AVENEL, N.J., July 23, 2008 (PRIME NEWSWIRE) -- Northfield Bancorp, Inc. (Nasdaq:NFBK), the holding company for Northfield Bank, reported net income of $3.6 million for the quarter ended June 30, 2008, and $9.1 million for the six months ended June 30, 2008, compared to $2.3 million for the quarter ended June 30, 2007, and $7.0 million for the six months ended June 30, 2007. Operating results for the six months ended June 30, 2008, included a $2.5 million, nontaxable, death benefit realized on bank owned life insurance in the first quarter. For the six months ended June 30, 2007, operating results included a pre-tax gain of $4.3 million ($2.4 million, net of tax) related to the sale of two underperforming branch locations and associated deposit relationships in the first quarter. Earnings per common share for the quarter and six months ended June 30, 2008, was $0.08 and $0.21, respectively. Excluding the realized gain on the death benefit from bank owned life insurance of $0.06 per share in the first quarter of 2008, earnings per share for the six months ended June 30, 2008 was $0.15 per common share.
Northfield Bank's Tier 1 (core) capital ratio was 17.5% at June 30, 2008, and continued to be over three times the required regulatory capital necessary to be considered "well capitalized" under federal capital regulations for financial institutions.
Loans held-for-investment, net totaled $517.7 million at June 30, 2008, an increase of 22.0% over the December 31, 2007 balance of $424.3 million while deposits totaled $909.0 million at June 30, 2008, an increase of 3.6% over the December 31, 2007 balance of $877.2 million. Northfield Bank's asset quality remained stable with total non-performing loans of $10.5 million, or 2.03% of total loans at June 30, 2008, as compared to $9.8 million, or 2.32% of total loans at December 31, 2007.
Commenting on the current quarter and six month results, John W. Alexander, the Company's Chairman and Chief Executive Officer said, "Our conservative investment philosophy and loan underwriting standards continue to result in favorable financial results. With strong capital and liquidity positions, management can maintain the Company's focus on prudently originating high quality commercial real estate and multifamily real estate-backed mortgage loans."
Mr. Alexander also said, "Our financial performance continues to benefit from our disciplined deposit pricing strategy, as well as from securities leveraging strategies with manageable levels of interest rate and credit risk."
Results of Operations
Net income for the quarter and six months ended June 30, 2008, as compared to the same prior year periods, was positively affected by an increase in net interest income of $3.3 million and $5.6 million, respectively. These items were partially offset by increases in the provision for loan losses of $1.1 million and $1.3 million for the quarter and six months ended June 30, 2008. The increases in the provision for loan losses for the quarter ended June 30, 2008 was due primarily to loan growth, increases in certain estimated loss factors for groups of similar loan types, and increased provisions for certain impaired loans.
Net income was negatively affected by decreases in non-interest income of $163,000 and $2.4 million for the quarter and six months ended June 30, 2008, as compared to the same prior year periods. The decrease in non-interest income for the six months ended June 30, 2008, was due primarily to a pre-tax gain of $4.3 million on the sale of two underperforming branch locations, and associated deposit relationships, recognized in March 2007. We had no similar transactions in 2008. The reduction in non-interest income for the first six months of 2008 was partially offset by the realized nontaxable death benefit of $2.5 million in the quarter ended March 31, 2008. We had no similar transactions in 2007. Total non-interest expense declined slightly over the comparable prior year periods.
The increase in net interest income of $3.3 million, or 40%, for the quarter ended June 30, 2008, as compared to the quarter ended June 30, 2007, was primarily the result of an increase in average interest-earning assets of $221.8 million, or 18.0%, coupled with an increase in the net interest margin of 51 basis points, or 19.0%, from 2.68% to 3.19%. The increase in net interest income of $5.6 million, or 34%, for the six months ended June 30, 2008, was primarily the result of an increase in average interest-earning assets of $184.1 million, or 15.0%, coupled with an increase in the net interest margin of 45 basis points, or 16.7%, from 2.70% to 3.15%. The increase in average interest-earning assets and the net interest margin for both current year periods benefited from the Company's completion of its stock offering in November 2007, resulting in gross proceeds of $192.7 million, which included $82.4 million in transfers from deposit accounts. Net interest margin also benefited from decreases in the cost of interest-bearing deposits of 53 basis points and 41 basis points, respectively, as compared to the comparable prior year periods.
The Company recorded income tax expense of $2.0 million and $3.8 million for the quarter and six months ended June 30, 2008, respectively, as compared to $1.3 million and $4.0 million, respectively, in the corresponding prior year periods. The effective tax rate was 36.1% and 29.3% for the quarter and six months ended June 30, 2008, respectively, compared to 35.7% and 36.2%, in the corresponding prior periods. The increase in the effective tax rate for the quarter ended June 30, 2008, compared to the same prior year period was a result of increased taxable income as compared to total pre-tax income. The decrease in the effective tax rate for the six months ended June 30, 2008, compared to the same prior year period was a result of the $2.5 million, nontaxable, death benefit realized on bank owned life insurance in the first quarter of 2008.
Financial Condition
Total assets increased to $1.6 billion at June 30, 2008, from $1.4 billion at December 31, 2007. The increase reflected increases of $93.4 million in loans held-for-investment, net, securities available-for-sale of $41.3 million, and certificates of deposit in other financial institutions of $70.0 million.
Total liabilities increased to $1.2 billion at June 30, 2008, from $1.0 billion at December 31, 2007. The increase resulted from an increase in securities sold under agreements to repurchase of $92.5 million, an increase in other borrowings of $81.2 million, and an increase in deposits of $31.8 million. The increase in deposits was due primarily to an increase in money market deposits, partially offset by a decrease in certificates of deposit. Total stockholders' equity increased to $373.6 million at June 30, 2008, from $367.3 million at December 31, 2007. The increase resulted from net income of $9.1 million for the six months ended June 30, 2008, partially offset by an increase in other comprehensive losses of $3.2 million, related primarily to unrealized losses on securities available for sale, net of tax. The increase in unrealized losses on securities available for sale is due primarily to the general increase in market interest rates, with a resultant decrease in estimated fair values of investment securities.
Asset Quality
The Company's non-performing loans totaled $10.5 million at June 30, 2008, $11.3 million at March 31, 2008, $9.8 million at December 31, 2007, $11.7 million at June 30, 2007, $8.8 million at March 31, 2007, and $7.1 million at December 31, 2006. The increase in non-performing loans from December 31, 2007, was primarily attributable to an increase in non-accruing one- to four-family residential mortgage loans of $622,000, an increase in non-accruing commercial real estate loans of $398,000, and an increase in non-accruing commercial and industrial loans of $232,000. These increases were partially offset by a decrease in loans 90 days or more past due and accruing of $592,000, which consisted primarily of commercial and industrial loans, land, and construction loans paying in accordance with their original contractual terms but past maturity. Although, non-performing loans remained stable compared to December 31, 2007 and March 31, 2008 the Company provided additional reserves for non-performing loans due to estimated decreases in the underlying collateral values.
The Company does not have any lending programs commonly referred to as sub-prime lending. Sub-prime lending generally targets borrowers with weakened credit histories typically characterized by payment delinquencies, previous charge-offs, judgments, bankruptcies, or borrowers with questionable repayment capacity as evidenced by low credit scores or high debt burden ratios.
Forward-Looking Statements: This release may contain certain "forward looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, and may be identified by the use of such words as "may," "believe," "expect," "anticipate," "should," "plan," "estimate," "predict," "continue," and "potential" or the negative of these terms or other comparable terminology. Examples of forward-looking statements include, but are not limited to, estimates with respect to the financial condition, results of operations and business of Northfield Bancorp, Inc. Any or all of the forward-looking statements in this release and in any other public statements made by Northfield Bancorp, Inc. may turn out to be wrong. They can be affected by inaccurate assumptions Northfield Bancorp, Inc. might make or by known or unknown risks and uncertainties. Consequently, no forward-looking statement can be guaranteed. Northfield Bancorp, Inc. does not intend to update any of the forward-looking statements after the date of this release or to conform these statements to actual events.
NORTHFIELD BANCORP, INC.
SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA
(Dollars in thousands, except per share amounts)
(unaudited)
At At
June 30, December 31,
2008 2007
Selected Financial Condition Data: ----------- -----------
Total assets $ 1,590,973 $ 1,386,918
Cash and due from banks 16,931 25,088
Certificates of deposit 94,527 24,500
Securities available-for-sale, at
estimated fair value 843,742 802,417
Securities held-to-maturity 16,967 19,686
Trading securities 3,663 3,605
Loans held for sale -- 270
Loans held-for-investment, net 517,683 424,329
Allowance for loan losses (7,463) (5,636)
Net loans held-for-investment 510,222 418,693
Bank owned life insurance 41,127 41,560
Non-performing loans(1) 10,492 9,834
Federal Home Loan Bank of New York stock,
at cost 14,630 6,702
Securities sold under agreements to
repurchase 194,500 102,000
Other borrowings 103,654 22,420
Deposits 909,032 877,225
Total liabilities 1,217,387 1,019,532
Total stockholders' equity 373,586 367,340
Three Months Ended Six Months Ended
June 30, June 30,
---------------- ----------------
2008 2007 2008 2007
------- ------- ------- -------
Selected Operating Data:
Interest income $18,097 $15,644 $35,412 $31,146
Interest expense 6,550 7,397 13,274 14,641
------- ------- ------- -------
Net interest income before
provision for loan losses 11,547 8,247 22,138 16,505
Provision for loan losses 1,240 97 1,836 537
------- ------- ------- -------
Net interest income after
provision for loan losses 10,307 8,150 20,302 15,968
Non-interest income 1,207 1,370 4,606 6,972
Non-interest expense 5,939 5,997 11,973 12,023
------- ------- ------- -------
Income before income tax
expense 5,575 3,523 12,935 10,917
Income tax expense 2,010 1,256 3,794 3,957
------- ------- ------- -------
Net income $ 3,565 $ 2,267 $ 9,141 $ 6,960
======= ======= ======= =======
Net income per common
share (2) $ 0.08 $ N/A $ 0.21 $ N/A
======= ======= ======= =======
At or For the At or For the
Three Months Six Months
Ended Ended
---------------- ----------------
June 30, June 30,
2008 2007 2008 2007
------- ------- ------- -------
Selected Financial Ratios:
Performance Ratios:
Return on assets (ratio of
net income to average
total assets)(3) 0.93% 0.71% 1.23% 1.09%
Return on equity (ratio of
net income to average
equity)(3) 3.83% 5.33% 4.91% 8.37%
Average equity to average
total assets 24.40% 13.26% 24.97% 13.03%
Interest rate spread(3) 2.49% 2.15% 2.40% 2.18%
Net interest margin(3) 3.19% 2.68% 3.15% 2.70%
Efficiency ratio(4) 46.57% 62.36% 44.77% 51.21%
Non-interest expense to
average total assets(3) 1.56% 1.87% 1.61% 1.88%
Average interest-earning
assets to average interest-
bearing liabilities 139.28% 122.22% 139.20% 121.60%
Asset Quality Ratios:
Non-performing loans to
total assets 0.66% 0.91% 0.66% 0.91%
Non-performing loans to total
loans 2.03% 2.76% 2.03% 2.76%
Allowance for loan losses to
non-performing loans 71.13% 40.44% 71.13% 40.44%
Allowance for loan losses to
total loans 1.44% 1.12% 1.44% 1.12%
(1) Non-performing loans consist of non-accruing loans and loans
90 or more past due and still accruing, and are included in
loans held-for-investment, net.
(2) Net income per common share (calculated based on 43,126,414
average shares outstanding for the three months ended June 30,
2008 and 43,119,145 average shares outstanding for the six
months ended June 30, 2008) is not applicable prior to the
Company's completion of its stock offering on November 7,
2007.
(3) Annualized.
(4) The efficiency ratio represents non-interest expense divided
by the sum of net interest income and non-interest income.
NORTHFIELD BANCORP, INC.
ANALYSIS OF NET INTEREST INCOME
(Dollars in thousands)
For the Quarter Ended June, 30
-------------------------------------------------------------------
2008 2007
--------------------------- ---------------------------
Average Average
Average Yield/ Average Yield/
Outstanding Rate Outstanding Rate
Balance Interest (1) Balance Interest (1)
-------------------------------------------------------------------
Interest-
earning
assets:
Loans $ 468,535 $ 7,397 6.35% $ 425,993 $ 7,133 6.72%
Mortgage-
backed
securities 838,466 9,346 4.48 697,764 7,234 4.16
Other
securities 28,751 226 3.16 33,363 388 4.66
Federal Home
Loan Bank
of New
York stock 12,598 204 6.51 6,354 128 8.08
Interest-
earning
deposits
in
financial
institu-
tions 105,443 924 3.52 68,547 761 4.45
---------- ---------- ---------- ----------
Total
interest-
earning
assets 1,453,793 18,097 5.01 1,232,021 15,644 5.09
Non-interest-
earning
assets 82,224 54,396
---------- ----------
Total
assets $1,536,017 $1,286,417
========== ==========
Interest-
bearing
liabili-
ties:
Savings,
NOW,
and money
market
accounts $ 428,342 1,242 1.17 $ 385,713 785 0.82
Certifi-
cates
of
deposit 362,739 3,189 3.53 485,970 5,258 4.34
---------- ---------- ---------- ----------
Total
interest-
bearing
deposits 791,081 4,431 2.25 871,683 6,043 2.78
Repurchase
agreements 209,242 1,738 3.33 113,879 1,140 4.02
Other
borrow-
ings 43,502 381 3.51 22,475 214 3.82
---------- ---------- ---------- ----------
Total
interest-
bearing
liabili-
ties 1,043,825 6,550 2.52 1,008,037 7,397 2.94
Non-interest
bearing
deposit
accounts 104,531 92,942
Accrued
expenses
and other
liabili-
ties 12,879 14,880
---------- ----------
Total
liabili-
ties 1,161,235 1,115,859
Stockholders'
equity 374,782 170,558
---------- ----------
Total
liabili-
ties and
stock-
holders'
equity $1,536,017 $1,286,417
========== ==========
---------- ----------
Net
interest
income $ 11,547 $ 8,247
========== ==========
Net
interest
rate
spread (2) 2.49% 2.15%
Net
interest-
earning
assets (3) $ 409,968 $ 223,984
========== ==========
Net
interest
margin (4) 3.19% 2.68%
Average
interest-
earning
assets to
interest-
bearing
liabilities 139.28% 122.22%
(1) Average yields and rates for the three months ended June
30, 2008 and 2007 are annualized.
(2) Net interest rate spread represents the difference between the
weighted average yield on interest-earning assets and the
weighted average cost of interest-bearing liabilities.
(3) Net interest-earning assets represent total interest-earning
assets less total interest-bearing liabilities.
(4) Net interest margin represents net interest income divided by
average total interest-earning assets.
NORTHFIELD BANCORP, INC.
ANALYSIS OF NET INTEREST INCOME
(Dollars in thousands)
For the Six Months Ended June, 30
-------------------------------------------------------------------
2008 2007
--------------------------- ---------------------------
Average Average
Average Yield/ Average Yield/
Outstanding Rate Outstanding Rate
Balance Interest (1) Balance Interest (1)
-------------------------------------------------------------------
Interest-
earning
assets:
Loans $ 450,850 $ 14,386 6.42% $ 421,457 $ 14,046 6.72%
Mortgage-
backed
securities 799,242 17,771 4.47 699,178 14,433 4.16
Other
securities 43,396 936 4.34 44,421 1,063 4.83
Federal
Home Loan
Bank of
New York
stock 11,561 335 5.83 6,636 268 8.14
Interest-
earning
deposits
in
financial
institu-
tions 109,790 1,984 3.63 59,049 1,336 4.56
---------- ---------- ---------- ----------
Total
interest
-earning
assets 1,414,839 35,412 5.03 1,230,741 31,146 5.10
Non-
interest-
earning
assets 83,519 55,742
---------- ----------
Total
assets $1,498,358 $1,286,483
========== ==========
Interest
-bearing
liabili-
ties:
Savings,
NOW, and
money
market
accounts $ 411,140 2,145 1.05 $ 390,354 1,474 0.76
Certifi-
cates of
deposit 374,251 7,071 3.80 491,019 10,634 4.37
---------- ---------- ---------- ----------
Total
interest
-bearing
deposits 785,391 9,216 2.36 881,373 12,108 2.77
Repurchase
agreements 194,082 3,389 3.51 108,260 2,106 3.92
Other
borrowings 36,951 669 3.64 22,485 427 3.83
---------- ---------- ---------- ----------
Total
interest
-bearing
liabili-
ties 1,016,424 13,274 2.63 1,012,118 14,641 2.92
Non-
interest
bearing
deposit
accounts 92,511 93,091
Accrued
expenses
and other
liabili-
ties 15,348 13,601
---------- ----------
Total
liabili-
ties 1,124,283 1,118,810
Stock-
holders'
equity 374,075 167,673
---------- ----------
Total
liabili-
ties and
stock-
holders'
equity $1,498,358 $1,286,483
========== ==========
---------- ----------
Net
interest
income $ 22,138 $ 16,505
========== ==========
Net
interest
rate
spread (2) 2.40% 2.18%
Net
interest-
earning
assets (3) $ 398,415 $ 218,623
========== ==========
Net
interest
margin (4) 3.15% 2.70%
Average
interest
-earning
assets
to
interest
-bearing
liabilities 139.20% 121.60%
(1) Average yields and rates for the six months ended June 30,
2008 and 2007 are annualized.
(2) Net interest rate spread represents the difference between
the weighted average yield on interest-earning assets and the
weighted average cost of interest-bearing liabilities.
(3) Net interest-earning assets represent total interest-earning
assets less total interest-bearing liabilities.
(4) Net interest margin represents net interest income divided by
average total interest-earning assets.