Northfield Bancorp(US:NFBK)2024-11-12 21:25Financial Performance - Net income for the nine months ended September 30, 2024, was $18.7 million, down from $29.4 million for the same period in 2023, primarily due to a decrease in net interest income [165]. - Basic and diluted earnings per common share were $0.45 for the nine months ended September 30, 2024, down from $0.67 for the same period in 2023 [165]. - The company reported a net income of $18.7 million for the nine months ended September 30, 2024, a decrease from $29.4 million in the same period of 2023 [186]. - Net income for the quarter ended September 30, 2024, was $6.5 million, down from $8.2 million for the same quarter in 2023, reflecting a decrease in net interest income and an increase in the provision for credit losses [199]. Interest Income and Expense - Interest income increased by $23.9 million, or 15.5%, to $178.2 million for the nine months ended September 30, 2024, primarily due to a rise in interest-earning assets [187]. - Interest expense rose by $34.8 million, or 59.4%, to $93.4 million for the nine months ended September 30, 2024, driven by higher costs of deposits and borrowings [188]. - Interest income for the quarter ended September 30, 2024, increased by $6.6 million, or 12.5%, to $59.3 million, primarily due to a 38 basis point increase in the yield on interest-earning assets [200]. - Interest expense increased by $8.0 million, or 34.9%, to $31.1 million for the quarter ended September 30, 2024, from $23.0 million for the same quarter in 2023 [201]. Asset and Liability Management - Total assets increased by $132.5 million, or 2.4%, to $5.73 billion at September 30, 2024, from $5.60 billion at December 31, 2023 [166]. - Total liabilities increased by $132.3 million, or 2.7%, to $5.03 billion at September 30, 2024, mainly due to increased borrowings [179]. - The Bank's total short-term borrowed funds were $983 million at September 30, 2024, with a weighted average interest rate of 3.92% [224]. - The Company borrowed $300 million under the Bank Term Funding Program (BTFP) as of September 30, 2024 [224]. Loan Portfolio - Loans held-for-investment, net, decreased by $139.7 million, or 3.3%, to $4.06 billion at September 30, 2024, primarily due to decreases in multifamily and commercial real estate loans [170]. - Multifamily loans decreased by $110.1 million, or 4.0%, to $2.64 billion at September 30, 2024 [170]. - Total commercial real estate loans amounted to $878.2 million as of September 30, 2024, with a loan-to-value (LTV) ratio monitoring system in place [173]. - The multifamily loan portfolio totaled $2.64 billion, representing 65% of the total loan portfolio, with $447.5 million (11%) collateralized by rent-regulated properties in New York [219]. Credit Losses and Provisions - The allowance for credit losses on loans decreased to $35.2 million at September 30, 2024, from $37.5 million at December 31, 2023 [178]. - The provision for credit losses on loans increased by $1.3 million to $2.3 million for the nine months ended September 30, 2024, compared to $1.1 million for the same period in 2023, driven by a specific reserve related to a single commercial relationship totaling $12.5 million [190]. - Net charge-offs for the nine months ended September 30, 2024, were $4.7 million, primarily due to $3.9 million in net charge-offs on small business unsecured commercial and industrial loans [190]. - Provision for credit losses on loans increased by $2.4 million to $2.5 million for the quarter ended September 30, 2024, from $188,000 for the same quarter in 2023 [203]. Non-Interest Income and Expense - Non-interest income increased by $1.5 million, or 18.7%, to $9.8 million for the nine months ended September 30, 2024, compared to $8.3 million for the same period in 2023, primarily due to increases in fees and service charges [191]. - Non-interest expense increased by $3.2 million, or 5.2%, to $65.7 million for the nine months ended September 30, 2024, compared to $62.5 million for the same period in 2023, mainly due to higher employee compensation and benefits [193]. - Non-interest income increased by $1.5 million, or 68.7%, to $3.6 million for the quarter ended September 30, 2024, from $2.1 million for the same quarter in 2023 [204]. - Non-interest expense decreased by $189,000, or 0.9%, to $20.4 million for the quarter ended September 30, 2024, from $20.6 million for the same quarter in 2023 [205]. Regulatory Compliance and Risk Management - Northfield Bank and Northfield Bancorp, Inc. exceeded all regulatory capital requirements as of September 30, 2024 [232]. - The company has been in compliance with all Board-approved policies regarding interest rate risk management as of September 30, 2024 [243]. - The Management Asset-Liability Committee is responsible for evaluating interest rate risk and managing it according to guidelines approved by the Board of Directors [240]. - The company concluded that its disclosure controls and procedures were effective as of September 30, 2024 [249]. Market and Economic Conditions - The estimated change in net present value (NPV) of assets would decrease by $67,431, or 8.80%, with a 400 basis point increase in interest rates [245]. - A 100 basis point increase in interest rates would result in a 4.09% increase in net interest income [245]. - In the event of a 400 basis point decrease in interest rates, the estimated net portfolio value would increase by 19.60%, with a 2.07% increase in net interest income in year one and an 11.68% decrease in year two [243]. - The company's policies state that in the event of a 200 basis point decrease or less in interest rates, the net present value ratio should decrease by no more than 300 basis points and 10% [243]. Internal Controls and Legal Matters - There were no changes in the company's internal control over financial reporting that materially affected its effectiveness during the three months ended September 30, 2024 [250]. - Legal actions arising in the normal course of business are not expected to have a material adverse effect on the company's consolidated financial condition or results of operations [252].