Northfield Bancorp, Inc. Announces Second Quarter 2025 Results
NOTABLE ITEMS FOR THE QUARTER INCLUDE:
DILUTED EARNINGS PER SHARE WERE $0.24 FOR THE CURRENT QUARTER COMPARED TO $0.19 FOR THE TRAILING QUARTER, AND $0.14 FOR THE SECOND QUARTER OF 2024.
NET INTEREST MARGIN INCREASED BY 19 BASIS POINTS TO 2.57% FOR THE CURRENT QUARTER COMPARED TO 2.38% FOR THE TRAILING QUARTER, AND BY 48 BASIS POINTS COMPARED TO 2.09% FOR THE SECOND QUARTER OF 2024, DRIVEN BY LOWER FUNDING COSTS AND HIGHER YIELDS ON INTEREST-EARNING ASSETS.
COST OF DEPOSITS, EXCLUDING BROKERED DEPOSITS, AT JUNE 30, 2025 WAS 1.88% AS COMPARED TO 1.94% AT MARCH 31, 2025.
ASSET QUALITY IMPROVED WITH NON-PERFORMING LOANS TO TOTAL LOANS AT 0.36% AT JUNE 30, 2025 COMPARED TO 0.48% AT MARCH 31, 2025.
THE COMPANY MAINTAINED STRONG LIQUIDITY WITH OVER $800 MILLION IN UNPLEDGED AVAILABLE-FOR-SALE SECURITIES AND LOANS READILY AVAILABLE-FOR-PLEDGE OF APPROXIMATELY $1 BILLION.
A $10.0 MILLION REPURCHASE PLAN APPROVED ON APRIL 23, 2025 WAS COMPLETED DURING THE CURRENT QUARTER AS THE COMPANY REPURCHASED 862,469 SHARES.
CASH DIVIDEND DECLARED OF $0.13 PER SHARE OF COMMON STOCK, PAYABLE ON AUGUST 20, 2025, TO STOCKHOLDERS OF RECORD AS OF AUGUST 6, 2025.
WOODBRIDGE, N.J., July 23, 2025 (GLOBE NEWSWIRE) -- NORTHFIELD BANCORP, INC. (NASDAQ:NFBK) (the "Company"), the holding company for Northfield Bank, reported net income of $9.6 million, or $0.24 per diluted share, for the three months ended June 30, 2025, compared to $7.9 million, or $0.19 per diluted share, for the three months ended March 31, 2025, and $6.0 million, or $0.14 per diluted share, for the three months ended June 30, 2024. For the six months ended June 30, 2025, net income totaled $17.4 million, or $0.43 per diluted share, compared to $12.2 million, or $0.29 per diluted share, for the six months ended June 30, 2024. For the three and six months ended June 30, 2025, net income included $580,000 of additional tax expense related to options that expired in May 2025. For the three and six months ended June 30, 2024, net income included $795,000 of additional tax expense related to options that expired in June 2024, and $683,000 of severance expense. The increase in net income for the current quarter and the six months ended June 30, 2025, as compared to the comparable prior year periods was primarily due to an increase in net interest income, attributable to lower funding costs and higher yields on loans and securities, partially offset by an increase in the provision for credit losses on loans.
Commenting on the quarter, Steven M. Klein, the Company's Chairman and Chief Executive Officer, noted, "Our strong financial results reflect the continued execution of our strategic initiatives, focused on prudent and disciplined lending and deposit gathering, net interest margin expansion, and expense discipline." Mr. Klein further noted, "I'm pleased to report that we continue to deploy our substantial capital base, including through stock repurchases of $15.0 million for the year and the declaration of a quarterly cash dividend of $0.13 per common share, payable August 20, 2025, to stockholders of record on August 6, 2025."
Results of Operations
Comparison of Operating Results for the Six Months Ended June 30, 2025 and 2024
Net income was $17.4 million and $12.2 million for the six months ended June 30, 2025 and June 30, 2024, respectively. Significant variances from the comparable prior year period are as follows: a $9.6 million increase in net interest income, a $4.9 million increase in the provision for credit losses on loans, a $1.3 million increase in non-interest income, a $920,000 decrease in non-interest expense, and a $1.7 million increase in income tax expense.
Net interest income for the six months ended June 30, 2025, increased $9.6 million, or 17.0%, to $66.2 million, from $56.6 million for the six months ended June 30, 2024 due to a $6.0 million decrease in interest expense and a $3.6 million increase in interest income. The decrease in interest expense was primarily due to a decrease in the average balance of interest-bearing liabilities of $141.5 million, or 3.3%, as well as a decrease in the cost of interest-bearing liabilities, which decreased by 18 basis points to 2.74% for the six months ended June 30, 2025, from 2.92% for the six months ended June 30, 2024. The average balance of interest-bearing liabilities decreased primarily due to a $378.9 million, or 35.2%, decrease in the average balance of borrowed funds, partially offset by a $237.2 million, or 7.5%, increase in the average balance of interest-bearing deposits, primarily certificates of deposit. The decrease in the cost of interest-bearing liabilities was driven primarily by an eight basis point decrease in the cost of interest-bearing deposits to 2.47% from 2.55% and a four basis point decrease in the cost of borrowings to 3.83% from 3.87%. The increase in interest income was primarily due to a 25 basis point increase in the yield on interest-earning assets, due to higher yields on mortgage-backed securities and loans, partially offset by a $128.0 million, or 2.3%, decrease in the average balance of interest-earning assets. The decrease was primarily due to decreases in the average balance of loans of $175.5 million, the average balance of other securities of $275.8 million, and the average balance of interest-earning deposits in financial institutions of $128.1 million, partially offset by an increase in the average balance of mortgage-backed securities of $453.4 million. The changes reflect the purchase of higher-yielding mortgage-related securities with excess cash and proceeds from the maturities of other securities.
Net interest margin increased by 42 basis points to 2.48% for the six months ended June 30, 2025, from 2.06% for the six months ended June 30, 2024. The increase in net interest margin was primarily due to higher yields on loans and mortgage-backed securities, coupled with a decrease in the cost of interest-bearing liabilities. Net interest income for the six months ended June 30, 2025, included $609,000 of interest income related to the settlement of a non-accrual loan in May 2025. The Company accreted interest income related to purchased credit-deteriorated ("PCD") loans of $469,000 for the six months ended June 30, 2025, as compared to $747,000 for the six months ended June 30, 2024. Net interest income for the six months ended June 30, 2025, also included loan prepayment income of $767,000 as compared to $561,000 for the six months ended June 30, 2024.
The provision for credit losses on loans increased by $4.9 million to $4.7 million for the six months ended June 30, 2025, compared to a benefit of $203,000 for the six months ended June 30, 2024, primarily due to an increase in general reserves related to a worsening macroeconomic forecast in the current quarter within our Current Expected Credit Loss ("CECL") model, an increase in specific reserves of $1.2 million, changes in model assumptions including a reduction in prepayment speeds, and higher net charge-offs. Partially offsetting the increase in reserves was a decline in loan balances. Net charge-offs were $3.7 million for the six months ended June 30, 2025, primarily due to $3.2 million in net charge-offs on small business unsecured commercial and industrial loans, as compared to net charge-offs of $2.6 million for the six months ended June 30, 2024. Management continues to closely monitor the small business unsecured commercial and industrial loan portfolio, which totaled $24.0 million at June 30, 2025.
Non-interest income increased by $1.3 million, or 21.0%, to $7.5 million for the six months ended June 30, 2025, compared to $6.2 million for the six months ended June 30, 2024. The increase was primarily due to an increase in income on bank-owned life insurance of $1.4 million, primarily related to the exchange of certain policies in the fourth quarter of 2024 which have higher yields, partially offset by a $178,000 decrease in gains on trading securities. Gains on trading securities in the six months ended June 30, 2025, were $709,000, as compared to gains of $887,000 in the six months ended June 30, 2024. The trading portfolio is utilized to fund the Company's deferred compensation obligation to certain employees and directors of the plan. The participants of this plan, at their election, defer a portion of their compensation. Gains and losses on trading securities have no effect on net income since participants benefit from, and bear the full risk of changes in the trading securities market values. Therefore, the Company records an equal and offsetting amount in compensation expense, reflecting the change in the Company's obligations under the plan.
Non-interest expense decreased by $920,000, or 2.0%, to $44.4 million for the six months ended June 30, 2025, compared to $45.3 million for the six months ended June 30, 2024. The decrease was primarily due to a $650,000 decrease in employee compensation and benefits, primarily due to severance expense of $683,000 which was recorded during the six months ended June 30, 2024, and a $178,000 decrease in deferred compensation expense, which is described above, and had no effect on net income. Partially offsetting the decreases were higher salary expense related to annual merit increases and higher stock compensation expense as the prior year included a credit of $461,000 related to performance stock awards not expected to vest. Additionally, there was a $456,000 decrease in advertising expense attributable to a change in marketing strategy and the timing of specific deposit and lending campaigns, and a $311,000 decrease in other expense. Partially offsetting the decreases was a $485,000 increase in professional fees related to outsourced audit services and recruitment fees.
The Company recorded income tax expense of $7.2 million for the six months ended June 30, 2025, compared to $5.5 million for the six months ended June 30, 2024. The effective tax rate for the six months ended June 30, 2025, was 29.3% compared to 31.2% for the six months ended June 30, 2024. In May 2025, options granted in 2015 expired and resulted in additional tax expense of $580,000 for the six months ended June 30, 2025, as compared to options granted in 2014 that expired in June 2024 and resulted in additional tax expense of $795,000 for the six months ended June 30, 2024.
Comparison of Operating Results for the Three Months Ended June 30, 2025 and 2024
Net income was $9.6 million and $6.0 million for the quarters ended June 30, 2025 and June 30, 2024, respectively. Significant variances from the comparable prior year quarter are as follows: a $5.7 million increase in net interest income, a $2.7 increase in the provision for credit losses on loans, a $1.7 million increase in non-interest income, and a $1.1 million increase in income tax expense.
Net interest income for the quarter ended June 30, 2025, increased $5.7 million, or 19.9%, to $34.4 million, from $28.7 million for the quarter ended June 30, 2024, due to a $3.5 million decrease in interest expense and a $2.2 million increase in interest income. The decrease in interest expense was primarily due to a decrease in the average balance of interest-bearing liabilities of $177.0 million, or 4.1%, as well as a decrease in the cost of interest-bearing liabilities which decreased by 22 basis points to 2.73% for the three months ended June 30, 2025, from 2.95% for the three months ended June 30, 2024. The average balance of interest-bearing liabilities decreased primarily due to a $344.2 million, or 33.1% decrease in the average balance of borrowed funds, partially offset by a $167.0 million, or 5.2%, increase in the average of interest-bearing deposits. The decrease in the cost of interest-bearing liabilities was driven by an 18 basis point decrease in the cost of interest-bearing deposits to 2.42% from 2.60%, partially offset by a 10 basis point increase in the cost of borrowed funds to 3.98% from 3.88%. The increase in interest income was primarily due to a 28 basis point increase in the yield on interest-earning assets due to higher yields on mortgage-backed securities and loans, partially offset by a $151.7 million, or 2.8%, decrease in the average balance of interest-earning assets. The decrease was primarily due to decreases in the average balance of other securities of $277.3 million, the average balance of loans of $183.3 million and the average balance of interest-earning deposits in financial institutions of $112.0 million, partially offset by an increase in the average balance of mortgage-backed securities of $422.3 million. The changes reflect the purchase of higher-yielding mortgage-related securities with excess cash and proceeds from the maturities of other securities.
Net interest margin increased by 48 basis points to 2.57% for the quarter ended June 30, 2025, from 2.09% for the quarter ended June 30, 2024. The increase in net interest margin was primarily due to higher yields on loans and mortgage-backed securities, coupled with a decrease in the cost of interest-bearing liabilities. Net interest income for the quarter ended June 30, 2025, included $609,000 of interest income related to the settlement of a non-accrual loan in May 2025. The Company accreted interest income related to PCD loans of $247,000 for the quarter ended June 30, 2025, as compared to $321,000 for the quarter ended June 30, 2024. Net interest income for the quarter ended June 30, 2025, included loan prepayment income of $522,000, as compared to $210,000 for the quarter ended June 30, 2024.
The provision for credit losses on loans increased by $2.7 million to $2.1 million for the quarter ended June 30, 2025, from a benefit of $618,000 for the quarter ended June 30, 2024, primarily due to an increase in general reserves related to a worsening macroeconomic forecast in the current quarter within our CECL model, an increase in specific reserves of $1.2 million, and changes in model assumptions, including a reduction in prepayment speeds. Partially offsetting the increase in reserves was a decline in loan balances and lower net charge-offs. Net charge-offs were $887,000 for the quarter ended June 30, 2025, primarily due to $879,000 in net charge-offs on small business unsecured commercial and industrial loans, as compared to net charge-offs of $1.6 million for the quarter ended June 30, 2024.
Non-interest income increased by $1.7 million, or 58.3%, to $4.5 million for the quarter ended June 30, 2025, from $2.9 million for the quarter ended June 30, 2024. The increase was primarily due to increases of $820,000 in gains on trading securities and $760,000 in income on bank-owned life insurance, primarily related to the exchange of certain policies in the fourth quarter of 2024 which have higher yields. Gains on trading securities in the three months ended June 30, 2025, were $1.0 million as compared to gains of $188,000 in the quarter ended June 30, 2024.
Non-interest expense remained stable at $23.0 million for both quarters ended June 30, 2025 and June 30, 2024.
The Company recorded income tax expense of $4.3 million for the quarter ended June 30, 2025, compared to $3.2 million for the quarter ended June 30, 2024. The effective tax rate for the quarter ended June 30, 2025, was 31.0% compared to 35.0% for the quarter ended June 30, 2024. In May 2025, options granted in 2015 expired and resulted in additional tax expense of $580,000 for the quarter ended June 30, 2025, as compared to options granted in 2014 that expired in June 2024 and resulted in additional tax expense of $795,000 for the quarter ended June 30, 2024.
Comparison of Operating Results for the Three Months Ended June 30, 2025 and March 31, 2025
Net income was $9.6 million and $7.9 million for the quarters ended June 30, 2025, and March 31, 2025, respectively. Significant variances from the prior quarter are as follows: a $2.6 million increase in net interest income, a $496,000 decrease in the provision for credit losses on loans, a $1.5 million increase in non-interest income, a $1.5 million increase in non-interest expense, and a $1.4 million increase in income tax expense.
Net interest income for the quarter ended June 30, 2025, increased by $2.6 million, or 8.2%, to $34.4 million, from $31.8 million for the quarter ended March 31, 2025, due to a $2.3 million increase in interest income and a $272,000 decrease in interest expense. The increase in interest income was primarily due to a 17 basis point increase in the yield on interest-earning assets, partially offset by a $49.1 million decrease in the average balance of interest-earning assets, primarily due to decreases in the average balance of loans of $62.4 million, the average balance of other securities of $61.5 million, and the average balance of interest-earning deposits in financial institutions of $39.5 million, which were partially offset by an increase in the average balance of mortgage-backed securities of $114.1 million. The changes reflect the purchase of higher-yielding mortgage-related securities with excess cash and proceeds from the maturities of other securities. The decrease in interest expense was primarily due to a $66.1 million, or 1.6%, decrease in the average balance of interest-bearing liabilities largely attributable to a $67.8 million decrease in the average balance of interest-bearing deposits.
Net interest margin increased by 19 basis points to 2.57% for the quarter ended June 30, 2025, from 2.38% for the quarter ended March 31, 2025, primarily due to higher yields on loans and mortgage-backed securities. Net interest income for the quarter ended June 30, 2025, included $609,000 of interest income related to the settlement of a non-accrual loan in May 2025. Net interest income for the quarter ended June 30, 2025, included loan prepayment income of $522,000 as compared to $245,000 for the quarter ended March 31, 2025. The Company accreted interest income related to PCD loans of $247,000 for the quarter ended June 30, 2025, as compared to $223,000 for the quarter ended March 31, 2025.
The provision for credit losses on loans decreased by $496,000 to $2.1 million for the quarter ended June 30, 2025, from $2.6 million for the quarter ended March 31, 2025. The decrease in the provision for the current quarter was primarily due to lower net charge-offs and a decline in loan balances, partially offset by an increase in specific reserves of $569,000 and an increase in general reserves due to a worsening macroeconomic forecast in the current quarter within our CECL model. Net charge-offs were $887,000 for the quarter ended June 30, 2025, as compared to net charge-offs of $2.8 million for the quarter ended March 31, 2025.
Non-interest income increased by $1.5 million, or 49.8%, to $4.5 million for the quarter ended June 30, 2025, from $3.0 million for the quarter ended March 31, 2025. The increase was primarily due to a $1.3 million increase in gains on trading securities, net. For the quarter ended June 30, 2025, gains on trading securities, net, were $1.0 million, compared to losses of $299,000 for the quarter ended March 31, 2025.
Non-interest expense increased by $1.5 million, or 7.2%, to $23.0 million for the quarter ended June 30, 2025, from $21.4 million for the quarter ended March 31, 2025. The increase was primarily due to a $2.0 million increase in compensation and employee benefits, of which $1.3 million was attributable to an increase in deferred compensation expense and has no effect on net income due to offsetting gains on trading securities. The remaining increase in compensation and employee benefits was primarily due to higher salary expense related to an increase in headcount during the current quarter as well as recognizing a full quarter of merit-related increases as compared to one month in the prior quarter. Additionally, there was a $280,000 increase in data processing costs attributable to an increase in core system expenses. Partially offsetting the increases were decreases of $205,000 in occupancy expense, $169,000 in professional fees, $210,000 in other expense, and $156,000 in credit loss expense/(benefit) for off-balance sheet exposure. The decrease in credit loss expense/(benefit) for off-balance sheet exposure was due to a benefit of $53,000 recorded during the quarter ended June 30, 2025, as compared to a provision of $103,000 recorded during the quarter ended March 31, 2025.
The Company recorded income tax expense of $4.3 million for the quarter ended June 30, 2025, compared to $2.9 million for the quarter ended March 31, 2025. The effective tax rate for the quarter ended June 30, 2025 was 31.0%, compared to 27.0% for the quarter ended March 31, 2025. During the quarter ended June 30, 2025, options granted in 2015 expired and resulted in additional tax expense of $580,000, contributing to the higher effective tax rate for the quarter ended June 30, 2025 compared to the quarter ended March 31, 2025.
Financial Condition
Total assets increased by $12.9 million, or 0.2%, to $5.68 billion at June 30, 2025, from $5.67 billion at December 31, 2024. The increase was primarily due to an increase in available-for-sale debt securities of $200.2 million, or 18.2%, partially offset by decreases in loans receivable of $106.5 million, or 2.6%, cash and cash equivalents of $70.2 million, or 41.8% and other assets of $9.6 million, or 20.4%.
Cash and cash equivalents decreased by $70.1 million, or 41.8%, to $97.6 million at June 30, 2025, from $167.7 million at December 31, 2024, as excess liquidity was deployed into purchasing higher-yielding mortgage-backed securities. Balances fluctuate based on the timing of receipt of security and loan repayments and the redeployment of cash into higher-yielding assets such as loans and securities, or the funding of deposit outflows or borrowing maturities.
Loans held-for-investment, net, decreased by $101.6 million, or 2.5%, to $3.92 billion at June 30, 2025 from $4.02 billion at December 31, 2024, primarily due to a decrease in multifamily real estate loans, partially offset by increases in one-to-four family residential mortgage and home equity and lines of credit loans. The decrease in loan balances reflects the Company's continued strategic focus on managing concentration risk within its commercial and multifamily real estate loan portfolios, while maintaining disciplined loan pricing. Multifamily loans decreased $114.4 million, or 4.4%, to $2.48 billion at June 30, 2025 from $2.60 billion at December 31, 2024, commercial and industrial loans decreased $4.9 million, or 3.0%, to $158.5 million at June 30, 2025 from $163.4 million at December 31, 2024, commercial real estate loans decreased $3.7 million, or 0.4%, to $886.1 million at June 30, 2025 from $889.8 million at December 31, 2024, and construction and land loans decreased $3.6 million, or 10.0%, to $32.3 million at June 30, 2025 from $35.9 million at December 31, 2024. Partially offsetting these decreases were increases in home equity and lines of credit of $12.8 million, or 7.3%, to $186.8 million at June 30, 2025 from $174.1 million at December 31, 2024, and one-to-four family residential loans of $12.5 million, or 8.3%, to $162.8 million at June 30, 2025 from $150.2 million at December 31, 2024.
As of June 30, 2025, non-owner occupied commercial real estate loans (as defined by regulatory guidance) to total risk-based capital was estimated at approximately 416%. Management believes that Northfield Bank (the "Bank") maintains appropriate risk management practices including risk assessments, board-approved underwriting policies and related procedures, which includes 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. 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.
Our real estate portfolio includes credit risk exposure to loans collateralized by office buildings and multifamily properties in New York subject to some form of rent regulation limiting rent increases for rent stabilized multifamily properties. At June 30, 2025, office-related loans represented $178.8 million, or 4.6% 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 39% were owner-occupied. The geographic locations of the properties collateralizing our office-related loans are: 49.9% in New York, 48.6% in New Jersey and 1.5% in Pennsylvania. At June 30, 2025, our largest office-related loan had a principal balance of $90.0 million (with a net active principal balance for the Bank of $29.3 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. At June 30, 2025, multifamily loans that have some form of rent stabilization or rent control totaled $434.1 million, or 11% of our total loan portfolio, with an average balance of $1.7 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 50%. At June 30, 2025, our largest rent-regulated loan had a principal balance of $16.6 million, was secured by an apartment building located in Staten Island, New York, and was performing in accordance with its original contractual terms. Management continues to closely monitor its office and rent-regulated portfolios. For further details on our rent-regulated multifamily portfolio see "Asset Quality".
PCD loans totaled $9.0 million and $9.2 million at June 30, 2025 and December 31, 2024, respectively. The majority of the remaining PCD loan balance consists of loans acquired as part of a Federal Deposit Insurance Corporation-assisted transaction. The Company accreted interest income of $247,000 and $469,000 attributable to PCD loans for the three and six months ended June 30, 2025, respectively, compared to $321,000 and $747,000 for the three and six months ended June 30, 2024, respectively. PCD loans had an allowance for credit losses of approximately $2.7 million at June 30, 2025.
Loan balances are summarized as follows (dollars in thousands):
June 30, 2025
March 31, 2025
December 31, 2024
Real estate loans:
Multifamily
$
2,483,078
$
2,567,913
$
2,597,484
Commercial mortgage
886,135
882,600
889,801
One-to-four family residential mortgage
162,750
146,791
150,217
Home equity and lines of credit
186,848
181,354
174,062
Construction and land
32,300
40,284
35,897
Total real estate loans
3,751,111
3,818,942
3,847,461
Commercial and industrial loans
158,539
162,133
163,425
Other loans
2,008
1,411
2,165
Total commercial and industrial and other loans
160,547
163,544
165,590
Loans held-for-investment, net (excluding PCD)
3,911,658
3,982,486
4,013,051
PCD loans
8,955
9,043
9,173
Total loans held-for-investment, net
$
3,920,613
$
3,991,529
$
4,022,224
Other assets decreased by $9.6 million, or 20.4%, to $37.4 million at June 30, 2025, from $46.9 million at December 31, 2024. The decrease was primarily attributable to a decrease in deferred tax assets primarily due to a decrease in unrealized losses on the securities available-for-sale portfolio.
The Company's available-for-sale debt securities portfolio increased by $200.2 million, or 18.2%, to $1.30 billion at June 30, 2025, from $1.10 billion at December 31, 2024. The increase was primarily attributable to purchases of securities, partially offset by paydowns and maturities. At June 30, 2025, $1.27 billion of the portfolio consisted of residential mortgage-backed securities issued or guaranteed by Fannie Mae, Freddie Mac, or Ginnie Mae. In addition, the Company held $29.7 million in corporate bonds, substantially all of which were investment grade, $684,000 in municipal bonds and $613,000 in U.S. Government agency securities at June 30, 2025. Unrealized losses, net of tax, on available-for-sale debt securities and held-to-maturity securities approximated $14.6 million and $276,000, respectively, at June 30, 2025, and $21.8 million and $400,000, respectively, at December 31, 2024.
Equity securities were $6.3 million at June 30, 2025 and $14.3 million at December 31, 2024. Equity securities are primarily comprised of an investment in a Small Business Administration ("SBA") Loan Fund. This investment is utilized by the Bank as part of its Community Reinvestment Act program. The decrease in equity securities was primarily due to a redemption, at par, of $5.0 million of our investment in the SBA Loan Fund during the quarter ended June 30, 2025.
Total liabilities increased $7.3 million, or 0.1%, to $4.97 billion at June 30, 2025, from $4.96 billion at December 31, 2024. The increase was primarily attributable to an increase in borrowings of $165.5 million, partially offset by a decrease in deposits of $152.3 million. 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 $152.3 million, or 3.7%, to $3.99 billion at June 30, 2025 as compared to $4.14 billion at December 31, 2024. Brokered deposits decreased by $188.4 million, or 71.5%, as the Company placed less reliance on brokered deposits, which were used as a lower-cost alternative to borrowings in the quarter ended December 31, 2024. Deposits, excluding brokered deposits, increased $36.0 million, or 0.9%. The increase in deposits, excluding brokered deposits, was primarily attributable to increases of $73.7 million in transaction accounts and $9.6 million in time deposits, partially offset by decreases of $29.2 million in savings accounts, and $18.0 million in money market accounts. Growth in transaction accounts and time deposits was primarily due to new municipal relationships and new commercial customer relationships.
Estimated gross uninsured deposits at June 30, 2025 were $1.87 billion. This total includes fully collateralized uninsured governmental deposits and intercompany deposits of $940.6 million, leaving estimated uninsured deposits of approximately $929.2 million, or 23.1%, of total deposits. At December 31, 2024, estimated uninsured deposits, excluding fully collateralized uninsured governmental deposits and intercompany deposits, totaled $896.5 million, or 21.7% of total deposits.
Deposit account balances are summarized as follows (dollars in thousands):
June 30, 2025
March 31, 2025
December 31, 2024
Transaction:
Non-interest bearing checking
$
735,811
$
722,994
$
706,976
Negotiable orders of withdrawal and interest-bearing checking
1,331,060
1,367,219
1,286,154
Total transaction
2,066,871
2,090,213
1,993,130
Savings and money market:
Savings
874,927
899,674
904,163
Money market
254,154
271,566
272,145
Total savings
1,129,081
1,171,240
1,176,308
Certificates of deposit:
$250,000 and under
573,612
602,959
580,940
Over $250,000
141,623
144,255
124,681
Brokered deposits
75,000
123,289
263,418
Total certificates of deposit
790,235
870,503
969,039
Total deposits
$
3,986,187
$
4,131,956
$
4,138,477
Included in the table above are business and municipal deposit account balances as follows (dollars in thousands):
June 30, 2025
March 31, 2025
December 31, 2024
Business customers
$
907,464
$
891,545
$
885,769
Municipal (governmental) customers
$
892,652
$
929,611
$
859,319
Borrowed funds increased to $893.5 million at June 30, 2025, from $727.8 million at December 31, 2024. The increase in borrowings for the period was primarily due to a $55.0 million increase in borrowings under an overnight line of credit, and a $110.5 million increase in other borrowings. Management utilizes borrowings to mitigate interest rate risk, for short-term liquidity, and to a lesser extent from time to time, as part of leverage strategies.
The following table sets forth borrowing maturities (excluding overnight borrowings and subordinated debt) and the weighted average rate by year at June 30, 2025 (dollars in thousands):
Year
Amount
Weighted Average Rate
2025
$295,684
4.44%
2026
148,000
4.36%
2027
173,000
3.19%
2028
154,288
3.96%
$770,972
4.05%
Total stockholders' equity increased by $5.6 million to $710.3 million at June 30, 2025, from $704.7 million at December 31, 2024. The increase was attributable to net income of $17.4 million for the six months ended June 30, 2025, an $11.9 million increase in accumulated other comprehensive income associated with an increase in the estimated fair value of our debt securities available-for-sale portfolio, and a $2.0 million increase in equity award activity, partially offset by $15.0 million in stock repurchases and $10.7 million in dividend payments. On February 26, 2025, the Board of Directors of the Company approved a $5.0 million stock repurchase program, and on April 23, 2025, the Board of Directors approved a $10.0 million stock repurchase program. During the six months ended June 30, 2025, the Company repurchased 1.3 million shares of its common stock outstanding at an average price of $11.52 for a total of $15.0 million pursuant to the approved stock repurchase plans. As of June 30, 2025, the Company has no outstanding repurchase program.
The Company's most liquid assets are cash and cash equivalents, corporate bonds, and unpledged mortgage-related securities issued or guaranteed by the U.S. Government, Fannie Mae, or Freddie Mac, that we can either borrow against or sell. We also have the ability to surrender bank-owned life insurance contracts. The surrender of these contracts would subject the Company to income taxes and penalties for increases in the cash surrender values over the original premium payments. We also have the ability to obtain additional funding from the Federal Home Loan Bank and Federal Reserve Bank of New York utilizing unencumbered and unpledged securities and multifamily loans. The Company expects to have sufficient funds available to meet current commitments in the normal course of business. The Company's on-hand liquidity ratio as of June 30, 2025 was 18.3%.
The Company had the following primary sources of liquidity at June 30, 2025 (dollars in thousands):
Cash and cash equivalents(1)
$
85,652
Corporate bonds(2)
$
15,525
Multifamily loans(2)
$
1,074,872
Mortgage-backed securities (issued or guaranteed by the U.S. Government, Fannie Mae, or Freddie Mac)(2)
$
791,369
(1) Excludes $12.0 million of cash at Northfield Bank.
(2) Represents estimated remaining borrowing potential.
The Company and the Bank utilize the Community Bank Leverage Ratio ("CBLR") framework. At June 30, 2025, the Company's and the Bank's estimated CBLR ratios were 12.09% and 12.56%, respectively, which exceeded the minimum requirement to be considered well-capitalized of 9%.
Asset Quality
The following table details total non-accrual loans (excluding PCD), non-performing assets, loans over 90 days delinquent on which interest is accruing, and accruing loans 30 to 89 days delinquent at June 30, 2025, March 31, 2025 and December 31, 2024 (dollars in thousands):
June 30, 2025
March 31, 2025
December 31, 2024
Non-accrual loans:
Held-for-investment
Real estate loans:
Multifamily
$
2,521
$
2,565
$
2,609
Commercial mortgage
4,555
4,565
4,578
Home equity and lines of credit
1,264
1,267
1,270
Commercial and industrial
4,517
4,972
5,807
Total non-accrual loans
12,857
13,369
14,264
Loans delinquent 90 days or more and still accruing:
Held-for-investment
Real estate loans:
Multifamily
—
—
164
Commercial mortgage
74
—
—
One-to-four family residential
871
878
882
Home equity and lines of credit
177
140
140
Commercial and industrial
121
—
—
Total loans held-for-investment delinquent 90 days or more and still accruing
1,243
1,018
1,186
Non-performing loans held-for-sale:
Commercial mortgage
—
4,397
4,397
Commercial and industrial
—
500
500
Total non-performing loans held-for-sale
—
4,897
4,897
Total non-performing loans
14,100
19,284
20,347
Total non-performing assets
$
14,100
$
19,284
$
20,347
Non-performing loans to total loans
0.36
%
0.48
%
0.51
%
Non-performing assets to total assets
0.25
%
0.34
%
0.36
%
Accruing loans 30 to 89 days delinquent
$
4,076
$
6,845
$
9,336
The decrease in non-performing loans held-for-sale from March 31, 2025, and December 31, 2024, was due to repayment of the loans in full from a settlement agreement in bankruptcy.
Accruing Loans 30 to 89 Days Delinquent
Loans 30 to 89 days delinquent and on accrual status totaled $4.1 million, $6.8 million and $9.3 million at June 30, 2025, March 31, 2025 and December 31, 2024, respectively. The following table sets forth delinquencies for accruing loans by type and by amount at June 30, 2025, March 31, 2025 and December 31, 2024 (dollars in thousands):
June 30, 2025
March 31, 2025
December 31, 2024
Held-for-investment
Real estate loans:
Multifamily
$
1,230
$
1,296
$
2,831
Commercial mortgage
14
147
78
One-to-four family residential
741
2,584
2,407
Home equity and lines of credit
1,398
1,141
1,472
Commercial and industrial loans
693
1,674
2,545
Other loans
—
3
3
Total delinquent accruing loans held-for-investment
$
4,076
$
6,845
$
9,336
PCD Loans (Held-for-Investment)
The Company accounts for PCD loans at estimated fair value using discounted expected future cash flows deemed to be collectible on the date acquired. Based on its 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 ($9.0 million at June 30, 2025 and $9.2 million at December 31, 2024, respectively) as accruing, even though they may be contractually past due. At June 30, 2025, 2.3% of PCD loans were past due 30 to 89 days, and 25.5% were past due 90 days or more, as compared to 2.1% and 24.9%, respectively, at December 31, 2024.
Our multifamily loan portfolio at June 30, 2025 totaled $2.48 billion, or 63% of our total loan portfolio, of which $434.1 million, or 11%, of our total loan portfolio included loans collateralized by properties in New York with units subject to some percentage of rent regulation. The table below sets forth details about our multifamily loan portfolio in New York (dollars in thousands).
% Rent Regulated
Balance
% Portfolio Total NY Multifamily Portfolio
Average Balance
Largest Loan
LTV*
Debt Service Coverage Ratio (DSCR)*
30-89 Days Delinquent
Non-Accrual
Special Mention
Substandard
0
$
294,926
40.5
%
$
1,229
$
16,361
