Northfield Bancorp(NFBK) - 2019 Q2 - Quarterly Report

Financial Performance - Net income for the six months ended June 30, 2019, was $17.0 million, down from $21.1 million for the same period in 2018, with earnings per share decreasing from $0.46 to $0.36[179] - Net income for the six months ended June 30, 2019, was $17.0 million, a decrease of $4.1 million or 19.4% compared to $21.1 million for the same period in 2018[197] - Net income for the quarter ended June 30, 2019, was $8.2 million, a decrease from $10.6 million for the same quarter in 2018[212] Assets and Liabilities - Total assets increased by $359.9 million, or 8.2%, to $4.77 billion at June 30, 2019, compared to $4.41 billion at December 31, 2018[181] - Total liabilities increased by $345.2 million, or 9.2%, to $4.09 billion at June 30, 2019, primarily due to increases in deposits and borrowings[193] - Total assets reached $4,574,933, an increase from $4,143,392, indicating a growth of 10.4% year-over-year[223] Loans and Interest - Loans held-for-investment, net, rose by $93.6 million to $3.34 billion at June 30, 2019, primarily driven by an increase in originated loans of $121.9 million[185] - Multifamily real estate loans increased by $98.7 million, or 5.1%, to $2.03 billion at June 30, 2019[185] - Non-performing loans increased to $10,883, representing 0.33% of total loans, compared to 0.28% at December 31, 2018[226] - The average yield on loans rose to 4.10% from 3.98% year-over-year, while the average yield on interest-earning assets increased to 3.77% from 3.69%[223] Income and Expenses - Interest income increased by $9.0 million, or 12.8%, to $79.7 million for the six months ended June 30, 2019, driven by a 9.9% increase in average interest-earning assets[198] - Interest expense rose by $9.9 million, or 64.5%, to $25.2 million for the six months ended June 30, 2019, primarily due to a $9.5 million increase in interest expense on deposits[199] - Net interest income decreased by $825,000, or 1.5%, to $54.5 million for the six months ended June 30, 2019, as a result of a 30 basis point decrease in net interest margin[200] - Non-interest income rose by $1.0 million, or 21.3%, to $5.9 million for the six months ended June 30, 2019, mainly due to increased gains on securities transactions[203] - Non-interest expense increased by $3.8 million, or 11.1%, to $38.0 million for the six months ended June 30, 2019, driven by higher employee compensation and benefits[204] Capital and Ratios - The capital ratios remain above the regulatory minimums, with a common equity Tier 1 capital ratio of 4.5% and a Tier 1 capital ratio of 6.0%[234] - As of June 30, 2019, Northfield Bank's Common Equity Tier 1 capital ratio was 14.69%, significantly exceeding the minimum requirement of 6.375% for well-capitalized institutions[238] - Total capital to risk-weighted assets for Northfield Bancorp, Inc. was 15.42% as of June 30, 2019, above the required 10% for well-capitalized status[238] Interest Rate Risk Management - The company has established a Management Asset-Liability Committee to oversee interest rate risk management[244] - The company aims to minimize exposure to interest rate changes by shortening the average term of interest-earning assets and increasing investments in shorter-term assets[245] - A 200 basis point decrease in interest rates would result in a 9.12% increase in estimated net portfolio value[252] - A 400 basis point increase in interest rates would lead to a 17.91% decrease in estimated net portfolio value[252] - The estimated net interest income would decrease by 15.83% in the first year following a 400 basis point increase in interest rates[252] Legal and Compliance - The company is subject to various legal actions, but management believes these will not materially affect its consolidated financial condition or results of operations[257] - No changes in the company's internal control over financial reporting materially affected the reporting during the three months ended June 30, 2019[255] - The company’s disclosure controls and procedures were evaluated and deemed effective as of June 30, 2019[254]