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Northfield Bancorp, Inc. Announces Second Quarter 2021 Results

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·52 min read
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NOTABLE ITEMS FOR THE QUARTER INCLUDE:

  • DILUTED EARNINGS PER SHARE INCREASED OVER 5% TO $0.40 AS COMPARED TO $0.38 FOR THE TRAILING QUARTER, AND OVER 73% COMPARED TO $0.23 FOR THE SECOND QUARTER OF 2020.

  • NET INTEREST INCOME DECREASED $1.5 MILLION, OR 3.7%, OVER THE TRAILING QUARTER, AND INCREASED $8.5 MILLION, OR 28.0%, COMPARED TO THE SECOND QUARTER OF 2020. CURRENT QUARTER INCLUDES $443,000 IN ACCRETED INTEREST INCOME ON PURCHASED CREDIT DETERIORATED LOANS AS COMPARED TO $2.4 MILLION FOR THE TRAILING QUARTER.

  • TOTAL LOANS, EXCLUDING PAYCHECK PROTECTION PROGRAM ("PPP") LOANS, DECREASED $80.6 MILLION, OR 2.1%. CURRENT QUARTER INCLUDES LOAN SALES OF APPROXIMATELY $126 MILLION, RESULTING IN A $1.4 MILLION GAIN.

  • DEPOSITS, EXCLUDING BROKERED, INCREASED $50.8 MILLION, OR 1.3%, SINCE MARCH 31, 2021. COST OF DEPOSITS DECREASED OVER 11% FOR THE QUARTER TO 16 BASIS POINTS, AS COMPARED TO 18 BASIS POINTS FOR THE TRAILING QUARTER.

  • NON-PERFORMING LOANS TO TOTAL LOANS DECREASED TO 0.23% AT JUNE 30, 2021, AS COMPARED TO 0.26% AT MARCH 2021, AND 0.27% AT JUNE 30, 2020.

  • REPURCHASED 900,771 SHARES TOTALING APPROXIMATELY $14.7 MILLION.

  • CASH DIVIDEND DECLARED OF $0.13 PER SHARE OF COMMON STOCK, PAYABLE AUGUST 25, 2021, TO STOCKHOLDERS OF RECORD AS OF AUGUST 11, 2021.

WOODBRIDGE, N.J., July 28, 2021 (GLOBE NEWSWIRE) -- NORTHFIELD BANCORP, INC. (Nasdaq:NFBK) (or the “Company”), the holding company for Northfield Bank, reported diluted earnings per common share of $0.40 and $0.78 for the three and six months ended June 30, 2021, respectively, as compared to $0.23 and $0.33 per diluted share for the three and six months ended June 30, 2020, respectively. Earnings for the three and six months ended June 30, 2021, included a negative provision for loan 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 loan losses of $1.9 million and $10.1 million for the three and six months ended June 30, 2020, respectively, under the incurred loss methodology. The provision for loan losses for the three and six months ended June 30, 2020, included incremental loss provisions of $1.8 million and $8.0 million, respectively, related to additional factors considered for economic uncertainties related to the Coronavirus 2019 (“COVID-19”) pandemic. Earnings for the three and six months ended June 30, 2021, included a gain on sale of loans of $1.4 million. Earnings for the six months ended June 30, 2021, also included approximately $1.9 million of accretable income related to the payoffs of purchased credit deteriorated (“PCD”) loans. Earnings for the three and six months ended June 30, 2020, included a gain on sale of loans of $665,000, and merger-related expenses of $205,000 and $384,000, respectively.

Commenting on the quarter, Steven M. Klein, the Company’s President and Chief Executive Officer noted, “Our strong financial results reflect the continued execution of our strategic initiatives focused on prudent and disciplined lending and deposit gathering, net interest margin optimization, and expense discipline.”

Mr. Klein further noted, “I’m pleased to report that we continue to deploy our substantial capital base, including through stock repurchases of $14.7 million for the second quarter, and the declaration of a quarterly cash dividend of $0.13 per common share, payable August 11, 2021, to stockholders of record on August 25, 2021.”

Results of Operations

Comparison of Operating Results for the Six Months Ended June 30, 2021 and 2020

Net income was $38.5 million and $15.3 million for the six months ended June 30, 2021 and June 30, 2020, respectively. Significant variances from the comparable prior year period are as follows: an $18.7 million increase in net interest income, a $16.2 million decrease in the provision for loan losses, a $3.2 million increase in non-interest income, a $5.9 million increase in non-interest expense, and a $9.1 million increase in income tax expense.

Net interest income for the six months ended June 30, 2021, increased $18.7 million, or 31.1%, to $78.9 million, from $60.2 million for the six months ended June 30, 2020, primarily due to a $504.2 million, or 10.6%, increase in the average balance of interest-earning assets and a 48 basis point increase in net interest margin to 3.03% from 2.55% for the six months ended June 30, 2020. The increase in the average balance of interest-earning assets was due to increases in the average balance of loans outstanding of $381.6 million, the average balance of mortgage-backed securities of $107.4 million and the average balance of interest-earning deposits in financial institutions of $38.2 million, partially offset by decreases in the average balance of other securities of $20.8 million and the average balance of Federal Home Loan Bank of New York (“FHLBNY”) stock of $2.2 million.

The increase in net interest margin was primarily due to the decrease in the cost of interest-bearing liabilities outpacing the decrease in yields on interest earning assets. Yields on interest-earning assets decreased 15 basis points to 3.40% for the six months ended June 30, 2021, from 3.55% for the six months ended June 30, 2020. The cost of interest-bearing liabilities decreased by 76 basis points to 0.48% for the six months ended June 30, 2021, from 1.24% for the six months ended June 30, 2020, primarily driven by lower cost of deposits due to the low interest rate environment 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. Net interest income for the six months ended June 30, 2021, included loan prepayment income of $2.2 million as compared to $992,000 for the six months ended June 30, 2020. The Company accreted interest income related to PCD loans of $2.9 million for the six months ended June 30, 2021, as compared to $1.5 million for the six months ended June 30, 2020. The increase in accretable interest income was primarily related to payoffs of PCD loans in the first quarter of 2021. Also contributing to the increase in net interest income for the six months ended June 30, 2021 were fees related to loans originated under the PPP of approximately $2.8 million.

The provision for loan losses decreased by $16.2 million to a negative provision of $6.1 million for the six months ended June 30, 2021, compared to a provision of $10.1 million for the six months ended June 30, 2020, driven by continued improvement in the economic forecast and an improvement in asset quality as well as a decline in loan balances. The higher provision for loan losses in the first half of 2020 was primarily due to increases in qualitative factors used in determining the adequacy of the allowance for loan losses related to unemployment, loan risk rating changes and increased risks related to loans on forbearance, resulting from economic uncertainty attributable to the COVID-19 pandemic, under the incurred loss methodology. Net charge-offs were $2.4 million for the six months ended June 30, 2021, primarily related to PCD loans, as compared to $292,000 for the six months ended June 30, 2020.

On January 1, 2021, the Company adopted ASU 2016-13, Financial Instruments- Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“CECL”). CECL requires the measurement of all expected credit losses over the life of financial instruments held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. 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. At adoption, the Company increased its allowance for credit losses by $11.1 million, comprised of $10.3 million and $737,000, respectively, for loans and unfunded commitments, including $6.8 million related to PCD loans. For PCD loans, the allowance for credit losses recorded is recognized through a gross-up that increases the amortized cost basis of loans with a corresponding increase to the allowance for credit losses, and therefore results in no impact to shareholders' equity.

Non-interest income increased $3.2 million to $7.6 million for the six months ended June 30, 2021, from $4.3 million for the six months ended June 30, 2020, due primarily to: an increase of $738,000 in fees and service charges for customer services, as the prior year period reflected fees waived and fewer transactions related to lower consumer spending in the early part of the pandemic; an increase of $546,000 in gains on sales of available-for-sale debt securities, net; a $1.5 million increase in gains on trading securities, net; and a $736,000 increase in gains on sales of loans. The increase in gains on sales of loans resulted from the sales of approximately $126.3 million of multifamily loans for gains of $1.4 million in the second quarter of 2021 compared to sales of $47.5 million of multifamily loans for gains of $665,000 in the second quarter of 2020. The Company periodically considers the sale of loans to manage its overall risk profile, including consideration of interest rate risk, concentration risk and capital deployment opportunities. For the six months ended June 30, 2021, gains on trading securities were $1.2 million as compared to losses of $366,000 for the six months ended June 30, 2020. 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. Partially offsetting the increases, was a $315,000 decrease in other income primarily due to lower swap fee income for the six months ended June 30, 2021, compared to the comparable prior year period due to a lower volume of such transaction in 2021.

Non-interest expense increased $5.9 million, or 17.6%, to $39.4 million for the six months ended June 30, 2021, compared to $33.5 million for the six months ended June 30, 2020. This was due primarily to a $3.6 million increase in employee compensation and benefits, $1.5 million of which is attributable to the increase in the Company's deferred compensation plan expense, which as discussed above has no effect on net income, as well as increases in salary and medical benefit expenses associated with increased personnel from our acquisition of VSB Bancorp, Inc. (“Victory”) on July 1, 2020. Additionally, occupancy expense increased by $1.1 million, primarily related to additional branches from the Victory acquisition, renovation of existing branches and higher snow removal costs in the first quarter of 2021. Data processing fees increased by $358,000 related to the Victory acquisition and organic growth in loan and deposit accounts. FDIC insurance premiums increased by $505,000 due to small bank assessment credits being applied in the prior year. Other expense increased by $537,000, primarily due to an increase in the reserve for unfunded commitments. Partially offsetting the increases was a $416,000 decrease in professional fees, primarily due to lower merger-related costs.

The Company recorded income tax expense of $14.6 million for the six months ended June 30, 2021, compared to $5.5 million for the six months ended June 30, 2020. The effective tax rate for the six months ended June 30, 2021, was 27.5% compared to 26.5% for the six months ended June 30, 2020. The higher effective tax rate was primarily due to higher taxable income. Additionally, on April 19, 2021, the Governor of New York signed into law an increase in the tax rate from 6.5% to 7.25%.

Comparison of Operating Results for the Three Months Ended June 30, 2021 and 2020

Net income was $19.8 million and $10.8 million for the quarters ended June 30, 2021, and June 30, 2020, respectively. Significant variances from the comparable prior year quarter are as follows: an $8.5 million increase in net interest income, a $5.6 million decrease in the provision for loan losses, a $678,000 increase in non-interest income, a $2.0 million increase in non-interest expense, and a $3.7 million increase in income tax expense.

Net interest income for the quarter ended June 30, 2021, increased $8.5 million, or 28.0%, primarily due to a $438.9 million, or 9.2%, increase in average interest-earning assets, and a 43 basis point increase in net interest margin to 2.96% from 2.53% for the quarter ended June 30, 2020. The increase in the average balance of interest-earning assets was due to increases in the average balance of loans outstanding of $360.4 million, the average balance of mortgage-backed securities of $54.3 million, the average balance of other securities of $12.7 million and the average balance of interest-earning deposits in financial institutions of $13.4 million, partially offset by a decrease of $1.8 million in the average balance of FHLBNY stock.

The increase in net interest margin was primarily due to the decrease in the cost of interest-bearing liabilities outpacing the decrease in yields on interest earning assets. Yields on interest earning assets decreased by 12 basis points to 3.31% for the quarter ended June 30, 2021, from 3.43% for the quarter ended June 30, 2020. The cost of interest-bearing liabilities decreased by 65 basis points to 0.47% for the quarter ended June 30, 2021, from 1.12% for the quarter ended June 30, 2020, driven primarily by lower cost of deposits due to the low interest rate environment 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. Net interest income for the quarter ended June 30, 2021, included loan prepayment income of $1.3 million, as compared to $365,000 for the quarter ended June 30, 2020. The Company accreted interest income related to PCD loans of $443,000 for the three months ended June 30, 2021, as compared to $717,000 for three months ended June 30, 2020. Net interest income for the three months ended June 30, 2021 included PPP fee income of approximately $1.6 million.

The provision for loan losses decreased by $5.6 million to a negative provision of $3.7 million for the quarter ended June 30, 2021, from a provision of $1.9 million for the quarter ended June 30, 2020, driven by continued improvement in the economic forecast and an improvement in asset quality as well as a decline in loan balances. The higher provision for loan losses in the prior year quarter was primarily due to increases in the qualitative factors used in determining the adequacy of the allowance for loan losses related to unemployment and loan risk rating changes related to loan modification requests, and to a lesser extent delinquencies, resulting from economic uncertainty attributable to the COVID-19 pandemic, under the incurred loss methodology. Net charge-offs were $3,000 for the quarter ended June 30, 2021, compared to $202,000 for the quarter ended June 30, 2020.

Non-interest income increased by $678,000, or 16.0%, to $4.9 million for the quarter ended June 30, 2021, from $4.2 million for the quarter ended June 30, 2020, primarily due to an increase of $661,000 in fees and service charges for customers, as the prior year quarter reflected certain fees waived and lower consumer spending during the early part of the pandemic, an increase of $436,000 in gains on available-for-sale debt securities, net, and an increase of $736,000 in gains on sales of loans, resulting from the sales of approximately $126.3 million of multifamily loans for gains of $1.4 million in the second quarter of 2021 compared to sales of $47.5 million of multifamily loans for gains of $665,000 in the second quarter of 2020. The increases were partially offset by decreases of $819,000 in gains on trading securities, net, and $328,000 in other income, primarily lower swap fee income. For the quarter ended June 30, 2021, gains on trading securities, net, included gains of $807,000 related to the Company’s trading portfolio, compared to gains of $1.6 million 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 increased by $2.0 million, or 11.3%, to $19.9 million for the quarter ended June 30, 2021, from $17.9 million for the quarter ended June 30, 2020. The increase was due primarily to a $362,000 increase in compensation and employee benefits, attributable to higher salary and medical benefit expense associated with increased personnel from the Victory acquisition, partially offset by a decrease in the mark to market of deferred compensation, a $482,000 increase in occupancy expense, related to additional branches from the Victory acquisition, and renovations of existing branches, a $186,000 increase in data processing fees, a $341,000 increase in advertising expense, and a $635,000 increase in other expense, primarily attributable an increase in the reserve for unfunded commitments.

The Company recorded income tax expense of $7.6 million for the quarter ended June 30, 2021, compared to $3.9 million for the quarter ended June 30, 2020. The effective tax rate for the quarter ended June 30, 2021, was 27.8% compared to 26.5% for the quarter ended June 30, 2020. The higher effective tax rate was primarily due to higher taxable income. Additionally, on April 19, 2021, the Governor of New York signed into law an increase in the tax rate from 6.5% to 7.25%.

Comparison of Operating Results for the Three Months Ended June 30, 2021 and March 31, 2021

Net income was $19.8 million and $18.7 million for the quarters ended June 30, 2021, and March 31, 2021, respectively. Significant variances from the prior quarter are as follows: a $1.5 million decrease in net interest income, a $1.3 million decrease in the provision for loan losses, a $2.3 million increase in non-interest income, a $308,000 increase in non-interest expense, and a $693,000 increase in income tax expense.

Net interest income for the quarter ended June 30, 2021, decreased $1.5 million, or 3.7%, primarily due to a $18.2 million, or 0.3%, decrease in average interest-earning assets and a 14 basis point decrease in net interest margin to 2.96% from 3.10% for the quarter ended March 31, 2021. The decrease in the average balance of interest-earning assets was primarily due to a decrease in the average balance of mortgage-backed securities of $148.8 million, partially offset by increases in the average balance of loans outstanding of $74.3 million, the average balance of other securities of $40.0 million, and the average balance of interest-earning deposits in financial institutions of $17.3 million.

The decrease in net interest margin was primarily due to lower yields on interest-earning assets, which decreased by 17 basis points to 3.31% for the quarter ended June 30, 2021, from 3.48% for the quarter ended March 31, 2021. The cost of interest-bearing liabilities decreased by three basis points to 0.47% for the quarter ended June 30, 2021, from 0.50% for the quarter ended March 31, 2021. Net interest income for the quarter ended June 30, 2021, included loan prepayment income of $1.3 million as compared to $860,000 for the quarter ended March 31, 2021. The Company accreted interest income related to PCD loans of $443,000 for the quarter ended June 30, 2021, as compared to $2.4 million for the quarter ended March 31, 2021. In the prior quarter, the higher accretable income was related to payoffs of PCD loans. Net interest income for the quarters ended June 30, 2021, and March 31, 2021 included PPP fee income of approximately $1.6 million and $1.2 million, respectively.

The provision for loan losses decreased by $1.3 million to a negative provision of $3.7 million for the quarter ended June 30, 2021, from a negative provision of $2.4 million for the quarter ended March 31, 2021. The decrease was primarily due to continued improvement in the economic forecast and an improvement in asset quality as well as a decline in loan balances. Net charge-offs were $3,000 for the quarter ended June 30, 2021, as compared to net charge-offs of $2.4 million for the quarter ended March 31, 2021. Net charge-offs for the quarter ended March 31, 2021, were primarily related to PCD loans.

Non-interest income increased by $2.3 million, or 86.5%, to $4.9 million for the quarter ended June 30, 2021, from $2.6 million for the quarter ended March 31, 2021. The increase was primarily due to increases of $412,000 in gains on available-for-sale debt securities, net, $443,000 in gains on trading securities, net, and $1.4 million in gains on sales of loans. For the quarter ended June 30, 2021, gains on trading securities, net, included gains of $807,000 related to the Company’s trading portfolio, compared to gains of $364,000 for the quarter ended March 31, 2021.

Non-interest expense increased by $308,000, or 1.6%, to $19.9 million for the quarter ended June 30, 2021, from $19.6 million for the quarter ended March 31, 2021, primarily due to a $274,000 increase in compensation and employee benefits, a $166,000 increase in data processing fees, and a $219,000 increase in advertising expense, partially offset by a $201,000 decrease in occupancy expense and a $74,000 decrease in professional fees.

The Company recorded income tax expense of $7.6 million for the quarter ended June 30, 2021, compared to $6.9 million for the quarter ended March 31, 2021. The effective tax rate for the quarter ended June 30, 2021 was 27.8%, compared to 27.1% for the quarter ended and March 31, 2021.

Financial Condition

Total assets decreased $87.6 million, or 1.6%, to $5.43 billion at June 30, 2021, from $5.51 billion at December 31, 2020. The decrease was primarily due to a decrease in available-for-sale debt securities of $167.4 million, or 13.2%, and a decrease in total loans of $25.9 million, or 0.7%, partially offset by an increase in cash and cash equivalents of $105.6 million, or 120.7%.

As of June 30, 2021, we estimate that our non-owner occupied commercial real estate concentration (as defined by regulatory guidance) to total risk-based capital was approximately 461.2%. 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 $105.6 million, or 120.7%, to $193.2 million at June 30, 2021, from $87.5 million at December 31, 2020, primarily due to the liquidity obtained from loans and securities sales or 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, decreased $6.0 million to $3.82 billion at June 30, 2021, from $3.82 billion at December 31, 2020, primarily due to the $126.3 million sale of a portfolio of multifamily loans and loan payoffs in other segments, related to refinancings as rates are at historical lows, partially offset by loan growth. One-to-four family residential loans decreased by $16.8 million, or 8.0%, to $194.0 million at June 30, 2021, from $210.8 million at December 31, 2020. Multifamily real estate loans decreased by $12.7 million, or 0.5%, to $2.50 billion at June 30, 2021, from $2.51 billion at December 31, 2020. Construction and land loans decreased by $11.2 million, or 15.1%, to $63.1 million at June 30, 2021 from $74.3 million at December 31, 2020. These decreases were offset by increases in commercial real estate loans of $18.3 million, or 2.6%, to $735.3 million at June 30, 2021 from $717.0 million at December 31, 2020, and in commercial and industrial loans of $15.2 million, or 7.8%, to $209.6 million at June 30, 2021, from $194.4 million at December 31, 2020.

The increase in commercial and industrial loans was primarily due to loans originated under the PPP as authorized by the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act. The PPP loans are administered by the Small Business Administration ("SBA"), which provides 100% federally guaranteed loans for small businesses to cover payroll, utilities, rent and interest. These small business loans may be forgiven if borrowers maintain their payrolls and satisfy certain other conditions for a period of time during the COVID-19 pandemic. The Company began accepting and funding loans under this program in April 2020. There were 1,453 PPP loans totaling $132.7 million at June 30, 2021, compared to 1,275 loans totaling $126.5 million at December 31, 2020. During the six months ended June 30, 2021, the Company originated and the SBA approved funding for $81.4 million of PPP loans. PPP provides for lender processing fees that range from 1% to 5% of the final disbursement made to individual borrowers. As of June 30, 2021, we have received loan processing fees of $9.5 million, of which $4.7 million has been recognized in earnings, including $2.8 million recognized in the six months ended June 30, 2021. The remaining unearned fees will be recognized in income over the remaining term of the loans.

The following tables detail multifamily real estate originations for the six months ended June 30, 2021 and 2020 (dollars in thousands):

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


For the Six Months Ended June 30, 2020

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

$

258,084

3.66%

60%

92

V

30 Years

1,500

4.40%

47%

180

F

15 Years

$

259,584

3.66%

60%

There were no loans held-for-sale at June 30, 2021 compared to $19.9 million at December 31, 2020. At December 31, 2020, loans held-for-sale were comprised of commercial real estate and multifamily loans, primarily accommodation loans that were modified in the form of interest and/or principal payment deferrals due to COVID-19 related hardships, and had not returned to contractual payments after 180 days of relief. The sale of these loans was completed in March 2021.

PCD loans totaled $16.7 million at June 30, 2021, and $18.5 million at December 31, 2020. 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, 2021 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 $443,000 and $2.9 million attributable to PCD loans for the three and six months ended June 30, 2021, respectively, as compared to $717,000 and $1.5 million for the three and six months ended June 30, 2020, respectively. The increase in income accreted for the six months ended June 30, 2021, was related to the payoff of PCD loans. PCD loans had an allowance for credit losses of approximately $4.8 million at June 30, 2021.

The Company’s available-for-sale debt securities portfolio decreased by $167.4 million, or 13.2%, to $1.10 billion at June 30, 2021, from $1.26 billion at December 31, 2020. The decrease was primarily attributable to paydowns, maturities, calls, and sales. At June 30, 2021, $970.1 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 $2.8 million in U.S. Government agency securities, $124.4 million in corporate bonds, all of which were considered investment grade at June 30, 2021, and $78,000 in municipal bonds.

Total liabilities decreased $86.9 million, or 1.8%, to $4.67 billion at June 30, 2021, from $4.76 billion at December 31, 2020. The decrease was primarily attributable to a decrease in Federal Home Loan Bank and other borrowings of $96.5 million and a decrease in securities sold under agreements to repurchase of $25.0 million, partially offset by an increase in deposits of $31.7 million and an increase advance payments by borrowers for taxes and insurance of $4.5 million.

Deposits increased $31.7 million, or 0.8%, to $4.11 billion at June 30, 2021, as compared to $4.08 billion at December 31, 2020. The increase was attributable to increases of $205.6 million in transaction accounts and $18.9 million in savings accounts, partially offset by a decrease of $184.2 million in money market accounts and $8.5 million in certificates of deposit. We continue to see balance runoff from high cost money market and certificates of deposit categories as we have strategically chosen not to compete on rate at this time.

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

June 30, 2021

March 31, 2021

December 31, 2020

Transaction:

Non-interest bearing checking

$

826,823

$

771,432

$

695,831

Negotiable orders of withdrawal and interest-bearing checking

979,788

918,367

905,208

Total transaction

1,806,611

1,689,799

1,601,039

Savings and Money market:

Savings

1,159,566

1,150,383

1,140,717

Money market

628,979

665,344

713,168

Brokered money market

100,000

Total savings

1,788,545

1,815,727

1,953,885

Certificates of deposit:

Brokered deposits

103,533

181,827

47,827

$250,000 and under

324,480

357,803

374,344

Over $250,000

85,100

90,560

99,456

Total certificates of deposit

513,113

630,190

521,627

Total deposits

$

4,108,269

$

4,135,716

$

4,076,551

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

June 30, 2021

March 31, 2021

December 31, 2020

Business customers

$

1,088,642

$

1,023,970

$

977,778

Municipal customers

$

547,920

$

514,653

$

501,040

Borrowings and securities sold under agreements to repurchase decreased to $470.3 million at June 30, 2021, from $591.8 million at December 31, 2020. Management utilizes borrowings to mitigate interest rate risk, for short-term liquidity, and to a lesser extent as part of leverage strategies.

The following is a table of term borrowing maturities (excluding capitalized leases and overnight borrowings) and the weighted average rate by year at June 30, 2021 (dollars in thousands):

Year

Amount

Weighted Average Rate

2021

$48,275

2.00%

2022

120,000

2.29%

2023

87,500

2.89%

2024

50,000

2.47%

2025

112,500

1.48%

Thereafter

45,000

1.45%

$463,275

2.11%

Total stockholders’ equity decreased by $771,000 to $753.2 million at June 30, 2021, from $754.0 million at December 31, 2020. The decrease was attributable to $24.8 million in stock repurchases, $11.8 million in dividend payments, and a $2.7 million decrease in accumulated other comprehensive income associated with a reduction in unrealized gains on our debt securities available-for-sale portfolio, partially offset by net income of $38.5 million for the six months ended June 30, 2021, and a $3.2 million increase in equity award activity. The Company repurchased 1,643,094 shares of its common stock outstanding at an average price of $15.11 for a total of $24.8 million during the six months ended June 30, 2021, pursuant to the approved stock repurchase plans. As of June 30, 2021, the Company had approximately $36.7 million in remaining capacity under its current repurchase program. In connection with the adoption of CECL, effective January 1, 2021, the Company recognized a cumulative effect adjustment that reduced stockholders’ equity by $3.1 million, net of tax, to establish initial allowances against credit losses on loans and off-balance sheet credit exposures.

The Company continues to maintain a strong liquidity and capital position, despite the economic uncertainties presented by the COVID-19 pandemic. 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, 2021 (dollars in thousands):

Cash and cash equivalents(1)

$

174,503

Corporate bonds

$

117,794

Multifamily loans(2)

$

1,426,296

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

$

450,092

(1) Excludes $18,681 of cash at Northfield Bank.
(2) Represents remaining borrowing potential.

The Company and the Bank elected to opt into the Community Bank Leverage Ratio (“CBLR”) framework, effective for the first quarter of 2020. The CBLR replaces the risk-based and leverage capital requirements in the generally applicable capital rules. At June 30, 2021, the Company and the Bank's estimated CBLR ratios were 12.77% and 11.37% respectively, which exceeded the minimum requirement to be considered well-capitalized of 8%. As a result of the COVID-19 pandemic the Federal Regulators have lowered the CBLR ratio to 8%, which will phase back to the original legislation of 9% by 2022.

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, 2021, March 31, 2021, and December 31, 2020 (dollars in thousands):

June 30, 2021

March 31, 2021

December 31, 2020

Non-accrual loans:

Held-for-investment

Real estate loans:

Commercial

$

5,028

$

4,961

$

6,229

One-to-four family residential

320

805

906

Construction and land

1,107

1,150

Multifamily

1,131

1,145

1,153

Home equity and lines of credit

128

187

191

Commercial and industrial

407

198

37

Other

3

Total non-accrual loans

8,124

8,446

8,516

Loans delinquent 90 days or more and still accruing:

Held-for-investment

Real estate loans:

Commercial

216

219

500

One-to-four family residential

223

172

174

Multifamily

516

Home equity and lines of credit

98

Commercial and industrial

194

738

436

Other

3

3

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

731

1,648

1,113

Non-performing loans held-for-sale

19,895

Total non-performing loans

8,855

10,094

29,524

Other real estate owned

100

100

Total non-performing assets

$

8,955

$

10,194

$

29,524

Non-performing loans to total loans

0.23

%

0.26

%

0.77

%

Non-performing assets to total assets

0.17

%

0.18

%

0.54

%

Loans subject to restructuring agreements and still accruing

$

7,603

$

7,326

$

7,697

Accruing loans 30 to 89 days delinquent

$

5,884

$

14,148

$

13,982

Other Real Estate Owned

Other real estate owned is comprised of one property acquired during the six months ended June 30, 2021, as a result of foreclosure. The property is located in New Jersey and had a carrying value of approximately $100,000 and was included in other assets on the consolidated balance sheet at June 30, 2021.

Non-performing Loans Held-for-Sale

Non-performing loans held for sale at December 31, 2020, totaled $19.9 million and were comprised of high risk commercial real estate and multifamily loans, primarily accommodation loans that were modified in the form of interest and/or principal payment deferrals due to COVID-19 related hardships, and had not returned to contractual payments after 180 days of relief. The sale of these loans was completed in the first quarter of 2021.

Accruing Loans 30 to 89 Days Delinquent

Loans 30 to 89 days delinquent and on accrual status totaled $5.9 million, $14.1 million, and $14.0 million at June 30, 2021, March 31, 2021, and December 31, 2020, respectively. The following table sets forth delinquencies for accruing loans by type and by amount at June 30, 2021 and December 31, 2020 (dollars in thousands):

June 30, 2021

March 31, 2021

December 31, 2020

Held-for-investment

Real estate loans:

Commercial

$

2,654

$

4,457

$

8,792

One-to-four family residential

1,219

4,023

1,152

Multifamily

1,686

2,419

1,893

Construction and land

390

994

Home equity and lines of credit

203

372

380

Commercial and industrial loans

122

2,480

760

Other loans

7

11

Total delinquent accruing loans held-for-investment

$

5,884

$

14,148

$

13,982

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 ($16.7 million at June 30, 2021 and $18.5 million at December 31, 2020) as accruing, even though they may be contractually past due. At June 30, 2021, 2.4% of PCD loans were past due 30 to 89 days, and 20.4% were past due 90 days or more, as compared to 9.6% and 35.2%, respectively, at December 31, 2020.

COVID-19 Exposure

Management continues to evaluate the Company's exposure to increased loan losses related to the COVID-19 pandemic, in particular the commercial real estate and multifamily loan portfolios. During the second quarter of 2020, the Company implemented a customer relief program to assist borrowers that may be experiencing financial hardship due to COVID-19 related challenges. The relief program grants principal and/or interest payment deferrals typically for a period of 90 days, which management may choose to extend for additional 90 days periods. At the peak of forbearance, June 2020, the Company had 286 loans approved for payment deferral representing $360.2 million, or approximately 10% of the Company's loan portfolio. As of June 30, 2021, the Company had approximately $21.5 million, or 21 outstanding loans remaining in deferral, representing approximately 0.6% of the Company’s outstanding loan portfolio (excluding PCD loans) as of that date. Loans currently in deferment status (“COVID-19 Modified Loans”) will continue to accrue interest during the deferment period unless otherwise classified as nonperforming. COVID-19 Modified Loans are required to make escrow payments for real estate taxes and insurance, if applicable. The COVID-19 Modified Loan agreements also require loans to be brought back to their fully contractual terms within 12 to 18 months and include covenants that prohibit distributions, bonuses, or payments of management fees to related entities until all deferred payments are made. Consistent with industry regulatory guidance, borrowers that were otherwise current on loan payments that were granted COVID-19 related financial hardship payment deferrals will continue to be reported as current loans throughout the agreed upon deferral period. Borrowers, which were delinquent in their payments to the Bank, prior to requesting a COVID-19 related financial hardship payment deferral are reviewed on a case by case basis for TDR classification and non-performing loan status.

The following table sets forth the property types collateralizing our loans held-for-investment (excluding PCD) in forbearance as of June 30, 2021 (dollars in thousands):

Loan Portfolio by Property Type at June 30, 2021

Loans in Forbearance for COVID Relief as of June 30, 2021

Number of Loans

Amount

Average Loan Size

Weighted Average LTV Ratio

% of Total Loans

Number of Loans (2)

Amount

Average Loan Size

Weighted Average LTV Ratio

% of Portfolio by Property Type

Commercial Real Estate and Multifamily

Multifamily(1)

1,135

$

2,496,614

$

2,200

55%

65.7

%

4

$

10,739

$

2,685

34%

0.43

%

Mixed use (majority of space is non-residential)

219

147,199

672

46%

3.9

%

1

2,890

2,890

37%

1.96

%

Retail

86

144,399

1,679

48%

3.8

%

1

607

607

55%

0.42

%

Office buildings

107

103,996

972

46%

2.7

%

1

551

551

46%

0.53

%

Accommodations

9

51,545

5,727

37%

1.4

%

1

155

155

16%

0.30

%

Nursing Home

5

27,501

5,500

57%

0.7

%

—%

%

Medical Office Buildings

24

26,661

1,111

63%

0.7

%

—%

%

Industrial and Manufacturing (Office and Plant)

21

17,552

836

44%

0.5

%

—%

%

Warehousing

29

20,677

713

45%

0.5

%

—%

%

Restaurant

22

12,831

583

51%

0.3

%

—%

%

Religious

16

10,556

660

39%

0.3

%

—%

%

Bank Branch

6

5,441

907

44%

0.1

%

—%

%

Schools/Child Day care

6

5,531

922

36%

0.2

%

—%

%

Automobile

18

6,384

355

52%

0.2

%

—%

%

Funeral Home

2

1,756

878

62%

%

—%

%

Recreational

5

7,044

1,409

47%

0.2

%

2

3,221

1,611

47%

45.73

%

Car Wash

1

489

489

18%

%

—%

%

Other

146

145,740

998

59%

3.8

%

—%

%

Total commercial real estate and multifamily

1,857

3,231,916

1,740

54%

85.0

%

10

18,163

1,816

38%

0.56

%

One-to-four family residential

614

193,976

316

35%

5.1

%

5

2,297

459

39%

1.18

%

Home equity and lines of credit

1,829

99,816

55

47%

2.6

%

1

197

197

29%

0.20

%

Construction and land

34

63,123

1,857

40%

1.7

%

—%

%

Commercial and industrial loans

2,230

209,579

94

NM

5.5

%

5

850

170

NM

0.41

%

Other

121

2,170

18

NM

0.1

%

—%

%

Total loans (excluding PCD)

6,685

$

3,800,580

569

100.0

%

21

$

21,507

1,024

0.57

%

(1) Property type is apartment units equal or greater than five units.

Of the loans currently in deferral as of June 30, 2021, two loans totaling $239,000 are in their first deferral period and 19 loans totaling $21.3 million are repeat deferrals. As of July 26, 2021, eight loans totaling $11.6 million in the table above had returned to contractual payments, including one multifamily loan totaling $9.4 million.

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, changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory fees and capital requirements, inflation and changes in the interest rate environment that reduce our margins or reduce the fair value of financial instruments, our ability to successfully integrate acquired entities, including Victory, 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


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,

2021

2020

2021

2021

2020

Selected Financial Ratios:

Performance Ratios (1)

Return on assets (ratio of net income to average total assets) (5)

1.44

%

0.85

%

1.36

%

1.40

%

0.61

%

Return on equity (ratio of net income to average equity) (5) (6) (8) (9)

10.53

6.12

10.03

10.28

4.37

Average equity to average total assets

13.64

13.92

13.57

13.60

14.02

Interest rate spread

2.84

2.31

2.98

2.92

2.31

Net interest margin

2.96

2.53

3.10

3.03

2.55

Efficiency ratio (2) (5)

45.57

51.80

45.70

45.63

51.99

Non-interest expense to average total assets

1.44

1.41

1.43

1.43

1.34

Non-interest expense to average total interest-earning assets

1.52

1.50

1.51

1.52

1.42

Average interest-earning assets to average interest-bearing liabilities

134.73

125.21

132.26

133.49

124.31

Asset Quality Ratios:

Non-performing assets to total assets

0.17

0.19

0.18

0.17

0.19

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

0.23

0.27

0.26

0.23

0.27

Allowance for credit losses to non-performing loans (6)

446.00

393.70

427.95

446.00

393.70

Allowance for credit losses to total loans held-for-investment, net (4) (6) (7) (8)

1.03

1.07

1.10

1.03

1.07

(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, and acquired loans.
(5) The three and six months ended June 30, 2020, included merger-related expenses of $205,000 and $384,000, respectively.
(6) The three and six months ended June 30, 2020, included an allowance for loan losses of $1.8 million ($1.3 million after-tax) and $8.0 million ($5.9 million after-tax), respectively, related to additional factors considered for COVID-19.
(7) Excluding PPP loans (which are fully government guaranteed and do not carry any provision for losses) of $132.7 million, $167.9 million, and $105.7 million at June 30, 2021, March 31, 2021, and June 30, 2020, respectively, the allowance for loan losses to total loans held for investment, net, totaled 1.07%, 1.15%, and 1.11% respectively, at June 30, 2021, March 31, 2021, and June 30, 2020.
(8) The Company adopted the CECL accounting standard effective January 1, 2021, and recorded a $10.3 million increase to its allowance for loan losses, including reserves of $6.8 million related to PCD loans. Ratios as of June 30, 2020 do not reflect the adoption of CECL.
(9) 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, 2021

March 31, 2021

December 31, 2020

ASSETS:

Cash and due from banks

$

18,681

$

15,920

$

16,115

Interest-bearing deposits in other financial institutions

174,503

111,650

71,429

Total cash and cash equivalents

193,184

127,570

87,544

Trading securities

12,743

12,142

12,291

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

1,097,423

1,207,238

1,264,805

Debt securities held-to-maturity, at amortized cost

6,417

6,913

7,234

Equity securities

219

473

253

Loans held-for-sale

19,895

Loans held-for-investment, net

3,817,273

3,933,015

3,823,238

Allowance for credit losses

(39,493

)

(43,197

)

(37,607

)

Net loans held-for-investment

3,777,780

3,889,818

3,785,631

Accrued interest receivable

14,521

14,753

14,690

Bank-owned life insurance

163,628

162,771

161,924

Federal Home Loan Bank of New York stock, at cost

24,508

28,641

28,641

Operating lease right-of-use assets

34,574

35,662

36,741

Premises and equipment, net

27,268

27,509

28,188

Goodwill

41,012

41,320

41,320

Other assets

33,633

22,114

25,387

Total assets

$

5,426,910

$

5,576,924

$

5,514,544

LIABILITIES AND STOCKHOLDERS’ EQUITY:

LIABILITIES:

Deposits

$

4,108,269

$

4,135,716

$

4,076,551

Securities sold under agreements to repurchase

50,000

75,000

75,000

Federal Home Loan Bank advances and other borrowings

420,329

517,170

516,789

Lease liabilities

40,721

42,067

42,734

Advance payments by borrowers for taxes and insurance

24,203

24,027

19,677

Accrued expenses and other liabilities

30,178

28,379

29,812

Total liabilities

4,673,700

4,822,359

4,760,563

STOCKHOLDERS’ EQUITY:

Total stockholders’ equity

753,210

754,565

753,981

Total liabilities and stockholders’ equity

$

5,426,910

$

5,576,924

$

5,514,544

Total shares outstanding

50,843,651

51,638,582

52,209,897

Tangible book value per share (1)

$

14.00

$

13.80

$

13.64

(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 $540,000, $590,000, and $640,000 at June 30, 2021, March 31, 2021, and December 31, 2020, 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,

2021

2020

2021

2021

2020

Interest income:

Loans

$

39,699

$

35,343

$

41,277

$

80,976

$

70,680

Mortgage-backed securities

2,682

4,304

2,959

5,641

9,926

Other securities

484

777

424

908

1,801

FHLB of New York dividends

336

456

370

706

1,033

Deposits in other financial institutions

35

31

37

72

203

Total interest income

43,236

40,911

45,067

88,303

83,643

Interest expense:

Deposits

1,671

7,473

1,870

3,541

16,752

Borrowings

2,878

3,208

3,021

5,899

6,728

Total interest expense

4,549

10,681

4,891

9,440

23,480

Net interest income

38,687

30,230

40,176

78,863

60,163

(Credit)/provision for loan losses

(3,701

)

1,921

(2,374

)

(6,075

)

10,104

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

42,388

28,309

42,550

84,938

50,059

Non-interest income:

Fees and service charges for customer services

1,327

666

1,197

2,524

1,786

Income on bank-owned life insurance

857

865

848

1,705

1,741

Gains (losses) on available-for-sale debt securities, net

509

73

97

606

60

Gains (losses) on trading securities, net

807

1,626

364

1,171

(366

)

Gain on sale of loans

1,401

665

1,401

665

Other

15

343

130

145

460

Total non-interest income

4,916

4,238

2,636

7,552

4,346

Non-interest expense:

Compensation and employee benefits

10,806

10,444

10,532

21,338

17,733

Occupancy

3,500

3,018

3,701

7,201

6,078

Furniture and equipment

442

349

437

879

682

Data processing

1,798

1,612

1,632

3,430

3,072

Professional fees

832

1,045

906

1,738

2,154

Advertising

684

343

465

1,149

1,161

Federal Deposit Insurance Corporation insurance

346

216

375

721

216

Other

1,463

828

1,515

2,978

2,441

Total non-interest expense

19,871

17,855

19,563

39,434

33,537

Income before income tax expense

27,433

14,692

25,623

53,056

20,868

Income tax expense

7,639

3,899

6,946

14,585

5,524

Net income

$

19,794

$

10,793

$

18,677

$

38,471

$

15,344

Net income per common share:

Basic

$

0.40

$

0.23

$

0.38

$

0.78

$

0.33

Diluted

$

0.40

$

0.23

$

0.38

$

0.78

$

0.33

Basic average shares outstanding

48,907,585

46,837,473

49,528,419

49,216,157

46,814,647

Diluted average shares outstanding

49,307,661

46,871,490

49,633,644

49,468,808

46,927,504


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

For the Three Months Ended

June 30, 2021

March 31, 2021

June 30, 2020

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)

$

3,948,136

$

39,699

4.03

%

$

3,873,884

$

41,277

4.32

%

$

3,587,772

$

35,343

3.96

%

Mortgage-backed securities (3)

967,526

2,682

1.11

1,116,281

2,959

1.08

913,203

4,304

1.90

Other securities (3)

141,475

484

1.37

101,523

424

1.69

128,818

777

2.43

Federal Home Loan Bank of New York stock

27,703

336

4.86

28,640

370

5.24

29,478

456

6.22

Interest-earning deposits in financial institutions

150,494

35

0.09

133,208

37

0.11

137,120

31

0.09

Total interest-earning assets

5,235,334

43,236

3.31

5,253,536

45,067

3.48

4,796,391

40,911

3.43

Non-interest-earning assets

295,768

310,681

300,511

Total assets

$

5,531,102

$

5,564,217

$

5,096,902

Interest-bearing liabilities:

Savings, NOW, and money market accounts

$

2,754,346

845

0.12

%

$

2,768,816

$

932

0.14

%

$

2,132,213

$

2,894

0.55

%

Certificates of deposit

574,899

826

0.58

611,267

938

0.62

1,023,276

4,579

1.80

Total interest-bearing deposits

3,329,245

1,671

0.20

3,380,083

1,870

0.22

3,155,489

7,473

0.95

Borrowed funds

556,682

2,878

2.07

591,993

3,021

2.07

675,109

3,208

1.91

Total interest-bearing liabilities

3,885,927

4,549

0.47

3,972,076

4,891

0.50

3,830,598

10,681

1.12

Non-interest bearing deposits

795,613

739,064

465,082

Accrued expenses and other liabilities

95,274

98,261

91,957

Total liabilities

4,776,814

4,809,401

4,387,637

Stockholders' equity

754,288

754,816

709,265

Total liabilities and stockholders' equity

$

5,531,102

$

5,564,217

$

5,096,902

Net interest income

$

38,687

$

40,176

$

30,230

Net interest rate spread (4)

2.84

%

2.98

%

2.31

%

Net interest-earning assets (5)

$

1,349,407

$

1,281,460

$

965,793

Net interest margin (6)

2.96

%

3.10

%

2.53

%

Average interest-earning assets to interest-bearing liabilities

134.73

%

132.26

%

125.21

%

(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, 2021

June 30, 2020

Average Outstanding Balance

Interest

Average Yield/ Rate (1)

Average Outstanding Balance

Interest

Average Yield/ Rate (1)

Interest-earning assets:

Loans (2)

$

3,911,215

$

80,976

4.18

%

$

3,529,569

$

70,680

4.03

%

Mortgage-backed securities (3)

1,041,493

5,641

1.09

934,114

9,926

2.14

Other securities (3)

121,609

908

1.51

142,446

1,801

2.54

Federal Home Loan Bank of New York stock

28,169

706

5.05

30,371

1,033

6.84

Interest-earning deposits in financial institutions

141,899

72

0.10

103,673

203

0.39

Total interest-earning assets

5,244,385

88,303

3.40

4,740,173

83,643

3.55

Non-interest-earning assets

303,183

295,218

Total assets

$

5,547,568

$

5,035,391

Interest-bearing liabilities:

Savings, NOW, and money market accounts

$

2,761,541

$

1,777

0.13

%

$

2,067,140

$

6,967

0.68

%

Certificates of deposit

592,983

1,764

0.60

1,068,660

9,785

1.84

Total interest-bearing deposits

3,354,524

3,541

0.21

3,135,800

16,752

1.07

Borrowed funds

574,240

5,899

2.07

677,293

6,728

2.00

Total interest-bearing liabilities

$

3,928,764

9,440

0.48

$

3,813,093

23,480

1.24

Non-interest bearing deposits

767,495

423,563

Accrued expenses and other liabilities

96,759

92,543

Total liabilities

4,793,018

4,329,199

Stockholders' equity

754,550

706,192

Total liabilities and stockholders' equity

$

5,547,568

$

5,035,391

Net interest income

$

78,863

$

60,163

Net interest rate spread (4)

2.92

%

2.31

%

Net interest-earning assets (5)

$

1,315,621

$

927,080

Net interest margin (6)

3.03

%

2.55

%

Average interest-earning assets to interest-bearing liabilities

133.49

%

124.31

%

(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.


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