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What changed in Northfield Bancorp, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Northfield Bancorp, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+468 added−485 removedSource: 10-K (2025-03-03) vs 10-K (2024-02-29)

Top changes in Northfield Bancorp, Inc.'s 2024 10-K

468 paragraphs added · 485 removed · 392 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

167 edited+16 added−25 removed152 unchanged
Biggest changeAt December 31, 2023 2022 2021 (Dollars in thousands) Non-accrual loans held-for-investment: Real estate loans: Commercial $ 6,491 $ 5,184 $ 5,117 One-to-four family residential 104 118 314 Multifamily 2,709 3,285 1,882 Home equity and lines of credit 499 262 281 Commercial and industrial loans 305 964 28 Other 7 — — Total non-accrual loans held-for-investment 10,115 9,813 7,622 Loans delinquent 90 days or more and still accruing held-for-investment: Real estate loans: Commercial — 8 147 One-to-four family residential 406 155 165 Multifamily 201 233 — Home equity and lines of credit 711 — — Other — 5 — Commercial and industrial loans — 24 72 Total loans delinquent 90 days or more and still accruing 1,318 425 384 Total non-performing loans held-for-investment 11,433 10,238 8,006 Other real estate owned — — 100 Total non-performing assets $ 11,433 $ 10,238 $ 8,106 Ratios: Non-performing loans to total loans (1) 0.27 % 0.24 % 0.21 % Non-accrual loans held-for-investment to total loans held-for-investment, net 0.24 % 0.23 % 0.20 % Non-performing assets to total assets 0.20 % 0.18 % 0.15 % Total assets $ 5,598,396 $ 5,601,293 $ 5,430,542 Loans held-for-investment, net $ 4,203,654 $ 4,243,693 $ 3,806,617 (1) Includes non-performing loans transferred to held-for-sale.
Biggest changeAt December 31, 2024 2023 2022 (Dollars in thousands) Non-accrual loans held-for-investment: Real estate loans: Commercial real estate loans $ 4,578 $ 6,491 $ 5,184 One-to-four family residential — 104 118 Multifamily 2,609 2,709 3,285 Home equity and lines of credit 1,270 499 262 Commercial and industrial loans 5,807 305 964 Other — 7 — Total non-accrual loans held-for-investment 14,264 10,115 9,813 Loans delinquent 90 days or more and still accruing held-for-investment: Real estate loans: Commercial real estate loans — — 8 One-to-four family residential 882 406 155 Multifamily 164 201 233 Home equity and lines of credit 140 711 — Other — — 5 Commercial and industrial loans — — 24 Total loans delinquent 90 days or more and still accruing 1,186 1,318 425 Non-performing loans held-for-sale Commercial real estate loans 4,397 — — Commercial and industrial loans 500 — — Total non-performing loans held-for-sale 4,897 — — Total non-performing loans held-for-investment 20,347 11,433 10,238 Total non-performing assets $ 20,347 $ 11,433 $ 10,238 Ratios: Non-performing loans to total loans (1) 0.51 % 0.27 % 0.24 % Non-accrual loans held-for-investment to total loans held-for-investment, net 0.35 % 0.24 % 0.23 % Non-performing assets to total assets 0.36 % 0.20 % 0.18 % Total assets $ 5,666,378 $ 5,598,396 $ 5,601,293 Loans held-for-investment, net $ 4,022,224 $ 4,203,654 $ 4,243,693 (1) Includes non-performing loans transferred to held-for-sale.
Northfield Bank offers a variety of deposit accounts, including certificates of deposit, passbook, statement, and money market savings accounts, transaction deposit accounts which are Northfield Bank’s primary source of funds for its lending and investing activities. Northfield Bank also borrows funds, principally through FHLBNY advances and repurchase agreements with brokers.
Northfield Bank offers a variety of deposit accounts, including certificates of deposit, passbook, statement, money market savings and transaction deposit accounts, which are Northfield Bank’s primary source of funds for its lending and investing activities. Northfield Bank also borrows funds, principally through FHLBNY advances and repurchase agreements with brokers.
In underwriting a loan secured by real property, we require an appraisal of the property by an independent licensed or certified appraiser approved by our Board of Directors. For commercial real estate loans $500,000 or less, we generally obtain an evaluation from an independent firm.
In underwriting a loan secured by real property, we require an appraisal of the property by an independent licensed or certified appraiser approved by our Board of Directors. For commercial real estate loans of $500,000 or less, we generally obtain an evaluation from an independent firm.
Adjustable-rate loan originations are generally tied to a specifically identified market rate index. We also originate, to a lesser extent, 10- to 15-year fixed-rate, fully amortizing loans.
Adjustable-rate loan originations are generally tied to a specifically identified market rate index. We also originate, to a lesser extent, 10- to 15-year fixed-rate, fully amortizing loans.
However, if the estimated value of the completed project is inaccurate, the borrower may hold the real estate with a value that is insufficient to assure full repayment of the construction loan upon its sale.
However, if the estimated value of the completed project is inaccurate, the borrower may hold real estate with a value that is insufficient to assure full repayment of the construction loan upon its sale.
On a regular basis, we promote the health and wellness of our employees by encouraging work-life balance, offering flexible work schedules, and encouraging and sponsoring various wellness programs. Subsidiary Activities Northfield-Bancorp, Inc. owns 100% of Northfield Investments, Inc., an inactive New Jersey investment company, and 100% of Northfield Bank.
On a regular basis, we promote the health and wellness of our employees by encouraging work-life balance, offering flexible work schedules, and encouraging and sponsoring various wellness programs. Subsidiary Activities Northfield Bancorp owns 100% of Northfield Investments, Inc., an inactive New Jersey investment company, and 100% of Northfield Bank.
Deposit accounts in Northfield Bank are insured up to a maximum of $250,000 per account ownership category for each separately insured depositor by the FDIC. The FDIC assesses insured depository institutions to maintain the Deposit Insurance Fund. Under the FDIC’s risk-based assessment system, institutions deemed less risky pay lower assessments.
Deposit accounts in Northfield Bank are insured by the FDIC up to a maximum of $250,000 per account ownership category for each separately insured depositor. The FDIC assesses insured depository institutions to maintain the Deposit Insurance Fund. Under the FDIC’s risk-based assessment system, institutions deemed less risky pay lower assessments.
Management of Northfield Bank does not know of any practice, condition, or violation that may lead to termination of the Northfield Bank’s deposit insurance. Federal Home Loan Bank System Northfield Bank is a member of the FHLBNY, and therefore is a member of the FHLB System, which consists of 11 regional FHLBs.
Management of Northfield Bank does not know of any practice, condition, or violation that may lead to termination of Northfield Bank’s deposit insurance. Federal Home Loan Bank System Northfield Bank is a member of the FHLBNY, and therefore is a member of the FHLB System, which consists of 11 regional FHLBs.
Northfield Bank’s operations are also subject to federal laws applicable to credit transactions, such as the: • Truth-In-Lending Act, governing disclosures of credit terms to consumer borrowers; • Real Estate Settlement Procedures Act, requiring that borrowers for mortgage loans for one-to-four family residential real estate receive various disclosures, including good faith estimates of settlement costs, lender servicing and escrow account practices, and prohibiting certain practices that increase the cost of settlement services; • Home Mortgage Disclosure Act, requiring financial institutions to provide information to enable the public and public officials to determine whether a financial institution is fulfilling its obligation to help meet the housing needs of the community it serves; • Equal Credit Opportunity Act and the Fair Housing Act, prohibiting discrimination on the basis of race, creed or other prohibited factors in extending credit; • Fair Credit Reporting Act, governing the use and provision of information to credit reporting agencies; • Fair Debt Collection Practices Act, governing the manner in which consumer debts may be collected; • Flood Disaster Protection Act, requiring flood insurance of collateral properties located in designated flood zones; 27 • Servicemembers Civil Relief Act, providing a wide range of protections in lending for individuals entering or called to active duty in the military, and for deployed service members; and • Rules and regulations of the various federal agencies charged with the responsibility of implementing such federal laws.
Northfield Bank’s operations are also subject to federal laws applicable to credit transactions, such as the: • Truth-In-Lending Act, governing disclosures of credit terms to consumer borrowers; • Real Estate Settlement Procedures Act, requiring that borrowers for mortgage loans for one-to-four family residential real estate receive various disclosures, including good faith estimates of settlement costs, lender servicing and escrow account practices, and prohibiting certain practices that increase the cost of settlement services; • Home Mortgage Disclosure Act, requiring financial institutions to provide information to enable the public and public officials to determine whether a financial institution is fulfilling its obligation to help meet the housing needs of the community it serves; • Equal Credit Opportunity Act and the Fair Housing Act, prohibiting discrimination on the basis of race, creed or other prohibited factors in extending credit; • Fair Credit Reporting Act, governing the use and provision of information to credit reporting agencies; • Fair Debt Collection Practices Act, governing the manner in which consumer debts may be collected; 27 • Flood Disaster Protection Act, requiring flood insurance of collateral properties located in designated flood zones; • Servicemembers Civil Relief Act, providing a wide range of protections in lending for individuals entering or called to active duty in the military, and for deployed service members; and • Rules and regulations of the various federal agencies charged with the responsibility of implementing such federal laws.
Change in Bank Control Act and Regulations Under the Change in Bank Control Act, no person may acquire control of a savings and loan holding company, such as Northfield Bancorp, Inc., unless the FRB has been given 60 days prior written notice and has not issued a notice disapproving the proposed acquisition, taking into consideration certain factors, including the financial and managerial resources of the acquirer and the competitive effects of the acquisition.
Change in Bank Control Act and Regulations Under the Change in Bank Control Act, no person may acquire control of a savings and loan holding company, such as Northfield Bancorp, unless the FRB has been given 60 days prior written notice and has not issued a notice disapproving the proposed acquisition, taking into consideration certain factors, including the financial and managerial resources of the acquirer and the competitive effects of the acquisition.
These mortgages will be either held-for-investment or held-for-sale and sold in the secondary market. Historically, we have not offered “interest-only” mortgage loans on one-to-four family residential real estate properties, where the borrower pays interest for an initial period, after which the loan converts to a fully amortizing loan.
These mortgages will be either held-for-investment or held-for-sale and sold in the secondary market. 10 Historically, we have not offered “interest-only” mortgage loans on one-to-four family residential real estate properties, where the borrower pays interest for an initial period, after which the loan converts to a fully amortizing loan.
Since adoption of ASU 2022-02, the Company has ceased to recognize or measure for new TDRs but those existing at January 1, 2023 remain until settled. Non-Performing and Restructured Loans (excluding PCD). The table below sets forth the amounts and categories of our non-performing assets at the dates indicated.
Since adoption of ASU 2022-02, the Company has ceased to recognize or measure for new TDRs but those existing at January 1, 2023 remain until settled. 12 Non-Performing and Restructured Loans (excluding PCD). The table below sets forth the amounts and categories of our non-performing assets at the dates indicated.
Acquisition of more than 10% of any class of a savings and loan holding company’s voting stock constitutes a rebuttable determination of control under the regulations under certain circumstances, including where, as is the case with Northfield Bancorp, Inc., the issuer has registered securities under Section 12 of the Securities Exchange Act of 1934. Federal Taxation General .
Acquisition of more than 10% of any class of a savings and loan holding company’s voting stock constitutes a rebuttable determination of control under the regulations under certain circumstances, including where, as is the case with Northfield Bancorp, the issuer has registered securities under Section 12 of the Securities Exchange Act of 1934. Federal Taxation General .
Any change in applicable laws or regulations, whether by the FDIC, the OCC, the FRB, the SEC, or Congress, could have a material adverse effect on Northfield Bancorp, Inc. and Northfield Bank and their operations. Set forth below is a brief description of material regulatory requirements that are or will be applicable to Northfield Bank and Northfield Bancorp, Inc.
Any change in applicable laws or regulations, whether by the FDIC, the OCC, the FRB, the SEC, or Congress, could have a material adverse effect on Northfield Bancorp and Northfield Bank and their operations. Set forth below is a brief description of material regulatory requirements that are or will be applicable to Northfield Bank and Northfield Bancorp.
We also historically have not offered loans that provide for negative amortization of principal, such as “Option ARM” loans, where the borrower can pay less than the interest owed on the loan, resulting in an increased principal balance during the life of the loan. 10 Home Equity Loans and Lines of Credit.
We also historically have not offered loans that provide for negative amortization of principal, such as “Option ARM” loans, where the borrower can pay less than the interest owed on the loan, resulting in an increased principal balance during the life of the loan. Home Equity Loans and Lines of Credit.
Fintech companies tend to have stronger operating efficiencies and less regulatory burdens than traditional banks. Our deposit sources are primarily concentrated in the communities surrounding our branch offices in the New York counties of Richmond (Staten Island) and Kings (Brooklyn), and Hunterdon, Mercer, Middlesex and Union counties in New Jersey.
Fintech companies tend to have stronger operating efficiencies and less regulatory burdens than traditional banks. Our deposit sources are primarily concentrated in the communities surrounding our branch offices in Richmond (Staten Island) and Kings (Brooklyn) counties in New York, and Hunterdon, Mercer, Middlesex and Union counties in New Jersey.
Federal law prohibits a savings and loan holding company, directly or indirectly, or through one or more subsidiaries, from acquiring more than 5% of another savings institution or savings and loan holding company without prior written approval of the FRB and from acquiring or retaining control of any depository institution not insured by the FDIC.
Federal law prohibits a savings and loan holding company, directly or indirectly, or through one or more subsidiaries, from acquiring more than 5% of another savings association or savings and loan holding company without prior written approval of the FRB and from acquiring or retaining control of any depository institution not insured by the FDIC.
In general, the maximum loan-to-value ratio for land acquisition loans is 50% of the appraised value of the property, and the maximum term of these loans is three years. Construction and land loans generally carry higher interest rates and have shorter terms than multifamily and commercial real estate loans.
In general, the maximum loan-to-value ratio for land acquisition loans is 50% of the appraised value of the property, and the maximum term of these loans is three years. 9 Construction and land loans generally carry higher interest rates and have shorter terms than multifamily and commercial real estate loans.
“Portfolio assets” generally mean total assets less specified liquid assets up to 20% of total assets, goodwill, and other intangible assets and the value of property used to conduct business. A savings bank that fails the QTL test must operate under specified restrictions.
“Portfolio assets” generally mean total assets less specified liquid assets up to 20% of total assets, goodwill, and other intangible assets and the value of property used to conduct business. A federal savings bank that fails the QTL test must operate under specified restrictions.
Northfield Bank is also a member of and owns stock in the FHLBNY, which is one of the 11 regional banks in the FHLB System. As a savings and loan holding company, Northfield Bancorp, Inc. is required to comply with the rules and regulations of the FRB.
Northfield Bank is also a member of and owns stock in the FHLBNY, which is one of the 11 regional banks in the FHLB System. As a savings and loan holding company, Northfield Bancorp is required to comply with the rules and regulations of the FRB.
Applicable law limits the aggregate amount of “covered transactions” with any individual affiliate, including loans to the affiliate, to 10% of the capital stock and surplus of the savings association. The aggregate amount of covered transactions with all affiliates is limited to 20% of the savings association’s capital stock and surplus.
Applicable law limits the aggregate amount of “covered transactions” with any individual affiliate, including loans to the affiliate, to 10% of the capital stock and surplus of the federal savings association. The aggregate amount of covered transactions with all affiliates is limited to 20% of the federal savings association’s capital stock and surplus.
Savings and loan holding companies above $3 billion in consolidated assets, such as Northfield Bancorp, Inc., are subject to consolidated regulatory capital requirements that are as stringent as those required for their insured depository subsidiaries.
Savings and loan holding companies above $3 billion in consolidated assets, such as Northfield Bancorp, are subject to consolidated regulatory capital requirements that are as stringent as those required for their insured depository subsidiaries.
For federal income tax purposes, Northfield Bancorp, Inc. currently reports its income and expenses on the accrual method of accounting and uses a tax year ending December 31 for filing its federal and state income tax returns. Bad Debt Reserves .
For federal income tax purposes, Northfield Bancorp currently reports its income and expenses on the accrual method of accounting and uses a tax year ending December 31 for filing its federal and state income tax returns. Bad Debt Reserves .
The following discussion of federal taxation is intended only to summarize certain pertinent federal income tax matters and is not a comprehensive description of the tax rules applicable to Northfield Bancorp, Inc. or Northfield Bank. Method of Accounting .
The following discussion of federal taxation is intended only to summarize certain pertinent federal income tax matters and is not a comprehensive description of the tax rules applicable to Northfield Bancorp or Northfield Bank. Method of Accounting .
It is required to file certain reports with and is subject to examination by and the enforcement authority of the FRB. Northfield Bancorp, Inc. is also subject to the rules and regulations of the SEC under the federal securities laws.
It is required to file certain reports with and is subject to examination by and the enforcement authority of the FRB. Northfield Bancorp is also subject to the rules and regulations of the SEC under the federal securities laws.
Bureau of Labor Statistics: Unemployment Rate at December 31, 2023 2022 2021 2020 2019 Hunterdon County, NJ 3.5 % 2.3 % 3.5 % 5.5 % 2.7 % Middlesex County, NJ 4.1 2.7 4.3 6.6 3.0 Mercer County, NJ 3.7 2.5 3.8 6.0 3.1 Union County, NJ 4.7 3.3 5.3 7.8 3.7 Richmond County, NY 4.6 5.0 7.1 9.4 3.0 Kings County, NY 5.4 5.5 8.1 11.3 3.2 National Average 3.7 3.5 3.9 6.7 3.5 The following table sets forth median household income at December 31, 2023 and 2022, for the communities we serve and the national average, as published by the U.S.
Bureau of Labor Statistics: Unemployment Rate at December 31, 2024 2023 2022 2021 2020 Hunterdon County, NJ 3.2 % 3.5 % 2.3 % 3.5 % 5.5 % Middlesex County, NJ 3.9 4.1 2.7 4.3 6.6 Mercer County, NJ 3.7 3.7 2.5 3.8 6.0 Union County, NJ 4.5 4.7 3.3 5.3 7.8 Richmond County, NY 4.6 4.6 5.0 7.1 9.4 Kings County, NY 5.5 5.4 5.5 8.1 11.3 National Average 4.1 3.7 3.5 3.9 6.7 The following table sets forth median household income at December 31, 2024 and 2023, for the communities we serve and the national average, as published by the U.S.
In underwriting multifamily real estate loans, we consider a number of factors, including the ratio of the projected net cash flow to the loan’s debt service requirement (generally requiring a minimum ratio of 120%, computed after deduction for a vacancy factor and property expenses we deem appropriate), the age and condition of the collateral, the financial resources and income of the sponsor, and the sponsor’s experience in owning or managing similar properties.
In underwriting multifamily real estate loans, we consider a number of factors, including the ratio of the projected net cash flows to the loan’s debt service requirement (generally requiring a minimum ratio of 120%, computed after deduction for a vacancy factor and property expenses we deem appropriate), the age and condition of the collateral, the financial resources and income of the sponsor, and the sponsor’s experience in owning or managing similar properties.
The operations of Northfield Bank also are subject to the: • Truth in Savings Act and Regulation DD, which requires disclosures of deposit terms to consumers; • Regulation CC, which relates to the availability of deposit funds to consumers; • Right to Financial Privacy Act, which imposes a duty to maintain confidentiality of consumer financial records and prescribes procedures for complying with administrative subpoenas of financial records; • Electronic Funds Transfer Act, which governs automatic deposits to and withdrawals from deposit accounts and customers’ rights and liabilities arising from the use of automated teller machines and other electronic banking services; • The Bank Secrecy Act and USA PATRIOT Act, which require savings associations to, among other things, establish anti-money laundering compliance programs, customer identification programs, and customer due diligence policies and controls to ensure the detection and prevention of money laundering and terrorist financing; • Regulations of the Office of Foreign Assets Control, which enforce economic and trade sanctions against targeted foreign countries and regimes, individuals, and organizations; and • The Gramm-Leach-Bliley Act, which places limitations on the sharing of consumer financial information by financial institutions with unaffiliated third parties and requires all financial institutions offering products or services to retail customers to provide such customers with the financial institution’s privacy policy and allow such customers the opportunity to “opt out” of the sharing of certain personal financial information with unaffiliated third parties.
The operations of Northfield Bank also are subject to the: • Truth in Savings Act and Regulation DD, which requires disclosures of deposit terms to consumers; • Regulation CC, which relates to the availability of deposit funds to consumers; • Right to Financial Privacy Act, which imposes a duty to maintain confidentiality of consumer financial records and prescribes procedures for complying with administrative subpoenas of financial records; • Electronic Funds Transfer Act, which governs automatic deposits to and withdrawals from deposit accounts and customers’ rights and liabilities arising from the use of automated teller machines and other electronic banking services; • The Bank Secrecy Act and USA PATRIOT Act, which require federal savings associations to, among other things, establish anti-money laundering and countering the financing of terrorism compliance programs, customer identification programs, and customer due diligence policies and controls to ensure the detection and prevention of money laundering, terrorist financing, and other illicit activities; • Regulations of the Office of Foreign Assets Control, which enforce economic and trade sanctions against targeted foreign countries and regimes, individuals, and organizations; and • The Gramm-Leach-Bliley Act, which places limitations on the sharing of consumer financial information by financial institutions with unaffiliated third parties and requires all financial institutions offering products or services to retail customers to provide such customers with the financial institution’s privacy policy and allow such customers the opportunity to “opt out” of the sharing of certain personal financial information with unaffiliated third parties.
The description is limited to certain material aspects of the statutes and regulations addressed and is not intended to be a complete description of such statutes and regulations and their effects on Northfield Bank and Northfield Bancorp, Inc.
The description is limited to certain material aspects of the statutes and regulations addressed and is not intended to be a complete description of such statutes and regulations and their effects on Northfield Bank and Northfield Bancorp.
An additional amount may be loaned, equal to 10% of capital and surplus, if the loan is secured by readily marketable collateral, which is defined to include certain financial instruments and bullion, but generally does not include real estate. As of December 31, 2023, we were in compliance with our loans-to-one-borrower limitations.
An additional amount may be loaned, equal to 10% of capital and surplus, if the loan is secured by readily marketable collateral, which is defined to include certain financial instruments and bullion, but generally does not include real estate. As of December 31, 2024, we were in compliance with our loans-to-one-borrower limitations.
As a Delaware business corporation, Northfield Bancorp, Inc. is required to file an annual report with and pay franchise taxes to the state of Delaware. 30
As a Delaware business corporation, Northfield Bancorp is required to file an annual report with and pay franchise taxes to the state of Delaware. 30
An acquisition by a savings and loan holding company of a savings institution in another state to be held as a separate subsidiary may not be approved unless it is a supervisory acquisition under Section 13(k) of the Federal Deposit Insurance Act or the law of the state in which the target is located authorizes such acquisitions by out-of-state companies.
An acquisition by a savings and loan holding company of a savings association in another state to be held as a separate subsidiary may not be approved unless it is a supervisory acquisition under Section 13(k) of the Federal Deposit Insurance Act or the law of the state in which the target is located authorizes such acquisitions by out-of-state companies.
We also originate one-to-four family residential real estate loans (non-owner occupied investment properties), construction and land loans, commercial and industrial loans, and home equity loans and lines of credit. Loan Originations, Purchases and Sales, Participations, and Servicing. All loans we originate are underwritten pursuant to our policies and procedures or are approved as exceptions to our policies and procedures.
We also originate one-to-four family residential real estate loans (non-owner occupied investment properties), construction and land loans, and home equity loans and lines of credit. Loan Originations, Purchases and Sales, Participations, and Servicing. All loans we originate are underwritten pursuant to our policies and procedures or are approved as exceptions to our policies and procedures.
For purposes of the regulations, capital distributions generally include cash dividends and other transactions charged to the capital account of a savings association.
For purposes of the regulations, capital distributions generally include cash dividends and other transactions charged to the capital account of a federal savings association.
In evaluating applications by savings and loan holding companies to acquire savings institutions, the FRB must consider such things as the financial and managerial resources and future prospects of the company and institution involved, the effect of the acquisition on the institution, the risk to the federal Deposit Insurance Fund, the convenience and needs of the community, and competitive factors.
In evaluating applications by savings and loan holding companies to acquire savings associations, the FRB must consider such things as the financial and managerial resources and future prospects of the company and institution involved, the effect of the acquisition on the institution, the risk to the federal Deposit Insurance Fund, the convenience and needs of the community, and competitive factors.
In July 2023, the State of New Jersey enacted new legislation that requires real estate investment trusts and investment companies to be included in the combined filing unless they are owned 50% or more by a Bank with assets that do not exceed $15 billion. Delaware State Taxation.
In July 2023, the State of New Jersey enacted new legislation that requires real estate investment trusts and investment companies to be included in the combined filing unless they are owned 50% or more by a Bank with assets that do not exceed $15 billion.
The following tables summarize the scheduled repayments of our loan portfolio and weighted average contractual rate by loan type at December 31, 2023. Demand loans (loans having no stated repayment schedule or maturity) and overdraft loans are reported as being due in the year ending December 31, 2024.
The following tables summarize the scheduled repayments of our loan portfolio and weighted average contractual rate by loan type at December 31, 2024. Demand loans (loans having no stated repayment schedule or maturity) and overdraft loans are reported as being due in the year ending December 31, 2025.
This loan was performing in accordance with its original contractual terms. At December 31, 2023, our largest outstanding home equity loan was $1.7 million and was performing in accordance with its original contractual terms. We offer home equity loans and home equity lines of credit that are secured by the borrower’s primary residence or second home.
This loan was performing in accordance with its original contractual terms. At December 31, 2024, our largest outstanding home equity loan was $1.7 million and was performing in accordance with its original contractual terms. We offer home equity loans and home equity lines of credit that are secured by the borrower’s primary residence or second home.
Regulation W also provides that transactions with affiliates, including covered transactions, must be on terms and under circumstances, including credit standards, that are substantially the same or at least as favorable to the association as those prevailing at the time for comparable transactions with or involving non-affiliated companies.
Regulation W also provides that transactions with affiliates, including covered transactions, must be on terms and under circumstances, including credit standards, that are substantially the same or at least as favorable to the federal savings association as those prevailing at the time for comparable transactions with or involving non-affiliated companies.
The regulations provide that a capital restoration plan must be filed with the OCC within 45 days of the date a federal savings association receives notice that it is “undercapitalized,” “significantly undercapitalized” or “critically undercapitalized.” Any holding company for the savings institution required to submit a capital restoration plan must guarantee the lesser of an amount equal to 5.0% of the savings institution’s assets at the time it was notified or deemed to be undercapitalized by the OCC, or the amount necessary to restore the savings institution to adequately capitalized status.
The regulations provide that a capital restoration plan must be filed with the OCC within 45 days of the date a federal savings association receives notice that it is “undercapitalized,” “significantly undercapitalized” or “critically undercapitalized.” Any holding company for the federal savings association required to submit a capital restoration plan must guarantee the lesser of an amount equal to 5.0% of the savings association’s assets at the time it was notified or deemed to be undercapitalized by the OCC, or the amount necessary to restore the savings association to adequately capitalized status.
Our core values of trust, respect and excellence, coupled with our vision to be the high-performing community bank where employees want to work, customers want to bank, and stockholders want to invest. fosters innovation, increases business value, and enriches our corporate culture. We believe our relationship with our employees is strong.
Our core values of trust, respect and excellence, coupled with our vision to be a high-performing community bank where employees want to work, customers want to bank, and stockholders want to invest fosters innovation, increases business value, and enriches our corporate culture. We believe our relationship with our employees is strong.
The composition and maturities of the investment securities portfolio at December 31, 2023, are summarized in the following table. Maturities are based on the final contractual payment dates, and do not reflect the effect of scheduled principal repayments, prepayments, or early redemptions that may occur.
The composition and maturities of the investment securities portfolio at December 31, 2024, are summarized in the following table. Maturities are based on the final contractual payment dates, and do not reflect the effect of scheduled principal repayments, prepayments, or early redemptions that may occur.
Applications or notices may be denied if the institution will be undercapitalized after the proposed dividend, the proposed dividend raises safety and soundness concerns or the proposed dividend would violate a law, regulation, written agreement, or regulatory condition. 25 In the event that a savings institution’s capital falls below its regulatory requirements or it is notified by the regulatory agency that it is in need of more than normal supervision, its ability to make capital distributions would be restricted.
Applications or notices may be denied if the institution will be undercapitalized after the proposed dividend, the proposed dividend raises safety and soundness concerns or the proposed dividend would violate a law, regulation, written agreement, or regulatory condition. 25 In the event that a federal savings association's capital falls below its regulatory requirements or it is notified by the regulatory agency that it is in need of more than normal supervision, its ability to make capital distributions would be restricted.
The FHLB System provides a central credit facility primarily for member institutions. Members of the FHLB are required to acquire and hold a specified amount of shares of FHLB capital stock. Northfield Bank was in compliance with this requirement at December 31, 2023.
The FHLB System provides a central credit facility primarily for member institutions. Members of the FHLB are required to acquire and hold a specified amount of shares of FHLB capital stock. Northfield Bank was in compliance with this requirement at December 31, 2024.
In addition, savings associations are prohibited by law from lending to any affiliate that is engaged in activities that are not permissible for bank holding companies, and no savings association may purchase the securities of any affiliate other than a subsidiary.
In addition, federal savings associations are prohibited by law from lending to any affiliate that is engaged in activities that are not permissible for bank holding companies, and no such savings association may purchase the securities of any affiliate other than a subsidiary.
Enforcement The OCC has primary enforcement responsibility over federal savings associations, including the authority to bring enforcement actions against “institution-related parties,” including officers, directors, certain shareholders, as well as attorneys, appraisers and accountants who knowingly or recklessly participate in specified misconduct which caused or is likely to cause a financial loss to or an adverse effect on an insured institution.
Enforcement The OCC has primary enforcement responsibility over federal savings associations, including the authority to bring enforcement actions against “institution-related parties,” a term that includes officers, directors, certain shareholders, as well as attorneys, appraisers and accountants who knowingly or recklessly participate in specified misconduct which caused or is likely to cause a financial loss to or an adverse effect on an insured institution.
At December 31, 2023, all participation loans were performing in accordance with their terms. Loan Approval Procedures and Authority . Our lending activities follow written, non-discriminatory, underwriting standards approved by our Board of Directors.
At December 31, 2024, all participation loans were performing in accordance with their terms. Loan Approval Procedures and Authority . Our lending activities follow written, non-discriminatory, underwriting standards approved by our Board of Directors.
The term “affiliate” generally includes any company that controls or is under common control with a savings association, including Northfield Bancorp, Inc., and the non-savings association subsidiaries of that savings association. Certain other subsidiaries of the savings association itself are not considered affiliates.
The term “affiliate” generally includes any company that controls or is under common control with a federal savings association, including Northfield Bancorp, and the non-savings association subsidiaries of that savings association. Certain other subsidiaries of the federal savings association itself are not considered affiliates.
Extensions of credit to executive officers are subject to additional restrictions on the types and amounts of loans that may be made. At December 31, 2023, Northfield Bank was in compliance with these laws and regulations.
Extensions of credit to executive officers are subject to additional restrictions on the types and amounts of loans that may be made. At December 31, 2024, Northfield Bank was in compliance with these laws and regulations.
Northfield Bank reports income on a calendar year basis to New York City and is subject to the New York City Financial Corporation Tax calculated, subject to a New York City income and expense allocation, on a similar basis as the New York State Tax, at a rate of 8.85%.
Northfield Bank reports income on a calendar year basis to New York City and is subject to the New York City Financial Corporation Tax calculated, subject to a New York City income and expense allocation, on a similar basis as the New York State Tax, at a rate of 8.85%. New Jersey State Taxation.
Weighted average yield is based on amortized cost. 18 One Year or Less More than One Year through Five Years More than Five Years through Ten Years More than Ten Years Total Amortized Cost Weighted Average Yield Amortized Cost Weighted Average Yield Amortized Cost Weighted Average Yield Amortized Cost Weighted Average Yield Amortized Cost Fair Value Weighted Average Yield (Dollars in thousands) Securities available-for-sale: U.S.
Weighted average yield is based on amortized cost. 19 One Year or Less More than One Year through Five Years More than Five Years through Ten Years More than Ten Years Total Amortized Cost Weighted Average Yield Amortized Cost Weighted Average Yield Amortized Cost Weighted Average Yield Amortized Cost Weighted Average Yield Amortized Cost Fair Value Weighted Average Yield (Dollars in thousands) Securities available-for-sale: U.S.
We consider our competitive products and pricing, branch network, customer service, and financial position, as our major strengths in attracting and retaining customers in our market areas. We face intense competition in our market areas both in making loans and attracting deposits.
We consider our competitive products and pricing, branch network, customer service, local decision making and financial position, as our major strengths in attracting and retaining customers in our market areas. We face intense competition in our market areas both in making loans and attracting deposits.
As of December 31, 2023, 2022, and 2021, we also had a trading portfolio with a fair value of $12.5 million, $10.8 million and $13.5 million, respectively, consisting of mutual funds quoted in actively traded markets. These securities are utilized to fund non-qualified deferred compensation obligations.
As of December 31, 2024, 2023, and 2022, we also had a trading portfolio with a fair value of $13.9 million, $12.5 million and $10.8 million, respectively, consisting of mutual funds quoted in actively traded markets. These securities are utilized to fund non-qualified deferred compensation obligations.
This guarantee remains in place until the OCC notifies the savings institution that it has maintained adequately capitalized status for each of four consecutive calendar quarters, and the OCC has the authority to require payment and collect payment under the guarantee. Various restrictions, including on growth and capital distributions, also apply to “undercapitalized” institutions.
This guarantee remains in place until the OCC notifies the federal savings association that it has maintained adequately capitalized status for each of four consecutive calendar quarters, and the OCC has the authority to require payment and collect payment under the guarantee. Various restrictions, including on growth and capital distributions, also apply to “undercapitalized” institutions.
At December 31, 2023, the total federal pre-base year bad debt reserve of Northfield Bank was approximately $5.9 million. Corporate Dividends-Received Deduction . Northfield Bancorp, Inc. may exclude from its federal taxable income 100% of dividends received from Northfield Bank as a wholly-owned subsidiary by filing consolidated tax returns.
At December 31, 2024, the total federal pre-base year bad debt reserve of Northfield Bank was approximately $5.9 million. Corporate Dividends-Received Deduction . Northfield Bancorp may exclude from its federal taxable income 100% of dividends received from Northfield Bank as a wholly-owned subsidiary by filing consolidated tax returns.
The business activities of savings and loan holding companies are generally limited to those activities permissible for bank holding companies under Section 4(c)(8) of the Bank Holding Company Act, subject to the prior approval of the Federal Reserve Board, and certain additional activities authorized by FRB regulations, unless the holding company has elected “financial holding company” status.
The business activities of savings and loan holding companies are generally limited to those activities permissible for bank holding companies under Section 4(c)(8) of the Bank Holding Company Act, subject to the prior approval of the FRB, and certain additional activities authorized by FRB regulations, unless the holding company has elected “financial holding company” status.
ITEM 1. BUSINESS Forward-Looking Statements This Annual Report contains certain “forward-looking statements,” which can be identified by the use of such words as “estimate,” “project,” “believe,” “intend,” “anticipate,” “plan,” “seek,” “expect,” “could,” “may,” “should,” “will,” and words of similar meaning.
ITEM 1. BUSINESS Forward-Looking Statements This Annual Report may contain certain “forward-looking statements,” which can be identified by the use of such words as “estimate,” “project,” “believe,” “intend,” “anticipate,” “plan,” “seek,” “expect,” “could,” “may,” “should,” “will,” and words of similar meaning.
Eligible institutions may opt into and out of the community bank leverage ratio framework on their quarterly call report. Northfield Bank elected to opt into the framework effective March 31, 2020. As of December 31, 2023, Northfield Bancorp, Inc. and Northfield Bank exceeded all capital adequacy requirements to which they were subject.
Eligible institutions may opt into and out of the community bank leverage ratio framework on their quarterly call report. Northfield Bank elected to opt into the framework effective March 31, 2020. As of December 31, 2024, Northfield Bancorp and Northfield Bank exceeded all capital adequacy requirements to which they were subject.
Holding Company Regulation Northfield Bancorp, Inc. is a unitary savings and loan holding company subject to regulation and supervision by the FRB. The FRB has enforcement authority over Northfield Bancorp, Inc. and its non-savings institution subsidiaries. Among other things, that authority permits the FRB to restrict or prohibit activities that are determined to be a risk to Northfield Bank.
Holding Company Regulation Northfield Bancorp is a unitary savings and loan holding company subject to regulation and supervision by the FRB. The FRB has enforcement authority over Northfield Bancorp and its non-savings association subsidiaries. Among other things, that authority permits the FRB to restrict or prohibit activities that are determined to be a risk to Northfield Bank.
At December 31, 2023 2022 2021 Amortized Cost Estimated Fair Value Amortized Cost Estimated Fair Value Amortized Cost Estimated Fair Value (Dollars in thousands) Debt securities available-for-sale: U.S. Treasuries $ 44,364 $ 44,379 $ — $ — $ — $ — U.S.
At December 31, 2024 2023 2022 Amortized Cost Estimated Fair Value Amortized Cost Estimated Fair Value Amortized Cost Estimated Fair Value (Dollars in thousands) Debt securities available-for-sale: U.S. Treasuries $ — $ — $ 44,364 $ 44,379 $ — $ — U.S.
These regulatory policies could affect the ability of Northfield Bancorp, Inc. to pay dividends, repurchase common stock or otherwise engage in capital distributions. Federal Securities Laws Northfield Bancorp, Inc.’s common stock is registered with the SEC under the Securities Exchange Act of 1934, as amended.
These regulatory policies could affect the ability of Northfield Bancorp to pay dividends, repurchase common stock or otherwise engage in capital distributions. Federal Securities Laws Northfield Bancorp’s common stock is registered with the SEC under the Securities Exchange Act of 1934, as amended.
Northfield Bank's investment policy is reviewed at least annually by the Risk Committee of the Board of Directors. Any changes to the policy are subject to ratification by the full Board of Directors.
Northfield Bank's investment policy is reviewed at least annually by the Risk Committee of the Board of Directors (“Risk Committee”). Any changes to the policy are subject to ratification by the full Board of Directors.
A savings institution that is a subsidiary of a holding company, which is the case with Northfield Bank, must file a notice with the FRB at least 30 days before the Board of Directors declares any dividend and receive FRB non-objection to the payment of the dividend.
A federal savings association that is a subsidiary of a holding company, which is the case with Northfield Bank, must file a notice with the FRB at least 30 days before the Board of Directors declares any dividend and receive FRB non-objection to the payment of the dividend.
Northfield Bank also purchases investment securities, including mortgage-backed securities and corporate bonds, and, to a lesser extent, deposit funds in other financial institutions, including the Federal Reserve Bank of New York, and the Federal Home Loan Bank (“FHLB”) of New York (“FHLBNY”).
Northfield Bank also purchases investment securities, including mortgage-backed securities and corporate bonds, and, to a lesser extent, deposit funds in other financial institutions, including the Federal Reserve Bank of New York (or the “Federal Reserve Bank”) and the Federal Home Loan Bank (“FHLB”) of New York (“FHLBNY”).
As of December 31, 2023, we maintained 75.6% of our portfolio assets in qualified thrift investments and, therefore, we met the QTL test. 23 Standards for Safety and Soundness Federal law requires each federal banking agency to prescribe for insured depository institutions under its jurisdiction standards relating to, among other things, internal controls, information systems and internal audit systems, loan documentation, credit underwriting, interest rate risk exposure, asset growth, employee compensation, and other operational and managerial standards as the agency deems appropriate.
As of December 31, 2024, we maintained 77.7% of our portfolio assets in qualified thrift investments and, therefore, we met the QTL test. 23 Standards for Safety and Soundness Federal law requires each federal banking agency to prescribe for insured depository institutions under its jurisdiction standards relating to, among other things, internal controls, information systems and internal audit systems, loan documentation, credit underwriting, interest rate risk exposure, asset growth, employee compensation, and other operational and managerial standards as the agency deems appropriate.
At December 31, 2023, our largest loan of this type (excluding purchased loan pools, discussed below) had a principal balance of $5.3 million and was collateralized by 42 condominiums within a complex in Union County, New Jersey. The loan was performing in accordance with its original contractual terms.
At December 31, 2024, our largest loan of this type (excluding purchased loan pools, discussed below) had a principal balance of $5.1 million and was collateralized by 42 condominiums within a complex in Union County, New Jersey. The loan was performing in accordance with its original contractual terms.
Northfield Bancorp, Inc. may invest in equity securities of other financial institutions, as well as preferred stock, up to certain limitations. As of December 31, 2023, we did not hold any asset-backed securities other than mortgage-backed securities.
Northfield Bancorp may invest in equity securities of other financial institutions, as well as preferred stock, up to certain limitations. As of December 31, 2024, we did not hold any asset-backed securities other than mortgage-backed securities.
Northfield Bank and Northfield Bancorp, Inc. are subject to federal income taxation in the same general manner as other corporations, with some exceptions discussed below. Northfield Bancorp, Inc.'s consolidated federal tax returns are not currently under audit.
Northfield Bank and Northfield Bancorp are subject to federal income taxation in the same general manner as other corporations, with some exceptions discussed below. Northfield Bancorp's consolidated federal tax returns are not currently under audit.
Consolidated regulatory capital requirements identical to those applicable to the subsidiary depository institutions (including the community bank leverage ratio alternative) also apply to savings and loan holding companies. Northfield Bancorp, Inc. exceeded the FRB’s consolidated capital requirements as of December 31, 2023. Federal law applies the FRB's “source of strength” doctrine to savings and loan holding companies.
Consolidated regulatory capital requirements identical to those applicable to the subsidiary depository institutions (including the community bank leverage ratio alternative) also apply to savings and loan holding companies. Northfield Bancorp exceeded the FRB’s consolidated capital requirements as of December 31, 2024. 28 Federal law applies the FRB's “source of strength” doctrine to savings and loan holding companies.
All of our securities at December 31, 2023, were taxable with the exception of our U.S. Government agency securities and municipal portfolio.
All of our securities at December 31, 2024, were taxable with the exception of our U.S. Government agency securities and municipal portfolio.
Deposits traditionally have been our primary source of funds for our securities and lending activities. We also borrow from the FHLBNY, the FRB and other financial institutions to supplement cash flow needs, to manage the maturities of liabilities for interest rate and investment risk management purposes, and to manage our cost of funds.
Deposits traditionally have been our primary source of funds for our securities and lending activities. We also borrow from the FHLBNY, the Federal Reserve Bank and other financial institutions to supplement cash flow needs, to manage the maturities of liabilities for interest rate and investment risk management purposes, and to manage our cost of funds.
Our current investment policy does permit hedging through the use of derivative instruments such as financial futures or interest rate options and swaps, although we currently have no derivative hedging instruments in place.
Our current investment policy permits hedging through the use of derivative instruments such as financial futures or interest rate options and swaps, although we currently have no derivative hedging instruments in place.
Community Reinvestment Act and Fair Lending Laws Federal savings associations have a responsibility under the Community Reinvestment Act and its implementing regulations to help meet the credit needs of their communities, including low- and moderate-income neighborhoods.
Community Reinvestment Act Federal savings associations have a responsibility under the Community Reinvestment Act and its implementing regulations to help meet the credit needs of their communities, including low- and moderate-income neighborhoods.
At December 31, 2023, the average home equity loan and line of credit balance was approximately $68,000 although we originate these types of loans in amounts substantially greater than this average. At December 31, 2023, our largest home equity line of credit had an outstanding balance of approximately $2.0 million.
At December 31, 2024, the average home equity loan and line of credit balance was approximately $70,000 although we originate these types of loans in amounts substantially greater than this average. At December 31, 2024, our largest home equity line of credit had an outstanding balance of approximately $2.0 million.
Once an obligation has been restructured because of credit problems, it continues to be considered restructured until paid in full or, if the obligation yields a market rate (a rate equal to or greater than the rate we were willing to accept at the time of the restructuring for a new loan with comparable risk), until the year after which the restructuring takes place, provided the borrower has performed under the modified terms for a consecutive six-month period.
Once an obligation had been restructured because of credit problems, it continued to be considered restructured until paid in full or, if the obligation yielded a market rate (a rate equal to or greater than the rate we were willing to accept at the time of the restructuring for a new loan with comparable risk), until the year after which the restructuring takes place, provided the borrower had performed under the modified terms for a consecutive six-month period.
At December 31, 2023, we had 1,186 multifamily real estate loans, with an average loan balance of approximately $2.3 million, although there are a large number of loans with balances substantially greater than this average.
At December 31, 2024, we had 1,144 multifamily real estate loans, with an average loan balance of approximately $2.3 million, although there are a large number of loans with balances substantially greater than this average.
At December 31, 2023, our commercial real estate loan portfolio consisted of 710 loans with an average loan balance of approximately $1.3 million, although there are a large number of loans with balances substantially greater than this average.
At December 31, 2024, our commercial real estate loan portfolio consisted of 663 loans with an average loan balance of approximately $1.3 million, although there are a large number of loans with balances substantially greater than this average.
As of December 31, 2023, the average balance of one-to-four family residential real estate loans was approximately $477,000, although we have originated these types of loan in amounts substantially greater than this average.
As of December 31, 2024, the average balance of one-to-four family residential real estate loans was approximately $476,000, although we have originated these types of loan in amounts substantially greater than this average.
We offer employees competitive short-term and long-term compensation that we periodically benchmark to market data utilizing third party consultants specialized in employee compensation and retention. We provide a comprehensive and competitive portfolio of health and welfare benefits including medical, dental and vision insurance, life insurance, short-term disability, and various expense reimbursement programs.
We offer employees competitive short-term and long-term compensation that we periodically benchmark to market data utilizing third-party consultants specialized in employee compensation and retention. We offer health and welfare benefits, including medical, dental and vision insurance, life insurance, short-term disability, and various expense reimbursement programs.
Management believes that the credit enhancements are adequate to protect us from material losses on our private label mortgage-backed securities investments. 17 At December 31, 2023, our corporate bond portfolio consisted of securities, substantially all of which were investment-grade, and had remaining maturities generally shorter than five years.
Management believes that the credit enhancements are adequate to protect us from material losses on our private label mortgage-backed securities investments. 18 At December 31, 2024, our corporate bond portfolio consisted of securities, substantially all of which were investment-grade, and had remaining maturities generally shorter than ten years.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

80 edited+31 added−27 removed95 unchanged
Biggest changeThis can result in lower appraised values, which can limit the ability of borrowers to refinance existing debt and may result in higher charge-offs of our non-performing collateral dependent loans. Our balance sheet composition is weighted towards assets with longer durations, which expose us to risks upon changes in interest rates.
Biggest changeOur balance sheet composition is weighted towards assets with longer durations, which expose us to risks upon changes in interest rates. We are subject to reinvestment risk associated with changes in interest rates. Changes in interest rates may affect the average life of loans and mortgage-related securities.
The risks and uncertainties described below are not the only ones facing us. Additional risks and uncertainties that management is not aware of or focused on or that management currently deems immaterial may also impair our business operations. This report is qualified in its entirety by these risk factors.
The risks and uncertainties described below are not the only ones facing us. Additional risks and uncertainties that management currently is not aware of or focused on or that management currently deems immaterial may also impair our business operations. This report is qualified in its entirety by these risk factors.
In addition, any compromise of our systems could deter customers from using our products and services. Although we rely on security systems to provide security and authentication necessary to affect the secure transmission of data, these precautions may not protect our systems from compromises or breaches of security.
In addition, any compromise of our systems could deter customers from using our products and services. Although we rely on security systems to provide the security and authentication necessary to affect the secure transmission of data, these precautions may not protect our systems from compromises or breaches of security.
Our certificate of incorporation and bylaws, federal regulations, Delaware law, shares of restricted stock and stock options that we have granted or may grant to employees and directors, stock ownership by our management and directors and employment agreements that we have entered into with our executive officers, and various other factors may make it more difficult for companies or persons to acquire control of Northfield Bancorp, Inc. without the consent of our Board of Directors, which could adversely affect the market price of our common stock.
Our certificate of incorporation and bylaws, federal regulations, Delaware law, shares of restricted stock and stock options that we have granted or may grant to employees and directors, stock ownership by our management and directors and employment agreements that we have entered into with our executive officers, and various other factors may make it more difficult for companies or persons to acquire control of Northfield Bancorp without the consent of our Board of Directors, which could adversely affect the market price of our common stock.
We seek acquisition partners that offer us either significant market presence or the potential to expand our market footprint and improve profitability through economies of scale or expanded services. Acquiring other banks, non-bank entities, businesses, or branches may have an adverse effect on our financial results and may involve various other risks commonly associated with acquisitions.
We seek acquisition partners that offer us either significant market presence or the potential to expand our market footprint and improve profitability through economies of scale or expanded services. Acquiring other banks, non-bank entities, businesses, or branches initially may have an adverse effect on our financial results and may involve various other risks commonly associated with acquisitions.
Any of these events could have a material adverse effect on our financial condition and results of operations. Cyber-attacks or other security breaches could adversely affect our operations, net income, or reputation. We regularly collect, process, transmit and store significant amounts of confidential information regarding our customers, employees and others and concerning our own business, operations, plans and strategies.
Any of these events could have a material adverse effect on our financial condition and results of operations. Cyber-attacks or other security breaches could adversely affect our operations, net income, or reputation. We regularly collect, process, transmit and store significant amounts of confidential information regarding our customers, employees and others and concerning our business, operations, plans and strategies.
In addition, if we continue to grow our commercial real estate loan portfolio and our residential mortgage loan portfolio decreases, it is possible that in order to maintain our QTL status, we may have to buy mortgage-backed securities or other qualifying assets at times when the terms of such investments may not be attractive.
In addition, if we continue to grow our commercial real estate loan portfolio and our residential mortgage loan portfolio decreases, it is possible that to maintain our QTL status, we may have to buy mortgage-backed securities or other qualifying assets at times when the terms of such investments may not be attractive.
As information security risks and cyber threats continue to evolve, we may be required to expend additional resources to continue to enhance our information security measures and/or to investigate and remediate any information security vulnerabilities. Because the nature of the financial services business involves a high volume of transactions, we face significant operational risks, including fraud and other financial crimes.
As information security risks and cyber threats continue to evolve, we may be required to expend additional resources to continue to enhance our information security measures and/or to investigate and remediate any information security vulnerabilities. 40 Because the nature of the financial services business involves a high volume of transactions, we face significant operational risks, including fraud and other financial crimes.
Adverse operating results or changes in industry conditions could lead to difficulty or an inability to access these additional funding sources. 38 Our financial flexibility will be severely constrained if we are unable to maintain our access to funding or if adequate financing is not available to accommodate future growth at acceptable interest rates.
Adverse operating results or changes in industry conditions could lead to difficulty or an inability to access these additional funding sources. Our financial flexibility will be severely constrained if we are unable to maintain our access to funding or if adequate financing is not available to accommodate future growth at acceptable interest rates.
This regulatory structure also gives the regulatory authorities extensive discretion in connection with their supervisory and enforcement actions and examination policies, including policies with respect to capital levels, the timing and amount of dividend payments, the classification of assets, the establishment of adequate loan loss reserves for regulatory purposes and the timing and amounts of assessments and fees.
This regulatory structure also gives the regulatory authorities extensive discretion in connection with their supervisory and enforcement actions and examination policies, including policies with respect to capital and liquidity levels, the timing and amount of dividend payments, the classification of assets, the establishment of adequate loan loss reserves for regulatory purposes and the timing and amounts of assessments and fees.
ITEM 1A. RISK FACTORS The material risks and uncertainties that management believes affect us are described below. You should carefully consider the risks and uncertainties described below, together with all of the other information included or incorporated by reference herein as well as in other documents we file with the SEC.
ITEM 1A. RISK FACTORS Certain material risks and uncertainties that management believes affect us are described below. You should carefully consider the risks and uncertainties described below, together with all of the other information included or incorporated by reference herein as well as in other documents we file with the SEC.
Price competition from other financial institutions, credit unions, money market and mutual funds, insurance companies, and other non-traditional competitors such as financial technology companies, for loans and deposits sometimes results in us charging lower interest rates on our loans and paying higher interest rates on our deposits and may reduce our net interest income.
Price competition from other financial institutions, credit unions, money market and mutual funds, insurance companies, and other non-traditional competitors such as financial technology companies, for loans and deposits sometimes results in us charging lower interest rates on our loans and paying higher interest rates on our deposits, which may reduce our net interest income.
Loans that were acquired as part of our acquisitions of other depository institutions were not underwritten or originated in accordance with our credit standards, including environmental matters, and we did not have long-standing relationships with many of these borrowers at the time of acquisition.
Loans that were acquired as part of our acquisitions of other depository institutions are not underwritten or originated in accordance with our credit standards, including environmental matters, and we did not have long-standing relationships with many of these borrowers at the time of acquisition.
Our continued ability to compete effectively depends on our ability to attract new employees and to retain and motivate our existing employees. Risks associated with system failures, interruptions, or breaches of security could affect our earnings negatively. Information technology systems are critical to our business.
Our continued ability to compete effectively depends on our ability to attract new employees and to retain and motivate our existing employees. 39 Risks associated with system failures, interruptions, or breaches of security could affect our earnings negatively. Information technology systems are critical to our business.
We continue to analyze the impact of this regulation on our investment portfolio, and whether any changes are required to our investment strategies that could negatively affect our earnings. 42 We may be adversely affected by recent changes in tax laws.
We continue to analyze the impact of this regulation on our investment portfolio, and whether any changes are required to our investment strategies that could negatively affect our earnings. We may be adversely affected by recent changes in tax laws.
We could also be required to apply a new or revised standard retroactively, resulting in our restating prior period financial statements in material amounts. 41 We hold certain intangible assets that could be classified as impaired in the future.
We could also be required to apply a new or revised standard retroactively, resulting in our restating prior period financial statements in material amounts. We hold certain intangible assets that could be classified as impaired in the future.
The minimum capital requirements applicable to Northfield Bancorp, Inc. and Northfield Bank are: (i) a common equity Tier 1 capital ratio of 4.5%; (ii) a Tier 1 to risk-based assets capital ratio of 6%; (iii) a total capital ratio of 8%; and (iv) a Tier 1 leverage ratio of 4%.
The minimum capital requirements applicable to Northfield Bancorp and Northfield Bank are: (i) a common equity Tier 1 capital ratio of 4.5%; (ii) a Tier 1 to risk-based assets capital ratio of 6%; (iii) a total capital ratio of 8%; and (iv) a Tier 1 leverage ratio of 4%.
A significant decline in asset valuations or cash flows may also cause us not to realize expected benefits. 35 Our inability to tailor our retail delivery model to respond to consumer preferences in banking may negatively affect earnings.
A significant decline in asset valuations or cash flows may also cause us not to realize expected benefits. Our inability to tailor our retail delivery model to respond to consumer preferences in banking may negatively affect earnings.
Growth opportunities may not be available or we may not be able to manage our growth successfully. If we do not manage our growth effectively, our financial condition and operating results could be negatively affected. Acquisitions may disrupt our business and dilute stockholder value.
Growth opportunities may not be available or we may not be able to manage our growth successfully. If we do not manage our growth effectively, our financial condition and operating results could be negatively affected. 35 Acquisitions may disrupt our business and dilute stockholder value.
In addition, Northfield Bank maintains an Information and Cybersecurity Program under the leadership of our Chief Risk Officer, the Chief Information Officer, and the Chief Information Security Officer, with Board of Directors oversight for identifying and mitigating information security risks.
In addition, Northfield Bank maintains an Information and Cybersecurity Program under the leadership of the Chief Risk Officer, the Chief Information Officer, and the Chief Information Security Officer, with Board of Directors oversight for identifying and mitigating information security risks.
Any borrowing or funds needed to raise capital required to make a capital injection may be difficult and expensive and could have an adverse effect on our business, financial condition and results of operations. Legislative or regulatory responses to perceived financial and market problems could impair our rights against borrowers.
Any borrowing or funds needed to raise capital required to make a capital contribution may be difficult and expensive and could have an adverse effect on our business, financial condition and results of operations. Legislative or regulatory responses to perceived financial and market problems could impair our rights against borrowers.
If these assets are considered to be either partially or fully impaired in the future, our earnings and the book values of these assets would decrease. At December 31, 2023, we had $41.0 million in goodwill which we are required to test on a periodic basis.
If these assets are considered to be either partially or fully impaired in the future, our earnings and the book values of these assets would decrease. At December 31, 2024, we had $41.0 million in goodwill which we are required to test on a periodic basis.
The monetary policies and regulations of the FRB have had a significant effect on the overall economy and the operating results of financial institutions in the past and are expected to continue to do so in the future.
The monetary policies and regulations of the government, including the FRB, have had a significant effect on the overall economy and the operating results of financial institutions in the past and are expected to continue to do so in the future.
We have established processes and procedures intended to identify, measure, monitor, report and analyze the types of risk to which we are subject, including credit, liquidity, operational, regulatory compliance and reputational.
We have established processes and procedures intended to identify, measure, monitor, report and analyze the types of risk to which we are subject, including credit, liquidity, operational, market, strategic, regulatory compliance and reputational.
If our assumptions are incorrect, if delinquencies, non-accrual or non-performing loans increase, or macroeconomic conditions are worse than anticipated, our allowance for credit losses may not be sufficient to cover losses inherent in our loan portfolio, which would require additions to our allowance. Material additions to our allowance would materially decrease our net income.
If our assumptions are incorrect, if delinquencies, non-accrual or non-performing loans increase, or macroeconomic conditions are worse than anticipated, our allowance for credit losses may not be sufficient to cover currently expected losses in our loan portfolio, which would require additions to our allowance. Material additions to our allowance would materially decrease our net income.
A capital injection may be required at times when the holding company may not have the resources to provide it and therefore may be required to borrow the funds or raise capital.
A capital contribution may be required at times when the holding company may not have the resources to provide it and therefore may be required to borrow the funds or raise capital.
Inflation risk is the risk that the value of assets or income from investments will be worth less in the future as inflation decreases the value of money. Over the past year, in response to a pronounced rise in inflation, the FRB has raised certain benchmark interest rates to combat inflation.
Inflation risk is the risk that the value of assets or income from investments will be worth less in the future as inflation decreases the value of money. In response to a pronounced rise in inflation, the FRB has raised certain benchmark interest rates to combat inflation.
Further, unless and until U.S. political, credit and financial market conditions have been sufficiently resolved or stabilized, it may increase our future borrowing costs. Risks Related to Competitive Matters Strong traditional and non-traditional competition within our market areas may limit our growth and profitability. We face intense competition in making loans and attracting deposits.
Further, unless and until U.S. political, credit and financial market conditions have been sufficiently resolved or stabilized, it may increase our future borrowing costs. 37 Risks Related to Competitive Matters Competition within our market areas may limit our growth and profitability. We face intense competition in making loans and attracting deposits.
Under the “source of strength” doctrine, the FRB may require a holding company to make capital injections into a troubled subsidiary bank and may charge the holding company with engaging in unsafe and unsound practices for failure to commit resources to a subsidiary bank.
Under the “source of strength” doctrine, the FRB may require a holding company to contribute capital into a troubled subsidiary bank and may charge the holding company with engaging in unsafe and unsound practices for failure to commit resources to a subsidiary bank.
Mobile phishing, a means for identity thieves to obtain sensitive personal information through fraudulent e-mail, text or voice mail, is an emerging threat targeting the customers of financial entities.
Mobile phishing, a means for identity thieves to obtain sensitive personal information through fraudulent e-mail, text or voice mail, is a continuing threat targeting the customers of financial entities.
The purpose of the guidance is to guide banks in developing risk management practices and capital levels commensurate with the level and nature of real estate concentrations. The guidance states that management should employ heightened risk management practices including board and management oversight and strategic planning, development of underwriting standards, risk assessment, and monitoring through market analysis and stress testing.
The guidance guides banks in developing risk management practices and capital levels commensurate with the level and nature of real estate concentrations. The guidance states that management should employ heightened risk management practices including board and management oversight and strategic planning, development of underwriting standards, risk assessment, and monitoring through market analysis and stress testing.
While we have developed policies and procedures designed to assist in compliance with these laws and regulations, these policies and procedures may not be effective in preventing violations of these laws and regulations. Monetary policies and regulations of the FRB could adversely affect our business, financial condition and results of operations.
While we have developed policies and procedures designed to assist in compliance with these laws and regulations, these policies and procedures may not be effective in preventing violations of these laws and regulations. The fiscal and monetary policies and regulations of the government, including the FRB and other agencies, could adversely affect our business, financial condition and results of operations.
The longer timelines have been the result of the economic crisis, additional consumer protection initiatives related to the foreclosure process, increased documentary requirements and judicial scrutiny, and, both voluntary and mandatory programs under which lenders may consider loan modifications or other alternatives to foreclosure.
The longer timelines are the result of the additional consumer protection initiatives related to the foreclosure process, increased documentary requirements and judicial scrutiny, and, both voluntary and mandatory programs under which lenders may consider loan modifications or other alternatives to foreclosure.
Implementation of changes to asset risk weightings for risk-based capital calculations, items included or deducted in calculating regulatory capital and/or additional capital conservation buffers could result in management modifying its business strategy, and could limit our ability to make distributions, including paying dividends or buying back shares.
Implementation of changes to asset risk weightings for risk-based capital calculations, items included or deducted in calculating regulatory capital and/or additional capital conservation buffers could result in management modifying its business strategy, and could limit our ability to make distributions, including paying dividends or repurchasing shares. See “Item 1.
However, a loan that does not exceed $2 million (including a group of loans to one borrower) that is for commercial, corporate, business, or agricultural purposes is included in our qualified thrift investments. As of December 31, 2023, we maintained 75.6% of our portfolio assets in qualified thrift investments.
However, a loan that does not exceed $2 million (including a group of loans to one borrower) that is for commercial, corporate, business, or agricultural purposes is included in our qualified thrift investments. As of December 31, 2024, we maintained 77.7% of our portfolio assets in qualified thrift investments.
Alternatively, we may find it necessary to pursue different structures, including converting Northfield Bank’s savings bank charter to a commercial bank charter. We are subject to stringent capital requirements, which may adversely affect our return on equity, require us to raise additional capital, or constrain us from paying dividends or repurchasing shares.
Alternatively, we may find it necessary to pursue different structures, including converting Northfield Bank’s savings bank charter to a commercial bank charter or electing to be treated as a covered savings association. 34 We are subject to stringent capital requirements, which may adversely affect our return on equity, require us to raise additional capital, or constrain us from paying dividends or repurchasing shares.
At December 31, 2023, our simulation model indicated that our net portfolio value (the net present value of our interest-earning assets and interest-bearing liabilities) would decrease by 9.04% if there was an instantaneous parallel 200 basis point increase in market interest rates.
At December 31, 2024, our simulation model indicated that our net portfolio value (the net present value of our interest-earning assets and interest-bearing liabilities) would increase by 6.87% if there was an instantaneous parallel 200 basis point decrease in market interest rates.
The final rule also established a “capital conservation buffer” of 2.5%, resulting in the following minimum ratios: (i) a common equity Tier 1 capital ratio of 7.0%, (ii) a Tier 1 to risk-based assets capital ratio of 8.5%, and (iii) a total capital ratio of 10.5%.
Applicable regulations also establish a “capital conservation buffer” of 2.5%, resulting in the following minimum ratios: (i) a common equity Tier 1 capital ratio of 7.0%, (ii) a Tier 1 to risk-based assets capital ratio of 8.5%, and (iii) a total capital ratio of 10.5%.
Furthermore, the imposition of liquidity requirements in connection with Basel III could result in our having to lengthen the term of our funding, restructure our business models, and/or increase our holdings of liquid assets.
Furthermore, the imposition of additional liquidity requirements could result in our having to lengthen the term of our funding, restructure our business models, and/or increase our holdings of liquid assets.
As rates increased rapidly in recent periods, we have increased the rates we pay on our deposits and borrowed funds more quickly than interest rates earned on our loans and investments, resulting in a negative effect on interest spreads and net interest income which has negatively affected our profitability.
As rates increase, the rates we pay on our deposits and borrowed funds can increase more quickly than interest rates earned on our loans and investments, resulting in a negative effect on interest spreads and net interest income which has negatively affected our profitability.
These rules require financial institutions to establish procedures for identifying and verifying the identity of customers seeking to open new financial accounts. Failure to comply with these regulations could result in fines or sanctions.
These rules require financial institutions to establish procedures for identifying and verifying the identity of customers seeking to open new financial accounts. Failure to comply with these regulations could result in fines or sanctions and place restrictions on mergers and acquisitions and other expansionary activities.
Conversely, should market interest rates fall below current levels, our net interest margin could also be affected negatively if competitive pressures keep us from further reducing rates on our deposits, while the yields on our assets decrease more rapidly through loan prepayments and interest rate adjustments.
Conversely, when interest rates fall, our net interest margin could be affected negatively if competitive pressures keep us from reducing rates on our deposits, while the yields on our assets may decrease more rapidly through loan prepayments and interest rate adjustments.
If hazardous conditions or toxic substances are found on these properties, we may be liable for remediation costs, as well as for personal injury and property damage, civil fines and criminal penalties regardless of when the hazardous conditions or toxic substances first affected any particular property.
In doing so, there is a risk that hazardous or toxic substances could be found on these properties. If so, we may be liable for remediation costs, as well as for personal injury and property damage, civil fines and criminal penalties regardless of when the hazardous conditions or toxic substances first affected any particular property.
Our accounting policies are essential to understanding our financial results and condition. Some of these policies require the use of estimates and assumptions that may affect the value of our assets or liabilities and financial results.
Some of these policies require the use of estimates and assumptions that may affect the value of our assets or liabilities and financial results.
Based on these factors we have a concentration in multifamily and commercial real estate lending, as such loans represent approximately 456.2% of Northfield Bank's capital as of December 31, 2023.
Based on these factors we have a concentration in multifamily and commercial real estate lending, as such loans represented approximately 433.5% of Northfield Bank's capital as of December 31, 2024.
In addition, if loans that are collateralized by real estate become troubled and the value of the real estate has been significantly impaired, then we may not be able to recover the full contractual amount of principal and interest that we anticipated at the time we originated the loan, which could cause us to increase our provision for credit losses and adversely affect our operating results and financial condition. 31 Our New York State multifamily loan portfolio could be adversely impacted by changes in legislation or regulation.
In addition, if loans that are collateralized by real estate become troubled and the value of the real estate has been significantly impaired, then we may not be able to recover the full contractual amount of principal and interest that we anticipated at the time we originated the loan, which could cause us to increase our provision for credit losses and adversely affect our operating results and financial condition. 31 Our concentration of loans in certain industries could have adverse effects on credit quality.
As of December 31, 2023, we had a net unrealized loss of $45.0 million on our debt securities available-for-sale portfolio as a result of the rising interest rate environment. Our investment securities totaled $828.5 million, or 14.8%, of total assets, at December 31, 2023.
As of December 31, 2024, we had a net unrealized loss of $29.0 million on our debt securities available-for-sale portfolio as a result of the previously rising interest rate environment. Our investment securities totaled $1.14 billion, or 20.1%, of total assets, at December 31, 2024.
In addition, as a result of rising interest rates, we have experienced a shift in deposits from lower-cost transaction and savings accounts to higher-cost certificates of deposit. However, the rates we earn on our loans did not increase as rapidly during the year ended December 31, 2023.
In addition, as a result of rising interest rates, customers may shift deposits from lower-cost transaction and savings accounts to higher-cost certificates of deposit. However, the rates we earn on our loans may not increase as rapidly.
At December 31, 2023, $3.68 billion, or 87.6%, of our loan portfolio held-for-investment, net, consisted of multifamily and other commercial real estate loans.
At December 31, 2024, $3.49 billion, or 86.7%, of our loan portfolio held-for-investment, net, consisted of multifamily and other commercial real estate loans.
Although interest rate risk calculations provide an indication of our interest rate risk exposure at a particular point in time, such measurements are not intended to and do not provide a precise forecast of the effect of changes in market interest rates on our net portfolio value or net interest income and likely will differ from actual results.
Although interest rate risk calculations provide an indication of our interest rate risk exposure at a particular point in time, such measurements are not intended to and do not provide a precise forecast of the effect of changes in market interest rates on our net portfolio value or net interest income and likely will differ from actual results. 38 Risks Related to Operational Matters Our funding sources may prove insufficient to replace deposits at maturity and support our future growth.
Deterioration in economic conditions, including as a result of inflation or recession, changes in interest rates, or disruptions to the global supply chain, could result in the following consequences, any of which could have a material adverse effect on our business, financial condition, liquidity and results of operations: • demand for our products and services may decline; • loan delinquencies, problem assets, and foreclosures may increase; • collateral for loans, especially real estate, may decline in value, (including due to the inability to complete construction projects due to disruption in the supply chain) in turn reducing customers’ future borrowing power, and reducing the value of assets and collateral associated with existing loans; • we may increase our allowance for credit losses; • the value of our securities portfolio may decline; or • the net worth and liquidity of loan guarantors may decline, impairing their ability to honor commitments to us.
A significant decline in general economic conditions, caused by inflation, tariffs or other domestic or international governmental policies, changes in interest rates, recession, acts of terrorism, an outbreak of hostilities or other international or domestic events, tax reform, unemployment, an epidemic or pandemic or other factors beyond our control, could result in the following consequences, any of which could have a material adverse effect on our business, financial condition, liquidity and results of operations: • demand for our products and services may decline; • loan delinquencies, problem assets, and foreclosures may increase; 36 • collateral for loans, especially real estate, may decline in value, (including due to the inability to complete construction projects due to disruption in the supply chain) in turn reducing customers’ future borrowing power, and reducing the value of assets and collateral associated with existing loans; • our allowance for credit losses may increase; • the value of our securities portfolio may decline; or • the net worth and liquidity of loan guarantors may decline, impairing their ability to honor commitments to us.
If a significant amount of these deposits were withdrawn within a short period of time, it could have a negative impact on our short-term liquidity or if the cost to replace such funds was more expensive, it could have an adverse impact on our earnings.
If a significant amount of these deposits were withdrawn within a short period of time, it could have a negative impact on our short-term liquidity or if the cost to replace such funds was more expensive, it could have an adverse impact on our earnings. 42 Changes in the valuation of our securities portfolio could reduce net income and lower our capital levels.
A deterioration in economic conditions in the United States and our markets could result in an increase in loan delinquencies and non-performing assets, decreases in loan collateral values and a decrease in demand for our products and services, all of which, in turn, would adversely affect our business, financial condition and results of operations. 36 Our stock price may be negatively impacted by unrelated bank failures and negative depositor confidence in depository institutions.
A deterioration in economic conditions in the United States and our markets could result in an increase in loan delinquencies and non-performing assets, decreases in loan collateral values and a decrease in demand for our products and services, all of which, in turn, would adversely affect our business, financial condition and results of operations.
Given that future deterioration in the U.S. credit and financial markets is a possibility, losses or significant deterioration in the fair value of our U.S. government issued or guaranteed investments may occur. At December 31, 2023, we had approximately $44.4 million, $73.9 million, $125.8 million and $550.6 million invested in U.S. Treasuries, U.S.
Given that future deterioration in the U.S. credit and financial markets is a possibility, losses or significant deterioration in the fair value of our U.S. government issued or guaranteed investments may occur. At December 31, 2024, we had approximately $75.3 million, $35.8 million and $989.0 million invested in U.S.
These limitations established a maximum percentage of eligible retained income that can be utilized for such actions. 34 The application of these more stringent capital requirements, among other things, could result in lower returns on equity, require the raising of additional capital, and result in regulatory actions if we were to be unable to comply with such requirements.
The application of these capital requirements, among other things, could result in lower returns on equity, require the raising of additional capital, and result in regulatory actions if we were to be unable to comply with such requirements.
Deposits have traditionally been our primary source of funds for use in lending and investment activities. We also receive funds from loan repayments, investment maturities and income on other interest-earning assets. While we emphasize the generation of low-cost core deposits as a source of funding, there is strong competition for such deposits in our market area.
We also receive funds from loan repayments, investment security maturities and income on other interest-earning assets. While we emphasize the generation of low-cost core deposits as a source of funding, there is strong competition for such deposits in our market area. Additionally, deposit balances can decrease if customers identify alternative investments opportunities.
UNRESOLVED STAFF COMMENTS There are no unresolved staff comments. 43
ITEM 1B. UNRESOLVED STAFF COMMENTS There are no unresolved staff comments.
Our concentration in multifamily loans and commercial real estate loans could expose us to increased lending risks and related credit losses. Our current business strategy is to continue to originate multifamily loans and, to a lesser extent, other commercial real estate loans.
Our concentration in multifamily loans and commercial real estate loans could expose us to increased lending risks and related credit losses.
As discussed above, as inflation increases and market interest rates rise the value of our investment securities, particularly those with longer maturities, would decrease, although this effect can be less pronounced for floating rate instruments.
However, in September, the FRB reduced rates by 50 basis points and by an additional 25 basis points in November and December. As inflation increases and market interest rates rise, the value of our investment securities, particularly those with longer maturities, decrease although this effect can be less pronounced for floating rate instruments.
However, as with any risk management framework, there are inherent limitations to our risk management strategies as there may exist, or develop in the future, risks that we have not appropriately anticipated or identified.
However, as with any risk management framework, there are inherent limitations to our risk management strategies as there may exist, or develop in the future, risks that we have not appropriately anticipated or identified. If our risk management framework proves ineffective, we could suffer unexpected losses and our business and results of operations could be materially adversely affected.
We are subject to reinvestment risk associated with changes in interest rates. Changes in interest rates may affect the average life of loans and mortgage-related securities. Decreases in interest rates often result in increased prepayments of loans and mortgage-related securities as borrowers refinance their loans to reduce borrowings costs.
Decreases in interest rates often result in increased prepayments of loans and mortgage-related securities as borrowers refinance their loans to reduce borrowings costs.
An institution may become subject to limitations on paying dividends, engaging in share repurchases, and paying discretionary bonuses if its capital level falls below the buffer amount.
An institution may become subject to limitations on paying dividends, engaging in share repurchases, and paying discretionary bonuses if its capital level falls below the buffer amount. These limitations establish a maximum percentage of eligible retained income that can be utilized for such actions.
Our heavy reliance on information technology systems (both internal and third-party) exposes us to operational risks which include the risk of malfeasance by employees or persons outside of our organization, errors relating to transaction processing and technology, systems failures or interruptions, failures to properly implement systems upgrades, breaches of our internal control systems and compliance requirements, and business continuation and disaster recovery. 39 Information security risks have generally increased in recent years because of the proliferation of new technologies, the use of the Internet and telecommunications technologies to conduct financial and other transactions, and the increased sophistication and activities of perpetrators of cyber-attacks and mobile phishing.
Our heavy reliance on information technology systems (both internal and external) exposes us to operational risks which include the risk of malfeasance by employees or persons outside of our organization, errors relating to transaction processing and technology, systems failures or interruptions, failures to properly implement systems upgrades, breaches of our internal control systems and compliance requirements, and business continuation and disaster recovery.
The CIT Committee retains an independent external cybersecurity consultant who regularly attends all CIT Committee meetings and reports directly to the CIT Committee Chair.
Our Chief Information Security Officer provides the CIT Committee with periodic reports on our cybersecurity risks and any material cybersecurity incidents. The CIT Committee retains an independent external cybersecurity consultant who regularly attends all CIT Committee meetings and reports directly to the CIT Committee Chair.
Our business, financial condition, and results of operations could be adversely affected by natural disasters, health epidemics, and other catastrophic events. We could be adversely affected if key personnel or a significant number of employees were to become unavailable due to a pandemic, natural disaster, war, act of terrorism, accident, or other reason.
We could be adversely affected if key personnel or a significant number of employees were to become unavailable due to a pandemic, natural disaster, war, act of terrorism, accident, or other reason. Any of these events could result in the temporary reduction of operations, employees, and customers, which could limit our ability to provide services.
Changes in the valuation of our securities portfolio could reduce net income and lower our capital levels. Our securities portfolio may be affected by fluctuations in market value, potentially reducing accumulated other comprehensive income and/or earnings. Fluctuations in market value may be caused by changes in market interest rates, lower market prices for securities and limited investor demand.
Our securities portfolio may be affected by fluctuations in market value, potentially reducing accumulated other comprehensive income and/or earnings. Fluctuations in market value may be caused by changes in market interest rates, lower market prices for securities and limited investor demand. Management evaluates securities for impairment on a quarterly basis, with more frequent evaluation for selected issues.
Our financial condition and results of operations are significantly affected by changes in market interest rates. Our results of operations substantially depend on our net interest income, which is the difference between the interest income we earn on our interest-earning assets and the interest expense we pay on our interest-bearing liabilities.
Our results of operations substantially depend on our net interest income, which is the difference between the interest income we earn on our interest-earning assets and the interest expense we pay on our interest-bearing liabilities. Our interest-bearing liabilities generally reprice or mature more quickly than our interest-earning assets.
On June 14, 2019, the New York State legislature passed the Housing Stability and Tenant Protection Act of 2019, impacting about one million rent regulated apartment units.
Our New York State multifamily loan portfolio could be adversely impacted by changes in legislation or regulation. In 2019, the New York State legislature passed the Housing Stability and Tenant Protection Act of 2019, impacting about one million rent regulated apartment units.
This legislation generally limits a landlord’s ability to increase rents on rent-regulated apartments and makes it more difficult to convert rent regulated apartments to market rate apartments. As a result, the value of the collateral located in New York State securing our multifamily loans or the future net operating income of such properties could potentially become impaired.
As a result, the value of the collateral located in New York State securing our multifamily loans or the future net operating income of such properties could potentially become impaired.
Risks Related to Operational Matters Our funding sources may prove insufficient to replace deposits at maturity and support our future growth. A lack of liquidity could adversely affect our financial condition and results of operations and result in regulatory limits being placed on us. We maintain sufficient funds to respond to the needs of depositors and borrowers.
A lack of liquidity could adversely affect our financial condition and results of operations and result in regulatory limits being placed on us. We maintain sufficient funds to respond to the needs of depositors and borrowers. Deposits have traditionally been our primary source of funds for use in lending and investment activities.
As we continue to grow, we are likely to become more dependent on these sources, which may include Federal Home Loan Bank advances, federal funds purchased and brokered certificates of deposit.
Accordingly, as a part of our liquidity management, we may use a number of funding sources in addition to deposits and repayments and maturities of loans and investments. As we continue to grow, we are likely to become more dependent on these sources, which may include FHLB advances, federal funds purchased and brokered certificates of deposit.
Those borrowers might not be able to repay their loans, and the collateral for such loans may decline significantly in value. Other Risks Related to Our Business Changes in our accounting policies or in accounting standards could materially affect how we report our financial condition and results of operations.
Other Risks Related to Our Business Changes in our accounting policies or in accounting standards could materially affect how we report our financial condition and results of operations. Our accounting policies are essential to understanding our financial results and condition.
Recent regulatory changes have made available to qualifying institutions of under $10 billion in assets an alternative “community bank leverage ratio” framework of 9% Tier 1 capital to average total consolidated assets. That framework was available for election starting in 2020, which the Northfield Bank opted into in the first quarter of 2020.
However, qualifying institutions of under $10 billion in assets may elect to be subject to an alternative “community bank leverage ratio” framework, which is currently 9% Tier 1 capital to average total consolidated assets. Northfield Bank has opted into this framework.
If our municipal banking deposits were lost within a short period of time, this could negatively impact our liquidity and earnings. As of December 31, 2023, municipal deposits totaled $768.6 million, or 19.8% of total deposits. Municipal deposits may be more volatile than other deposits.
If our municipal banking deposits were lost within a short period of time, this could negatively impact our liquidity and earnings. As of December 31, 2024, municipal deposits, which are secured by the Bank's investment securities or letters of credit issued by the FHLBNY, totaled $859.3 million, or 20.8% of total deposits.
Any of these events could result in the temporary reduction of operations, employees, and customers, which could limit our ability to provide services. Additionally, many of our borrowers may suffer property damage, experience interruption of their businesses or lose their jobs after such events.
Additionally, many of our borrowers may suffer property damage, experience interruption of their businesses or lose their jobs after such events. Those borrowers might not be able to repay their loans, and the collateral for such loans may decline significantly in value.
The Board of Directors established its Compliance and Information Technology (“CIT”) Committee with specific responsibilities for overseeing cybersecurity threats, among other things. Our Chief Information Security Officer provides the CIT Committee with periodic reports on our cybersecurity risks and any material cybersecurity incidents.
Our Board of Directors needs to leverage, to a large degree, management and an outside consultant, in overseeing cybersecurity risk management. The Board of Directors established a Compliance and Information Technology (“CIT”) Committee with specific responsibilities for overseeing cybersecurity threats, among other things.
However, the framework is not expected to effectively lower the amount of capital needed to comply with regulatory requirements. See “Item 1. Business — Supervision and Regulation.” Risks Related to Strategic Matters Implementing our growth strategies could cause us to incur significant costs and expenses, which may negatively affect our financial condition and results of operations.
Risks Related to Strategic Matters Implementing our growth strategies could cause us to incur significant costs and expenses, which may negatively affect our financial condition and results of operations. We expect to continue to grow our assets, the level of our deposits or borrowings, and the scale of our operations.
As discussed below, the increase in market interest rates has already had and is expected to further have an adverse effect on our net interest income and profitability. 37 Changes in market interest rates in an increasing rate environment could adversely affect our financial condition and results of operations.
Risks Related to Interest Rates Changes in market interest rates in an increasing rate environment could adversely affect our financial condition and results of operations. Our financial condition and results of operations are significantly affected by changes in market interest rates.
The new legislation may cause us to lose the benefit of certain of our tax management strategies and may cause our total tax expense to increase. Various factors may make takeover attempts more difficult to achieve.
Various factors may make takeover attempts more difficult to achieve.
At December 31, 2023, the Company has approximately $457.8 million of New York multifamily loans that have some form of rent stabilization or rent control. Uncertainties associated with increased loan originations may result in errors in judging collectability, which may lead to additional provisions for credit losses or charge-offs, which would negatively affect our financial condition and results of operations.
At December 31, 2024, the Company had approximately $437.7 million of New York multifamily loans, or 11% of our total loan portfolio, that have some form of rent stabilization or rent control. If our allowance for credit losses is not sufficient to cover actual credit losses, our earnings and capital could decrease.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeKey elements of our cybersecurity risk management program include: • implementation of policies and procedures in the areas of Information Security, Business Continuity, Disaster Recovery, Privacy, Third-Party Service Provider Risk Management, and Incident Response; • risk assessments designed to help identify material cybersecurity risks to our critical systems, information, products, services, and our broader enterprise information technology environment; • an independent second line function, the Information Security Department, is principally responsible for managing our cybersecurity risk assessment processes, testing and monitoring of our security controls, and our response to cybersecurity incidents; • the use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security controls, including but not limited to penetration testing; • training and awareness programs for Information Security Department members that include periodic and ongoing assessments to drive adoption and awareness of cybersecurity processes and controls; • throughout the year, all employees are trained on cybersecurity awareness, confidential information protection and simulated phishing attacks, and all directors engage in interactive training modules; • membership with the Financial Services Information Sharing and Analysis Center (FS-ISAC) and annual participation in the Cyber Attacks against Payment Systems (CAPS) exercises; • cybersecurity metrics and other risk management matters are reported to both management level committees and the CIT Committee; • a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; and • a third-party risk management process for service providers, suppliers and vendors that analyses, monitors, reports, and mitigates cyber risks associated with third-party vendors, suppliers, and service providers.
Biggest changeKey elements of our enterprise cybersecurity risk management program include: • implementation of policies and procedures in the areas of Information Security, Business Continuity, Disaster Recovery, Privacy, Third-Party Relationship Risk Management, Risk Management, and Incident Response; • risk assessments designed to help identify material cybersecurity risks to our critical systems, data, products, services, and our broader enterprise information technology environment; • an independent second line function, the Information Security Department, which is principally responsible for managing our cybersecurity risk assessment processes, executing our incident response plan, and monitoring of our security controls; • the use of external service providers, where appropriate, to assess, test and enhance our security controls, including penetration testing, training, and table top exercises; • a comprehensive employee training and awareness program which includes periodic security assessments to test knowledge and reinforce adoption of security processes and controls that include simulated phishing attacks; • membership with the Financial Services Information Sharing and Analysis Center (FS-ISAC) and annual participation in the Cyber Attacks against Payment Systems (CAPS) exercises; • regular reporting of cybersecurity metrics and other risk/threat information matters to both the Management Risk and CIT Committees; • a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; and • a third-party relationships risk management process for service providers, suppliers and vendors which analyses, monitors, reports, and mitigates cyber risks associated with third-party relationships.
This does not imply that we meet any particular technical standards, specifications, or requirements, but rather that we use these standards as a guide to help us identify, assess, and manage cybersecurity risks relevant to our business. Our cybersecurity risk management program is aligned with the Company’s business strategy.
This does not imply that we meet any particular technical standards, specifications, or requirements, but rather that we use these standards as a guide to help us identify, assess, and manage cybersecurity risks relevant to our business. 43 Our cybersecurity risk management program is closely aligned with the Company’s business strategy.
ITEM 1C. CYBERSECURITY Cybersecurity Risk Management and Strategy Our Cybersecurity Risk Management program is an integrated component of the Enterprise Risk Management strategy intended to protect the confidentiality, integrity and availability of our critical systems and information.
ITEM 1C. CYBERSECURITY Cybersecurity Risk Management and Strategy Our cybersecurity risk management program is an integrated component of the Enterprise Risk Management strategy designed to protect the confidentiality, integrity and availability of our critical systems and information.
We design and assess our program based on industry standards such as the National Institute of Standards and Technology Cybersecurity Framework and the Center for Internet Security Controls.
We design and evaluate our program based on industry recognized standards such as the National Institute of Standards and Technology Cybersecurity Framework and the Center for Internet Security Controls.
Cybersecurity Governance The Board of Directors established its CIT Committee with specific responsibilities for overseeing cybersecurity threats, among other things. Our Chief Information Security Officer provides the CIT Committee with periodic reports on our cybersecurity risks and any material cybersecurity incidents.
Cybersecurity Governance The Board of Directors has established its CIT Committee with specific responsibilities for overseeing the cybersecurity risk management program, among other things. Our Chief Information Security Officer (“CISO”) provides the CIT Committee with periodic reports on cybersecurity risks, threats and any material cybersecurity incidents.
It shares common methodologies, reporting channels and governance processes that apply to other areas of enterprise risk, including legal, compliance, strategic, operational, and financial risks.
It shares common methodologies, reporting channels and governance processes that apply to other areas of enterprise risk, including third-party relationships, legal, compliance, strategic, operational, and financial.
Our Chief Information Security Officer and our Chief Information Officer, along with key members of their departments, regularly collaborate with peer institutions, industry groups, and policymakers to discuss cybersecurity trends and issues and identify best practices. The information security program is periodically reviewed by such personnel with the goal of addressing changing threats and conditions.
Our CISO and our Chief Information Officer, along with key members of their departments, regularly collaborate with peer institutions, industry groups, policymakers and third-party relationships to discuss cybersecurity trends and issues and identify best practices. The cybersecurity risk management program is periodically reviewed to address changing threats and conditions.
In the last three fiscal years, the Company has not experienced any cybersecurity incident that has materially affected or is reasonably likely to materially affect the Company, including its business strategy, results of operations, or financial conditions, and any expenses incurred from cybersecurity incidents have been immaterial.
Risks from cybersecurity threats, including any previous cybersecurity events, have not materially affected or are reasonably likely to materially affect the Company, including its business strategy, results of operations, or financial conditions, and any expenses incurred from cybersecurity incidents have been immaterial.
The Information Security Department also monitors the prevention, detection, mitigation, and remediation of cybersecurity risks and incidents through various means, which may include briefings with internal security personnel, threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us, and alerts and reports produced by security tools deployed in the information technology environment.
Our internal audit team, led by our Chief Internal Auditor, provides independent assurance and evaluation of processes, controls and cybersecurity risk management practices to ensure they are adequate and functioning as intended. 44 The Information Security Department also monitors the prevention, detection, mitigation, and remediation of cybersecurity risks and incidents through various means, including briefings with internal security personnel, threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us, and alerts and reports produced by security tools deployed in the information technology environment.
The CIT Committee retains an independent external cybersecurity consultant who regularly attends all CIT Committee meetings and reports directly to the CIT Committee Chair.
The CIT Committee also retains an independent external cybersecurity consultant who attends all CIT Committee meetings and reports directly to the CIT Committee Chair. In addition, the external cyber security consultant provides periodic training to the CIT Committee and to our Board of Directors.
Our immediate past CISO had over 15 years of experience in the cybersecurity space and has obtained professional security certifications and advanced training in the field of cybersecurity and technology. Northfield Bank is currently onboarding a new CISO, who comes to us from a money center bank and has a similar background.
The Information Security Department is led by our CISO, who has over 15 years of experience in the cybersecurity space and has obtained professional security certifications and advanced training in the field of cybersecurity and technology.
In addition, the Chief Information Security Officer provides periodic training and reports to our Board of Directors. 44 Northfield Bank maintains an Information and Cybersecurity Program under the leadership of our Chief Risk Officer, the Chief Information Officer, and the Chief Information Security Officer, with timely Board oversight for identifying and mitigating information security risks.
Northfield Bank maintains a comprehensive Information and Cybersecurity Program led by our Chief Risk Officer, the Chief Information Officer, and the CISO. The program is designed to identify and mitigate information security risks, with timely Board oversight.
The Information Security Department is primarily responsible for identifying, assessing and managing material risks from cybersecurity threats and overseeing cybersecurity vendors. The Information Security Department is led by our Chief Information Security Officer (“CISO”).
The Chief Risk Officer briefs the Board of Directors on information security matters during every meeting, ensuring that cybersecurity risks and strategies align with Northfield Bank's risk profile. The Information Security Department is primarily responsible for identifying, assessing and managing material risks from cybersecurity threats and overseeing cybersecurity third-party relationships.
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Our internal audit team, led by our Chief Internal Auditor, provides independent assurance and evaluation of processes, controls and cybersecurity risk management practices to ensure they are adequate and functioning as intended.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. PROPERTIES The Company operates from its corporate offices located at 581 Main Street, Woodbridge, New Jersey, its home office in Staten Island, New York, and its additional 38 branch offices located in New York and New Jersey.
Biggest changeITEM 2. PROPERTIES The Company operates from its corporate offices located at 581 Main Street, Woodbridge, New Jersey, its home office located at a branch in Staten Island, New York, and its additional 36 branch offices located in New York and New Jersey.
The branch offices are located in the New York counties of Richmond, and Kings and the New Jersey counties of Hunterdon, Mercer, Middlesex, and Union. The net book value of our premises, land, and equipment was $24.8 million at December 31, 2023.
The branch offices are located in the New York counties of Richmond and Kings, and the New Jersey counties of Hunterdon, Mercer, Middlesex, and Union. The net book value of our premises, land, and equipment was $22.0 million at December 31, 2024.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 3. LEGAL PROCEEDINGS In the normal course of business, we may be party to various outstanding legal proceedings and claims. In the opinion of management, our consolidated financial statements are not likely to be materially affected by the outcome of such legal proceedings and claims as of December 31, 2023. ITEM 4.
Biggest changeITEM 3. LEGAL PROCEEDINGS In the normal course of business, we may be party to various outstanding legal proceedings and claims. In the opinion of management, our consolidated financial statements are not likely to be materially affected by the outcome of such legal proceedings and claims as of December 31, 2024. ITEM 4.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 45 Part II. Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 46 Item 6. [Reserved] 47 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 48 Item 7A. Quantitative and Qualitative Disclosures about Market Risk 68 Item 8.
Biggest changeItem 4. Mine Safety Disclosures 45 Part II. Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 46 Item 6. [Reserved] 47 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 48 Item 7A. Quantitative and Qualitative Disclosures about Market Risk 67 Item 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeSmallCap Bank Index 100.00 125.46 113.94 158.62 139.85 140.55 KBW NASDAQ Bank Index 100.00 136.13 122.09 168.88 132.75 131.57 Source: S&P Global Market Intelligence, a division of S&P Global Inc. 46 Issuer Purchases of Equity Securities On June 16, 2022, the Company's Board of Directors approved a $45.0 million stock repurchase program, which was suspended on March 16, 2023 and reinstated and completed in May 2023.
Biggest changeSmallCap Bank Index 100.00 90.82 126.43 111.47 112.03 132.44 KBW NASDAQ Bank Index 100.00 89.69 124.06 97.52 96.65 132.60 Source: S&P Global Market Intelligence, a division of S&P Global Inc. 46 Issuer Purchases of Equity Securities On June 16, 2022, the Board of Directors of the Company approved a $45.0 million stock repurchase program, which was completed in May 2023.
Certain shares of Northfield Bancorp, Inc. are held in “nominee” or “street” name and accordingly, the number of beneficial owners of such shares is not known or included in the foregoing number.
Certain shares of Northfield Bancorp are held in “nominee” or “street” name and accordingly, the number of beneficial owners of such shares is not known or included in the foregoing number.
Stock Performance Graph Set forth below is a stock performance graph comparing (a) the cumulative total return on the Northfield Bancorp, Inc.’s common stock for the period December 31, 2018, through December 31, 2023, (b) the cumulative total return of the stocks included in the NASDAQ Composite Index over such period, (c) the cumulative total return on stocks included in the S&P U.S.
Stock Performance Graph Set forth below is a stock performance graph comparing (a) the cumulative total return on the Northfield Bancorp’s common stock for the period December 31, 2019, through December 31, 2024, (b) the cumulative total return of the stocks included in the NASDAQ Composite Index over such period, (c) the cumulative total return on stocks included in the S&P U.S.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES Our shares of common stock are traded on the NASDAQ Global Select Market under the symbol “NFBK.” The approximate number of holders of record of Northfield Bancorp, Inc.’s common stock as of February 26, 2024, was 3,711.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES Our shares of common stock are traded on the NASDAQ Global Select Market under the symbol “NFBK.” The approximate number of holders of record of Northfield Bancorp’s common stock as of February 28, 2025, was 3,565.
During the years ended December 31, 2023 and 2022, the Company repurchased 3,074,332 shares of its common stock outstanding at an average price of $11.99 per share for a total cost of $36.9 million, and 2,092,157 shares of its common stock outstanding at an average price of $14.72 per share for a total cost of $38.0 million, respectively, pursuant to the approved stock repurchase plans.
During the years ended December 31, 2024 and 2023, the Company repurchased 1,802,072 shares of its common stock outstanding at an average price of $10.24 per share for a total cost of $18.4 million, and 3,074,332 shares of its common stock outstanding at an average price of $11.99 per share for a total cost of $36.9 million, respectively, pursuant to the approved stock repurchase plans.
On June 1, 2023, the Board of Directors of the Company approved a $10.0 million stock repurchase program which was completed in August 2023. On November 7, 2023, the Board of Directors of the Company approved a $7.5 million stock repurchase program. The stock repurchase program is administered in accordance with Rule 10b5-1 of the Securities and Exchange Commission.
On June 1, 2023, the Board of Directors of the Company approved a $10.0 million stock repurchase program which was completed in August 2023. On November 7, 2023, the Board of Directors of the Company approved a $7.5 million stock repurchase program which was completed in January 2024.
Removed
Previously, the Company compared its price performance to the NASDAQ Composite Index, S&P Composite 1500 Thrifts & Mortgage Finance Index and the KBW NASDAQ Bank Index. In March 2023, S&P Global revised their Global Industry Classification Standard and the S&P Composite 1500 Thrifts & Mortgage Finance Index was discontinued. It was deemed that the S&P U.S.
Added
As of Index 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 Northfield Bancorp, Inc. 100.00 75.64 102.25 103.13 86.46 83.83 NASDAQ Composite Index 100.00 144.92 177.06 119.45 172.77 223.87 S&P U.S.
Removed
SmallCap Banks Index was an appropriate index to use in its place as Northfield Bancorp is a member of this index. As of Index 12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 Northfield Bancorp, Inc. 100.00 128.69 97.34 131.58 132.72 111.26 NASDAQ Composite Index 100.00 136.69 198.10 242.03 163.28 236.17 S&P U.S.
Added
On April 24, 2024, the Board of Directors of the Company approved a $5.0 million stock repurchase program which was completed in May 2024, and on June 14, 2024, the Board of Directors of the Company approved a $10.0 million stock repurchase program which was completed in August 2024.
Removed
The timing of the repurchases will depend on certain factors, including but not limited to, market conditions and prices, the Company’s liquidity and capital requirements, and alternative uses of capital. Any repurchased shares will be held as treasury stock and will be available for general corporate purposes.
Added
At December 31, 2024, the Company had no outstanding repurchase programs. The Company did not make any repurchases of its common stock during the three months ended December 31, 2024. On February 26, 2025, the Board of Directors of the Company approved a new $5.0 million stock repurchase program and anticipates conducting such repurchases beginning on March 3, 2025.
Removed
The repurchases may be suspended, terminated or modified at any time for any reason, including market conditions, the cost of repurchasing shares, the availability of alternative investment opportunities, liquidity, and other factors deemed appropriate.
Removed
At December 31, 2023, the maximum dollar value of shares remaining for repurchase under the plan was $3.1 million. The following table reports information regarding purchases of the Company’s common stock during the three months ended December 31, 2023.
Removed
Period (a) Total Number of Shares Purchased (b) Average Price Paid per Share (c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (d) Maximum Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs (in thousands) October 1, 2023 to October 31, 2023 — $ — — $ — November 1, 2023 to November 30, 2023 319,476 9.77 319,476 4,380 December 1, 2023 to December 31, 2023 111,045 11.76 111,045 3,074 Total 430,521 430,521

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe following table details non-performing loans by loan type at December 31, 2023 and 2022 (in thousands): December 31, 2023 2022 Held-for-investment Real estate loans: Multifamily $ 2,709 $ 3,285 Commercial 6,491 5,184 One-to-four family residential 104 118 Home equity and lines of credit 499 262 Commercial and industrial 305 964 Other 7 — Total non-accrual loans held-for-investment 10,115 9,813 Loans delinquent 90 days or more and still accruing: Real estate loans: Multifamily $ 201 $ 233 Commercial — 8 One-to-four family residential 406 155 Home equity and lines of credit 711 — Commercial and industrial — 24 Other — 5 Total loans delinquent 90 days or more and still accruing held-for-investment 1,318 425 Total non-performing assets $ 11,433 $ 10,238 At December 31, 2023 and 2022, the Company had no assets acquired through foreclosure.
Biggest changeThe following table details non-performing assets consisting of non-performing loans held-for-investment and non-performing loans held-for-sale at December 31, 2024 and 2023 (in thousands): December 31, 2024 2023 Non-accrual loans: Held-for-investment $ 14,264 $ 10,115 Loans 90 days or more past due and still accruing: Held-for-investment 1,186 1,318 Total non-performing loans held-for-investment 15,450 11,433 Other non-performing loans held-for-sale 4,897 — Total non-performing loans 20,347 11,433 Total non-performing assets $ 20,347 $ 11,433 Accruing loans 30 to 89 days delinquent $ 9,336 $ 8,683 The following table details non-performing loans by loan type at December 31, 2024 and 2023 (in thousands): December 31, 2024 2023 Held-for-investment Real estate loans: Multifamily $ 2,609 $ 2,709 Commercial 4,578 6,491 One-to-four family residential — 104 Home equity and lines of credit 1,270 499 Commercial and industrial 5,807 305 Other — 7 Total non-accrual loans held-for-investment 14,264 10,115 Loans delinquent 90 days or more and still accruing: Real estate loans: Multifamily $ 164 $ 201 One-to-four family residential 882 406 Home equity and lines of credit 140 711 Total loans delinquent 90 days or more and still accruing held-for-investment 1,186 1,318 Non-performing loans held-for-sale Commercial real estate 4,397 — Commercial and industrial 500 — Total non-performing loans held-for-sale 4,897 — Total non-performing loans $ 20,347 $ 11,433 Total non-performing assets $ 20,347 $ 11,433 The Company's non-performing loans at December 31, 2024, totaled $20.3 million, or 0.51%, of total loans, and include $4.9 million of loans held-for-sale, as compared to $11.4 million, or 0.27%, at December 31, 2023.
Our Risk Committee is responsible for establishing and monitoring our liquidity targets and strategies in order to ensure that sufficient liquidity exists for meeting the borrowing needs and withdrawals of deposits by our customers as well as unanticipated contingencies.
The Risk Committee is responsible for establishing and monitoring our liquidity targets and strategies in order to ensure that sufficient liquidity exists for meeting the borrowing needs and withdrawals of deposits by our customers as well as unanticipated contingencies.
The Company continues to maintain an adequate liquidity position and expects to have sufficient funds available to meet current commitments in the normal course of business. The Company has a diversified deposit base, with long-standing client relationships across multiple customer segments providing stable funding. Government deposits are collateralized by assets or letters of credit issued by the FHLBNY.
The Company continues to maintain an adequate liquidity position and expects to have sufficient funds available to meet current commitments in the normal course of business. 65 The Company has a diversified deposit base, with long-standing client relationships across multiple customer segments providing stable funding. Government deposits are collateralized by assets or letters of credit issued by the FHLBNY.
Our model requires us to make certain assumptions that may or may not reflect the manner in which actual yields and costs respond to changes in market interest rates. However, we also apply consistent parallel yield curve shifts (in both directions) to determine possible changes in net interest income if the theoretical yield curve shifts occurred gradually.
Our model requires us to make certain assumptions that may or may not reflect the manner in which actual yields and costs respond to changes in market interest rates. We also apply consistent parallel yield curve shifts (in both directions) to determine possible changes in net interest income if the theoretical yield curve shifts occurred gradually.
Additionally, on March 12, 2023, the Board of Governors of the Federal Reserve System created the BTFP, which aims to enhance liquidity by allowing institutions to pledge certain securities at par value, and at pay a borrowing rate of ten basis points over the one-year overnight index swap rate.
On March 12, 2023, the Board of Governors of the Federal Reserve System created the BTFP, which aims to enhance liquidity by allowing institutions to pledge certain securities at par value, and at pay a borrowing rate of ten basis points over the one-year overnight index swap rate.
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.
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 the Bank’s commercial real estate portfolio under severe, adverse economic conditions.
Individually impaired loans that have no impairment losses are not considered for collective allowances described earlier. We have a concentration of loans secured by real property located in New York, New Jersey, and, to a lesser extent, eastern Pennsylvania.
Individually impaired loans that have no impairment losses are not considered for collective allowances described earlier. 52 We have a concentration of loans secured by real property located in New York, New Jersey, and, to a lesser extent, eastern Pennsylvania.
PPP loans were of insignificant value at December 31, 2023. 50 Critical Accounting Policies Critical accounting policies are defined as those that involve significant judgments and uncertainties, and could potentially result in materially different results under different assumptions and conditions.
PPP loans were of insignificant value at December 31, 2023 and 2024. 50 Critical Accounting Policies Critical accounting policies are defined as those that involve significant judgments and uncertainties, and could potentially result in materially different results under different assumptions and conditions.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion should be read in conjunction with the consolidated financial statements of Northfield Bancorp, Inc. and the Notes thereto included elsewhere in this report (collectively, the “financial statements”).
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion should be read in conjunction with the consolidated financial statements of Northfield Bancorp and the Notes thereto included elsewhere in this report (collectively, the “financial statements”).
Generally, non-performing loans are charged down to the appraised value of collateral less costs to sell for collateral-dependent loans and to the present value of the expected future cash flows for non-collateral dependent loans, which reduces the ratio of the allowance for credit losses to non-performing loans.
Generally, non-performing loans are charged down to the appraised value of collateral less costs to sell for collateral-dependent loans and to the present value of the expected future cash flows for non-collateral dependent loans, which reduces allowance for credit losses and consequently the ratio of the allowance for credit losses to non-performing loans.
As part of our ongoing asset-liability management, we currently use the following strategies to manage our interest rate risk: • originating multifamily loans and commercial real estate loans that generally have shorter maturities than one-to-four family residential real estate loans and have higher interest rates that generally reset from five to ten years; • investing in investment grade corporate securities and mortgage-backed securities; and • obtaining general financing through lower-cost core deposits, brokered deposits, and longer-term FHLB advances, borrowings under the BTFP, and repurchase agreements.
As part of our ongoing asset-liability management, we currently use the following strategies to manage our interest rate risk: • originating multifamily loans and commercial real estate loans that generally have shorter maturities than one-to-four family residential real estate loans and have higher interest rates that generally reset from five to ten years; • investing in investment grade corporate securities and mortgage-backed securities; and • obtaining general financing through lower-cost core deposits, brokered deposits, longer-term FHLB advances, and repurchase agreements.
GAAP generally requires the measurement of financial position and operating results in terms of historical dollars without consideration for changes in the relative purchasing power of money over time due to inflation. The effect of inflation is reflected in the increased cost of our operations. Unlike industrial companies, our assets and liabilities are primarily monetary in nature.
U.S. GAAP generally requires the measurement of financial position and operating results in terms of historical dollars without consideration for changes in the relative purchasing power of money over time due to inflation. The effect of inflation is reflected in the increased cost of our operations. Unlike industrial companies, our assets and liabilities are primarily monetary in nature.
Conversely, if we removed the upside scenarios and reallocated the weights from S0 to S4 and S1 to S3, the allowance for credit losses would have increased approximately $2.7 million. These forecasts revert to our long-term historical average loss rate after a 24 month forecasting period.
Conversely, if we removed the upside scenarios and reallocated the weights from S0 to S4 and S1 to S3, the allowance for credit losses would have increased approximately $2.8 million. These forecasts revert to our long-term historical average loss rate after a 24-month forecasting period.
Accordingly, our Board of Directors has established a Management Asset-Liability Committee (“MALCO”), comprised of our SVP & Chief Investment Officer and Treasurer, who chairs this Committee, our President & Chief Executive Officer, our EVP & Chief Risk Officer, our EVP & Chief Financial Officer, our EVP & Chief Lending Officer, our EVP & Chief Branch Administration, Deposit Operations & Business Development Officer, and our SVP & Director of Marketing, and other officers and staff as necessary or appropriate.
Accordingly, our Board of Directors has established a Management Asset-Liability Committee (“MALCO”), comprised of our SVP & Chief Investment Officer and Treasurer, who chairs this Committee, our President & Chief Executive Officer, our EVP & Chief Risk Officer, our EVP & Chief Financial Officer, our EVP & Chief Lending Officer, and our EVP & Chief Branch Administration, Deposit Operations & Business Development Officer, and other officers and staff as necessary or appropriate.
This committee is responsible for, among other things, evaluating the interest rate risk inherent in our assets and liabilities, for recommending to the Risk Committee of our Board of Directors (“Risk Committee”) the level of risk that is appropriate given our business strategy, operating environment, capital, liquidity and performance objectives, and for managing this risk consistent with the guidelines approved by the Board of Directors.
This committee is responsible for, among other things, evaluating the interest rate risk inherent in our assets and liabilities, for recommending to the Risk Committee the level of risk that is appropriate given our business strategy, operating environment, capital, liquidity and performance objectives, and for managing this risk consistent with the guidelines approved by the Board of Directors.
(11) Includes originated loans held-for-investment, PCD loans and acquired loans (and related allowance for credit losses). (12) Excluding PPP loans of $5.1 million, which are fully government guaranteed and do not carry any provision for losses, the allowance for credit losses to total loans held for investment, net, totaled 1.01% at December 31, 2022.
(12) Includes originated loans held-for-investment, PCD loans and acquired loans (and related allowance for credit losses). (13) Excluding PPP loans of $5.1 million, which are fully government guaranteed and do not carry any provision for losses, the allowance for credit losses to total loans held for investment, net, totaled 1.01% at December 31, 2022.
Depending on current market interest rates we then calculate what the net interest income would be for the same period under the assumption that interest rates experience an instantaneous and sustained increase of 100, 200, 300, or 400 basis points, or a decrease of 100 and 200 basis points, which is based on the current interest rate environment. 64 The following tables set forth, as of December 31, 2023 and December 31, 2022, our calculation of the estimated changes in our NPV, NPV ratio, and percent change in net interest income that would result from the designated instantaneous and sustained changes in interest rates (dollars in thousands).
Depending on current market interest rates we then calculate what the net interest income would be for the same period under the assumption that interest rates experience an instantaneous and sustained increase of 100, 200, 300, or 400 basis points, or a decrease of 100, 200, 300 or 400 basis points, which is based on the current interest rate environment. 63 The following tables set forth, as of December 31, 2024 and December 31, 2023, our calculation of the estimated changes in our NPV, NPV ratio, and percent change in net interest income that would result from the designated instantaneous and sustained changes in interest rates (dollars in thousands).
(9) Non-performing loans consist of non-accruing loans and loans 90 days or more past due and still accruing (excluding PCD loans), included in total loans held-for-investment, net, and non-performing loans held-for-sale, included in loans held-for-sale. (10) Includes originated loans held-for-investment, PCD loans, acquired loans, and loans held-for-sale.
(9) Non-performing loans consist of non-accruing loans and loans 90 days or more past due and still accruing (excluding PCD loans), included in total loans held-for-investment, net, and non-performing loans held-for-sale, included in loans held-for-sale. (10) Includes originated loans held-for-investment, PCD loans, acquired loans, and loans held-for-sale. (11) Excludes non-performing loans held-for-sale.
The following table details the five Moody's scenarios utilized in determining the allowance for credit losses on loans at December 31, 2023, and weightings of each scenario: Model Scenario Moody's Scenario Description Weight S0 Upside - 4th Percentile 4% S1 Upside - 10th Percentile 10% S3 Downside - 90th Percentile 10% S4 Downside - 96th Percentile 4% Baseline Baseline Scenario 72% If we placed 100% weighting on the baseline scenario, the quantitative allowance for credit losses at December 31, 2023 would have been approximately $1.4 million lower.
The following table details the five Moody's scenarios utilized in determining the allowance for credit losses on loans at December 31, 2024, and weightings of each scenario: Model Scenario Moody's Scenario Description Weight S0 Upside - 4th Percentile 4% S1 Upside - 10th Percentile 10% S3 Downside - 90th Percentile 10% S4 Downside - 96th Percentile 4% Baseline Baseline Scenario 72% If we placed 100% weighting on the baseline scenario, the quantitative allowance for credit losses at December 31, 2024 would have been approximately $2.8 million lower.
Based on the composition of our loan portfolio, we believe the primary risks are increases in interest rates, a decline in the economy generally, or a decline in real estate market values in New York, New Jersey, or eastern Pennsylvania.
Based on the composition of our loan portfolio, we believe the primary risks are changes in interest rates, inflation, a decline in the economy generally, or a decline in real estate market values in New York, New Jersey, or eastern Pennsylvania.
Comparison of Operating Results for the Years Ended December 31, 2022 and 2021 For a discussion of our results of operations for the year ended December 31, 2022 compared to the year ended December 31, 2021, see “Part II, Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations” Comparison of Operating Results, included in our 2022 Form 10-K, filed with the SEC on March 1, 2023. 57 Average Balances and Yields The following table sets forth average balance sheets, average yields and costs, and certain other information for the years indicated.
Comparison of Operating Results for the Years Ended December 31, 2023 and 2022 For a discussion of our results of operations for the year ended December 31, 2023 compared to the year ended December 31, 2022, see “Part II, Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations” Comparison of Operating Results, included in our 2023 Form 10-K, filed with the SEC on February 29, 2024. 57 Average Balances and Yields The following table sets forth average balance sheets, average yields and costs, and certain other information for the years indicated.
During the year ended December 31, 2023, the Company recorded net charge-offs of $6.4 million, as compared to net charge-offs of $838,000 for the year ended December 31, 2022, and net charge-offs of $2.8 million for the year ended December 31, 2021. Charge-offs in 2023 were primarily related to small business unsecured commercial and industrial loans.
During the year ended December 31, 2024, the Company recorded net charge-offs of $6.6 million, as compared to net charge-offs of $6.4 million for the year ended December 31, 2023, and net charge-offs of $838,000 for the year ended December 31, 2022. Charge-offs in 2024 and 2023 were primarily related to small business unsecured commercial and industrial loans.
At December 31, 2023 and December 31, 2022, we were in compliance with all Board-approved policies with respect to interest rate risk management. 65 Certain shortcomings are inherent in the methodologies used in determining interest rate risk through changes in net portfolio value and net interest income.
At December 31, 2024 and December 31, 2023, we were in compliance with all Board-approved policies with respect to interest rate risk management. 64 Certain shortcomings are inherent in the methodologies used in determining interest rate risk through changes in net portfolio value and net interest income.
At the same time, net charge-offs have remained low at 0.15% of average loans outstanding for the year ended December 31, 2023, as compared to 0.02% for the year ended December 31, 2022, and 0.07% for the year ended December 31, 2021. 59 Non-performing Assets and Delinquent Loans.
At the same time, net charge-offs have remained low at 0.16% of average loans outstanding for the year ended December 31, 2024, as compared to 0.15% for the year ended December 31, 2023, and 0.02% for the year ended December 31, 2022. 59 Non-performing Assets and Delinquent Loans.
Downward adjustments to appraisal values, primarily to reflect “quick sale” discounts, are generally recorded as specific reserves within the allowance for credit losses. The allowance for credit losses to total loans held-for-investment, net, was 0.89% at December 31, 2023, as compared to 1.00% at December 31, 2022.
Downward adjustments to appraisal values, primarily to reflect “quick sale” discounts, are generally recorded as specific reserves within the allowance for credit losses. The allowance for credit losses to total loans held-for-investment, net, was 0.87% at December 31, 2024, as compared to 0.89% at December 31, 2023.
Significant variances from the prior year are as follows: a $33.6 million decrease in net interest income, a $3.1 million decrease in the provision for credit losses on loans, a $3.9 million increase in non-interest income, a $6.5 million increase in non-interest expense, and a $9.6 million decrease in income tax expense.
Significant variances from the prior year are as follows: a $10.2 million decrease in net interest income, a $2.9 million increase in the provision for credit losses on loans, a $4.9 million increase in non-interest income, a $3.1 million increase in non-interest expense, and a $3.5 million decrease in income tax expense.
As of December 31, 2023, non-owner occupied commercial real estate loans (as defined by regulatory guidance) to total risk-based capital was estimated at approximately 456%.
As of December 31, 2024, non-owner occupied commercial real estate loans (as defined by regulatory guidance) to total risk-based capital was estimated at approximately 434%.
At December 31, 2023, 2.9% of PCD loans were past due 30 to 89 days, and 27.1% were past due 90 days or more, as compared to 6.8% and 23.0%, respectively, at December 31, 2022. Loans General. Maintaining loan quality historically has been, and will continue to be, a key element of our business strategy.
At December 31, 2024, 2.1% of PCD loans were past due 30 to 89 days, and 24.9% were past due 90 days or more, as compared to 2.9% and 27.1%, respectively, at December 31, 2023. Loans General. Maintaining loan quality historically has been, and will continue to be, a key element of our business strategy.
(2) The year ended December 31, 2022, includes $925,000, after tax, of net interest income generated from accelerated accretion of fees related to the forgiveness of PPP loans and $326,000, after-tax, in gains on loans sold.
(2) The year ended December 31, 2023, includes $317,000, after tax, of severance costs and $96,000, after tax, of gains on loans sold. (3) The year ended December 31, 2022, includes $925,000, after tax, of net interest income generated from accelerated accretion of fees related to the forgiveness of PPP loans and $326,000, after-tax, in gains on loans sold.
Significant variances from the prior year are as follows: a $33.6 million decrease in net interest income, a $3.1 million decrease in the provision for credit losses on loans, a $3.9 million increase in non-interest income, a $6.5 million increase in non-interest expense, and a $9.6 million decrease in income tax expense. 55 Interest Income.
Significant variances from the prior year are as follows: a $10.2 million decrease in net interest income, a $2.9 million increase in the provision for credit losses on loans, a $4.9 million increase in non-interest income, a $3.1 million increase in non-interest expense, and a $3.5 million decrease in income tax expense. Interest Income.
We employ conservative underwriting standards for new loan originations and maintain sound credit administration practices while the loans are outstanding. In addition, substantially all of our loans are secured, predominantly by real estate. At December 31, 2023, our non-performing loans totaled $11.4 million, or 0.27%, of total loans.
We employ conservative underwriting standards for new loan originations and maintain sound credit administration practices while the loans are outstanding. In addition, substantially all of our loans are secured, predominantly by real estate. At December 31, 2024, our non-performing loans totaled $20.3 million, or 0.51%, of total loans.
The allowance for credit losses for off-balance sheet credit exposures is recorded in other liabilities on the consolidated balance sheets and the corresponding provision is included in other non-interest expense. 53 Comparison of Financial Condition at December 31, 2023 and 2022 Total assets decreased by $2.9 million, or 0.1%, to $5.60 billion at December 31, 2023 compared to December 31, 2022.
The allowance for credit losses for off-balance sheet credit exposures is recorded in other liabilities on the consolidated balance sheets and the corresponding provision is included in other non-interest expense. 53 Comparison of Financial Condition at December 31, 2024 and 2023 Total assets increased by $68.0 million, or 1.2%, to $5.67 billion at December 31, 2024, from $5.60 billion at December 31, 2023.
Because of the of the high degree of judgment involved in management's estimates of the allowance for credit losses, the subjectivity of assumptions used, and the potential for changes in the forecasted economic environment, there is inherent uncertainty in such estimates.
Because of the of the high degree of judgment involved in management's estimates of the allowance for credit losses, the subjectivity of assumptions used, and the potential for changes in the forecasted economic environment, there is inherent uncertainty in such estimates. Changes in these estimates could significantly impact the allowance for credit losses on loans.
PCD loans had an allowance for credit losses of approximately $3.1 million and $3.9 million at December 31, 2023 and December 31, 2022, respectively. Bank-owned life insurance increased $3.6 million, or 2.2%, to $171.5 million at December 31, 2023, as compared to $167.9 million at December 31, 2022.
PCD loans had an allowance for credit losses of approximately $2.9 million and $3.1 million at December 31, 2024 and December 31, 2023, respectively. Bank-owned life insurance increased $4.2 million, or 2.5%, to $175.8 million at December 31, 2024, as compared to $171.5 million at December 31, 2023.
Allowance for credit losses allocated to the home equity and lines of credit and commercial and industrial loan portfolios increased from December 31, 2022 to December 31, 2023. This increase was primarily due to risk rating downgrades in those portfolios. 63 Management of Market Risk General . A majority of our assets and liabilities are monetary in nature.
Allowance for credit losses allocated to the home equity and lines of credit and commercial and industrial loan portfolios increased from December 31, 2023 to December 31, 2024 primarily due to risk rating downgrades in those portfolios and higher loan balances. 62 Management of Market Risk General . A majority of our assets and liabilities are monetary in nature.
Changes in these estimates could significantly impact the allowance for credit losses on loans. 52 Allowance for Individually Evaluated Loans The Company measures specific reserves for individual loans that do not share common risk characteristics with other loans, consisting of all loans designated as TDRs prior to the adoption of ASU 2022-02 and non-accrual loans with an outstanding balance of $500,000 or greater.
Allowance for Individually Evaluated Loans The Company measures specific reserves for individual loans that do not share common risk characteristics with other loans, consisting of all loans designated as TDRs prior to the adoption of ASU 2022-02 and non-accrual loans with an outstanding balance of $500,000 or greater.
Management continues to monitor the small business unsecured commercial and industrial loan portfolio, which totaled $37.4 million at December 31, 2023. Non-interest Income.
Management continues to monitor the small business unsecured commercial and industrial loan portfolio, which totaled $28.9 million at December 31, 2024. Non-interest Income.
Among other things, these adjustments include and account for differences in: (i) changes in lending policies and procedures; (ii) changes in local, regional, national, and international economic and business conditions and developments that affect the collectability of our portfolio, including the condition of various market segments; (iii) changes in the experience, ability and depth of lending management and other relevant staff; (iv) changes in the quality of our loan review system; (v) the existence and effect of any concentrations of credit, and changes in the level of such concentrations; and (vi) the effect of other external factors such as competition and legal and regulatory requirements on the level of estimated credit losses in our existing portfolio.
Among other things, these adjustments include and account for differences in: (i) changes in lending policies and procedures; (ii) changes in local, regional, national, and international economic and business conditions and developments that affect the collectability of our portfolio, including the condition of various market segments; (iii) changes in the experience, ability and depth of lending management and other relevant staff; (iv) changes in the quality of our loan review system; (v) the existence and effect of any concentrations of credit, and changes in the level of such concentrations; and (vi) the effect of other external factors such as competition and legal and regulatory requirements on the level of estimated credit losses in our existing portfolio. 51 The Company utilizes a two-year reasonable and supportable forecast period after which estimated losses revert to historical loss experience immediately for the remaining life of the loan.
The Company continues to focus on the credit needs of its customers, and to a lesser extent, the development of new business notwithstanding the current uncertain economic environment.
The Company continues to focus on the credit needs of its customers, and to a lesser extent, the development of new business.
This decrease was primarily attributable to a decrease of $5.1 million, or 11.9%, in the allowance for credit losses as well as an increase in non-performing loans of $1.2 million, from $10.2 million at December 31, 2022 to $11.4 million at December 31, 2023.
This decrease was primarily attributable to a decrease of $2.4 million, or 6.3%, in the allowance for credit losses as well as an increase in non-performing loans of $8.9 million, from $11.4 million at December 31, 2023 to $20.3 million at December 31, 2024.
At December 31, 2023, office-related loans represented $208.6 million, or approximately 5% of our total loan portfolio, with an average balance of $1.8 million (although we have originated these type of loans in amounts substantially greater than this average) and a weighted average loan-to-value ratio of 58%. Approximately 46% were owner-occupied.
At December 31, 2024, office-related loans represented $184.0 million, or approximately 5% of our total loan portfolio, with an average balance of $1.8 million (although we have originated these types of loans in amounts substantially greater than this average) and a weighted average loan-to-value ratio of 59%. Approximately 42% were owner-occupied.
In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”. The amendments in the this ASU require improved annual income tax disclosures surrounding rate reconciliation, income taxes paid, and other disclosures. This update will be effective for financial statements issued for fiscal years beginning after December 15, 2024. Early adoption is permitted.
The amendments in this ASU require improved annual income tax disclosures surrounding rate reconciliation, income taxes paid, and other disclosures. This update will be effective for financial statements issued for fiscal years beginning after December 15, 2024, with early adoption is permitted.
A forecast of cash flow data for the upcoming twelve months is presented to the Risk Committee on a quarterly basis. Liquidity is the ability to fund assets and meet obligations as they come due.
In addition, a twelve-month liquidity forecast is presented to MALCO in order to assess potential future liquidity scenarios. A forecast of cash flow data for the upcoming twelve months is presented to the Risk Committee on a quarterly basis. Liquidity is the ability to fund assets and meet obligations as they come due.
The Company recorded income tax expense of $14.1 million for the year ended December 31, 2023, compared to $23.7 million for the year ended December 31, 2022, with the decrease due to lower taxable income. The effective tax rate for the year ended December 31, 2023, was 27.2%, compared to 28.0% for the year ended December 31, 2022.
The Company recorded income tax expense of $10.6 million for the year ended December 31, 2024, compared to $14.1 million for the year ended December 31, 2023, with the decrease due to lower taxable income. The effective tax rate for the year ended December 31, 2024, was 26.1%, compared to 27.2% for the year ended December 31, 2023.
Overview Net income was $37.7 million, or $0.86 per diluted common share, and $61.1 million, or $1.32 per diluted common share, for the years ended December 31, 2023 and December 31, 2022, respectively.
Overview Net income was $29.9 million, or $0.72 per diluted common share, and $37.7 million, or $0.86 per diluted common share, for the years ended December 31, 2024 and December 31, 2023, respectively.
(2) Represents remaining borrowing potential. At December 31, 2023, we had $7.0 million in outstanding loan commitments. In addition, we had $292.7 million in unused lines of credit to borrowers. Certificates of deposit due within one year of December 31, 2023 totaled $635.8 million, or 16.4% of total deposits.
(2) Represents remaining borrowing potential. At December 31, 2024, we had $51.3 million in outstanding loan commitments. In addition, we had $261.8 million in unused lines of credit to borrowers. Certificates of deposit due within one year of December 31, 2024 totaled $940.2 million, or 22.7% of total deposits.
Treasuries, $125.8 million in corporate bonds, substantially all of which were considered investment grade, and $763,000 in municipal bonds at December 31, 2023. Gross unrealized losses, net of tax, on available-for-sale debt securities and held-to-maturity securities approximated $32.5 million and $279,000, respectively, at December 31, 2023, and $48.6 million and $332,000, respectively, at December 31, 2022.
Government agency securities, $35.8 million in corporate bonds, substantially all of which were considered investment grade, and $685,000 in municipal bonds at December 31, 2024. Gross unrealized losses, net of tax, on available-for-sale debt securities and held-to-maturity securities approximated $21.8 million and $400,000, respectively, at December 31, 2024, and $32.5 million and $279,000, respectively, at December 31, 2023.
The Company routinely utilizes brokered deposits and borrowed funds to manage interest rate risk, the cost of interest-bearing liabilities, and funding needs related to loan originations and deposit activity. Deposits decreased $271.8 million, or 6.5%, to $3.88 billion at December 31, 2023, as compared to $4.15 billion at December 31, 2022. Brokered deposits decreased by $290.0 million, or 74.4%.
The Company routinely utilizes brokered deposits and borrowed funds to manage interest rate risk, the cost of interest-bearing liabilities, and funding needs related to loan originations and deposit activity. Deposits increased $260.0 million, or 6.70%, to $4.14 billion at December 31, 2024, as compared to $3.88 billion at December 31, 2023.
Net charge-offs were $6.4 million for the year ended December 31, 2023, as compared to net charge-offs of $838,000 for the year ended December 31, 2022, due to $6.2 million in charge-offs on small business unsecured commercial and industrial loans.
Net charge-offs were $6.6 million for the year ended December 31, 2024, as compared to net charge-offs of $6.4 million for the year ended December 31, 2023, and included charge-offs of $5.5 million and $6.2 million on small business unsecured commercial and industrial loans for the years ended December 31, 2024 and 2023, respectively.
We believe that the most critical accounting policies upon which our financial condition and results of operation depend, and which involve the most complex subjective decisions or assessments, are the following: Allowance for Credit Losses on Loans.
We believe that the most critical accounting policies upon which our financial condition and results of operation depend, and which involve the most complex subjective decisions or assessments, are the following: Allowance for Credit Losses on Loans. The Company estimates and recognize an allowance for lifetime expected credit losses for loans and other financial assets measured at amortized cost.
In the event of a 400 basis point increase in interest rates, we would experience a 22.31% decrease in estimated net portfolio value, a 25.83% decrease in net interest income in year one and an 11.03% decrease in net interest income in year two.
In the event of a 400 basis point increase in interest rates, we would experience an 11.18% decrease in estimated net portfolio value, a 15.51% decrease in net interest income in year one and a 1.73% increase in net interest income in year two.
The decrease was attributable to $36.9 million in stock repurchases and $22.8 million in dividend payments, partially offset by net income of $37.7 million for the year ended December 31, 2023, a $15.9 million reduction in accumulated other comprehensive loss due to an increase in the fair value of our debt securities available-for-sale portfolio, and a $4.2 million increase in equity award activity. 48 Selected Financial Data The summary information presented below at the dates or for each of the years presented is derived in part from our consolidated financial statements.
The increase was attributable to net income of $29.9 million for the year ended December 31, 2024, a $12.1 million increase in accumulated other comprehensive income, associated with an increase in the estimated fair value of our debt securities available-for-sale portfolio due to the increase in market interest rates, and a $3.6 million increase in equity award activity, partially offset by $18.1 million in stock repurchases and $21.8 million in dividend payments. 48 Selected Financial Data The summary information presented below at the dates or for each of the years presented is derived in part from our consolidated financial statements.
(6) Dividend payout ratio is calculated as total dividends declared for the year divided by net income for the year. (7) The efficiency ratio represents non-interest expense divided by the sum of net interest income and non-interest income. (8) The year ended December 31, 2023, includes $440,000 pre-tax, of severance costs.
(6) Dividend payout ratio is calculated as total dividends declared for the year divided by net income for the year. (7) The efficiency ratio represents non-interest expense divided by the sum of net interest income and non-interest income.
The decrease in the coverage ratio from December 31, 2022 was primarily attributable to a decrease of $5.1 million, or 11.9%, in the allowance for credit losses from December 31, 2022 to December 31, 2023, offset by a decrease in the loan portfolio of $40.0 million, or 0.9%.
The decrease in the coverage ratio from December 31, 2023 was primarily attributable to a decrease of $2.4 million, or 6.3%, in the allowance for credit losses from December 31, 2023 to December 31, 2024, offset by a decrease in the loan portfolio of $176.5 million, or 4.2%.
The increase in FHLBNY stock directly correlates with higher short-term borrowing balances at December 31, 2023, as compared to December 31, 2022. Other assets decreased $5.9 million, or 10.7%, to $48.6 million at December 31, 2023, from $54.4 million at December 31, 2022.
The decrease in FHLBNY stock directly correlates with lower short-term borrowing balances at December 31, 2024, as compared to December 31, 2023. Other assets decreased $1.6 million, or 3.4%, to $46.9 million at December 31, 2024, from $48.6 million at December 31, 2023.
At December 31, 2023 2022 2021 (Dollars in thousands) Selected Financial Condition Data: Total assets $ 5,598,396 $ 5,601,293 $ 5,430,542 Cash and cash equivalents 229,506 45,799 91,068 Trading securities 12,549 10,751 13,461 Debt securities available-for-sale, at estimated fair value 795,464 952,173 1,208,237 Debt securities held-to-maturity, at amortized cost 9,866 10,760 5,283 Equity securities 10,629 10,443 5,342 Loans held-for-investment, net 4,203,654 4,243,693 3,806,617 Allowance for credit losses (37,535) (42,617) (38,973) Net loans held-for-investment 4,166,119 4,201,076 3,767,644 Bank-owned life insurance 171,543 167,912 164,500 FHLBNY stock, at cost 39,667 30,382 22,336 Operating lease right-of-use assets 30,202 34,288 33,943 Other real estate owned — — 100 Deposits 3,878,435 4,150,219 4,169,334 Borrowed funds 859,272 583,859 421,755 Subordinated debentures, net of issuance costs 61,219 60,996 — Operating lease liabilities 35,205 39,790 39,851 Total liabilities 4,898,951 4,899,903 4,690,659 Total stockholders’ equity $ 699,445 $ 701,390 $ 739,883 Years Ended December 31, 2023 2022 2021 (Dollars in thousands, except share data) Selected Operating Data: Interest income $ 208,795 $ 179,688 $ 172,298 Interest expense 84,128 21,382 16,649 Net interest income before provision/(benefit) for credit losses 124,667 158,306 155,649 Provision/(benefit) for credit losses 1,353 4,482 (6,184) Net interest income after provision/(benefit) for credit losses 123,314 153,824 161,833 Non-interest income 11,896 7,983 14,453 Non-interest expense 83,450 76,948 79,159 Income before income taxes 51,760 84,859 97,127 Income tax expense 14,091 23,740 26,473 Net income $ 37,669 $ 61,119 $ 70,654 Net income per common share - basic $ 0.86 $ 1.32 $ 1.46 Net income per common share - diluted $ 0.86 $ 1.32 $ 1.45 Weighted average basic shares outstanding 43,560,844 46,234,122 48,416,495 Weighted average diluted shares outstanding 43,638,616 46,438,119 48,754,263 49 At or For the Years Ended December 31, 2023 2022 2021 Selected Financial Ratios and Other Data: Performance Ratios: Return on assets (ratio of net income to average total assets) (1) (2) (3) 0.68 % 1.09 % 1.29 % Return on equity (ratio of net income to average equity) (1) (2) (3) 5.45 8.57 9.42 Interest rate spread (4) 1.82 2.82 2.89 Net interest margin (5) 2.35 2.97 3.01 Dividend payout ratio (6) 60.51 39.48 34.39 Efficiency ratio (7) (8) 61.11 46.27 46.54 Non-interest expense to average total assets 1.50 1.38 1.44 Average interest-earning assets to average interest-bearing liabilities 133.01 137.82 135.63 Average equity to average total assets 12.44 12.75 13.69 Asset Quality Ratios: Non-performing assets to total assets 0.20 0.18 0.15 Non-performing loans to total loans (9) (10) 0.27 0.24 0.21 Allowance for credit losses to total non-performing loans 328.30 416.26 486.80 Allowance for credit losses to total loans held-for-investment, net (11) (12) 0.89 1.00 1.02 Capital Ratio: Tier 1 capital (to adjusted assets) 12.58 12.64 12.93 Other Data: Number of full service offices 39 38 38 Full time equivalent employees 401 400 385 (1) The year ended December 31, 2023, includes $317,000, after tax, of severance costs and $96,000, after tax, of gains on loans sold.
At December 31, 2024 2023 2022 (Dollars in thousands) Selected Financial Condition Data: Total assets $ 5,666,378 $ 5,598,396 $ 5,601,293 Cash and cash equivalents 167,744 229,506 45,799 Trading securities 13,884 12,549 10,751 Debt securities available-for-sale, at estimated fair value 1,100,817 795,464 952,173 Debt securities held-to-maturity, at amortized cost 9,303 9,866 10,760 Equity securities 14,261 10,629 10,443 Loans held-for-sale 4,897 — — Loans held-for-investment, net 4,022,224 4,203,654 4,243,693 Allowance for credit losses (35,183) (37,535) (42,617) Net loans held-for-investment 3,987,041 4,166,119 4,201,076 Bank-owned life insurance 175,759 171,543 167,912 FHLBNY stock, at cost 35,894 39,667 30,382 Operating lease right-of-use assets 27,771 30,202 34,288 Deposits 4,138,477 3,878,435 4,150,219 Borrowed funds 666,402 859,272 583,859 Subordinated debentures, net of issuance costs 61,442 61,219 60,996 Operating lease liabilities 32,209 35,205 39,790 Total liabilities 4,961,682 4,898,951 4,899,903 Total stockholders’ equity $ 704,696 $ 699,445 $ 701,390 Years Ended December 31, 2024 2023 2022 (Dollars in thousands, except share data) Selected Operating Data: Interest income $ 237,908 $ 208,795 $ 179,688 Interest expense 123,423 84,128 21,382 Net interest income before provision for credit losses 114,485 124,667 158,306 Provision for credit losses 4,281 1,353 4,482 Net interest income after provision for credit losses 110,204 123,314 153,824 Non-interest income 16,822 11,896 7,983 Non-interest expense 86,525 83,450 76,948 Income before income taxes 40,501 51,760 84,859 Income tax expense 10,556 14,091 23,740 Net income $ 29,945 $ 37,669 $ 61,119 Net income per common share - basic $ 0.72 $ 0.86 $ 1.32 Net income per common share - diluted $ 0.72 $ 0.86 $ 1.32 Weighted average basic shares outstanding 41,567,370 43,560,844 46,234,122 Weighted average diluted shares outstanding 41,628,660 43,638,616 46,438,119 49 At or For the Years Ended December 31, 2024 2023 2022 Selected Financial Ratios and Other Data: Performance Ratios: Return on assets (ratio of net income to average total assets) (1) (2) (3) 0.52 % 0.68 % 1.09 % Return on equity (ratio of net income to average equity) (1) (2) (3) 4.30 5.45 8.57 Interest rate spread (4) 1.45 1.82 2.82 Net interest margin (5) 2.10 2.35 2.97 Dividend payout ratio (6) 72.89 60.51 39.48 Efficiency ratio (7) (8) 65.90 61.11 46.27 Non-interest expense to average total assets 1.51 1.50 1.38 Average interest-earning assets to average interest-bearing liabilities 128.77 133.01 137.82 Average equity to average total assets 12.14 12.44 12.75 Asset Quality Ratios: Non-performing assets to total assets 0.36 0.20 0.18 Non-performing loans to total loans (9) (10) 0.51 0.27 0.24 Allowance for credit losses to total non-performing loans (11) 227.72 328.30 416.26 Allowance for credit losses to total loans held-for-investment, net (12) (13) 0.87 0.89 1.00 Capital Ratio: Tier 1 capital (to adjusted assets) 12.11 12.58 12.64 Other Data: Number of full service offices 37 39 38 Full time equivalent employees 359 401 400 (1) The year ended December 31, 2024, includes a $2.4 million, after tax, gain on sale of property, $795,000 additional tax expense related to options that expired in June 2024, and $492,000, after tax, of severance costs.
Net interest income for the year ended December 31, 2023, decreased $33.6 million, or 21.2%, to $124.7 million, from $158.3 million for the year ended December 31, 2022, primarily due to a 62 basis point decrease in net interest margin to 2.35% for the year ended December 31, 2023 from 2.97% for the year ended December 31, 2022.
Net interest income for the year ended December 31, 2024, decreased $10.2 million, or 8.2%, to $114.5 million, from $124.7 million for the year ended December 31, 2023, primarily due to a 25 basis point decrease in net interest margin to 2.10% for the year ended December 31, 2024 from 2.35% for the year ended December 31, 2023.
Each scenario is weighted with a majority of the weighting placed on the Baseline scenario and lower weights placed on both the Upside and Downside scenarios. The weighting assigned by management is based on the economic outlook and available information at the reporting date. The model projects economic variables under each scenario based on detailed statistical analyses.
The weighting assigned by management is based on the economic outlook and available information at the reporting date. The model projects economic variables under each scenario based on detailed statistical analyses.
Year Ended December 31, Year Ended December 31, 2023 vs. 2022 2022 vs. 2021 Total Total Increase (Decrease) Due to Increase Increase (Decrease) Due to Increase Volume Rate (Decrease) Volume Rate (Decrease) (Dollars in thousands) Interest-earning assets: Loans $ 6,944 $ 13,783 $ 20,727 $ 4,493 $ (1,799) $ 2,694 Mortgage-backed securities (1,661) 3,908 2,247 (1,001) 2,822 1,821 Other securities (514) 1,276 762 1,982 378 2,360 FHLBNY stock 1,225 714 1,939 (152) 47 (105) Interest-earning deposits 136 3,296 3,432 (46) 666 620 Total interest-earning assets 6,130 22,977 29,107 5,276 2,114 7,390 Interest-bearing liabilities: Savings, NOW and money market accounts (459) 27,257 26,798 96 483 579 Certificates of deposit 625 11,041 11,666 110 3,393 3,503 Total deposits 166 38,298 38,464 206 3,876 4,082 Borrowings 16,963 7,319 24,282 (854) 1,505 651 Total interest-bearing liabilities 17,129 45,617 62,746 (648) 5,381 4,733 Change in net interest income $ (10,999) $ (22,640) $ (33,639) $ 5,924 $ (3,267) $ 2,657 Asset Quality PCD Loans (Held-for-Investment) Based on a 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 of $9.9 million at December 31, 2023 and $11.5 million at December 31, 2022 as accruing, even though they may be contractually past due.
Year Ended December 31, Year Ended December 31, 2024 vs. 2023 2023 vs. 2022 Total Total Increase (Decrease) Due to Increase Increase (Decrease) Due to Increase Volume Rate (Decrease) Volume Rate (Decrease) (Dollars in thousands) Interest-earning assets: Loans $ (5,383) $ 7,677 $ 2,294 $ 6,944 $ 13,783 $ 20,727 Mortgage-backed securities 3,742 10,956 14,698 (1,661) 3,908 2,247 Other securities 1,385 4,987 6,372 (514) 1,276 762 FHLBNY stock (166) 757 591 1,225 714 1,939 Interest-earning deposits 4,463 695 5,158 136 3,296 3,432 Total interest-earning assets 4,041 25,072 29,113 6,130 22,977 29,107 Interest-bearing liabilities: Savings, NOW and money market accounts (177) 19,997 19,820 (459) 27,257 26,798 Certificates of deposit 6,546 7,153 13,699 625 11,041 11,666 Total deposits 6,369 27,150 33,519 166 38,298 38,464 Borrowings 3,376 2,400 5,776 16,963 7,319 24,282 Total interest-bearing liabilities 9,745 29,550 39,295 17,129 45,617 62,746 Change in net interest income $ (5,704) $ (4,478) $ (10,182) $ (10,999) $ (22,640) $ (33,639) Asset Quality PCD Loans (Held-for-Investment) Based on a 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 of $9.2 million at December 31, 2024 and $9.9 million at December 31, 2023 as accruing, even though they may be contractually past due.
The Company had the following primary sources of liquidity at December 31, 2023 (in thousands): Cash and cash equivalents (1) $ 215,617 Corporate bonds (2) $ 110,914 Multifamily loans (2) $ 930,990 Mortgage-backed securities (issued or guaranteed by the U.S. Government, Fannie Mae, or Freddie Mac) (2) $ 382,787 (1) Excludes $13.9 million of cash at Northfield Bank.
The Company had the following primary sources of liquidity at December 31, 2024 (in thousands): Cash and cash equivalents (1) $ 154,701 Corporate bonds (2) $ 21,843 Loans (2) $ 934,784 Mortgage-backed securities (issued or guaranteed by the U.S. Government, Fannie Mae, or Freddie Mac) (2) $ 661,518 (1) Excludes $13.0 million of cash at Northfield Bank.
Loans held for investment, net, decreased by $40.0 million to $4.20 billion at December 31, 2023, from $4.24 billion at December 31, 2022, primarily due to a decrease in multifamily loans, partially offset by an increase in commercial real estate loans.
Loans held for investment, net, decreased by $181.4 million to $4.02 billion at December 31, 2024, from $4.20 billion at December 31, 2023, primarily due to a decrease in multifamily loans and commercial real estate loans, partially offset by an increase in home equity and lines of credit, commercial and industrial, and construction and land loans.
Liquidity and Capital Resources The Board of Directors of the Bank has approved a liquidity policy that it reviews and updates at least annually. Senior management is responsible for implementing the policy.
Liquidity and Capital Resources The Board of Directors of the Bank has approved a liquidity policy that it reviews and updates at least annually. Senior management is responsible for implementing the policy. The MALCO is responsible for general oversight and strategic implementation of the policy and the appropriate departments are designated responsibility for implementing any strategies established by MALCO.
For the Years Ended December 31, 2023 2022 2021 Average Outstanding Balance Interest Average Yield/ Rate Average Outstanding Balance Interest Average Yield/ Rate Average Outstanding Balance Interest Average Yield/ Rate (Dollars in thousands) Interest-earning assets: Loans (1) $ 4,248,355 $ 181,638 4.28 % $ 4,077,175 $ 160,911 3.95 % $ 3,862,243 $ 158,217 4.10 % Mortgage-backed securities (2) 682,416 14,708 2.16 863,897 12,461 1.44 975,518 10,640 1.09 Other securities (2) 238,722 5,087 2.13 285,385 4,325 1.52 151,495 1,965 1.30 FHLBNY stock 40,684 3,113 7.65 22,541 1,174 5.21 25,420 1,279 5.03 Interest-earning deposits 97,975 4,249 4.34 85,485 817 0.96 164,553 197 0.12 Total interest-earning assets 5,308,152 208,795 3.93 5,334,483 179,688 3.37 5,179,229 172,298 3.33 Non-interest-earning assets 247,050 259,891 299,664 Total assets $ 5,555,202 $ 5,594,374 $ 5,478,893 Interest-bearing liabilities: Savings, NOW, and money market accounts $ 2,463,455 $ 30,408 1.23 % $ 2,898,048 $ 3,610 0.12 % $ 2,811,552 $ 3,031 0.11 % Certificates of deposit 571,041 18,345 3.21 525,557 6,679 1.27 505,472 3,176 0.63 Total interest-bearing deposits 3,034,496 48,753 1.61 3,423,605 10,289 0.30 3,317,024 6,207 0.19 Borrowings 895,229 32,055 3.58 413,697 9,296 2.25 501,523 10,442 2.08 Subordinated debt 61,169 3,320 5.43 33,436 1,797 5.37 — — — Total interest-bearing liabilities 3,990,894 84,128 2.11 3,870,738 21,382 0.55 3,818,547 16,649 0.44 Non-interest-bearing deposits 770,939 907,603 812,805 Accrued expenses and other liabilities 102,563 102,807 97,385 Total liabilities 4,864,396 4,881,148 4,728,737 Stockholders’ equity 690,806 713,226 750,156 Total liabilities and stockholders’ equity $ 5,555,202 $ 5,594,374 $ 5,478,893 Net interest income $ 124,667 $ 158,306 $ 155,649 Net interest rate spread (3) 1.82 % 2.82 % 2.89 % Net interest-earning assets (4) $ 1,317,258 $ 1,463,745 $ 1,360,682 Net interest margin (5) 2.35 % 2.97 % 3.01 % Average interest-earning assets to interest-bearing liabilities 133.01 % 137.82 % 135.63 % (1) Includes non-accruing loans.
For the Years Ended December 31, 2024 2023 2022 Average Outstanding Balance Interest Average Yield/ Rate Average Outstanding Balance Interest Average Yield/ Rate Average Outstanding Balance Interest Average Yield/ Rate (Dollars in thousands) Interest-earning assets: Loans (1) $ 4,106,641 $ 183,932 4.48 % $ 4,248,355 $ 181,638 4.28 % $ 4,077,175 $ 160,911 3.95 % Mortgage-backed securities (2) 831,681 29,406 3.54 682,416 14,708 2.16 863,897 12,461 1.44 Other securities (2) 293,776 11,459 3.90 238,722 5,087 2.13 285,385 4,325 1.52 FHLBNY stock 38,350 3,704 9.66 40,684 3,113 7.65 22,541 1,174 5.21 Interest-earning deposits 189,379 9,407 4.97 97,975 4,249 4.34 85,485 817 0.96 Total interest-earning assets 5,459,827 237,908 4.36 5,308,152 208,795 3.93 5,334,483 179,688 3.37 Non-interest-earning assets 271,162 247,050 259,891 Total assets $ 5,730,989 $ 5,555,202 $ 5,594,374 Interest-bearing liabilities: Savings, NOW, and money market accounts $ 2,449,037 $ 50,228 2.05 % $ 2,463,455 $ 30,408 1.23 % $ 2,898,048 $ 3,610 0.12 % Certificates of deposit 746,629 32,044 4.29 571,041 18,345 3.21 525,557 6,679 1.27 Total interest-bearing deposits 3,195,666 82,272 2.57 3,034,496 48,753 1.61 3,423,605 10,289 0.30 Borrowings 982,994 37,822 3.85 895,229 32,055 3.58 413,697 9,296 2.25 Subordinated debt 61,322 3,329 5.43 61,169 3,320 5.43 33,436 1,797 5.37 Total interest-bearing liabilities 4,239,982 123,423 2.91 3,990,894 84,128 2.11 3,870,738 21,382 0.55 Non-interest-bearing deposits 694,543 770,939 907,603 Accrued expenses and other liabilities 100,704 102,563 102,807 Total liabilities 5,035,229 4,864,396 4,881,148 Stockholders’ equity 695,760 690,806 713,226 Total liabilities and stockholders’ equity $ 5,730,989 $ 5,555,202 $ 5,594,374 Net interest income $ 114,485 $ 124,667 $ 158,306 Net interest rate spread (3) 1.45 % 1.82 % 2.82 % Net interest-earning assets (4) $ 1,219,845 $ 1,317,258 $ 1,463,745 Net interest margin (5) 2.10 % 2.35 % 2.97 % Average interest-earning assets to interest-bearing liabilities 128.77 % 133.01 % 137.82 % (1) Includes non-accruing loans.
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, the Company's ability to pay dividends, and overall profitability.
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, the Company's ability to pay dividends, and overall profitability. 54 Our real estate portfolio includes credit risk exposure to loans collateralized by office buildings and multifamily properties in New York State subject to some form of rent regulation limiting increases for rent stabilized multifamily properties.
The decrease was attributable to $36.9 million in stock repurchases and $22.8 million in dividend payments, partially offset by net income of $37.7 million for the year ended December 31, 2023, a $15.9 million reduction in accumulated other comprehensive loss due to an increase in the fair value of our debt securities available-for-sale portfolio, and a $4.2 million increase in equity award activity.
The increase was attributable to net income of $29.9 million for the year ended December 31, 2024, a $12.1 million increase in accumulated other comprehensive income, associated with an increase in the estimated fair value of our debt securities available-for-sale portfolio due to the increase in market interest rates, and a $3.6 million increase in equity award activity, partially offset by $18.1 million in stock repurchases and $21.8 million in dividend payments.
The geographic locations of the properties collateralizing our office-related loans are as follows: 54.2% in New York and 45.8% in New Jersey.
The geographic locations of the properties collateralizing our office-related loans are as follows: 49.9% in New York, 48.6% in New Jersey and 1.5% in Pennsylvania.
At December 31, 2022, the Company had 20 loans classified as individually impaired and recorded $38,200 of specific reserves on four of the 20 impaired loans. 62 The following table sets forth activity in our allowance for credit losses, by loan type, at December 31, for the years indicated (in thousands): Real estate loans Commercial (1) One-to-four Family Residential Construction and Land Home Equity and Lines of Credit Commercial and Industrial Other PCD Total Allowance for Credit Losses 2020 $ 33,005 $ 207 $ 1,214 $ 260 $ 1,842 $ 198 $ 881 $ 37,607 Impact of CECL Adjustment (1,949) 5,233 (921) 419 947 (188) 6,812 10,353 Balance at January 1, 2021 31,056 5,440 293 679 2,789 10 7,693 47,960 (Benefit)/provision for credit losses (4,331) (1,903) (124) (145) 991 (3) (669) (6,184) Recoveries 60 29 — 26 39 5 119 278 Charge-offs — (21) — — (646) (3) (2,411) (3,081) 2021 26,785 3,545 169 560 3,173 9 4,732 38,973 Provision/(benefit) for credit losses 2,876 359 155 287 1,243 (12) (426) 4,482 Recoveries 102 32 — 19 144 12 178 487 Charge-offs (278) — — — (446) — (601) (1,325) 2022 29,485 3,936 324 866 4,114 9 3,883 42,617 (Benefit)/provision for credit losses (6,301) (651) (175) 838 8,445 (3) (800) 1,353 Recoveries 71 — — 1 63 — 10 145 Charge-offs — — — — (6,572) — (8) (6,580) 2023 $ 23,255 $ 3,285 $ 149 $ 1,705 $ 6,050 $ 6 $ 3,085 $ 37,535 (1) Commercial includes commercial real estate loans collateralized by owner-occupied, non-owner occupied, and multifamily properties.
The following table sets forth activity in our allowance for credit losses, by loan type, at December 31, for the years indicated (in thousands): Real estate loans Commercial (1) One-to-four Family Residential Construction and Land Home Equity and Lines of Credit Commercial and Industrial Other PCD Total Allowance for Credit Losses 2021 $ 26,785 $ 3,545 $ 169 $ 560 $ 3,173 $ 9 $ 4,732 $ 38,973 Provision/(benefit) for credit losses 2,876 359 155 287 1,243 (12) (426) 4,482 Recoveries 102 32 — 19 144 12 178 487 Charge-offs (278) — — — (446) — (601) (1,325) 2022 29,485 3,936 324 866 4,114 9 3,883 42,617 Provision/(benefit) for credit losses (6,301) (651) (175) 838 8,445 (3) (800) 1,353 Recoveries 71 — — 1 63 — 10 145 Charge-offs — — — — (6,572) — (8) (6,580) 2023 23,255 3,285 149 1,705 6,050 6 3,085 37,535 Provision/(benefit) for credit losses (2,227) (1,049) (46) 457 7,329 (2) (181) 4,281 Recoveries 57 9 — 92 218 — — 376 Charge-offs (136) — — — (6,873) — — (7,009) 2024 $ 20,949 $ 2,245 $ 103 $ 2,254 $ 6,724 $ 4 $ 2,904 $ 35,183 (1) Commercial includes commercial real estate loans collateralized by owner-occupied, non-owner occupied, and multifamily properties.
(1) a collective reserve for estimated expected credit losses for pools of loans that share common risk characteristics and (2) an individual reserve for loans that do not share risk characteristics, consisting of collateral-dependent and, prior to January 1, 2023, TDR loans. 51 Allowance for Collectively Evaluated Loans Held-for-Investment The Company estimates the collective reserve using a risk rating migration model which calculates an expected life of loan loss percentage for each loan by generating probability of default and loss given default metrics.
Allowance for Collectively Evaluated Loans Held-for-Investment The Company estimates the collective reserve using a risk rating migration model which calculates an expected life of loan loss percentage for each loan by generating probability of default and loss given default metrics.
Comparison of Operating Results for the Years Ended December 31, 2023 and 2022 Net Income. Net income was $37.7 million and $61.1 million for the years ended December 31, 2023 and December 31, 2022, respectively.
Net income was $29.9 million and $37.7 million for the years ended December 31, 2024 and December 31, 2023, respectively.
Partially offsetting these decreases were increases in commercial real estate loans of $30.3 million, or 3.4%, to $929.6 million at December 31, 2023 from $899.2 million at December 31, 2022, home equity loans of $11.0 million, or 7.2%, to $163.5 million at December 31, 2023 from $152.6 million at December 31, 2022, and construction and land loans of $6.0 million, or 24.2%, to $31.0 million at December 31, 2023 from $24.9 million at December 31, 2022.
Partially offsetting these decreases were increases in home equity and lines of credit loans of $10.5 million, or 6.4%, to $174.1 million at December 31, 2024 from $163.5 million at December 31, 2023, commercial and industrial loans of $8.2 million, or 5.3%, to $163.4 million at December 31, 2024 from $155.3 million at December 31, 2023, and construction and land loans of $4.9 million, or 15.9%, to $35.9 million at December 31, 2024 from $31.0 million at December 31, 2023.
Uninsured deposits (excluding fully collateralized uninsured governmental deposits and intercompany deposits of $856.5 million) are estimated at approximately $869.9 million, or 22.4%, of total deposits as of December 31, 2023.
This total includes fully collateralized uninsured government deposits and intercompany deposits of $923.8 million, leaving estimated uninsured deposits of approximately $896.5 million, or 21.7%, of total deposits as of December 31, 2024. At December 31, 2023, estimated uninsured deposits totaled $869.9 million, or 22.4% of total deposits.
During the year ended December 31, 2023, the Company repurchased approximately 3.1 million of its common stock outstanding at an average price of $11.99 for a total of $36.9 million pursuant to the approved stock repurchase plans. As of December 31, 2023, the Company had approximately $3.1 million in remaining capacity under its current repurchase program.
During the year ended December 31, 2024, the Company repurchased 1.8 million of its common stock at an average price of $10.03 for a total of $18.1 million pursuant to the approved stock repurchase programs. As of December 31, 2024, the Company had no outstanding repurchase program.
At December 31, 2023, our largest office-related loan had a principal balance of $90.0 million (with a net active principal balance for the Bank of $30.0 million as we have a 33.3% participation interest), was secured by an office facility located in Staten Island, New York, and was performing in accordance with its original contractual terms. 54 PCD loans totaled $9.9 million and $11.5 million at December 31, 2023 and December 31, 2022, respectively, with the decrease being primarily due to one loan with a balance of approximately $950,000 which was sold during the quarter ended December 31, 2023.
At December 31, 2024, our largest office-related loan had a principal balance of $89.1 million (with a net active principal balance for the Bank of $29.7 million as we have a 33.3% participation interest), was secured by an office facility located in Staten Island, New York, and was performing in accordance with its original contractual terms.
The decrease in the average balance of interest-earning assets was due to decreases in the average balance of mortgage-backed securities of $181.5 million and the average balance of other securities of $46.7 million, partially offset by increases in the average balance of loans outstanding of $171.2 million, the average balance of FHLBNY stock of $18.1 million, and the average balance of interest-earning deposits in financial institutions of $12.5 million.
The increase in the average balance of interest-earning assets was primarily due to increases in the average balance of mortgage-backed securities of $149.3 million, the average balance of interest-earning deposits in financial institutions of $91.4 million, and the average balance of other securities of $55.1 million, partially offset by a decrease in the average balance of loans of $141.7 million.
The Company accreted interest income related to PCD loans of $1.3 million for the year ended December 31, 2023, as compared to $1.5 million for the year ended December 31, 2022. Fees recognized from PPP loans totaled $31,000 for the year ended December 31, 2023, as compared to $1.3 million for the year ended December 31, 2022.
The Company accreted interest income of $568,000 and $1.3 million attributable to PCD loans for the quarter and year ended December 31, 2024, respectively, as compared to $330,000 and $1.3 million for the quarter and year ended December 31, 2023, respectively.
We seek to maintain a ratio of liquid assets (not subject to pledge or encumbered) as a percentage of deposits and borrowings of 35% or greater. At December 31, 2023, this ratio was 39.23%. Systemic events of March 2023 impacted liquidity in the overall banking system, particularly for mid-size and regional banks.
We seek to maintain a ratio of liquid assets (not subject to pledge or encumbered) as a percentage of deposits and borrowings of 35% or greater. At December 31, 2024, this ratio was 49.39%.
Specific reserves on loans individually evaluated for impairment increased by $7,000 to $45,200 at December 31, 2023 from $38,200 at December 31, 2022. At December 31, 2023, the Company had 19 loans classified as individually impaired and recorded $45,200 of specific reserves on four of the 19 impaired loans.
At December 31, 2024, the Company had 20 loans classified as individually impaired and recorded $1.3 million of specific reserves on three of the 20 impaired loans. At December 31, 2023, the Company had 19 loans classified as individually impaired and recorded $45,200 of specific reserves on four of the 19 impaired loans.
(unconsolidated) had liquid assets of $29.2 million. Northfield Bank and Northfield Bancorp, Inc. are both subject to various regulatory capital requirements, including a risk-based capital measure. The risk-based capital guidelines include both a definition of capital and a framework for calculating risk-weighted assets by assigning assets and off-balance sheet items to broad risk categories.
The risk-based capital guidelines include both a definition of capital and a framework for calculating risk-weighted assets by assigning assets and off-balance sheet items to broad risk categories. At December 31, 2024, both Northfield Bank and Northfield Bancorp exceeded all regulatory capital requirements and are considered “well capitalized” under regulatory guidelines. See “Item 1.
The increase in interest expense on deposits was attributable to a 131 basis point increase in the cost of interest-bearing deposits from 0.30% for the year ended December 31, 2022 to 1.61% for the year ended December 31, 2023, due to rising market interest rates and a shift in the composition of the deposit portfolio towards higher-costing certificates of deposit.
The increase in interest expense was largely driven by the cost of interest-bearing liabilities, which increased by 80 basis points to 2.91% for the year ended December 31, 2024, from 2.11% for the year ended December 31, 2023, driven primarily by a 96 basis point increase in the cost of interest-bearing deposits from 1.61% to 2.57% for the year ended December 31, 2024, and, to a lesser extent, a 27 basis point increase in the cost of borrowings from 3.58% to 3.85% due to rising market interest rates, a shift in the composition of the deposit portfolio towards higher-costing certificates of deposit and a continuing reliance on borrowings.
Interest income increased $29.1 million, or 16.2%, to $208.8 million for the year ended December 31, 2023, from $179.7 million for the year ended December 31, 2022, primarily due to a 56 basis point increase in yields on interest-earning assets due to the rising rate environment and a greater percentage of assets consisting of higher-yielding loans, partially offset by a $26.3 million, or 0.5%, decrease in the average balance of interest-earning assets.
Interest income increased $29.1 million, or 13.9%, to $237.9 million for the year ended December 31, 2024, from $208.8 million for the year ended December 31, 2023, The increase in interest income was primarily due to a $151.7 million, or 2.9%, increase in the average balance of interest-earning assets coupled with a 43 basis point increase in yields on interest-earning assets, which increased to 4.36% for the year ended December 31, 2024, from 3.93% for the year ended December 31, 2023, due to the rising rate environment.

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