• Northfield Bancorp, Inc. Announces Second Quarter 2022 Results

    Source: Nasdaq GlobeNewswire / 27 Jul 2022 17:35:02   America/Chicago

    • 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 assets12.81  13.64  13.34  13.07  13.60 
    Interest rate spread2.94  2.84  2.77  2.85  2.92 
    Net interest margin3.03  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 assets1.35  1.44  1.38  1.36  1.43 
    Non-interest expense to average total interest-earning assets1.41  1.52  1.46  1.44  1.52 
    Average interest-earning assets to average interest-bearing liabilities138.40  134.73  139.03  138.71  133.49 
    Asset Quality Ratios:         
    Non-performing assets to total assets0.19  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 loans372.65  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


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