Northfield Bancorp(NFBK) - 2025 Q2 - Quarterly Results

Second Quarter 2025 Financial Highlights The company reported strong net income growth, improved asset quality, and continued capital returns through dividends and buybacks | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Net Income | $9.6 million | $7.9 million | $6.0 million | | Diluted EPS | $0.24 | $0.19 | $0.14 | - Net income growth was primarily driven by an increase in net interest income, attributable to lower funding costs and higher yields on loans and securities[3] | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Net Interest Margin | 2.57% | 2.38% | 2.09% | - Asset quality improved, with the ratio of non-performing loans to total loans decreasing to 0.36% at June 30, 2025, from 0.48% at March 31, 2025[5] - The company continued its capital return program, repurchasing $15.0 million in stock year-to-date and declaring a quarterly cash dividend of $0.13 per common share[4][5] Results of Operations The company's operational results show significant year-over-year and sequential growth, primarily driven by expanding net interest income Comparison for the Six Months Ended June 30, 2025 and 2024 Net income for the six-month period grew to $17.4 million, propelled by higher net interest income and lower non-interest expenses | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net Income | $17.4 million | $12.2 million | | Diluted EPS | $0.43 | $0.29 | - Net interest income rose 17.0% to $66.2 million, driven by a $6.0 million decrease in interest expense and a $3.6 million increase in interest income[7][8] - The provision for credit losses increased by $4.9 million to $4.7 million, primarily due to a worsening macroeconomic forecast in the CECL model[9] - Non-interest expense decreased by $920,000, mainly due to the absence of prior-year severance expense and lower advertising costs[11] Comparison for the Three Months Ended June 30, 2025 and 2024 (YoY) Year-over-year net income increased significantly to $9.6 million, driven by a 19.9% rise in net interest income and margin expansion | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net Income | $9.6 million | $6.0 million | | Net Interest Income | $34.4 million | $28.7 million | | Net Interest Margin | 2.57% | 2.09% | - The increase in net interest income was due to a $3.5 million decrease in interest expense and a $2.2 million increase in interest income[14] - The provision for credit losses was $2.1 million, an increase of $2.7 million from a benefit in the prior-year quarter[16] - Non-interest income grew by $1.7 million, primarily due to higher gains on trading securities and increased income from bank-owned life insurance[17] Comparison for the Three Months Ended June 30, 2025 and March 31, 2025 (QoQ) Quarter-over-quarter net income grew to $9.6 million, supported by higher net interest income and a lower provision for credit losses | Metric | Q2 2025 | Q1 2025 | | :--- | :--- | :--- | | Net Income | $9.6 million | $7.9 million | | Net Interest Income | $34.4 million | $31.8 million | | Net Interest Margin | 2.57% | 2.38% | - The provision for credit losses decreased to $2.1 million from $2.6 million in the prior quarter, mainly due to lower net charge-offs[23] - Non-interest income increased by $1.5 million, primarily due to a $1.3 million increase in gains on trading securities[24] - Non-interest expense increased by $1.5 million, largely due to a $2.0 million rise in compensation and benefits[25] Financial Condition The company's balance sheet remained stable with a strategic shift in asset composition and a reduction in brokered deposits Assets Total assets grew slightly to $5.68 billion, reflecting a strategic reallocation from cash and loans to debt securities | Asset Category | June 30, 2025 | Dec 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Total Assets | $5.68 billion | $5.67 billion | +$12.9 million | | Cash & Equivalents | $97.6 million | $167.7 million | -$70.1 million | | Loans Held-for-Investment, net | $3.92 billion | $4.02 billion | -$101.6 million | | Available-for-Sale Debt Securities | $1.30 billion | $1.10 billion | +$200.2 million | - The decrease in the loan portfolio was a strategic effort to manage concentration risk, with multifamily loans decreasing by $114.4 million[29] Loan Portfolio Composition (in thousands) | Loan Type | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Multifamily | $2,483,078 | $2,597,484 | | Commercial mortgage | $886,135 | $889,801 | | One-to-four family residential | $162,750 | $150,217 | | Home equity and lines of credit | $186,848 | $174,062 | | Total loans held-for-investment, net | $3,920,613 | $4,022,224 | Liabilities and Stockholders' Equity Liabilities remained stable as reduced brokered deposits were offset by increased borrowings, while equity grew through retained earnings | Liability/Equity Category | June 30, 2025 | Dec 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Total Liabilities | $4.97 billion | $4.96 billion | +$7.3 million | | Deposits | $3.99 billion | $4.14 billion | -$152.3 million | | Borrowed Funds | $893.5 million | $727.8 million | +$165.5 million | | Total Stockholders' Equity | $710.3 million | $704.7 million | +$5.6 million | - The company reduced its reliance on brokered deposits, which decreased by 71.5%, while core deposits increased by $36.0 million[37] - The company completed $15.0 million in stock repurchases during the first six months of 2025 and has no outstanding repurchase program[40] - The Company and the Bank remain well-capitalized, with Community Bank Leverage Ratios (CBLR) of 12.09% and 12.56% respectively[43] Asset Quality Asset quality improved with a notable decrease in non-performing loans and delinquencies, particularly within the multifamily portfolio Asset Quality Ratios | Metric | June 30, 2025 | March 31, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | :--- | | Non-performing loans to total loans | 0.36% | 0.48% | 0.51% | | Non-performing assets to total assets | 0.25% | 0.34% | 0.36% | | Accruing loans 30-89 days delinquent | $4.1 million | $6.8 million | $9.3 million | - The decrease in non-performing loans was partly due to the full repayment of non-performing loans held-for-sale from a settlement agreement[45] - The multifamily loan portfolio totaled $2.48 billion (63% of total loans), of which $434.1 million are collateralized by New York rent-regulated properties[50] New York Rent-Regulated Multifamily Portfolio | Metric | Value | | :--- | :--- | | Total Balance | $434.1 million | | Weighted Average LTV | 49.9% | | Weighted Average DSCR | 1.56x | Consolidated Financial Statements (Unaudited) This section presents the unaudited consolidated balance sheets, income statements, and key performance ratio analyses Selected Consolidated Financial and Other Data Key performance ratios, including ROA, ROE, and efficiency, showed significant improvement over the prior year Key Performance Ratios (Annualized) | Ratio | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Return on assets (ROA) | 0.68% | 0.41% | 0.62% | 0.42% | | Return on equity (ROE) | 5.41% | 3.45% | 4.97% | 3.52% | | Net interest margin | 2.57% | 2.09% | 2.48% | 2.06% | | Efficiency ratio | 59.02% | 72.89% | 60.22% | 72.16% | Consolidated Balance Sheets The balance sheet reflects stable total assets at $5.68 billion, with a shift in asset mix and modest growth in equity Key Balance Sheet Items (in thousands) | Item | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total Assets | $5,679,291 | $5,666,378 | | Net Loans Held-for-Investment | $3,884,493 | $3,987,041 | | Total Deposits | $3,986,187 | $4,138,477 | | Total Borrowings | $893,474 | $727,844 | | Total Stockholders' Equity | $710,274 | $704,696 | Consolidated Statements of Income The income statement highlights significant net income growth for both the quarter and six-month period, led by higher net interest income Key Income Statement Items (in thousands) | Item | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Interest Income | $34,396 | $28,687 | $66,187 | $56,571 | | Provision/(benefit) for credit losses | $2,086 | $(618) | $4,668 | $(203) | | Non-interest Income | $4,526 | $2,859 | $7,548 | $6,240 | | Non-interest Expense | $22,970 | $22,993 | $44,405 | $45,325 | | Net Income | $9,571 | $5,957 | $17,447 | $12,171 | Analysis of Net Interest Income Net interest margin expanded to 2.57% in Q2 2025, driven by higher asset yields and lower liability costs Net Interest Margin Analysis (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Avg. Yield on Interest-Earning Assets | 4.67% | 4.39% | | Avg. Cost of Interest-Bearing Liabilities | 2.73% | 2.95% | | Net Interest Rate Spread | 1.94% | 1.44% | | Net Interest Margin | 2.57% | 2.09% |