a $2.0
million decrease in employee compensation and benefits. The
decrease was due to a $3.9 million decrease in the mark to market
of the Company's deferred compensation plan expense, which as
discussed above has no effect on net income, as well as a decrease
in medical benefit costs, partially offset by an increase in salary
expense related to annual merit increases, and an increase in
equity award expense related to new awards issued in the first
quarter of 2022. Additionally, occupancy expense decreased by
$585,000, primarily related to lower snow removal costs,
advertising expense decreased by $468,000, due to the timing of
certain campaigns, and other expense decreased by $982,000. The
decrease in other expense was primarily related to a $1.8 million
decrease in the provision for unfunded commitments due to a benefit
of $1.3 million for the nine months ended September 30, 2022,
compared to a provision of $528,000 for the same period in 2021.
The decrease was primarily the result of a decrease in the pipeline
of loans approved and awaiting closing, combined with a decrease in
loan loss factors. Partially offsetting the decreases was an
increase in professional fees of $476,000, related to higher
recruitment, consulting and outsourcing fees, an increase in data
processing costs of $354,000 attributable to increased customer
accounts and a higher number of transactions, and an increase in
other operating expenses of $421,000.
The Company recorded income tax expense of $18.2
million for the nine months ended September 30, 2022, compared
to $20.7 million for the nine months ended September 30, 2021,
the decrease being due to a decrease in taxable income. The
effective tax rate for the nine months ended September 30,
2022, was 27.9% compared to 27.5% for the nine months ended
September 30, 2021.
Comparison of Operating Results for the Three
Months Ended September 30, 2022 and 2021
Net income was $17.0 million and $16.1 million
for the quarters ended September 30, 2022 and
September 30, 2021, respectively. Significant variances from
the comparable prior year quarter are as follows: a $3.6
million increase in net interest income, a $2.9 million
increase in the provision for credit losses on loans, a $342,000
decrease in non-interest income, a $1.2 million decrease in
non-interest expense, and a $667,000 increase in income tax
expense.
Net interest income for the quarter ended
September 30, 2022, increased $3.6 million, or 9.4%,
primarily due to an increase in average interest-earning assets of
$321.4 million, or 6.3% and a nine basis point increase in net
interest margin to 3.08% from 2.99% for the quarter ended
September 30, 2021. The increase in the average balance of
interest-earning assets was primarily due to increases in the
average balance of loans outstanding of $396.8 million and the
average balance of other securities of $135.5 million, partially
offset by decreases in the average balance of mortgage-backed
securities of $90.4 million, the average balance of
interest-earning deposits in financial institutions of $120.0
million, and the average balance of FHLBNY stock of $455,000.
Partially offsetting the increase in net interest income was a $1.3
million reduction in fees related to the forgiveness of PPP loans
in the current quarter as compared to the quarter ended
September 30, 2021.
The increase in net interest margin was
primarily due to rising interest rates. Yields on interest-earning
assets increased by 18 basis points to 3.46% for the quarter ended
September 30, 2022, from 3.28% for the quarter ended
September 30, 2021. The increase in yields was partially
offset by an increase in the cost of interest-bearing liabilities
which increased by 13 basis points to 0.53% for the quarter ended
September 30, 2022, from 0.40% for the quarter ended
September 30, 2021. The increase in the cost of interest
bearing liabilities was attributable to an increase in the cost of
deposits and borrowed funds reflective of the rising rate
environment and the issuance of $60.9 million of subordinated notes
(net of issuance costs) in June 2022. Net interest income for the
quarter ended September 30, 2022, included loan prepayment
income of $1.6 million, as compared to $902,000 for the quarter
ended September 30, 2021. The Company accreted interest income
related to PCD loans of $368,000 for the quarter ended
September 30, 2022, as compared to $356,000 for quarter ended
September 30, 2021. Fees recognized from PPP loans totaled
$144,000 for the quarter ended September 30, 2022, as compared
to $1.5 million for the quarter ended September 30, 2021.
The provision for credit losses on loans
increased by $2.9 million to a provision of $2.7 million for the
quarter ended September 30, 2022, from a benefit of $148,000
for the quarter ended September 30, 2021. The prior year
benefit for credit losses was primarily due to an 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 primarily due to loan growth and a declining
macroeconomic outlook, partially offset by an improvement in asset
quality and lower net charge-offs. At September 30, 2022,
management qualitatively adjusted the economic forecast to account
for uncertainty inherent in the third party economic forecast
scenarios utilized. Net recoveries were $149,000 for the quarter
ended September 30, 2022, compared to net charge-offs of
$484,000 for the quarter ended September 30, 2021. Partially
offsetting the increase in the provision for credit losses on
loans, was a decrease in the provision for unfunded commitments of
$2.2 million attributable to a decrease in the pipeline of loans
approved and awaiting closing, which flows through other
non-interest expense.
Non-interest income decreased by $342,000, or
13.0%, to $2.3 million for the quarter ended September 30,
2022, from $2.6 million for the quarter ended September 30,
2021, primarily due to a $351,000 increase in losses on trading
securities and a $370,000 decrease in net realized gains on
available-for-sale debt securities. For the quarter ended
September 30, 2022, losses on trading securities, net,
included losses of $426,000 related to the Company’s trading
portfolio, compared to losses of $75,000 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. Partially
offsetting increase in net losses on securities transactions was an
increase in fees and service charges for customer services of
$130,000 and an increase in gains on sales of loans of
$273,000.
Non-interest expense decreased by $1.2 million,
or 6.1%, to $17.9 million for the quarter ended September 30,
2022, from $19.0 million for the quarter ended September 30,
2021. The decrease was due primarily to a $1.8 million decrease in
other expense and a $156,000 decrease in advertising expense due to
the timing of certain campaigns. The decrease in other expense was
primarily related to a $2.2 million decrease in the provision for
unfunded commitments due to a benefit of $1.9 million for the
quarter ended September 30, 2022, compared to a provision of
$265,000 for the same period in 2021. The decrease was primarily
the result of a decrease in the pipeline of loans approved and
awaiting closing combined with a decrease in loan loss factors.
Partially offsetting the decreases, was a $450,000 increase in
compensation and employee benefits and a $309,000 increase in data
processing costs. The increase in compensation and employee
benefits expense is attributable to increases in salary expense due
to annual merit increases, an increase in equity award expense
related to new awards issued in the first quarter of 2022, and
higher medical benefit expense, partially offset by a decrease in
the mark to market of the Company's deferred compensation plan
expense, which has no effect on net income. The increase in data
processing expense is attributable to increased customer accounts
and a higher number of transactions.
The Company recorded income tax expense of $6.7
million for the quarter ended September 30, 2022, compared to
$6.1 million for the quarter ended September 30, 2021, with
the increase due to higher taxable income. The effective tax rate
for the quarter ended September 30, 2022 was 28.4%, compared
to 27.4% for the quarter ended September 30, 2021.
Comparison of Operating Results for the Three
Months Ended September 30, 2022 and June 30, 2022
Net income was $17.0 million and $15.9 million
for the quarters ended September 30, 2022, and June 30,
2022, respectively. Significant variances from the prior quarter
are as follows: a $1.9 million increase in net interest income, a
$2.6 million increase in the provision for credit losses on loans,
a $1.5 million increase in non-interest income, an $843,000
decrease in non-interest expense and a $631,000 increase in
income tax expense.
Net interest income for the quarter ended
September 30, 2022, increased by $1.9 million, or 4.8%,
primarily due to a five basis point increase in net interest margin
to 3.08% from 3.03% for the quarter ended June 30, 2022, and a
$111.8 million, or 2.1%, 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 $221.7 million and the
average balance of FHLBNY stock of $2.0 million, partially offset
by decreases in the average balance of mortgage-backed securities
of $65.5 million, the average balance of other securities of $3.1
million, and the average balance of interest-earning deposits in
financial institutions of $43.3 million.
The increase in net interest margin was
primarily due to higher yields on interest-earning assets, which
increased by 17 basis points to 3.46% for the quarter ended
September 30, 2022, from 3.29% for the quarter ended
June 30, 2022, partially offset by an increase in the cost of
interest-bearing liabilities which increased by 18 basis point to
0.53% for the quarter ended September 30, 2022, from 0.35% for
the quarter ended June 30, 2022, reflective of the rising rate
environment. Net interest income for the quarter ended
September 30, 2022, included loan prepayment income of $1.6
million as compared to $1.5 million for the quarter ended
June 30, 2022. The Company accreted interest income related to
PCD loans of $368,000 for the quarter ended September 30,
2022, as compared to $339,000 for the quarter ended June 30,
2022. Fees recognized from PPP loans totaled $144,000 and $432,000
respectively, for the quarters ended September 30, 2022, and
June 30, 2022.
The provision for credit losses on loans
increased by $2.6 million to a provision of $2.7 million for the
quarter ended September 30, 2022, from a provision of $149,000
for the quarter ended June 30, 2022. The increase in the
provision was primarily due to loan growth and a declining
macroeconomic outlook, partially offset by lower net charge-offs.
Net recoveries were $149,000 for the quarter ended
September 30, 2022, as compared to net charge-offs of $392,000
for the quarter ended June 30, 2022. Partially offsetting the
increase in the provision for credit losses on loans, was a
decrease in the provision for unfunded commitments of $2.2 million
attributable to a decrease in the pipeline of loans approved and
awaiting closing, which flows through other non-interest
expense.
Non-interest income increased by $1.5 million,
or 198.8%, to $2.3 million for the quarter ended September 30,
2022, from $765,000 for the quarter ended June 30, 2022. The
increase was primarily due to a $1.1 million decrease in losses on
trading securities, net. For the quarter ended September 30,
2022, losses on trading securities, net, were $426,000, compared to
losses of $1.6 million for the quarter ended June 30, 2022.
Additionally there was a $125,000 increase in fees and service
charges for customer services and a $273,000 increase in gains on
sales of loans.
Non-interest expense decreased by $843,000, or
4.5%, to $17.9 million for the quarter ended September 30,
2022, from $18.7 million for the quarter ended June 30, 2022.
The decrease was primarily due to a $2.1 million decrease in other
expense and a $326,000 decrease in professional fees, partially
offset by a $1.4 million increase in compensation and employee
benefits. The decrease in other expense was primarily related to a
$2.2 million decrease in the provision for unfunded commitments due
to a benefit of $1.9 million for the quarter ended September 30,
2022, compared to a provision of $349,000 in the quarter ended
June 30, 2022. The decrease was primarily the result of a
decrease in the pipeline of loans approved and awaiting closing.
The increase in compensation and employee benefits was primarily
due to a $1.1 million increase in the mark to market of the
Company's deferred compensation plan expense and higher salary
expense.
The Company recorded income tax expense of $6.7
million for the quarter ended September 30, 2022, compared to
$6.1 million for the quarter ended June 30, 2022 with the
increase due to higher taxable income. The effective tax rate for
the quarter ended September 30, 2022 was 28.4%, compared to
27.8% for the quarter ended and June 30, 2022.
Financial Condition
Total assets increased by $239.1 million, or
4.4%, to $5.67 billion at September 30, 2022, from $5.43
billion at December 31, 2021. The increase was primarily due
to increases in total loans of $440.1 million, or 11.6%, and other
assets of $24.2 million, or 65.2%, partially offset by decreases in
available-for-sale debt securities of $206.0 million, or 17.1%, and
cash and cash equivalents of $20.4 million, or 22.4%.
As of September 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 469%. Management believes that Northfield Bank (the
“Bank”) has implemented appropriate risk management practices
including risk assessments, board-approved underwriting policies
and related procedures, which include monitoring Bank portfolio
performance, performing market analysis (economic and real estate),
and stressing of the Bank’s commercial real estate portfolio under
severe, adverse economic conditions. Although management believes
the Bank has implemented appropriate policies and procedures to
manage its commercial real estate concentration risk, the Bank’s
regulators could require it to implement additional policies and
procedures or could require it to maintain higher levels of
regulatory capital, which might adversely affect its loan
originations, ability to pay dividends, and profitability.
Cash and cash equivalents decreased by $20.4
million, or 22.4%, to $70.7 million at September 30, 2022,
from $91.1 million at December 31, 2021. The decrease was due
to a decrease in deposits, as well as an increase in net loans
held-for-investment. Balances fluctuate based on the timing of
receipt of security and loan repayments and the redeployment of
cash into higher-yielding assets such as loans and securities, or
the funding of deposit outflows or borrowing maturities.
Loans held-for-investment, net, increased by
$439.6 million, or 11.5%, to $4.25 billion at
September 30, 2022 from $3.81 billion at December 31,
2021. The overall increase was due to strong loan originations in a
rising interest rate environment. Multifamily loans increased
$338.3 million, or 13.4%, to $2.86 billion at September 30,
2022 from $2.52 billion at December 31, 2021, commercial real
estate loans increased $80.8 million, or 10.0%, to $889.4 million
at September 30, 2022 from $808.6 million at December 31,
2021, home equity loans increased $36.6 million, or 33.3%, to
$146.5 million at September 30, 2022 from $110.0 million at
December 31, 2021, and commercial and industrial loans
(excluding PPP loans) increased $35.9 million, or 35.7%, to $136.4
million at September 30, 2022 from $100.5 million at
December 31, 2021. The increases were partially offset by
decreases in one-to-four family residential loans of $7.4 million,
or 4.0%, to $176.3 million at September 30, 2022 from $183.7
million at December 31, 2021, construction and land loans of
$5.8 million, or 21.2%, to $21.7 million at September 30, 2022
from $27.5 million at December 31, 2021, and PPP loans of
$35.0 million, or 86.4%, to $5.5 million at September 30, 2022
from $40.5 million at December 31, 2021. Through
September 30, 2022, 2,321 borrowers have received PPP
forgiveness payments totaling approximately $224.4 million.
There were nine PPP loans outstanding totaling
$5.5 million at September 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
September 30, 2022, $46,000 in unearned fees remain.
PCD loans totaled $12.0 million at
September 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 September 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 $368,000 and $1.1 million attributable to PCD
loans for the three and nine months ended September 30, 2022,
respectively, as compared to $356,000 and $3.4 million for the
three and nine months ended September 30, 2021, respectively. The
decrease in income accreted for the nine months ended
September 30, 2022 is due to the payoff of PCD loans in the
prior year. PCD loans had an allowance for credit losses of
approximately $4.0 million at September 30, 2022.
Loan balances are summarized as follows (dollars
in thousands):
|
September 30, 2022 |
|
June 30, 2022 |
|
December 31, 2021 |
Real estate loans: |
|
|
|
|
|
Multifamily |
$ |
2,856,322 |
|
$ |
2,771,002 |
|
$ |
2,518,065 |
Commercial mortgage |
|
889,390 |
|
|
850,186 |
|
|
808,597 |
One-to-four family residential mortgage |
|
176,251 |
|
|
185,376 |
|
|
183,665 |
Home equity and lines of credit |
|
146,546 |
|
|
137,868 |
|
|
109,956 |
Construction and land |
|
21,668 |
|
|
18,555 |
|
|
27,495 |
Total real estate loans |
|
4,090,177 |
|
|
3,962,987 |
|
|
3,647,778 |
Commercial and industrial
loans |
|
136,366 |
|
|
121,473 |
|
|
100,488 |
PPP loans |
|
5,507 |
|
|
11,949 |
|
|
40,517 |
Other loans |
|
2,158 |
|
|
2,312 |
|
|
2,015 |
Total commercial and industrial, PPP, and other loans |
|
144,031 |
|
|
135,734 |
|
|
143,020 |
Loans held-for-investment, net (excluding PCD) |
|
4,234,208 |
|
|
4,098,721 |
|
|
3,790,798 |
PCD loans |
|
11,973 |
|
|
13,136 |
|
|
15,819 |
Total loans held-for-investment, net |
$ |
4,246,181 |
|
$ |
4,111,857 |
|
$ |
3,806,617 |
|
|
|
|
|
|
|
|
|
The following tables detail multifamily real
estate originations for the nine months ended September 30,
2022 and 2021 (dollars in thousands):
For the Nine Months Ended September 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 |
$ |
640,540 |
|
3.66% |
|
57 |
% |
|
75 |
|
V |
|
25 to 30
Years |
|
1,200 |
|
3.75% |
|
18 |
% |
|
181 |
|
F |
|
15
Years |
$ |
641,740 |
|
3.66% |
|
57 |
% |
|
|
|
|
|
|
For the Nine Months Ended September 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 |
$ |
544,502 |
|
3.13 |
% |
|
63 |
% |
|
74 |
|
V |
|
10 to 30 Years |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Included within the tables above were $193.4 million and $159.1
million of multifamily loans originated in the quarters ended
September 30, 2022 and September 30, 2021, respectively, at a
weighted average rate of 4.22% and 3.13%, respectively.
The following table details loan pools purchased
during the nine months ended September 30, 2022 (dollars in
thousands):
For the Nine
Months Ended September 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 $206.0 million, or 17.1%, to $1.00 billion
at September 30, 2022, from $1.21 billion at December 31,
2021. The decrease was primarily attributable to paydowns,
maturities, calls, and sales, as well as a $77.3 million increase
in net unrealized losses due to an increase in market interest
rates. At September 30, 2022, $736.8 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 $71.8 million in U.S. Government agency
securities, $193.6 million in corporate bonds, all of which were
considered investment grade at September 30, 2022, and $26,000
in municipal bonds.
Equity securities increased by $3.2 million to
$8.6 million at September 30, 2022, from $5.3 million at
December 31, 2021, primarily due to an increase in our
investment in a Small Business Administration Loan Fund. This
investment is utilized by the Bank as part of its Community
Reinvestment Act program.
Total liabilities increased $285.6 million, or
6.1%, to $4.98 billion at September 30, 2022, from $4.69
billion at December 31, 2021. The increase was primarily
attributable to an increase in deposits of $234.8 million, the
issuance of subordinated debt, net of issuance costs, of $60.9
million, an increase in advance payments by borrowers for taxes and
insurance of $1.2 million, and an increase in other liabilities of
$2.7 million. The increases were partially offset by a decrease in
FHLB advances and other borrowings of $14.1 million.
Deposits increased $234.8 million, or 5.6%, to
$4.40 billion at September 30, 2022, as compared to $4.17
billion at December 31, 2021. The increase was attributable to
increases of $148.1 million in transaction accounts and $294.1
million in certificates of deposit, partially offset by decreases
of $125.9 million in savings accounts and $81.5 million in money
market accounts.
Deposit account balances are summarized as
follows (dollars in thousands):
|
September 30, 2022 |
|
June 30, 2022 |
|
December 31, 2021 |
Transaction: |
|
|
|
|
|
Non-interest bearing checking |
$ |
902,659 |
|
$ |
916,343 |
|
$ |
898,490 |
Negotiable orders of withdrawal and interest-bearing checking |
|
1,256,257 |
|
|
1,287,458 |
|
|
1,112,292 |
Total transaction |
|
2,158,916 |
|
|
2,203,801 |
|
|
2,010,782 |
Savings and money market: |
|
|
|
|
|
Savings |
|
1,040,841 |
|
|
1,149,976 |
|
|
1,166,761 |
Money market |
|
527,910 |
|
|
541,445 |
|
|
609,430 |
Total savings |
|
1,568,751 |
|
|
1,691,421 |
|
|
1,776,191 |
Certificates of deposit: |
|
|
|
|
|
Brokered deposits |
|
309,922 |
|
|
210,130 |
|
|
31,000 |
$250,000 and under |
|
308,563 |
|
|
253,556 |
|
|
286,580 |
Over $250,000 |
|
58,007 |
|
|
59,094 |
|
|
64,781 |
Total certificates of deposit |
|
676,492 |
|
|
522,780 |
|
|
382,361 |
Total deposits |
$ |
4,404,159 |
|
$ |
4,418,002 |
|
$ |
4,169,334 |
|
|
|
|
|
|
|
|
|
Included in the table above are business and municipal deposit
account balances as follows (dollars in thousands):
|
September 30, 2022 |
|
June 30, 2022 |
|
December 31, 2021 |
|
|
|
|
|
|
Business customers |
$ |
1,224,602 |
|
$ |
1,297,501 |
|
$ |
1,184,472 |
Municipal customers |
$ |
699,891 |
|
$ |
663,656 |
|
$ |
633,458 |
|
|
|
|
|
|
|
|
|
Borrowed funds increased to $468.6 million at
September 30, 2022, from $421.8 million at December 31,
2021. The increase in borrowings for the period was primarily
attributable to 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. Additionally, FHLB and other borrowings increased by
$10.9 million. Partially offsetting the increases was a decrease in
securities sold under agreements to repurchase of $25.0 million.
Management utilizes borrowings to mitigate interest rate risk, for
short-term liquidity, and to a lesser extent from time to time, as
part of leverage strategies.
The following is a table of term borrowing maturities (excluding
overnight borrowings and subordinated debt) and the weighted
average rate by year at September 30, 2022 (dollars in
thousands):
Year |
|
Amount |
|
Weighted Average Rate |
2023 |
|
$ |
87,500 |
|
2.89 |
% |
2024 |
|
|
50,000 |
|
2.47 |
% |
2025 |
|
|
112,500 |
|
1.48 |
% |
2026 |
|
|
20,000 |
|
3.48 |
% |
Thereafter |
|
|
125,000 |
|
2.79 |
% |
|
|
$ |
395,000 |
|
2.43 |
% |
|
|
|
|
|
|
|
Total stockholders’ equity decreased by $46.6
million to $693.3 million at September 30, 2022, from $739.9
million at December 31, 2021. The decrease was attributable to
a $55.9 million decrease in accumulated other comprehensive income
associated with a decline in the estimated fair value of our debt
securities available-for-sale portfolio, $18.2 million in dividend
payments, and $22.3 million in stock repurchases, partially offset
by net income of $47.0 million for the nine months ended
September 30, 2022, and a $2.8 million increase in equity
award activity. During the first quarter of 2022, the $54.2 million
stock repurchase program that was approved in March 2021, was
completed upon reaching the purchase limit. On June 16, 2022, the
Board of Directors of the Company approved a new $45.0 million
stock repurchase program. During the nine months ended
September 30, 2022, the Company repurchased approximately 1.5
million of its common stock outstanding at an average price of
$14.51 for a total of $22.3 million pursuant to the approved stock
repurchase plans. As of September 30, 2022, the Company had
approximately $31.0 million in remaining capacity under its current
repurchase program.
The Company continues to maintain adequate
liquidity and a strong capital position. The Company's most liquid
assets are cash and cash equivalents, corporate bonds, and
unpledged mortgage-related securities issued or guaranteed by the
U.S. Government, Fannie Mae, or Freddie Mac, that we can either
borrow against or sell. We also have the ability to surrender
bank-owned life insurance contracts. The surrender of these
contracts would subject the Company to income taxes and penalties
for increases in the cash surrender values over the original
premium payments. We also have the ability to obtain
additional funding from the FHLB and Federal Reserve Bank utilizing
unencumbered and unpledged securities and multifamily loans. The
Company expects to have sufficient funds available to meet current
commitments in the normal course of business.
The Company had the following primary sources of liquidity at
September 30, 2022 (dollars in thousands):
Cash and cash
equivalents(1) |
|
$ |
56,783 |
Corporate bonds |
|
$ |
177,896 |
Multifamily loans(2) |
|
$ |
1,628,273 |
Mortgage-backed securities
(issued or guaranteed by the U.S. Government, Fannie Mae, or
Freddie Mac)(2) |
|
$ |
265,021 |
|
|
|
(1) Excludes $13.9 million of cash at Northfield Bank.(2)
Represents estimated remaining borrowing
potential.
The Company and the Bank utilize the Community
Bank Leverage Ratio (“CBLR”) framework. The CBLR replaces the
risk-based and leverage capital requirements in the generally
applicable capital rules. At September 30, 2022, the
Company and the Bank's estimated CBLR ratios were 12.53% and
12.30%, respectively, which exceeded the minimum requirement to be
considered well-capitalized of 9%.
Asset Quality
The following table details total non-accrual
loans (excluding PCD), non-performing loans, non-performing assets,
troubled debt restructurings on which interest is accruing, and
accruing loans 30 to 89 days delinquent at September 30,
2022, June 30, 2022, and December 31, 2021 (dollars in
thousands):
|
September 30, 2022 |
|
June 30, 2022 |
|
December 31, 2021 |
Non-accrual loans: |
|
|
|
|
|
Held-for-investment |
|
|
|
|
|
Real estate loans: |
|
|
|
|
|
Multifamily |
$ |
3,697 |
|
|
$ |
4,022 |
|
|
$ |
1,882 |
|
Commercial |
|
5,211 |
|
|
|
5,330 |
|
|
|
5,117 |
|
One-to-four family residential |
|
126 |
|
|
|
304 |
|
|
|
314 |
|
Home equity and lines of credit |
|
267 |
|
|
|
332 |
|
|
|
281 |
|
Commercial and industrial |
|
524 |
|
|
|
275 |
|
|
|
28 |
|
Total non-accrual
loans |
|
9,825 |
|
|
|
10,263 |
|
|
|
7,622 |
|
Loans delinquent 90 days or
more and still accruing: |
|
|
|
|
|
Held-for-investment |
|
|
|
|
|
Real estate loans: |
|
|
|
|
|
Commercial |
|
18 |
|
|
|
27 |
|
|
|
147 |
|
One-to-four family residential |
|
6 |
|
|
|
160 |
|
|
|
165 |
|
PPP loans |
|
23 |
|
|
|
17 |
|
|
|
72 |
|
Other |
|
7 |
|
|
|
7 |
|
|
|
— |
|
Total loans
held-for-investment delinquent 90 days or more and still
accruing |
|
54 |
|
|
|
211 |
|
|
|
384 |
|
Total non-performing
loans |
|
9,879 |
|
|
|
10,474 |
|
|
|
8,006 |
|
Other real estate owned |
|
— |
|
|
|
— |
|
|
|
100 |
|
Total non-performing
assets |
$ |
9,879 |
|
|
$ |
10,474 |
|
|
$ |
8,106 |
|
Non-performing loans to total loans |
|
0.23 |
% |
|
|
0.25 |
% |
|
|
0.21 |
% |
Non-performing assets to total assets |
|
0.17 |
% |
|
|
0.19 |
% |
|
|
0.15 |
% |
Loans subject to
restructuring agreements and still accruing |
$ |
4,084 |
|
|
$ |
4,115 |
|
|
$ |
5,820 |
|
Accruing loans 30 to
89 days delinquent |
$ |
2,980 |
|
|
$ |
2,706 |
|
|
$ |
1,166 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Real Estate Owned
At September 30, 2022 and June 30, 2022,
the Company had no assets acquired through foreclosure. As of
December 31, 2021, other real estate owned was comprised of
one property located in New Jersey, which had a carrying value of
approximately $100,000, and which was sold during the second
quarter of 2022 for a small gain.
Accruing Loans 30 to 89 Days Delinquent
Loans 30 to 89 days delinquent and on accrual
status totaled $3.0 million, $2.7 million, and $1.2 million at
September 30, 2022, June 30, 2022, and December 31, 2021,
respectively. The following table sets forth delinquencies for
accruing loans by type and by amount at September 30, 2022,
June 30, 2022, and December 31, 2021 (dollars in thousands):
|
September 30, 2022 |
|
June 30, 2022 |
|
December 31, 2021 |
Held-for-investment |
|
|
|
|
|
Real estate loans: |
|
|
|
|
|
Multifamily |
$ |
725 |
|
$ |
— |
|
$ |
— |
Commercial |
|
366 |
|
|
658 |
|
|
144 |
One-to-four family residential |
|
606 |
|
|
805 |
|
|
593 |
Home equity and lines of credit |
|
599 |
|
|
147 |
|
|
412 |
Commercial and industrial loans |
|
684 |
|
|
581 |
|
|
— |
PPP loans |
|
— |
|
|
515 |
|
|
2 |
Other loans |
|
— |
|
|
— |
|
|
15 |
Total delinquent accruing loans held-for-investment |
$ |
2,980 |
|
$ |
2,706 |
|
$ |
1,166 |
|
|
|
|
|
|
|
|
|
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 ($12.0 million at
September 30, 2022 and $15.8 million at December 31,
2021) as accruing, even though they may be contractually past
due. At September 30, 2022, 0.9% of PCD loans were past
due 30 to 89 days, and 22.9% 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 to substandard, a lending relationship with an
outstanding principal balance at December 31, 2021, of
approximately $15.6 million 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 $3.9 million on the commercial line of credit,
reducing the outstanding balance to approximately $783,000 as of
September 30, 2022. At September 30, 2022, the aggregate
balances of the loans was $11.4 million.
The commercial real estate loans are secured by
two commercial properties with an 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. The
legal matters have now concluded with plea agreements providing for
various relief, and we are evaluating the impact on future
operations of the entities.
All loans under the lending relationship are
current as of October 26, 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 September 30, 2022, approximately $1.5 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 |
|
Nine Months Ended |
|
September 30, |
|
June 30, |
|
September 30, |
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2022 |
|
|
2021 |
|
Selected Financial
Ratios: |
|
|
|
|
|
|
|
|
|
Performance
Ratios (1) |
|
|
|
|
|
|
|
|
|
Return on assets (ratio of net
income to average total assets) |
1.19 |
% |
|
1.18 |
% |
|
1.14 |
% |
|
1.13 |
% |
|
1.33 |
% |
Return on equity (ratio of net
income to average equity) (7) (8) |
9.45 |
|
|
8.48 |
|
|
8.92 |
|
|
8.73 |
|
|
9.68 |
|
Average equity to average total
assets |
12.56 |
|
|
13.94 |
|
|
12.81 |
|
|
12.90 |
|
|
13.71 |
|
Interest rate spread |
2.93 |
|
|
2.88 |
|
|
2.94 |
|
|
2.88 |
|
|
2.90 |
|
Net interest margin |
3.08 |
|
|
2.99 |
|
|
3.03 |
|
|
2.99 |
|
|
3.02 |
|
Efficiency ratio (2) |
40.34 |
|
|
46.38 |
|
|
45.81 |
|
|
44.69 |
|
|
45.87 |
|
Non-interest expense to average
total assets |
1.25 |
|
|
1.40 |
|
|
1.35 |
|
|
1.33 |
|
|
1.42 |
|
Non-interest expense to average
total interest-earning assets |
1.31 |
|
|
1.48 |
|
|
1.41 |
|
|
1.39 |
|
|
1.50 |
|
Average interest-earning assets
to average interest-bearing liabilities |
137.26 |
|
|
137.26 |
|
|
138.40 |
|
|
138.21 |
|
|
134.71 |
|
Asset Quality
Ratios: |
|
|
|
|
|
|
|
|
|
Non-performing assets to total
assets |
0.17 |
|
|
0.14 |
|
|
0.19 |
|
|
0.17 |
|
|
0.14 |
|
Non-performing loans (3) to
total loans (4) |
0.23 |
|
|
0.20 |
|
|
0.25 |
|
|
0.23 |
|
|
0.20 |
|
Allowance for credit losses to
non-performing loans |
423.96 |
|
|
516.99 |
|
|
372.65 |
|
|
423.96 |
|
|
516.99 |
|
Allowance for credit losses to
total loans held-for-investment, net (5) (6) (7) |
0.99 |
|
|
1.02 |
|
|
0.95 |
|
|
0.99 |
|
|
1.02 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Annualized where
appropriate. (2) The efficiency ratio
represents non-interest expense divided by the sum of net interest
income and non-interest
income.(3) Non-performing loans consist of
non-accruing loans and loans 90 days or more past due and still
accruing (excluding PCD loans), and are included in total loans
held-for-investment, net.(4) Includes
originated loans held-for-investment, PCD loans, acquired loans and
loans held-for-sale.(5) Includes originated
loans held-for-investment, PCD loans, and acquired loans.
(6) Excluding PPP loans (which are fully
government guaranteed and do not carry any provision for losses) of
$5.5 million, $11.9 million, and $72.9 million at September 30,
2022, June 30, 2022, and September 30, 2021, respectively, the
allowance for credit losses to total loans held for investment,
net, totaled 0.99%, 0.95%, and 1.04%, respectively, at September
30, 2022, June 30, 2022, and September 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)
|
September 30, 2022 |
|
June 30, 2022 |
|
December 31, 2021 |
ASSETS: |
|
|
|
|
|
Cash and due from banks |
$ |
13,882 |
|
|
$ |
17,241 |
|
|
$ |
18,191 |
|
Interest-bearing deposits in
other financial institutions |
|
56,783 |
|
|
|
92,991 |
|
|
|
72,877 |
|
Total cash and cash
equivalents |
|
70,665 |
|
|
|
110,232 |
|
|
|
91,068 |
|
Trading securities |
|
10,074 |
|
|
|
10,401 |
|
|
|
13,461 |
|
Debt securities
available-for-sale, at estimated fair value |
|
1,002,231 |
|
|
|
1,086,868 |
|
|
|
1,208,237 |
|
Debt securities
held-to-maturity, at amortized cost |
|
4,572 |
|
|
|
5,201 |
|
|
|
5,283 |
|
Equity securities |
|
8,571 |
|
|
|
7,821 |
|
|
|
5,342 |
|
Loans held-for-sale |
|
504 |
|
|
|
2,346 |
|
|
|
— |
|
Loans held-for-investment,
net |
|
4,246,181 |
|
|
|
4,111,857 |
|
|
|
3,806,617 |
|
Allowance for credit losses |
|
(41,883 |
) |
|
|
(39,031 |
) |
|
|
(38,973 |
) |
Net loans
held-for-investment |
|
4,204,298 |
|
|
|
4,072,826 |
|
|
|
3,767,644 |
|
Accrued interest
receivable |
|
16,075 |
|
|
|
14,948 |
|
|
|
14,572 |
|
Bank-owned life insurance |
|
167,046 |
|
|
|
166,185 |
|
|
|
164,500 |
|
Federal Home Loan Bank of New
York stock, at cost |
|
22,417 |
|
|
|
19,942 |
|
|
|
22,336 |
|
Operating lease right-of-use
assets |
|
35,446 |
|
|
|
36,595 |
|
|
|
33,943 |
|
Premises and equipment,
net |
|
25,382 |
|
|
|
25,766 |
|
|
|
25,937 |
|
Goodwill |
|
41,012 |
|
|
|
41,012 |
|
|
|
41,012 |
|
Other assets |
|
61,302 |
|
|
|
47,008 |
|
|
|
37,207 |
|
Total
assets |
$ |
5,669,595 |
|
|
$ |
5,647,151 |
|
|
$ |
5,430,542 |
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY: |
|
|
|
|
|
LIABILITIES: |
|
|
|
|
|
Deposits |
$ |
4,404,159 |
|
|
$ |
4,418,002 |
|
|
$ |
4,169,334 |
|
Securities sold under
agreements to repurchase |
|
25,000 |
|
|
|
25,000 |
|
|
|
50,000 |
|
Federal Home Loan Bank
advances and other borrowings |
|
382,678 |
|
|
|
322,016 |
|
|
|
371,755 |
|
Subordinated debentures, net
of issuance costs |
|
60,940 |
|
|
|
60,917 |
|
|
|
— |
|
Lease liabilities |
|
41,051 |
|
|
|
42,298 |
|
|
|
39,851 |
|
Advance payments by borrowers
for taxes and insurance |
|
26,137 |
|
|
|
29,458 |
|
|
|
24,909 |
|
Accrued expenses and other
liabilities |
|
36,328 |
|
|
|
34,187 |
|
|
|
34,810 |
|
Total
liabilities |
|
4,976,293 |
|
|
|
4,931,878 |
|
|
|
4,690,659 |
|
|
|
|
|
|
|
STOCKHOLDERS’
EQUITY: |
|
|
|
|
|
Total stockholders’
equity |
|
693,302 |
|
|
|
715,273 |
|
|
|
739,883 |
|
Total liabilities and
stockholders’ equity |
$ |
5,669,595 |
|
|
$ |
5,647,151 |
|
|
$ |
5,430,542 |
|
|
|
|
|
|
|
Total shares outstanding |
|
47,888,376 |
|
|
|
48,684,875 |
|
|
|
49,266,733 |
|
Tangible book value per share
(1) |
$ |
13.61 |
|
|
$ |
13.84 |
|
|
$ |
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 $310,000, $347,000, and $440,000 at
September 30, 2022, June 30, 2022, and December 31, 2021,
respectively, and are included in other assets.
NORTHFIELD BANCORP,
INC.CONSOLIDATED STATEMENT OF INCOME(Dollars in thousands,
except share and per share amounts) (unaudited)
|
For the Three Months Ended |
|
For the Nine Months Ended |
|
September 30, |
|
June 30, |
|
September 30, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2022 |
|
|
|
2021 |
|
Interest
income: |
|
|
|
|
|
|
|
|
|
Loans |
$ |
42,311 |
|
|
$ |
38,539 |
|
|
$ |
38,998 |
|
|
$ |
118,030 |
|
|
$ |
119,515 |
|
Mortgage-backed securities |
|
3,284 |
|
|
|
2,738 |
|
|
|
3,043 |
|
|
|
8,802 |
|
|
|
8,379 |
|
Other securities |
|
1,201 |
|
|
|
494 |
|
|
|
989 |
|
|
|
2,885 |
|
|
|
1,402 |
|
Federal Home Loan Bank of New York dividends |
|
283 |
|
|
|
318 |
|
|
|
260 |
|
|
|
788 |
|
|
|
1,024 |
|
Deposits in other financial institutions |
|
199 |
|
|
|
57 |
|
|
|
166 |
|
|
|
423 |
|
|
|
129 |
|
Total interest income |
|
47,278 |
|
|
|
42,146 |
|
|
|
43,456 |
|
|
|
130,928 |
|
|
|
130,449 |
|
Interest
expense: |
|
|
|
|
|
|
|
|
|
Deposits |
|
2,121 |
|
|
|
1,420 |
|
|
|
1,334 |
|
|
|
4,614 |
|
|
|
4,961 |
|
Borrowings |
|
2,304 |
|
|
|
2,309 |
|
|
|
1,918 |
|
|
|
6,388 |
|
|
|
8,208 |
|
Subordinated debt |
|
842 |
|
|
|
— |
|
|
|
119 |
|
|
|
961 |
|
|
|
— |
|
Total interest expense |
|
5,267 |
|
|
|
3,729 |
|
|
|
3,371 |
|
|
|
11,963 |
|
|
|
13,169 |
|
Net interest income |
|
42,011 |
|
|
|
38,417 |
|
|
|
40,085 |
|
|
|
118,965 |
|
|
|
117,280 |
|
Provision/(benefit) for credit
losses |
|
2,703 |
|
|
|
(148 |
) |
|
|
149 |
|
|
|
3,255 |
|
|
|
(6,223 |
) |
Net interest income after
provision/(benefit) for credit losses |
|
39,308 |
|
|
|
38,565 |
|
|
|
39,936 |
|
|
|
115,710 |
|
|
|
123,503 |
|
Non-interest
income: |
|
|
|
|
|
|
|
|
|
Fees and service charges for customer services |
|
1,500 |
|
|
|
1,370 |
|
|
|
1,375 |
|
|
|
4,206 |
|
|
|
3,894 |
|
Income on bank-owned life insurance |
|
861 |
|
|
|
862 |
|
|
|
848 |
|
|
|
2,548 |
|
|
|
2,567 |
|
Gains on available-for-sale debt securities, net |
|
— |
|
|
|
370 |
|
|
|
— |
|
|
|
264 |
|
|
|
976 |
|
(Losses)/gains on trading securities, net |
|
(426 |
) |
|
|
(75 |
) |
|
|
(1,563 |
) |
|
|
(2,791 |
) |
|
|
1,096 |
|
Gain on sale of loans |
|
273 |
|
|
|
— |
|
|
|
— |
|
|
|
273 |
|
|
|
1,401 |
|
Other |
|
78 |
|
|
|
101 |
|
|
|
105 |
|
|
|
264 |
|
|
|
246 |
|
Total non-interest income |
|
2,286 |
|
|
|
2,628 |
|
|
|
765 |
|
|
|
4,764 |
|
|
|
10,180 |
|
Non-interest
expense: |
|
|
|
|
|
|
|
|
|
Compensation and employee benefits |
|
10,784 |
|
|
|
10,334 |
|
|
|
9,418 |
|
|
|
29,709 |
|
|
|
31,672 |
|
Occupancy |
|
3,347 |
|
|
|
3,425 |
|
|
|
3,286 |
|
|
|
10,041 |
|
|
|
10,626 |
|
Furniture and equipment |
|
438 |
|
|
|
431 |
|
|
|
426 |
|
|
|
1,290 |
|
|
|
1,310 |
|
Data processing |
|
1,847 |
|
|
|
1,538 |
|
|
|
1,762 |
|
|
|
5,322 |
|
|
|
4,968 |
|
Professional fees |
|
903 |
|
|
|
826 |
|
|
|
1,229 |
|
|
|
3,040 |
|
|
|
2,564 |
|
Advertising |
|
420 |
|
|
|
576 |
|
|
|
404 |
|
|
|
1,257 |
|
|
|
1,725 |
|
Federal Deposit Insurance Corporation insurance |
|
356 |
|
|
|
336 |
|
|
|
355 |
|
|
|
1,068 |
|
|
|
1,057 |
|
Other |
|
(225 |
) |
|
|
1,569 |
|
|
|
1,833 |
|
|
|
3,565 |
|
|
|
4,547 |
|
Total non-interest
expense |
|
17,870 |
|
|
|
19,035 |
|
|
|
18,713 |
|
|
|
55,292 |
|
|
|
58,469 |
|
Income before income tax
expense |
|
23,724 |
|
|
|
22,158 |
|
|
|
21,988 |
|
|
|
65,182 |
|
|
|
75,214 |
|
Income tax
expense |
|
6,745 |
|
|
|
6,078 |
|
|
|
6,114 |
|
|
|
18,202 |
|
|
|
20,663 |
|
Net
income |
$ |
16,979 |
|
|
$ |
16,080 |
|
|
$ |
15,874 |
|
|
$ |
46,980 |
|
|
$ |
54,551 |
|
Net income per common
share: |
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.37 |
|
|
$ |
0.33 |
|
|
$ |
0.34 |
|
|
$ |
1.01 |
|
|
$ |
1.12 |
|
Diluted |
$ |
0.37 |
|
|
$ |
0.33 |
|
|
$ |
0.34 |
|
|
$ |
1.01 |
|
|
$ |
1.11 |
|
Basic average shares outstanding |
|
46,047,104 |
|
|
|
48,095,473 |
|
|
|
46,591,723 |
|
|
|
46,486,086 |
|
|
|
48,838,396 |
|
Diluted average shares outstanding |
|
46,236,662 |
|
|
|
48,486,096 |
|
|
|
46,638,113 |
|
|
|
46,657,084 |
|
|
|
49,137,037 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NORTHFIELD BANCORP, INC.ANALYSIS
OF NET INTEREST INCOME(Dollars in thousands) (unaudited)
|
For the Three Months Ended |
|
September 30, 2022 |
|
June 30, 2022 |
|
September 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) |
$ |
4,214,438 |
|
$ |
42,311 |
|
3.98 |
% |
|
$ |
3,992,731 |
|
$ |
38,998 |
|
3.92 |
% |
|
$ |
3,817,638 |
|
$ |
38,539 |
|
4.01 |
% |
Mortgage-backed securities (3) |
|
833,975 |
|
|
3,284 |
|
1.56 |
|
|
|
899,479 |
|
|
3,043 |
|
1.36 |
|
|
|
924,326 |
|
|
2,738 |
|
1.18 |
|
Other securities (3) |
|
294,786 |
|
|
1,201 |
|
1.62 |
|
|
|
297,859 |
|
|
989 |
|
1.33 |
|
|
|
159,334 |
|
|
494 |
|
1.23 |
|
Federal Home Loan Bank of New York stock |
|
22,641 |
|
|
283 |
|
4.96 |
|
|
|
20,689 |
|
|
260 |
|
5.04 |
|
|
|
23,097 |
|
|
318 |
|
5.46 |
|
Interest-earning deposits in financial institutions |
|
51,364 |
|
|
199 |
|
1.54 |
|
|
|
94,689 |
|
|
166 |
|
0.70 |
|
|
|
171,381 |
|
|
57 |
|
0.13 |
|
Total interest-earning assets |
|
5,417,204 |
|
|
47,278 |
|
3.46 |
|
|
|
5,305,447 |
|
|
43,456 |
|
3.29 |
|
|
|
5,095,776 |
|
|
42,146 |
|
3.28 |
|
Non-interest-earning
assets |
|
257,177 |
|
|
|
|
|
|
266,303 |
|
|
|
|
|
|
300,036 |
|
|
|
|
Total assets |
$ |
5,674,381 |
|
|
|
|
|
$ |
5,571,750 |
|
|
|
|
|
$ |
5,395,812 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings, NOW, and money market accounts |
$ |
2,923,600 |
|
|
701 |
|
0.10 |
% |
|
$ |
3,007,929 |
|
$ |
599 |
|
0.08 |
% |
|
$ |
2,829,513 |
|
$ |
671 |
|
0.09 |
% |
Certificates of deposit |
|
554,018 |
|
|
1,420 |
|
1.02 |
|
|
|
438,835 |
|
|
735 |
|
0.67 |
|
|
|
444,629 |
|
|
749 |
|
0.67 |
|
Total interest-bearing deposits |
|
3,477,618 |
|
|
2,121 |
|
0.24 |
|
|
|
3,446,764 |
|
|
1,334 |
|
0.16 |
|
|
|
3,274,142 |
|
|
1,420 |
|
0.17 |
|
Borrowed funds |
|
407,668 |
|
|
2,304 |
|
2.24 |
|
|
|
377,044 |
|
|
1,918 |
|
2.04 |
|
|
|
438,238 |
|
|
2,309 |
|
2.09 |
|
Subordinated debt |
|
61,283 |
|
|
842 |
|
5.45 |
|
|
|
9,527 |
|
|
119 |
|
5.01 |
|
|
|
— |
|
|
— |
|
— |
|
Total interest-bearing liabilities |
|
3,946,569 |
|
|
5,267 |
|
0.53 |
|
|
|
3,833,335 |
|
|
3,371 |
|
0.35 |
|
|
|
3,712,380 |
|
|
3,729 |
|
0.40 |
|
Non-interest bearing
deposits |
|
911,183 |
|
|
|
|
|
|
918,980 |
|
|
|
|
|
|
835,065 |
|
|
|
|
Accrued expenses and other
liabilities |
|
103,853 |
|
|
|
|
|
|
105,525 |
|
|
|
|
|
|
96,293 |
|
|
|
|
Total liabilities |
|
4,961,605 |
|
|
|
|
|
|
4,857,840 |
|
|
|
|
|
|
4,643,738 |
|
|
|
|
Stockholders' equity |
|
712,776 |
|
|
|
|
|
|
713,910 |
|
|
|
|
|
|
752,074 |
|
|
|
|
Total liabilities and stockholders' equity |
$ |
5,674,381 |
|
|
|
|
|
$ |
5,571,750 |
|
|
|
|
|
$ |
5,395,812 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
|
$ |
42,011 |
|
|
|
|
|
$ |
40,085 |
|
|
|
|
|
$ |
38,417 |
|
|
Net interest rate spread
(4) |
|
|
|
|
2.93 |
% |
|
|
|
|
|
2.94 |
% |
|
|
|
|
|
2.88 |
% |
Net interest-earning assets
(5) |
$ |
1,470,635 |
|
|
|
|
|
$ |
1,472,112 |
|
|
|
|
|
$ |
1,383,396 |
|
|
|
|
Net interest margin (6) |
|
|
|
|
3.08 |
% |
|
|
|
|
|
3.03 |
% |
|
|
|
|
|
2.99 |
% |
Average interest-earning
assets to interest-bearing liabilities |
|
|
|
|
137.26 |
% |
|
|
|
|
|
138.40 |
% |
|
|
|
|
|
137.26 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Average yields and rates are
annualized.(2) Includes non-accruing
loans.(3) Securities available-for-sale and other
securities are reported at amortized cost.(4) Net
interest rate spread represents the difference between the weighted
average yield on interest-earning assets and the weighted average
cost of interest-bearing liabilities.(5) Net
interest-earning assets represent total interest-earning assets
less total interest-bearing liabilities.(6) Net
interest margin represents net interest income divided by average
total interest-earning assets.
|
For the Nine Months Ended |
|
September 30, 2022 |
|
September 30, 2021 |
|
Average Outstanding Balance |
|
Interest |
|
Average Yield/ Rate (1) |
|
Average Outstanding Balance |
|
Interest |
|
Average Yield/ Rate (1) |
Interest-earning
assets: |
|
|
|
|
|
|
|
|
|
|
|
Loans (2) |
$ |
4,019,750 |
|
$ |
118,030 |
|
3.93 |
% |
|
$ |
3,879,680 |
|
$ |
119,515 |
|
4.12 |
% |
Mortgage-backed securities (3) |
|
890,257 |
|
|
8,802 |
|
1.32 |
|
|
|
1,002,008 |
|
|
8,379 |
|
1.12 |
|
Other securities (3) |
|
283,017 |
|
|
2,885 |
|
1.36 |
|
|
|
134,322 |
|
|
1,402 |
|
1.40 |
|
Federal Home Loan Bank of New York stock |
|
21,845 |
|
|
788 |
|
4.82 |
|
|
|
26,460 |
|
|
1,024 |
|
5.17 |
|
Interest-earning deposits in financial institutions |
|
96,122 |
|
|
423 |
|
0.59 |
|
|
|
151,834 |
|
|
129 |
|
0.11 |
|
Total interest-earning assets |
|
5,310,991 |
|
|
130,928 |
|
3.30 |
|
|
|
5,194,304 |
|
|
130,449 |
|
3.36 |
|
Non-interest-earning
assets |
|
267,581 |
|
|
|
|
|
|
302,123 |
|
|
|
|
Total assets |
$ |
5,578,572 |
|
|
|
|
|
$ |
5,496,427 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
liabilities: |
|
|
|
|
|
|
|
|
|
|
|
Savings, NOW, and money market accounts |
$ |
2,961,776 |
|
$ |
1,871 |
|
0.08 |
% |
|
$ |
2,784,447 |
|
$ |
2,448 |
|
0.12 |
% |
Certificates of deposit |
|
455,985 |
|
|
2,743 |
|
0.80 |
|
|
|
542,988 |
|
|
2,513 |
|
0.62 |
|
Total interest-bearing deposits |
|
3,417,761 |
|
|
4,614 |
|
0.18 |
|
|
|
3,327,435 |
|
|
4,961 |
|
0.20 |
|
Borrowed funds |
|
401,109 |
|
|
6,388 |
|
2.13 |
|
|
|
528,408 |
|
|
8,208 |
|
2.08 |
|
Subordinated debt |
|
23,828 |
|
|
961 |
|
5.39 |
|
|
|
— |
|
|
— |
|
— |
|
Total interest-bearing liabilities |
$ |
3,842,698 |
|
|
11,963 |
|
0.42 |
|
|
$ |
3,855,843 |
|
|
13,169 |
|
0.46 |
|
Non-interest bearing
deposits |
|
913,322 |
|
|
|
|
|
|
790,266 |
|
|
|
|
Accrued expenses and other
liabilities |
|
103,075 |
|
|
|
|
|
|
96,602 |
|
|
|
|
Total liabilities |
|
4,859,095 |
|
|
|
|
|
|
4,742,711 |
|
|
|
|
Stockholders' equity |
|
719,477 |
|
|
|
|
|
|
753,716 |
|
|
|
|
Total liabilities and stockholders' equity |
$ |
5,578,572 |
|
|
|
|
|
$ |
5,496,427 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
|
$ |
118,965 |
|
|
|
|
|
$ |
117,280 |
|
|
Net interest rate spread
(4) |
|
|
|
|
2.88 |
% |
|
|
|
|
|
2.90 |
% |
Net interest-earning assets
(5) |
$ |
1,468,293 |
|
|
|
|
|
$ |
1,338,461 |
|
|
|
|
Net interest margin (6) |
|
|
|
|
2.99 |
% |
|
|
|
|
|
3.02 |
% |
Average interest-earning
assets to interest-bearing liabilities |
|
|
|
|
138.21 |
% |
|
|
|
|
|
134.71 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
(1) Average yields and rates are
annualized.(2) Includes non-accruing loans.(3)
Securities available-for-sale and other securities are
reported at amortized cost.(4) Net interest rate spread
represents the difference between the weighted average yield on
interest-earning assets and the weighted average cost of
interest-bearing liabilities.(5) Net interest-earning
assets represent total interest-earning assets less total
interest-bearing liabilities.(6) Net interest
margin represents net interest income divided by average total
interest-earning assets.
Company Contact:William R. JacobsChief Financial OfficerTel:
(732) 499-7200 ext. 2519
Northfield Bancorp (NASDAQ:NFBK)
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