Financial Data and Key Metrics Changes - Fully diluted earnings per share increased to $1.20, a 29% rise year-over-year and a 13% increase from the previous quarter [3] - Net interest margin improved for the sixth consecutive quarter, rising by seven basis points to 2.46% [3] - Return on common equity improved to 13.6% for the quarter [3] - Average deposits increased by 7% annualized [3] Business Line Data and Key Metrics Changes - Average balance of deposits contributed to the growth in net interest income, which increased by $7 million [14] - Consumer loans represented over half of total loans at 57%, amounting to $7.9 billion, with a focus on secured lending [8] - Commercial loans totaled $6.1 billion, with 73% secured by real estate [8] Market Data and Key Metrics Changes - Bank of Hawaii advanced its number one deposit market share position in Hawaii by 40 basis points as of June 30, 2025 [4] - The bank's market share has grown by 600 basis points since 2005, outperforming competitors in Hawaii [4] Company Strategy and Development Direction - The company aims to leverage its strong brand and market position to enhance its wealth management segment, which has lagged in growth [5][6] - A partnership with Saterra is expected to modernize the broker-dealer platform, enhancing client experience and attracting advisors [6] - The bank is focused on improving coordination between commercial and wealth teams to capitalize on cross-marketing opportunities [6] Management's Comments on Operating Environment and Future Outlook - Management anticipates further expansion of net interest margin in the coming quarters [5] - The bank's credit quality remains strong, with a diversified portfolio and low delinquency rates [11] - The outlook for loan growth is expected to remain in the low single digits, with improving pipelines [30] Other Important Information - Noninterest income increased to $46 million, driven by higher customer derivative activity and trust earnings [18] - The bank's capital ratios remain above regulatory thresholds, with Tier-One Capital at 14.3% [22] - A dividend of $0.70 per common share was declared for the fourth quarter of 2025 [23] Q&A Session Summary Question: Spot rate on total deposits - The total spot rate on deposits is 154 basis points [25] Question: Outlook for net interest margin (NIM) - Management believes achieving a 3% NIM is possible, with a projected increase of 25 basis points per year [26][28] Question: Loan growth outlook - The guidance for loan growth remains in the low single digits, with expectations for improvement in Q4 [30] Question: Wealth management strategy - The partnership with Saterra is progressing well, and the bank is focused on enhancing client experience and attracting top advisors [32][34] Question: Capital return and buybacks - The bank is considering share repurchases and is satisfied with current capital levels [37][38] Question: Credit quality in the office sector - A reduction in loans in the Central Business District was due to exiting a non-core relationship [44]

Core Viewpoint - Popular Bank is exiting the U.S. residential mortgage origination business due to competitive pressures and a desire to focus on more profitable areas [2][3] Company Summary - Popular Bank, based in Puerto Rico, is the second institution to exit home lending in a little over a month, following Oceanfirst Bank's similar decision [1][7] - The bank reported a net income of $211 million in the most recent quarter, with a $129 million increase in mortgage activity in its Puerto Rico business [3] - The exit from the mortgage segment will impact an unspecified number of employees and is accompanied by the closure of four branches in the New York metropolitan area [2][3] Industry Summary - The mortgage industry is undergoing significant changes due to current market conditions, leading to a wave of mergers and exits as companies reassess their strategies [4] - Rising interest rates and housing affordability challenges have resulted in many nonbank lenders struggling with profitability, prompting them to merge or exit the mortgage business [5][6] - Other institutions, such as Ally Financial and WaFd Bank, have also announced exits from the mortgage segment, indicating a broader trend in the industry [6]

Financial Data and Key Metrics Changes - The company reported net earnings of $6.8 million, or $0.28 per share, compared to core income of $2 million and $0.08 per share in Q3 2024 [5] - Return on Assets (ROA) improved to 70 basis points, and Return on Tangible Common Equity (ROTCE) improved to 9.45% [5] - Core ROA adjusted for certain non-permanent items is closer to 90 basis points, aligning with the target of 1% ROA [6] - Net interest margin increased to 3.18%, up from 2.86% in the previous quarter and 2.97% year-over-year [21] Business Line Data and Key Metrics Changes - The mortgage division's production increased from $20 million per month to $100 million - $120 million per month over the past few years, with a 10% annual production increase in Q3 [11] - Mortgage warehouse average balances grew to $210 million, with ending balances at $327 million, and pretax earnings of $1.6 million [12] - Panacea's loan balances increased to $530 million, with deposits growing 50% year-over-year to $132 million [13] Market Data and Key Metrics Changes - Non-interest bearing checking accounts grew by 16% year-over-year, improving the deposit mix and reducing the cost of deposits by almost 20% [7] - Average earning assets increased by 10% annualized in Q3, positioning the company to replace earning assets sold a year ago [20] Company Strategy and Development Direction - The company is focused on increasing the proportion of non-interest bearing deposits to 20% of total deposits, currently at about 20% in the core bank [36] - The strategy emphasizes core funding through checking accounts rather than brokered CDs or institutional borrowings, aiming for sustainable growth and profitability [46] - The company is leveraging technology and customer service to enhance deposit growth and maintain competitive margins [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving a 1% ROA, citing strong operational leverage and a focus on core relationships [6][26] - The company anticipates continued growth in profitability with minimal operating expense increases, despite inflationary pressures [24] - Management noted that the current quarter's results reflect a positive trend, with expectations for further improvements in the coming quarters [26] Other Important Information - The company experienced limited impacts on net interest margin due to interest reversals on loans moving to non-accrual status [22] - The provision for the quarter was a small release, driven by growth in the loan portfolio and low core charge-off activity [23] Q&A Session Summary Question: Thoughts on overall loan growth for Q4 and 2026 - Management indicated potential runoff in mortgage warehouse but expects to sustain levels, with Panacea loans projected to reach $150 million in annual production [30][32] Question: Timing for reaching a 3.3% margin - Management expects to be closer to a 3.3% margin by the first quarter of next year, focusing on increasing non-interest bearing deposits [35][36] Question: Impact of interest rates on deposit costs - Management noted that competition is likely to use falling rates to drive margins, but the company's growth in checking accounts allows for competitive positioning [45] Question: Stickiness of digital customers - Management confirmed that digital customers are stickier than expected, with high retention rates and strong deposit relationships [47][51] Question: Resolution of asset quality issues - Management indicated that one loan could be resolved in the current quarter, while others may take longer, with expectations for improved debt coverage [56][57] Question: Future expense trends - Management anticipates continued improvement in expense management over the next few quarters [59]

Financial Performance - Record net income for 3Q25 reached $368 million[9] - Diluted quarterly earnings per share hit a record of $2.65[9] - Record revenue of $778 million was achieved[12] - Net Interest Income (NII) reached a record of $678 million[12] - Fee income also hit a record at $92 million[12] Balance Sheet Strength - Total customer deposits increased by over $1.5 billion quarter-over-quarter[11] - Total loans increased by over $800 million quarter-over-quarter[11] - The company optimized funding by paying down $500 million of Federal Home Loan Bank (FHLB) advances[11] Asset Quality - Annualized quarterly Net Charge-Offs (NCOs) were at 13bps[11] - Nonperforming assets were at 25bps[11] - The company bolstered its Allowance for Loan Losses (ALLL) to 1.42%[11] Capital Position - Record reported total capital of $8.6 billion was achieved[12] - Common Equity Tier 1 (CET 1) ratio stood at 14.8%[12] - Tangible Common Equity (TCE) ratio was at 10.2%[12]

Financial Data and Key Metrics Changes - Net income for the third quarter totaled $10.1 million or $0.59 per share, representing a 9% increase from the previous quarter and a 45% increase year-over-year [3][5] - Net interest income increased for the fifth consecutive quarter, rising by $1.9 million to $29.3 million, driven by higher interest income of $3.2 million [6][8] - Net interest margin expanded by six basis points to 2.98%, marking a 30 basis point increase over the last four quarters [3][7] Business Line Data and Key Metrics Changes - Loans held for investment grew by $68 million or 8% on an annualized basis, primarily from the in-house mortgage origination business [4] - Third quarter loan originations totaled $188 million at a blended yield of 6.70%, which is 67 basis points above the prior quarter's blended loan portfolio yield [4][9] - Non-performing loans decreased by $11.3 million or 20% to $44.5 million, attributed to charge-offs and upgrades [9][10] Market Data and Key Metrics Changes - Total deposits increased by $178 million from the end of the second quarter to $3.4 billion, with growth across all deposit categories [11] - The allowance for loan losses to total loans held for investment ratio stood at 1.36% as of September 30, indicating appropriate risk coverage [11] Company Strategy and Development Direction - The company is focused on addressing remaining credit issues and improving asset quality, with a goal of resolving significant non-accrual loans [20][21] - There is an ongoing effort to shift the loan portfolio mix towards commercial and industrial (C&I) loans while maintaining strong growth in residential mortgages [34][36] - The company is considering opportunities for share buybacks and refinancing sub-debt, while also investing in business growth and technology [55] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about core earnings growth and lower credit costs, viewing these as positive signs for the future [3] - The competitive landscape for liquidity remains challenging, impacting the ability to reduce funding costs significantly [7][30] - The company anticipates continued loan growth, although Q4 may see some seasonal moderation [34] Other Important Information - The tangible book value per share increased to $25.89, reflecting a 12% annualized increase [11] - The company repurchased 660,000 shares, or 4% of shares outstanding, during the third quarter [11] Q&A Session Summary Question: Asset quality improvement metrics - Management acknowledged progress in asset quality but indicated that more work is needed, particularly in resolving non-accrual loans [18][19] Question: Capital and share repurchase authorization - Approximately $4 million remains in the current share repurchase program, with management open to future buybacks depending on stock price and market conditions [22][23] Question: Deposit beta and interest rates - Management noted that deposit beta has slowed due to fierce competition for liquidity, and they expect to capitalize on upcoming maturing time deposits [28][30] Question: Loan growth and portfolio mix - The pipeline remains healthy, with a focus on residential mortgages and a gradual shift towards C&I loans, although government shutdowns may impact SBA loan funding [35][36] Question: Interest recovery and FHLB advances - No significant interest recovery was noted in Q3, and FHLB advances were replaced with brokered deposits at higher rates [42][43]

Financial Data and Key Metrics Changes - Net income for the third quarter totaled $10.1 million or $0.59 per share, representing a 9% increase from the previous quarter and a 45% increase year-over-year [3][5] - Net interest income increased for the fifth consecutive quarter, rising by $1.9 million to $29.3 million, driven by higher interest income of $3.2 million [6][8] - Net interest margin expanded by six basis points to 2.98%, marking a 30 basis point increase over the last four quarters [3][7] Business Line Data and Key Metrics Changes - Loans held for investment grew by $68 million or 8% on an annualized basis, primarily from the in-house mortgage origination business [4] - Third quarter loan originations totaled $188 million at a blended yield of 6.70%, which is 67 basis points above the prior quarter's blended loan portfolio yield [4][9] - Non-performing loans decreased by $11.3 million or 20% to $44.5 million, attributed to charge-offs and upgrades [9][10] Market Data and Key Metrics Changes - Total deposits increased by $178 million from the end of the second quarter to $3.4 billion, with growth across all deposit categories [11] - The allowance for loan losses to total loans held for investment ratio stood at 1.36% as of September 30, indicating appropriate risk coverage [11] Company Strategy and Development Direction - The company is focused on addressing remaining credit issues and improving asset quality, with a goal of resolving significant non-accrual loans [20][21] - There is an ongoing effort to deepen relationships in existing markets and explore opportunities for sub-debt refinancing next year [55] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism regarding core earnings growth and lower credit costs, viewing these as positive signs for the future [3] - The company remains vigilant in addressing credit issues and is focused on maintaining loan growth while managing operating costs [20][21] Other Important Information - The tangible book value per share increased to $25.89, reflecting a 12% annualized increase [11] - The company repurchased 660,000 shares, or 4% of shares outstanding, during the third quarter [11] Q&A Session Summary Question: Asset quality improvement and future expectations - Management acknowledged progress in asset quality but indicated that more work is needed, with a focus on resolving significant non-accrual loans [18][20] Question: Capital and share repurchase authorization - The company has about $4 million left in the current share repurchase program and is considering future buyback opportunities [22][23] Question: Deposit beta and interest rates - Management noted that deposit beta has slowed due to fierce competition for liquidity, and they expect to capitalize on upcoming rate cuts [28][30] Question: Loan growth and portfolio mix - The pipeline remains healthy, with a focus on residential mortgage and commercial loans, although seasonality may moderate growth in Q4 [34][35] Question: Interest recovery and FHLB advances - There was no significant interest recovery in Q3, and FHLB advances were replaced with brokered deposits at a higher rate [42][43] Question: Margin expansion and future rate cuts - Management believes they can continue to expand margins despite potential rate cuts, driven by loan growth and origination yields [48][50]

Core Insights - Northfield Bancorp reported strong Q2 2025 results, with GAAP EPS of $0.24 exceeding analyst estimates of $0.23 and GAAP revenue of $38.9 million surpassing expectations of $36.53 million, reflecting significant year-over-year improvements in profitability and efficiency [1][2] Financial Performance - Q2 2025 GAAP EPS increased by 71.4% from $0.14 in Q2 2024 to $0.24 [2] - GAAP revenue rose by 23.5% from $31.6 million in Q2 2024 to $38.9 million [2] - Net income for the quarter was $9.6 million, up from $6.0 million in the prior-year period [5] - Non-interest income increased by 58.3% to $4.5 million, driven by higher trading activity and insurance income [11] Efficiency and Margins - Net interest margin improved to 2.57%, up from 2.09% a year earlier, due to lower costs on interest-bearing liabilities and higher yields on interest-earning assets [6] - The efficiency ratio decreased to 59.02% from 72.89% in Q1 2025, indicating improved operational efficiency [7] Asset Quality - Non-performing loans declined to 0.36% of total loans from 0.51% a year earlier, reflecting better asset quality [8] - The allowance for credit losses covered 256% of non-performing loans, with net charge-offs falling to $887,000 [8] Loan Portfolio and Funding - The loan portfolio saw a decline, particularly in multifamily loans, which decreased by $114.4 million from December 31, 2024, to June 30, 2025 [9] - Core non-brokered deposits increased by $36.0 million, while total deposits contracted due to a runoff of brokered deposits [10] Strategic Focus - The company is actively managing its loan book to reduce concentrations in higher-risk segments, aiming to maintain strong asset quality and regulatory capital standards [4] - Management emphasized a focus on margin expansion, careful portfolio risk management, and cost control, without providing formal guidance for future quarters [12][13]