Northfield Bancorp, Inc. Announces First Quarter 2025 Results
NOTABLE ITEMS FOR THE QUARTER INCLUDE:
- DILUTED EARNINGS PER SHARE WERE $0.19 FOR THE CURRENT QUARTER COMPARED TO $0.27 FOR THE TRAILING QUARTER, AND $0.15 FOR THE FIRST QUARTER OF 2024.
- Fourth Quarter 2024 earnings included a gain of $3.4 million, or $0.06 per share, on the sale and consolidation of a branch in December 2024.
- NET INTEREST MARGIN INCREASED TO 2.38% FOR THE CURRENT QUARTER AS COMPARED TO 2.18% FOR THE TRAILING QUARTER AND 2.03% FOR THE FIRST QUARTER OF 2024, REFLECTING LOWER FUNDING COSTS AND HIGHER YIELDS ON INTEREST-EARNING ASSETS.
- DEPOSITS (EXCLUDING BROKERED) INCREASED $133.6 MILLION, OR 13.8% ANNUALIZED, FROM DECEMBER 31, 2024. COST OF DEPOSITS AT MARCH 31, 2025 WAS 1.94% AS COMPARED TO 1.95% AT DECEMBER 31, 2024.
- LOANS DECLINED BY $30.7 MILLION, OR 3.0% ANNUALIZED, FROM DECEMBER 31, 2024, PRIMARILY DUE TO A DECREASE IN MULTIFAMILY LOANS, PARTIALLY OFFSET BY INCREASES IN HOME EQUITY AND CONSTRUCTION AND LAND LOANS.
- ASSET QUALITY REMAINS STRONG WITH NON-PERFORMING LOANS TO TOTAL LOANS AT 0.48% AT MARCH 31, 2025 AND 0.51% AT DECEMBER 31, 2024.
- THE COMPANY MAINTAINED STRONG LIQUIDITY WITH APPROXIMATELY $1.12 BILLION IN UNPLEDGED AVAILABLE-FOR-SALE SECURITIES AND LOANS READILY AVAILABLE-FOR-PLEDGE OF APPROXIMATELY $547 MILLION.
- THE BOARD OF DIRECTORS APPROVED A $10.0 MILLION REPURCHASE PLAN ON APRIL 23, 2025. THE PREVIOUSLY APPROVED $5.0 MILLION PLAN WAS COMPLETED DURING THE CURRENT QUARTER AND THE COMPANY REPURCHASED 440,150 SHARES.
- CASH DIVIDEND DECLARED OF $0.13 PER SHARE OF COMMON STOCK, PAYABLE ON MAY 21, 2025, TO STOCKHOLDERS OF RECORD AS OF MAY 7, 2025.
WOODBRIDGE, N.J., April 23, 2025 (GLOBE NEWSWIRE) — NORTHFIELD BANCORP, INC. (Nasdaq:NFBK) (the “Company”), the holding company for Northfield Bank, reported net income of $7.9 million, or $0.19 per diluted share, for the three months ended March 31, 2025, compared to $11.3 million, or $0.27 per diluted share, for the three months ended December 31, 2024, and $6.2 million, or $0.15 per diluted share, for the three months ended March 31, 2024. The decrease in net income for the three months ended March 31, 2025, compared to the trailing quarter was primarily due to a $3.4 million, or $0.06 per share, gain on sale of property in the trailing quarter. The increase in net income in the current quarter as compared to the first quarter of 2024 was primarily the result of an increase in net interest income, attributable to lower funding costs and higher yields on interest-earning assets, partially offset by an increase in the provision for credit losses on loans.
Commenting on the quarter, Steven M. Klein, the Company’s Chairman and Chief Executive Officer stated, “The Northfield team continued to focus on growing our franchise, deploying our strong capital base, and delivering solid financial performance for the quarter.” Mr. Klein commented further, “We remained focused on serving our communities, and the fundamentals of reducing our funding costs and increasing the yield on our interest-earning assets resulting in higher net interest income and net interest margin.” Mr. Klein further stated, “We remain committed to prudently managing our operating expenses, maintaining strong asset quality, and managing our strong capital levels through dividends and stock repurchases.”
Mr. Klein concluded, “I am pleased to announce that the Board of Directors has declared a cash dividend of $0.13 per common share, payable on May 21, 2025 to stockholders of record on May 7, 2025.”
Results of Operations
Comparison of Operating Results for the Three Months Ended March 31, 2025 and 2024
Net income was $7.9 million and $6.2 million for the three months ended March 31, 2025 and March 31, 2024, respectively. Significant variances from the comparable prior year period are as follows: a $3.9 million increase in net interest income, a $2.2 million increase in the provision for credit losses on loans, a $359,000 decrease in non-interest income, an $897,000 decrease in non-interest expense, and a $616,000 increase in income tax expense.
Net interest income for the three months ended March 31, 2025, increased $3.9 million, or 14.0%, to $31.8 million, from $27.9 million for the three months ended March 31, 2024, due to a $2.5 million decrease in interest expense and a $1.4 million increase in interest income. The decrease in interest expense was primarily due to a decrease in the cost of interest-bearing liabilities which decreased by 15 basis points to 2.74% for the three months ended March 31, 2025, from 2.89% for the three months ended March 31, 2024, driven by a 20 basis point decrease in the cost of borrowed funds to 3.67% from 3.87%, partially offset by a two basis point increase in the cost of interest-bearing deposits to 2.51% from 2.49%, due to a higher concentration of certificates of deposit. The decrease in the average balance of interest-bearing liabilities was primarily due to a $413.6 million, or 37.3% decrease in the average balance of borrowed funds, partially offset by a $307.8 million, or 9.9%, increase in the average balance of interest-bearing deposits. The increase in interest income was primarily due to a 23 basis point increase in the yield on interest-earning assets, specifically higher yields on mortgage-backed securities, partially offset by a $104.0 million, or 1.9%, decrease in the average balance of interest earning assets. The decrease in the average balance of interest-earning assets was primarily due to decreases in the average balance of other securities of $273.9 million, the average balance of loans of $167.4 million and the average balance of interest-earning deposits in financial institutions of $143.9 million, partially offset by an increase in the average balance of mortgage-backed securities of $483.9 million.
Net interest margin increased by 35 basis points to 2.38% for the three months ended March 31, 2025, from 2.03% for the three months ended March 31, 2024. The increase in net interest margin was primarily due to higher yields on mortgage-backed securities, coupled with a decrease in the cost of borrowed funds. The Company accreted interest income related to purchased credit-deteriorated (“PCD”) loans of $223,000 for the three months ended March 31, 2025, as compared to $426,000 for the three months ended March 31, 2024. Net interest income for the three months ended March 31, 2025, included loan prepayment income of $245,000 as compared to $351,000 for the three months ended March 31, 2024.
The provision for credit losses on loans increased by $2.2 million to $2.6 million for the three months ended March 31, 2025, compared to $415,000 for the three months ended March 31, 2024, primarily due to higher net charge-offs, changes in model assumptions, including a reduction in prepayment speeds and an increase in loss given defaults in the multifamily loans related to risk rating downgrades of certain loans in the portfolio. Net charge-offs were $2.8 million for the three months ended March 31, 2025, primarily due to $2.4 million in net charge-offs on small business unsecured commercial and industrial loans, as compared to net charge-offs of $911,000 for the three months ended March 31, 2024. Management continues to closely monitor the small business unsecured commercial and industrial loan portfolio, which totaled $25.5 million at March 31, 2025.
Non-interest income decreased by $359,000, or 10.6%, to $3.0 million for the three months ended March 31, 2025, compared to $3.4 million for the three months ended March 31, 2024. The decrease was primarily due to a decrease of $998,000 in gains on sales of trading securities, partially offset by an increase in income on bank-owned life insurance of $675,000, primarily related to the exchange of certain policies late in the fourth quarter of 2024 which have higher yields. Losses on trading securities in the three months ended March 31, 2025, were $299,000, as compared to gains of $699,000 in the three months ended March 31, 2024. The trading portfolio is utilized to fund the Company’s deferred compensation obligation to certain employees and directors of the plan. The participants of this plan, at their election, defer a portion of their compensation. Gains and losses on trading securities have no effect on net income since participants benefit from, and bear the full risk of, changes in the trading securities market values. Therefore, the Company records an equal and offsetting amount in compensation expense, reflecting the change in the Company’s obligations under the plan.
Non-interest expense decreased $897,000, or 4.0%, to $21.4 million for the three months ended March 31, 2025, compared to $22.3 million for the three months ended March 31, 2024. The decrease was primarily due to a $990,000 decrease in employee compensation and benefits, primarily attributable to a decrease in deferred compensation expense, which is described above, and had no effect on net income. Additionally, there was a $268,000 decrease in advertising expense. Partially offsetting the decreases were increases of $263,000 in professional fees related to outsourced audit services and recruitment fees and $164,000 in other expense.
The Company recorded income tax expense of $2.9 million for the three months ended March 31, 2025, compared to $2.3 million for the three months ended March 31, 2024. The effective tax rate for both the three months ended March 31, 2025, and March 31, 2024, was 27.0%. The effective tax rate for three months ending March 31, 2025, and March 31, 2024, were negatively impacted by increased tax expense of $79,000 and $18,000, respectively, as a result of vesting of stock awards.
Comparison of Operating Results for the Three Months Ended March 31, 2025 and December 31, 2024
Net income was $7.9 million and $11.3 million for the quarters ended March 31, 2025, and December 31, 2024, respectively. Significant variances from the prior quarter are as follows: a $2.1 million increase in net interest income, a $640,000 increase in the provision for credit losses on loans, a $4.0 million decrease in non-interest income, a $613,000 increase in non-interest expense, and a $246,000 increase in income tax expense.
Net interest income for the quarter ended March 31, 2025, increased by $2.1 million, or 7.1%, primarily due to a $1.7 million decrease in interest expense and a $370,000 increase in interest income. The decrease in interest expense was primarily due to an 11 basis point decrease in the cost of interest-bearing liabilities to 2.74% for the quarter ended March 31, 2025, from 2.85% for the quarter ended December 31, 2024, and a $7.0 million, or 0.2%, decrease in the average balance of interest-bearing liabilities attributable to an $80.4 million decrease in the average balance of borrowed funds, partially offset by a $73.3 million increase in the average balance of interest-bearing deposits. The increase in interest income was primarily due to an 11 basis point increase in the yield on interest-earning assets and a $206,000 increase in the average balance of interest-earning assets primarily due to an increase in the average balance of mortgage-backed securities of $182.4 million, partially offset by decreases in the average balance of interest-earning deposits in financial institutions of $85.2 million, the average balance of other securities of $59.4 million, and the average balance of loans of $37.5 million.
Net interest margin increased by 20 basis points to 2.38% for the quarter ended March 31, 2025, from 2.18% for the quarter ended December 31, 2024, primarily due to higher yields on loans and mortgage-backed securities coupled with a decrease in the cost of funds. Net interest income for the quarter ended March 31, 2025, included loan prepayment income of $245,000 as compared to $215,000 for the quarter ended December 31, 2024. The Company accreted interest income related to PCD loans of $223,000 for the quarter ended March 31, 2025, as compared to $568,000 for the quarter ended December 31, 2024.
The provision for credit losses on loans increased by $640,000 to $2.6 million for the quarter ended March 31, 2025, from $1.9 million for the quarter ended December 31, 2024. The increase in the provision for the current quarter was primarily due to an increase in reserves in the commercial and industrial and in multifamily loans related to risk rating downgrades of certain loans in the portfolio, and higher net charge-offs. Net charge-offs were $2.8 million for the quarter ended March 31, 2025, as compared to net charge-offs of $2.0 million for the quarter ended December 31, 2024.
Non-interest income decreased by $4.0 million, or 56.9%, to $3.0 million for the quarter ended March 31, 2025, from $7.0 million for the quarter ended December 31, 2024. The decrease was primarily due to a $3.4 million gain on sale of property in the quarter ended December 31, 2024. Additionally, there was a $367,000 decrease in gains on sales of trading securities, net, and a $561,000 decrease in other income, primarily due to lower swap fee income. For the quarter ended March 31, 2025, losses on trading securities, net, were $299,000, compared to gains of $68,000 for the quarter ended December 31, 2024. Partially offsetting the decreases was a $362,000 increase in income on bank owned life insurance, primarily related to the exchange of certain policies late in the fourth quarter of 2024 which have higher yields.
Non-interest expense increased by $613,000, or 2.9%, to $21.4 million for the quarter ended March 31, 2025, from $20.8 million for the quarter ended December 31, 2024. The increase was primarily due to increases of $280,000 in occupancy expense, related to higher repairs and maintenance costs, $201,000 in data processing costs due to an increase in core system expenses, $310,000 in professional fees primarily due to an increase in outsourced audit services and recruitment fees, and a $158,000 increase in credit loss expense/(benefit) for off-balance sheet exposure. The increase in credit loss/(benefit) for off-balance sheet exposure was due to a provision of $103,000 recorded during the quarter ended March 31, 2025, as compared to a benefit of $55,000 recorded during the quarter ended December 31, 2024. Partially offsetting the decreases was a $283,000 decrease in other expense.
The Company recorded income tax expense of $2.9 million for the quarter ended March 31, 2025, compared to $2.7 million for the quarter ended December 31, 2024. The effective tax rate for the quarter ended March 31, 2025 was 27.0%, compared to 19.2% for the quarter ended December 31, 2024. The effective tax rate for the quarter ending December 31, 2024, was positively impacted by the revaluation of certain state deferred tax assets.
Financial Condition
Total assets increased by $43.6 million, or 0.8%, to $5.71 billion at March 31, 2025, from $5.67 billion at December 31, 2024. The increase was primarily due to an increase in available-for-sale debt securities of $145.7 million, or 13.2%, partially offset by decreases in cash and cash equivalents of $66.1 million, or 39.4%, loans receivable of $30.7 million, or 0.8% and other assets of $4.5 million, or 9.6%.
Cash and cash equivalents decreased by $66.1 million, or 39.4%, to $101.7 million at March 31, 2025, from $167.7 million at December 31, 2024, as excess liquidity was deployed into purchasing higher-yielding mortgage-backed securities. Balances fluctuate based on the timing of receipt of security and loan repayments and the redeployment of cash into higher-yielding assets such as loans and securities, or the funding of deposit outflows or borrowing maturities.
Loans held-for-investment, net, decreased by $30.7 million, or 0.8%, to $3.99 billion at March 31, 2025 from $4.02 billion at December 31, 2024, primarily due to decreases in multifamily real estate loans, partially offset by increases in home equity and lines of credit and construction and land loans. The decrease in loan balances reflects the Company’s continued strategic focus on managing concentration risk within its commercial and multifamily real estate loan portfolios, while maintaining disciplined loan pricing. Multifamily loans decreased $29.6 million, or 1.1%, to $2.57 billion at March 31, 2025 from $2.60 billion at December 31, 2024, commercial real estate loans decreased $7.2 million, or 0.8%, to $882.6 million at March 31, 2025 from $889.8 million at December 31, 2024, one-to-four family residential loans decreased $3.4 million, or 2.3%, to $146.8 million at March 31, 2025 from $150.2 million at December 31, 2024, and commercial and industrial loans decreased $1.3 million, or 0.8%, to $162.1 million at March 31, 2025 from $163.4 million at December 31, 2024, and other loans decreased $754,000, or 34.8%, to $1.4 million at March 31, 2025 from $2.2 million at December 31, 2024. Partially offsetting these decreases were increases in home equity and lines of credit of $7.3 million, or 4.2%, to $181.4 million at March 31, 2025 from $174.1 million at December 31, 2024, and construction and land loans of $4.4 million, or 12.2%, to $40.3 million at March 31, 2025 from $35.9 million at December 31, 2024.
As of March 31, 2025, non-owner occupied commercial real estate loans (as defined by regulatory guidance) to total risk-based capital was estimated at approximately 424%. Management believes that Northfield Bank (the “Bank”) maintains appropriate risk management practices including risk assessments, board-approved underwriting policies and related procedures, which includes monitoring Bank portfolio performance, performing market analysis (economic and real estate), and stressing of the Bank’s commercial real estate portfolio under severe, adverse economic conditions. Although management believes the Bank has implemented appropriate policies and procedures to manage its commercial real estate concentration risk, the Bank’s regulators could require it to implement additional policies and procedures or could require it to maintain higher levels of regulatory capital, which might adversely affect its loan originations, the Company’s ability to pay dividends, and overall profitability.
Our real estate portfolio includes credit risk exposure to loans collateralized by office buildings and multifamily properties in New York State subject to some form of rent regulation limiting rent increases for rent stabilized multifamily properties. At March 31, 2025, office-related loans represented $182.4 million, or 4.6% of our total loan portfolio, with an average balance of $1.7 million (although we have originated these type of loans in amounts substantially greater than this average) and a weighted average loan-to-value ratio of 59%. Approximately 39% were owner-occupied. The geographic locations of the properties collateralizing our office-related loans are: 50.0% in New York, 48.5% in New Jersey and 1.5% in Pennsylvania. At March 31, 2025, our largest office-related loan had a principal balance of $90.0 million (with a net active principal balance for the Bank of $29.5 million as we have a 33.3% participation interest), was secured by an office facility located in Staten Island, New York, and was performing in accordance with its original contractual terms. At March 31, 2025, multifamily loans that have some form of rent stabilization or rent control totaled approximately $435.8 million, or approximately 11% of our total loan portfolio, with an average balance of $1.7 million (although we have originated these type of loans in amounts substantially greater than this average) and a weighted average loan-to-value ratio of 51%. At March 31, 2025, our largest rent-regulated loan had a principal balance of $16.7 million, was secured by an apartment building located in Staten Island, New York, and was performing in accordance with its original contractual terms. Management continues to closely monitor its office and rent-regulated portfolios. For further details on our rent-regulated multifamily portfolio see “Asset Quality”.
PCD loans totaled $9.0 million and $9.2 million at March 31, 2025 and December 31, 2024, respectively. 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 $223,000 attributable to PCD loans for three months ended March 31, 2025, compared to $426,000 for three months ended March 31, 2024. PCD loans had an allowance for credit losses of approximately $2.7 million at March 31, 2025.
Loan balances are summarized as follows (dollars in thousands):
| March 31, 2025 | December 31, 2024 | ||||
| Real estate loans: | |||||
| Multifamily | $ | 2,567,913 | $ | 2,597,484 | |
| Commercial mortgage | 882,600 | 889,801 | |||
| One-to-four family residential mortgage | 146,791 | 150,217 | |||
| Home equity and lines of credit | 181,354 | 174,062 | |||
| Construction and land | 40,284 | 35,897 | |||
| Total real estate loans | 3,818,942 | 3,847,461 | |||
| Commercial and industrial loans | 162,133 | 163,425 | |||
| Other loans | 1,411 | 2,165 | |||
| Total commercial and industrial and other loans | 163,544 | 165,590 | |||
| Loans held-for-investment, net (excluding PCD) | 3,982,486 | 4,013,051 | |||
| PCD loans | 9,043 | 9,173 | |||
| Total loans held-for-investment, net | $ | 3,991,529 | $ | 4,022,224 | |
The Company’s available-for-sale debt securities portfolio increased by $145.7 million, or 13.2%, to $1.25 billion at March 31, 2025, from $1.10 billion at December 31, 2024. The increase was primarily attributable to purchases of securities, partially offset by paydowns and maturities. At March 31, 2025, $1.21 billion 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 $33.4 million in corporate bonds, substantially all of which were investment grade, $683,000 in municipal bonds and $608,000 in U.S. Government agency securities at March 31, 2025. Unrealized losses, net of tax, on available-for-sale debt securities and held-to-maturity securities approximated $16.7 million and $307,000, respectively, at March 31, 2025, and $21.8 million and $400,000, respectively, at December 31, 2024.
Equity securities were $10.9 million at March 31, 2025 and $14.3 million at December 31, 2024. Equity securities are primarily comprised of an investment in a Small Business Administration Loan Fund. This investment is utilized by the Bank as part of its Community Reinvestment Act program. The decrease in equity securities was primarily due to a decrease in money market mutual funds.
Total liabilities increased $37.2 million, or 0.7%, to $5.00 billion at March 31, 2025, from $4.96 billion at December 31, 2024. The increase was primarily attributable to an increase in borrowings of $42.8 million, partially offset by a decrease in total deposits of $6.5 million. The Company routinely utilizes brokered deposits and borrowed funds to manage interest rate risk, the cost of interest-bearing liabilities, and funding needs related to loan originations and deposit activity.
Deposits decreased $6.5 million, or 0.2%, to $4.13 billion at March 31, 2025 as compared to $4.14 billion at December 31, 2024. Brokered deposits decreased by $140.1 million, or 53.2%, as the Company placed less reliance on brokered deposits which were used as a lower-cost alternative to borrowings in the trailing quarter. Deposits, excluding brokered deposits, increased $133.6 million, or 3.4%. The increase in deposits, excluding brokered deposits, was primarily attributable to increases of $97.1 million in transaction accounts and $41.6 million in time deposits, partially offset by decreases of $4.5 million in savings accounts, and $579,000 in money market accounts. Growth in transaction accounts and time deposits was primarily due to new municipal relationships and new commercial customer relationships.
Estimated gross uninsured deposits at March 31, 2025 were $1.95 billion. This total includes fully collateralized uninsured governmental deposits and intercompany deposits of $1.01 billion, leaving estimated uninsured deposits of approximately $934.7 million, or 22.6%, of total deposits. At December 31, 2024, estimated uninsured deposits totaled $896.5 million, or 21.7% of total deposits.
Deposit account balances are summarized as follows (dollars in thousands):
| March 31, 2025 | December 31, 2024 | ||||
| Transaction: | |||||
| Non-interest bearing checking | $ | 722,994 | $ | 706,976 | |
| Negotiable orders of withdrawal and interest-bearing checking | 1,367,219 | 1,286,154 | |||
| Total transaction | 2,090,213 | 1,993,130 | |||
| Savings and money market: | |||||
| Savings | 899,674 | 904,163 | |||
| Money market | 271,566 | 272,145 | |||
| Total savings | 1,171,240 | 1,176,308 | |||
| Certificates of deposit: | |||||
| $250,000 and under | 602,959 | 580,940 | |||
| Over $250,000 | 144,255 | 124,681 | |||
| Brokered deposits | 123,289 | 263,418 | |||
| Total certificates of deposit | 870,503 | 969,039 | |||
| Total deposits | $ | 4,131,956 | $ | 4,138,477 | |
Included in the table above are business and municipal deposit account balances as follows (dollars in thousands):
| March 31, 2025 | December 31, 2024 | ||||
| Business customers | $ | 891,545 | $ | 885,769 | |
| Municipal (governmental) customers | $ | 929,611 | $ | 859,319 | |
Borrowed funds increased to $770.7 million at March 31, 2025, from $727.8 million at December 31, 2024. The increase in borrowings for the period was primarily due to a $67.0 million increase in borrowings under an overnight line of credit, partially offset by a decrease of $24.2 million in other borrowings due to maturities. 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 table sets forth borrowing maturities (excluding overnight borrowings and subordinated debt) and the weighted average rate by year at March 31, 2025 (dollars in thousands):
| Year | Amount | Weighted Average Rate | ||
| 2025 | $160,684 | 3.89% | ||
| 2026 | 148,000 | 4.36% | ||
| 2027 | 173,000 | 3.19% | ||
| 2028 | 154,288 | 3.96% | ||
| $635,972 | 3.83% | |||
Total stockholders’ equity increased by $6.5 million to $711.1 million at March 31, 2025, from $704.7 million at December 31, 2024. The increase was attributable to net income of $7.9 million for the three months ended March 31, 2025, an $8.1 million increase in accumulated other comprehensive income, associated with an increase in the estimated fair value of our debt securities available-for-sale portfolio, and a $900,000 increase in equity award activity, partially offset by $5.0 million in stock repurchases and $5.4 million in dividend payments. On February 26, 2025, the Board of Directors of the Company approved a $5.0 million stock repurchase program. During the three months ended March 31, 2025, the Company repurchased 440,150 of its common stock outstanding at an average price of $11.36 for a total of $5.0 million pursuant to approved stock repurchase plan. As of March 31, 2025, the Company has no outstanding repurchase program.
The Company’s most liquid assets are cash and cash equivalents, corporate bonds, and unpledged mortgage-related securities issued or guaranteed by the U.S. Government, Fannie Mae, or Freddie Mac, that we can either borrow against or sell. We also have the ability to surrender bank-owned life insurance contracts. The surrender of these contracts would subject the Company to income taxes and penalties for increases in the cash surrender values over the original premium payments. We also have the ability to obtain additional funding from the Federal Home Loan Bank and Federal Reserve Bank of New York utilizing unencumbered and unpledged securities and multifamily loans. The Company expects to have sufficient funds available to meet current commitments in the normal course of business. The Company’s on-hand liquidity ratio as of March 31, 2025 was 24.3%.
The Company had the following primary sources of liquidity at March 31, 2025 (dollars in thousands):
| Cash and cash equivalents(1) | $ | 89,139 | |
| Corporate bonds(2) | $ | 19,323 | |
| Multifamily loans(2) | $ | 547,043 | |
| Mortgage-backed securities (issued or guaranteed by the U.S. Government, Fannie Mae, or Freddie Mac)(2) | $ | 1,102,759 | |
(1) Excludes $12.5 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. At March 31, 2025, the Company and the Bank’s estimated CBLR ratios were 12.08% and 12.62%, 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 assets, loans over 90 days delinquent on which interest is accruing, and accruing loans 30 to 89 days delinquent at March 31, 2025 and December 31, 2024 (dollars in thousands):
| March 31, 2025 | December 31, 2024 | ||||||
| Non-accrual loans: | |||||||
| Held-for-investment | |||||||
| Real estate loans: | |||||||
| Multifamily | $ | 2,565 | $ | 2,609 | |||
| Commercial mortgage | 4,565 | 4,578 | |||||
| Home equity and lines of credit | 1,267 | 1,270 | |||||
| Commercial and industrial | 4,972 | 5,807 | |||||
| Total non-accrual loans | 13,369 | 14,264 | |||||
| Loans delinquent 90 days or more and still accruing: | |||||||
| Held-for-investment | |||||||
| Real estate loans: | |||||||
| Multifamily | — | 164 | |||||
| One-to-four family residential | 878 | 882 | |||||
| Home equity and lines of credit | 140 | 140 | |||||
| Total loans held-for-investment delinquent 90 days or more and still accruing | 1,018 | 1,186 | |||||
| Non-performing loans held-for-sale | |||||||
| Commercial mortgage | 4,397 | 4,397 | |||||
| Commercial and industrial | 500 | 500 | |||||
| Total non-performing loans held-for-sale | 4,897 | 4,897 | |||||
| Total non-performing loans | 19,284 | 20,347 | |||||
| Total non-performing assets | $ | 19,284 | $ | 20,347 | |||
| Non-performing loans to total loans | 0.48 | % | 0.51 | % | |||
| Non-performing assets to total assets | 0.34 | % | 0.36 | % | |||
| Accruing loans 30 to 89 days delinquent | $ | 6,845 | $ | 9,336 | |||
Accruing Loans 30 to 89 Days Delinquent
Loans 30 to 89 days delinquent and on accrual status totaled $6.8 million and $9.3 million at March 31, 2025 and December 31, 2024, respectively. The following table sets forth delinquencies for accruing loans by type and by amount at March 31, 2025 and December 31, 2024 (dollars in thousands):
| March 31, 2025 | December 31, 2024 | ||||
| Held-for-investment | |||||
| Real estate loans: | |||||
| Multifamily | $ | 1,296 | $ | 2,831 | |
| Commercial mortgage | 147 | 78 | |||
| One-to-four family residential | 2,584 | 2,407 | |||
| Home equity and lines of credit | 1,141 | 1,472 | |||
| Commercial and industrial loans | 1,674 | 2,545 | |||
| Other loans | 3 | 3 | |||
| Total delinquent accruing loans held-for-investment | $ | 6,845 | $ | 9,336 | |
The decrease in delinquent multifamily loans was primarily due to one relationship totaling $2.1 million that became current during the quarter ended March 31, 2025. The decrease in delinquent commercial and industrial loans was primarily due to five unsecured small business loans that were charged off totaling $797,000. Management continues to monitor the unsecured small business commercial and industrial loan portfolio which represents the majority of the commercial and industrial delinquencies in the table above.
PCD Loans (Held-for-Investment)
The Company accounts for PCD loans at estimated fair value using discounted expected future cash flows deemed to be collectible on the date acquired. Based on its detailed review of PCD loans and experience in loan workouts, management believes it has a reasonable expectation about the amount and timing of future cash flows and accordingly has classified PCD loans ($9.0 million at March 31, 2025 and $9.2 million at December 31, 2024, respectively) as accruing, even though they may be contractually past due. At March 31, 2025, 2.1% of PCD loans were past due 30 to 89 days, and 25.2% were past due 90 days or more, as compared to 2.9% and 27.1%, respectively, at December 31, 2024.
Our multifamily loan portfolio at March 31, 2025 totaled $2.57 billion, or 64% of our total loan portfolio, of which $435.8 million, or 11%, included loans collateralized by properties in New York with units subject to some percentage of rent regulation. The table below sets forth details about our multifamily loan portfolio in New York (dollars in thousands).
| % Rent Regulated | Balance | % Portfolio Total NY Multifamily Portfolio | Average Balance | Largest Loan | LTV* | Debt Service Coverage Ratio (DSCR)* | 30-89 Days Delinquent | Non-Accrual | Special Mention | Substandard | |||||||||||||||||||
| 0 | $ | 279,630 | 39.1 | % | $ | 1,175 | $ | 16,441 | 50.6 | % | 1.48x | $ | 580 | $ | 499 | $ | — | $ | 1,800 | ||||||||||
| >0-10 | 4,696 | 0.6 | 1,565 | 2,107 | 50.9 | 1.33 | — | — | — | — | |||||||||||||||||||
| >10-20 | 18,397 | 2.6 | 1,415 | 2,834 | 48.7 | 1.40 | — | — | — | — | |||||||||||||||||||
| >20-30 | 19,268 | 2.7 | 2,141 | 5,449 | 53.2 | 1.65 | — | — | — | — | |||||||||||||||||||
| >30-40 | 14,958 | 2.1 | 1,247 | 3,037 | 47.8 | 1.59 | — | — | — | — | |||||||||||||||||||
| >40-50 | 21,558 | 3.0 | 1,268 | 2,710 | 46.9 | 1.77 | — | — | — | — | |||||||||||||||||||
| >50-60 | 9,298 | 1.3 | 1,550 | 2,313 | 39.4 | 1.80 | — | — | — | — | |||||||||||||||||||
| >60-70 | 20,765 | 2.9 | 2,966 | 11,181 | 53.4 | 1.51 | — | — | — | — | |||||||||||||||||||
| >70-80 | 22,158 | 3.1 | 2,462 | 4,874 | 47.5 | 1.43 | — | — | — | — | |||||||||||||||||||
| >80-90 | 20,516 | 2.9 | 1,140 | 3,124 | 46.1 | 1.64 | — | — | 1,124 | — | |||||||||||||||||||
| >90-100 | 284,164 | 39.7 | 1,733 | 16,698 | 51.6 | 1.60 | 665 | 2,067 | 3,630 | 4,389 | |||||||||||||||||||
| Total | $ | 715,408 | 100.0 | % | $ | 1,442 | $ | 16,698 | 50.6 | % | 1.55x | $ | 1,245 | $ | 2,566 | $ | 4,754 | $ | 6,189 | ||||||||||
The table below sets forth our New York rent-regulated loans by county (dollars in thousands).
| County | Balance | LTV* | DSCR* | |||||
| Bronx | $ | 116,944 | 51.2 | % | 1.60x | |||
| Kings | 184,545 | 50.5 | % | 1.57 | ||||
| Nassau | 2,155 | 35.8 | % | 1.88 | ||||
| New York | 48,838 | 46.3 | % | 1.61 | ||||
| Queens | 37,633 | 44.3 | % | 1.69 | ||||
| Richmond | 32,258 | 60.1 | % | 1.41 | ||||
| Westchester | 13,405 | 58.7 | % | 1.78 | ||||
| Total | $ | 435,778 | 50.6 | % | 1.59x | |||
* Weighted Average
None of the loans that are rent-regulated in New York are interest only. During the remainder of 2025, 27 loans with an aggregate principal balance of $46.0 million will re-price.
About Northfield Bank
Northfield Bank, founded in 1887, operates 37 full-service banking offices in Staten Island and Brooklyn, New York, and Hunterdon, Middlesex, Mercer, and Union counties, New Jersey. For more information about Northfield Bank, please visit www.eNorthfield.com.
Forward-Looking Statements: This release may contain certain “forward looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, and may be identified by the use of such words as “may,” “believe,” “expect,” “anticipate,” “should,” “plan,” “estimate,” “predict,” “continue,” and “potential” or the negative of these terms or other comparable terminology. Examples of forward-looking statements include, but are not limited to, estimates with respect to the financial condition, results of operations and business of Northfield Bancorp, Inc. Any or all of the forward-looking statements in this release and in any other public statements made by Northfield Bancorp, Inc. may turn out to be wrong. They can be affected by inaccurate assumptions Northfield Bancorp, Inc. might make or by known or unknown risks and uncertainties as described in our SEC filings, including, but not limited to, those related to general economic conditions, particularly in the market areas in which the Company operates, competition and demand for financial services in our market area, fluctuations in real estate values and both residential and commercial real estate market conditions, changes in liquidity, the size and composition of our deposit portfolio and the percentage of uninsured deposits in the portfolio, competition among depository and other financial institutions, including with respect to fees and interest rates, changes in laws or government regulations or policies affecting financial institutions, including changes in the monetary policies of the U.S. Treasury and the Board of Governors of the Federal Reserve System, the imposition of tariffs or other domestic or international governmental policies, changes in the quality and/or composition of our loan and securities portfolios, prepayment speeds, charge-offs and/or credit loss provisions, our ability to access cost-effective funding, changes in the value of our goodwill or other intangible assets, changes in regulatory fees, assessments and capital requirements, inflation and changes in the interest rate environment that reduce our margins, reduce the fair value of financial instruments or reduce our ability to originate loans, the failure to maintain current technologies and to successfully implement future information technology enhancements, cyber security and fraud risks against our information technology and those of our third-party providers, the ability of third-party providers to perform their obligations to us, 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.
Company Contact:
William R. Jacobs
Chief Financial Officer
Tel: (732) 499-7200 ext. 2519
(Tables follow)
| NORTHFIELD BANCORP, INC. | ||||||||
| SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA | ||||||||
| (Dollars in thousands, except per share amounts) (unaudited) | ||||||||
| At or For the Three Months Ended | ||||||||
| March 31, | December 31 | |||||||
| 2025 | 2024 | 2024 | ||||||
| Selected Financial Ratios: | ||||||||
| Performance Ratios (1) | ||||||||
| Return on assets (ratio of net income to average total assets) | 0.56 | % | 0.43 | % | 0.79 | % | ||
| Return on equity (ratio of net income to average equity) | 4.52 | 3.59 | 6.40 | |||||
| Average equity to average total assets | 12.43 | 12.04 | 12.28 | |||||
| Interest rate spread | 1.76 | 1.39 | 1.54 | |||||
| Net interest margin | 2.38 | 2.03 | 2.18 | |||||
| Efficiency ratio (2) | 61.57 | 71.43 | 56.75 | |||||
| Non-interest expense to average total assets | 1.53 | 1.55 | 1.46 | |||||
| Non-interest expense to average total interest-earning assets | 1.61 | 1.63 | 1.53 | |||||
| Average interest-earning assets to average interest-bearing liabilities | 129.42 | 128.66 | 129.20 | |||||
| Asset Quality Ratios: | ||||||||
| Non-performing assets to total assets | 0.34 | 0.29 | 0.36 | |||||
| Non-performing loans (3) to total loans (4) | 0.48 | 0.41 | 0.51 | |||||
| Allowance for credit losses to non-performing loans (5) | 242.73 | 214.83 | 227.72 | |||||
| Allowance for credit losses to total loans held-for-investment, net (6) | 0.87 | 0.89 | 0.87 | |||||
(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) Excludes loans held-for-sale.
(6) Includes originated loans held-for-investment, PCD loans, and acquired loans.
| NORTHFIELD BANCORP, INC. | |||||||
| CONSOLIDATED BALANCE SHEETS | |||||||
| (Dollars in thousands, except share and per share amounts) (unaudited) | |||||||
| March 31, 2025 | December 31, 2024 | ||||||
| ASSETS: | |||||||
| Cash and due from banks | $ | 12,523 | $ | 13,043 | |||
| Interest-bearing deposits in other financial institutions | 89,139 | 154,701 | |||||
| Total cash and cash equivalents | 101,662 | 167,744 | |||||
| Trading securities | 13,003 | 13,884 | |||||
| Debt securities available-for-sale, at estimated fair value | 1,246,473 | 1,100,817 | |||||
| Debt securities held-to-maturity, at amortized cost | 8,883 | 9,303 | |||||
| Equity securities | 10,855 | 14,261 | |||||
| Loans held-for-sale | 4,897 | 4,897 | |||||
| Loans held-for-investment, net | 3,991,529 | 4,022,224 | |||||
| Allowance for credit losses | (34,921 | ) | (35,183 | ) | |||
| Net loans held-for-investment | 3,956,608 | 3,987,041 | |||||
| Accrued interest receivable | 19,648 | 19,078 | |||||
| Bank-owned life insurance | 177,398 | 175,759 | |||||
| Federal Home Loan Bank of New York stock, at cost | 38,350 | 35,894 | |||||
| Operating lease right-of-use assets | 27,345 | 27,771 | |||||
| Premises and equipment, net | 21,431 | 21,985 | |||||
| Goodwill | 41,012 | 41,012 | |||||
| Other assets | 42,435 | 46,932 | |||||
| Total assets | $ | 5,710,000 | $ | 5,666,378 | |||
| LIABILITIES AND STOCKHOLDERS’ EQUITY: | |||||||
| LIABILITIES: | |||||||
| Deposits | $ | 4,131,956 | $ | 4,138,477 | |||
| Federal Home Loan Bank advances and other borrowings | 709,159 | 666,402 | |||||
| Subordinated debentures, net of issuance costs | 61,498 | 61,442 | |||||
| Lease liabilities | 31,630 | 32,209 | |||||
| Advance payments by borrowers for taxes and insurance | 29,270 | 24,057 | |||||
| Accrued expenses and other liabilities | 35,338 | 39,095 | |||||
| Total liabilities | 4,998,851 | 4,961,682 | |||||
| STOCKHOLDERS’ EQUITY: | |||||||
| Total stockholders’ equity | 711,149 | 704,696 | |||||
| Total liabilities and stockholders’ equity | $ | 5,710,000 | $ | 5,666,378 | |||
| Total shares outstanding | 42,676,274 | 42,903,598 | |||||
| Tangible book value per share(1) | $ | 15.70 | $ | 15.46 | |||
(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 $57 and $69 at March 31, 2025 and December 31, 2024, respectively, and are included in other assets.
| NORTHFIELD BANCORP, INC. | ||||||||||
| CONSOLIDATED STATEMENTS OF INCOME | ||||||||||
| (Dollars in thousands, except share and per share amounts) (unaudited) | ||||||||||
| For the Three Months Ended | ||||||||||
| March 31, | December 31, | |||||||||
| 2025 | 2024 | 2024 | ||||||||
| Interest income: | ||||||||||
| Loans | $ | 45,283 | $ | 46,047 | $ | 45,902 | ||||
| Mortgage-backed securities | 12,009 | 4,398 | 9,160 | |||||||
| Other securities | 797 | 3,841 | 1,428 | |||||||
| Federal Home Loan Bank of New York dividends | 862 | 970 | 885 | |||||||
| Deposits in other financial institutions | 1,141 | 3,392 | 2,347 | |||||||
| Total interest income | 60,092 | 58,648 | 59,722 | |||||||
| Interest expense: | ||||||||||
| Deposits | 21,191 | 19,273 | 22,031 | |||||||
| Borrowings | 6,291 | 10,663 | 7,169 | |||||||
| Subordinated debt | 819 | 828 | 837 | |||||||
| Total interest expense | 28,301 | 30,764 | 30,037 | |||||||
| Net interest income | 31,791 | 27,884 | 29,685 | |||||||
| Provision for credit losses | 2,582 | 415 | 1,942 | |||||||
| Net interest income after provision for credit losses | 29,209 | 27,469 | 27,743 | |||||||
| Non-interest income: | ||||||||||
| Fees and service charges for customer services | 1,620 | 1,615 | 1,634 | |||||||
| Income on bank-owned life insurance | 1,639 | 964 | 1,277 | |||||||
| (Losses)/gains on trading securities, net | (299 | ) | 699 | 68 | ||||||
| Gain on sale of property | — | — | 3,402 | |||||||
| Other | 62 | 103 | 623 | |||||||
| Total non-interest income | 3,022 | 3,381 | 7,004 | |||||||
| Non-interest expense: | ||||||||||
| Compensation and employee benefits | 11,775 | 12,765 | 11,761 | |||||||
| Occupancy | 3,533 | 3,553 | 3,253 | |||||||
| Furniture and equipment | 414 | 484 | 436 | |||||||
| Data processing | 2,122 | 2,147 | 1,921 | |||||||
| Professional fees | 1,072 | 809 | 762 | |||||||
| Advertising | 250 | 518 | 287 | |||||||
| Federal Deposit Insurance Corporation insurance | 617 | 588 | 625 | |||||||
| Credit loss expense/(benefit) for off-balance sheet exposures | 103 | 83 | (55 | ) | ||||||
| Other | 1,549 | 1,385 | 1,832 | |||||||
| Total non-interest expense | 21,435 | 22,332 | 20,822 | |||||||
| Income before income tax expense | 10,796 | 8,518 | 13,925 | |||||||
| Income tax expense | 2,920 | 2,304 | 2,674 | |||||||
| Net income | $ | 7,876 | $ | 6,214 | $ | 11,251 | ||||
| Net income per common share: | ||||||||||
| Basic | $ | 0.19 | $ | 0.15 | $ | 0.28 | ||||
| Diluted | $ | 0.19 | $ | 0.15 | $ | 0.27 | ||||
| Basic average shares outstanding | 40,864,529 | 42,367,243 | 40,889,355 | |||||||
| Diluted average shares outstanding | 40,922,829 | 42,408,953 | 41,029,275 | |||||||
| NORTHFIELD BANCORP, INC. | ||||||||||||||||||||||||||
| ANALYSIS OF NET INTEREST INCOME | ||||||||||||||||||||||||||
| (Dollars in thousands) (unaudited) | ||||||||||||||||||||||||||
| For the Three Months Ended | ||||||||||||||||||||||||||
| March 31, 2025 | December 31, 2024 | March 31, 2024 | ||||||||||||||||||||||||
| 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) | $ | 4,007,266 | $ | 45,283 | 4.58 | % | $ | 4,044,787 | $ | 45,902 | 4.51 | % | $ | 4,174,668 | $ | 46,047 | 4.44 | % | ||||||||
| Mortgage-backed securities(3) | 1,132,715 | 12,009 | 4.30 | 950,309 | 9,160 | 3.83 | 648,811 | 4,398 | 2.73 | |||||||||||||||||
| Other securities(3) | 118,082 | 797 | 2.74 | 177,462 | 1,428 | 3.20 | 391,980 | 3,841 | 3.94 | |||||||||||||||||
| Federal Home Loan Bank of New York stock | 36,929 | 862 | 9.47 | 37,065 | 885 | 9.50 | 39,599 | 970 | 9.85 | |||||||||||||||||
| Interest-earning deposits in financial institutions | 118,983 | 1,141 | 3.89 | 204,146 | 2,347 | 4.57 | 262,884 | 3,392 | 5.19 | |||||||||||||||||
| Total interest-earning assets | 5,413,975 | 60,092 | 4.50 | 5,413,769 | 59,722 | 4.39 | 5,517,942 | 58,648 | 4.27 | |||||||||||||||||
| Non-interest-earning assets | 277,586 | 277,067 | 266,428 | |||||||||||||||||||||||
| Total assets | $ | 5,691,561 | $ | 5,690,836 | $ | 5,784,370 | ||||||||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||||||||||
| Savings, NOW, and money market accounts | $ | 2,502,664 | $ | 12,148 | 1.97 | % | $ | 2,424,370 | $ | 11,997 | 1.97 | % | $ | 2,464,297 | $ | 12,331 | 2.01 | % | ||||||||
| Certificates of deposit | 923,713 | 9,043 | 3.97 | 928,658 | 10,034 | 4.30 | 654,328 | 6,942 | 4.27 | |||||||||||||||||
| Total interest-bearing deposits | 3,426,377 | 21,191 | 2.51 | 3,353,028 | 22,031 | 2.61 | 3,118,625 | 19,273 | 2.49 | |||||||||||||||||
| Borrowed funds | 695,281 | 6,291 | 3.67 | 775,722 | 7,169 | 3.68 | 1,108,880 | 10,663 | 3.87 | |||||||||||||||||
| Subordinated debt | 61,461 | 819 | 5.40 | 61,406 | 837 | 5.42 | 61,239 | 828 | 5.44 | |||||||||||||||||
| Total interest-bearing liabilities | 4,183,119 | 28,301 | 2.74 | 4,190,156 | 30,037 | 2.85 | 4,288,744 | 30,764 | 2.89 | |||||||||||||||||
| Non-interest bearing deposits | 706,217 | 703,886 | 699,640 | |||||||||||||||||||||||
| Accrued expenses and other liabilities | 94,819 | 97,918 | 99,594 | |||||||||||||||||||||||
| Total liabilities | 4,984,155 | 4,991,960 | 5,087,978 | |||||||||||||||||||||||
| Stockholders’ equity | 707,406 | 698,876 | 696,392 | |||||||||||||||||||||||
| Total liabilities and stockholders’ equity | $ | 5,691,561 | $ | 5,690,836 | $ | 5,784,370 | ||||||||||||||||||||
| Net interest income | $ | 31,791 | $ | 29,685 | $ | 27,884 | ||||||||||||||||||||
| Net interest rate spread(4) | 1.76 | % | 1.54 | % | 1.39 | % | ||||||||||||||||||||
| Net interest-earning assets(5) | $ | 1,230,856 | $ | 1,223,613 | $ | 1,229,198 | ||||||||||||||||||||
| Net interest margin(6) | 2.38 | % | 2.18 | % | 2.03 | % | ||||||||||||||||||||
| Average interest-earning assets to interest-bearing liabilities | 129.42 | % | 129.20 | % | 128.66 | % | ||||||||||||||||||||
(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.
