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Northfield Bancorp, Inc. Announces Second Quarter 2021 Results
ソース: Nasdaq GlobeNewswire / 28 7 2021 18:04:00 America/Chicago
NOTABLE ITEMS FOR THE QUARTER INCLUDE:
- DILUTED EARNINGS PER SHARE INCREASED OVER 5% TO $0.40 AS COMPARED TO $0.38 FOR THE TRAILING QUARTER, AND OVER 73% COMPARED TO $0.23 FOR THE SECOND QUARTER OF 2020.
- NET INTEREST INCOME DECREASED $1.5 MILLION, OR 3.7%, OVER THE TRAILING QUARTER, AND INCREASED $8.5 MILLION, OR 28.0%, COMPARED TO THE SECOND QUARTER OF 2020. CURRENT QUARTER INCLUDES $443,000 IN ACCRETED INTEREST INCOME ON PURCHASED CREDIT DETERIORATED LOANS AS COMPARED TO $2.4 MILLION FOR THE TRAILING QUARTER.
- TOTAL LOANS, EXCLUDING PAYCHECK PROTECTION PROGRAM ("PPP") LOANS, DECREASED $80.6 MILLION, OR 2.1%. CURRENT QUARTER INCLUDES LOAN SALES OF APPROXIMATELY $126 MILLION, RESULTING IN A $1.4 MILLION GAIN.
- DEPOSITS, EXCLUDING BROKERED, INCREASED $50.8 MILLION, OR 1.3%, SINCE MARCH 31, 2021. COST OF DEPOSITS DECREASED OVER 11% FOR THE QUARTER TO 16 BASIS POINTS, AS COMPARED TO 18 BASIS POINTS FOR THE TRAILING QUARTER.
- NON-PERFORMING LOANS TO TOTAL LOANS DECREASED TO 0.23% AT JUNE 30, 2021, AS COMPARED TO 0.26% AT MARCH 2021, AND 0.27% AT JUNE 30, 2020.
- REPURCHASED 900,771 SHARES TOTALING APPROXIMATELY $14.7 MILLION.
- CASH DIVIDEND DECLARED OF $0.13 PER SHARE OF COMMON STOCK, PAYABLE AUGUST 25, 2021, TO STOCKHOLDERS OF RECORD AS OF AUGUST 11, 2021.
WOODBRIDGE, N.J., July 28, 2021 (GLOBE NEWSWIRE) -- NORTHFIELD BANCORP, INC. (Nasdaq:NFBK) (or the “Company”), the holding company for Northfield Bank, reported diluted earnings per common share of $0.40 and $0.78 for the three and six months ended June 30, 2021, respectively, as compared to $0.23 and $0.33 per diluted share for the three and six months ended June 30, 2020, respectively. Earnings for the three and six months ended June 30, 2021, included a negative provision for loan losses of $3.7 million and $6.1 million, respectively, reflecting continued improvement in the economic forecast as well as an improvement in asset quality and a decline in loan balances, as compared to a provision for loan losses of $1.9 million and $10.1 million for the three and six months ended June 30, 2020, respectively, under the incurred loss methodology. The provision for loan losses for the three and six months ended June 30, 2020, included incremental loss provisions of $1.8 million and $8.0 million, respectively, related to additional factors considered for economic uncertainties related to the Coronavirus 2019 (“COVID-19”) pandemic. Earnings for the three and six months ended June 30, 2021, included a gain on sale of loans of $1.4 million. Earnings for the six months ended June 30, 2021, also included approximately $1.9 million of accretable income related to the payoffs of purchased credit deteriorated (“PCD”) loans. Earnings for the three and six months ended June 30, 2020, included a gain on sale of loans of $665,000, and merger-related expenses of $205,000 and $384,000, respectively.
Commenting on the quarter, Steven M. Klein, the Company’s President 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 optimization, 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 $14.7 million for the second quarter, and the declaration of a quarterly cash dividend of $0.13 per common share, payable August 11, 2021, to stockholders of record on August 25, 2021.”
Results of Operations
Comparison of Operating Results for the Six Months Ended June 30, 2021 and 2020
Net income was $38.5 million and $15.3 million for the six months ended June 30, 2021 and June 30, 2020, respectively. Significant variances from the comparable prior year period are as follows: an $18.7 million increase in net interest income, a $16.2 million decrease in the provision for loan losses, a $3.2 million increase in non-interest income, a $5.9 million increase in non-interest expense, and a $9.1 million increase in income tax expense.
Net interest income for the six months ended June 30, 2021, increased $18.7 million, or 31.1%, to $78.9 million, from $60.2 million for the six months ended June 30, 2020, primarily due to a $504.2 million, or 10.6%, increase in the average balance of interest-earning assets and a 48 basis point increase in net interest margin to 3.03% from 2.55% for the six months ended June 30, 2020. The increase in the average balance of interest-earning assets was due to increases in the average balance of loans outstanding of $381.6 million, the average balance of mortgage-backed securities of $107.4 million and the average balance of interest-earning deposits in financial institutions of $38.2 million, partially offset by decreases in the average balance of other securities of $20.8 million and the average balance of Federal Home Loan Bank of New York (“FHLBNY”) stock of $2.2 million.
The increase in net interest margin was primarily due to the decrease in the cost of interest-bearing liabilities outpacing the decrease in yields on interest earning assets. Yields on interest-earning assets decreased 15 basis points to 3.40% for the six months ended June 30, 2021, from 3.55% for the six months ended June 30, 2020. The cost of interest-bearing liabilities decreased by 76 basis points to 0.48% for the six months ended June 30, 2021, from 1.24% for the six months ended June 30, 2020, primarily driven by lower cost of deposits due to the low interest rate environment and a change in the composition of the deposit portfolio as the average balance of transaction accounts increased and the average balance of certificates of deposit decreased. Net interest income for the six months ended June 30, 2021, included loan prepayment income of $2.2 million as compared to $992,000 for the six months ended June 30, 2020. The Company accreted interest income related to PCD loans of $2.9 million for the six months ended June 30, 2021, as compared to $1.5 million for the six months ended June 30, 2020. The increase in accretable interest income was primarily related to payoffs of PCD loans in the first quarter of 2021. Also contributing to the increase in net interest income for the six months ended June 30, 2021 were fees related to loans originated under the PPP of approximately $2.8 million.
The provision for loan losses decreased by $16.2 million to a negative provision of $6.1 million for the six months ended June 30, 2021, compared to a provision of $10.1 million for the six months ended June 30, 2020, driven by continued improvement in the economic forecast and an improvement in asset quality as well as a decline in loan balances. The higher provision for loan losses in the first half of 2020 was primarily due to increases in qualitative factors used in determining the adequacy of the allowance for loan losses related to unemployment, loan risk rating changes and increased risks related to loans on forbearance, resulting from economic uncertainty attributable to the COVID-19 pandemic, under the incurred loss methodology. Net charge-offs were $2.4 million for the six months ended June 30, 2021, primarily related to PCD loans, as compared to $292,000 for the six months ended June 30, 2020.
On January 1, 2021, the Company adopted ASU 2016-13, Financial Instruments- Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“CECL”). CECL requires the measurement of all expected credit losses over the life of financial instruments held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. In connection with the adoption of CECL, the Company recognized a cumulative effect adjustment that reduced stockholders’ equity by $3.1 million, net of tax. At adoption, the Company increased its allowance for credit losses by $11.1 million, comprised of $10.3 million and $737,000, respectively, for loans and unfunded commitments, including $6.8 million related to PCD loans. For PCD loans, the allowance for credit losses recorded is recognized through a gross-up that increases the amortized cost basis of loans with a corresponding increase to the allowance for credit losses, and therefore results in no impact to shareholders' equity.
Non-interest income increased $3.2 million to $7.6 million for the six months ended June 30, 2021, from $4.3 million for the six months ended June 30, 2020, due primarily to: an increase of $738,000 in fees and service charges for customer services, as the prior year period reflected fees waived and fewer transactions related to lower consumer spending in the early part of the pandemic; an increase of $546,000 in gains on sales of available-for-sale debt securities, net; a $1.5 million increase in gains on trading securities, net; and a $736,000 increase in gains on sales of loans. The increase in gains on sales of loans resulted from the sales of approximately $126.3 million of multifamily loans for gains of $1.4 million in the second quarter of 2021 compared to sales of $47.5 million of multifamily loans for gains of $665,000 in the second quarter of 2020. The Company periodically considers the sale of loans to manage its overall risk profile, including consideration of interest rate risk, concentration risk and capital deployment opportunities. For the six months ended June 30, 2021, gains on trading securities were $1.2 million as compared to losses of $366,000 for the six months ended June 30, 2020. The trading portfolio is utilized to fund the Company’s deferred compensation obligation to certain employees and directors of the Company's deferred compensation plan (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. Partially offsetting the increases, was a $315,000 decrease in other income primarily due to lower swap fee income for the six months ended June 30, 2021, compared to the comparable prior year period due to a lower volume of such transaction in 2021.
Non-interest expense increased $5.9 million, or 17.6%, to $39.4 million for the six months ended June 30, 2021, compared to $33.5 million for the six months ended June 30, 2020. This was due primarily to a $3.6 million increase in employee compensation and benefits, $1.5 million of which is attributable to the increase in the Company's deferred compensation plan expense, which as discussed above has no effect on net income, as well as increases in salary and medical benefit expenses associated with increased personnel from our acquisition of VSB Bancorp, Inc. (“Victory”) on July 1, 2020. Additionally, occupancy expense increased by $1.1 million, primarily related to additional branches from the Victory acquisition, renovation of existing branches and higher snow removal costs in the first quarter of 2021. Data processing fees increased by $358,000 related to the Victory acquisition and organic growth in loan and deposit accounts. FDIC insurance premiums increased by $505,000 due to small bank assessment credits being applied in the prior year. Other expense increased by $537,000, primarily due to an increase in the reserve for unfunded commitments. Partially offsetting the increases was a $416,000 decrease in professional fees, primarily due to lower merger-related costs.
The Company recorded income tax expense of $14.6 million for the six months ended June 30, 2021, compared to $5.5 million for the six months ended June 30, 2020. The effective tax rate for the six months ended June 30, 2021, was 27.5% compared to 26.5% for the six months ended June 30, 2020. The higher effective tax rate was primarily due to higher taxable income. Additionally, on April 19, 2021, the Governor of New York signed into law an increase in the tax rate from 6.5% to 7.25%.
Comparison of Operating Results for the Three Months Ended June 30, 2021 and 2020
Net income was $19.8 million and $10.8 million for the quarters ended June 30, 2021, and June 30, 2020, respectively. Significant variances from the comparable prior year quarter are as follows: an $8.5 million increase in net interest income, a $5.6 million decrease in the provision for loan losses, a $678,000 increase in non-interest income, a $2.0 million increase in non-interest expense, and a $3.7 million increase in income tax expense.
Net interest income for the quarter ended June 30, 2021, increased $8.5 million, or 28.0%, primarily due to a $438.9 million, or 9.2%, increase in average interest-earning assets, and a 43 basis point increase in net interest margin to 2.96% from 2.53% for the quarter ended June 30, 2020. The increase in the average balance of interest-earning assets was due to increases in the average balance of loans outstanding of $360.4 million, the average balance of mortgage-backed securities of $54.3 million, the average balance of other securities of $12.7 million and the average balance of interest-earning deposits in financial institutions of $13.4 million, partially offset by a decrease of $1.8 million in the average balance of FHLBNY stock.
The increase in net interest margin was primarily due to the decrease in the cost of interest-bearing liabilities outpacing the decrease in yields on interest earning assets. Yields on interest earning assets decreased by 12 basis points to 3.31% for the quarter ended June 30, 2021, from 3.43% for the quarter ended June 30, 2020. The cost of interest-bearing liabilities decreased by 65 basis points to 0.47% for the quarter ended June 30, 2021, from 1.12% for the quarter ended June 30, 2020, driven primarily by lower cost of deposits due to the low interest rate environment and a change in the composition of the deposit portfolio as the average balance of transaction accounts increased and the average balance of certificates of deposit decreased. Net interest income for the quarter ended June 30, 2021, included loan prepayment income of $1.3 million, as compared to $365,000 for the quarter ended June 30, 2020. The Company accreted interest income related to PCD loans of $443,000 for the three months ended June 30, 2021, as compared to $717,000 for three months ended June 30, 2020. Net interest income for the three months ended June 30, 2021 included PPP fee income of approximately $1.6 million.
The provision for loan losses decreased by $5.6 million to a negative provision of $3.7 million for the quarter ended June 30, 2021, from a provision of $1.9 million for the quarter ended June 30, 2020, driven by continued improvement in the economic forecast and an improvement in asset quality as well as a decline in loan balances. The higher provision for loan losses in the prior year quarter was primarily due to increases in the qualitative factors used in determining the adequacy of the allowance for loan losses related to unemployment and loan risk rating changes related to loan modification requests, and to a lesser extent delinquencies, resulting from economic uncertainty attributable to the COVID-19 pandemic, under the incurred loss methodology. Net charge-offs were $3,000 for the quarter ended June 30, 2021, compared to $202,000 for the quarter ended June 30, 2020.
Non-interest income increased by $678,000, or 16.0%, to $4.9 million for the quarter ended June 30, 2021, from $4.2 million for the quarter ended June 30, 2020, primarily due to an increase of $661,000 in fees and service charges for customers, as the prior year quarter reflected certain fees waived and lower consumer spending during the early part of the pandemic, an increase of $436,000 in gains on available-for-sale debt securities, net, and an increase of $736,000 in gains on sales of loans, resulting from the sales of approximately $126.3 million of multifamily loans for gains of $1.4 million in the second quarter of 2021 compared to sales of $47.5 million of multifamily loans for gains of $665,000 in the second quarter of 2020. The increases were partially offset by decreases of $819,000 in gains on trading securities, net, and $328,000 in other income, primarily lower swap fee income. For the quarter ended June 30, 2021, gains on trading securities, net, included gains of $807,000 related to the Company’s trading portfolio, compared to gains of $1.6 million in the comparative prior year quarter. 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.
Non-interest expense increased by $2.0 million, or 11.3%, to $19.9 million for the quarter ended June 30, 2021, from $17.9 million for the quarter ended June 30, 2020. The increase was due primarily to a $362,000 increase in compensation and employee benefits, attributable to higher salary and medical benefit expense associated with increased personnel from the Victory acquisition, partially offset by a decrease in the mark to market of deferred compensation, a $482,000 increase in occupancy expense, related to additional branches from the Victory acquisition, and renovations of existing branches, a $186,000 increase in data processing fees, a $341,000 increase in advertising expense, and a $635,000 increase in other expense, primarily attributable an increase in the reserve for unfunded commitments.
The Company recorded income tax expense of $7.6 million for the quarter ended June 30, 2021, compared to $3.9 million for the quarter ended June 30, 2020. The effective tax rate for the quarter ended June 30, 2021, was 27.8% compared to 26.5% for the quarter ended June 30, 2020. The higher effective tax rate was primarily due to higher taxable income. Additionally, on April 19, 2021, the Governor of New York signed into law an increase in the tax rate from 6.5% to 7.25%.
Comparison of Operating Results for the Three Months Ended June 30, 2021 and March 31, 2021
Net income was $19.8 million and $18.7 million for the quarters ended June 30, 2021, and March 31, 2021, respectively. Significant variances from the prior quarter are as follows: a $1.5 million decrease in net interest income, a $1.3 million decrease in the provision for loan losses, a $2.3 million increase in non-interest income, a $308,000 increase in non-interest expense, and a $693,000 increase in income tax expense.
Net interest income for the quarter ended June 30, 2021, decreased $1.5 million, or 3.7%, primarily due to a $18.2 million, or 0.3%, decrease in average interest-earning assets and a 14 basis point decrease in net interest margin to 2.96% from 3.10% for the quarter ended March 31, 2021. The decrease in the average balance of interest-earning assets was primarily due to a decrease in the average balance of mortgage-backed securities of $148.8 million, partially offset by increases in the average balance of loans outstanding of $74.3 million, the average balance of other securities of $40.0 million, and the average balance of interest-earning deposits in financial institutions of $17.3 million.
The decrease in net interest margin was primarily due to lower yields on interest-earning assets, which decreased by 17 basis points to 3.31% for the quarter ended June 30, 2021, from 3.48% for the quarter ended March 31, 2021. The cost of interest-bearing liabilities decreased by three basis points to 0.47% for the quarter ended June 30, 2021, from 0.50% for the quarter ended March 31, 2021. Net interest income for the quarter ended June 30, 2021, included loan prepayment income of $1.3 million as compared to $860,000 for the quarter ended March 31, 2021. The Company accreted interest income related to PCD loans of $443,000 for the quarter ended June 30, 2021, as compared to $2.4 million for the quarter ended March 31, 2021. In the prior quarter, the higher accretable income was related to payoffs of PCD loans. Net interest income for the quarters ended June 30, 2021, and March 31, 2021 included PPP fee income of approximately $1.6 million and $1.2 million, respectively.
The provision for loan losses decreased by $1.3 million to a negative provision of $3.7 million for the quarter ended June 30, 2021, from a negative provision of $2.4 million for the quarter ended March 31, 2021. The decrease was primarily due to continued improvement in the economic forecast and an improvement in asset quality as well as a decline in loan balances. Net charge-offs were $3,000 for the quarter ended June 30, 2021, as compared to net charge-offs of $2.4 million for the quarter ended March 31, 2021. Net charge-offs for the quarter ended March 31, 2021, were primarily related to PCD loans.
Non-interest income increased by $2.3 million, or 86.5%, to $4.9 million for the quarter ended June 30, 2021, from $2.6 million for the quarter ended March 31, 2021. The increase was primarily due to increases of $412,000 in gains on available-for-sale debt securities, net, $443,000 in gains on trading securities, net, and $1.4 million in gains on sales of loans. For the quarter ended June 30, 2021, gains on trading securities, net, included gains of $807,000 related to the Company’s trading portfolio, compared to gains of $364,000 for the quarter ended March 31, 2021.
Non-interest expense increased by $308,000, or 1.6%, to $19.9 million for the quarter ended June 30, 2021, from $19.6 million for the quarter ended March 31, 2021, primarily due to a $274,000 increase in compensation and employee benefits, a $166,000 increase in data processing fees, and a $219,000 increase in advertising expense, partially offset by a $201,000 decrease in occupancy expense and a $74,000 decrease in professional fees.
The Company recorded income tax expense of $7.6 million for the quarter ended June 30, 2021, compared to $6.9 million for the quarter ended March 31, 2021. The effective tax rate for the quarter ended June 30, 2021 was 27.8%, compared to 27.1% for the quarter ended and March 31, 2021.
Financial Condition
Total assets decreased $87.6 million, or 1.6%, to $5.43 billion at June 30, 2021, from $5.51 billion at December 31, 2020. The decrease was primarily due to a decrease in available-for-sale debt securities of $167.4 million, or 13.2%, and a decrease in total loans of $25.9 million, or 0.7%, partially offset by an increase in cash and cash equivalents of $105.6 million, or 120.7%.
As of June 30, 2021, we estimate that our non-owner occupied commercial real estate concentration (as defined by regulatory guidance) to total risk-based capital was approximately 461.2%. 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. 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, ability to pay dividends, and profitability.
Cash and cash equivalents increased by $105.6 million, or 120.7%, to $193.2 million at June 30, 2021, from $87.5 million at December 31, 2020, primarily due to the liquidity obtained from loans and securities sales or paydowns as well as growth in deposits. 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 $6.0 million to $3.82 billion at June 30, 2021, from $3.82 billion at December 31, 2020, primarily due to the $126.3 million sale of a portfolio of multifamily loans and loan payoffs in other segments, related to refinancings as rates are at historical lows, partially offset by loan growth. One-to-four family residential loans decreased by $16.8 million, or 8.0%, to $194.0 million at June 30, 2021, from $210.8 million at December 31, 2020. Multifamily real estate loans decreased by $12.7 million, or 0.5%, to $2.50 billion at June 30, 2021, from $2.51 billion at December 31, 2020. Construction and land loans decreased by $11.2 million, or 15.1%, to $63.1 million at June 30, 2021 from $74.3 million at December 31, 2020. These decreases were offset by increases in commercial real estate loans of $18.3 million, or 2.6%, to $735.3 million at June 30, 2021 from $717.0 million at December 31, 2020, and in commercial and industrial loans of $15.2 million, or 7.8%, to $209.6 million at June 30, 2021, from $194.4 million at December 31, 2020.
The increase in commercial and industrial loans was primarily due to loans originated under the PPP as authorized by the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act. The PPP loans are administered by the Small Business Administration ("SBA"), which provides 100% federally guaranteed loans for small businesses to cover payroll, utilities, rent and interest. These small business loans may be forgiven if borrowers maintain their payrolls and satisfy certain other conditions for a period of time during the COVID-19 pandemic. The Company began accepting and funding loans under this program in April 2020. There were 1,453 PPP loans totaling $132.7 million at June 30, 2021, compared to 1,275 loans totaling $126.5 million at December 31, 2020. During the six months ended June 30, 2021, the Company originated and the SBA approved funding for $81.4 million of PPP loans. PPP provides for lender processing fees that range from 1% to 5% of the final disbursement made to individual borrowers. As of June 30, 2021, we have received loan processing fees of $9.5 million, of which $4.7 million has been recognized in earnings, including $2.8 million recognized in the six months ended June 30, 2021. The remaining unearned fees will be recognized in income over the remaining term of the loans.
The following tables detail multifamily real estate originations for the six months ended June 30, 2021 and 2020 (dollars in thousands):
For the Six Months Ended June 30, 2021 Multifamily Originations Weighted Average Interest Rate Weighted Average LTV Ratio Weighted Average Months to Next Rate Change or Maturity for Fixed Rate Loans (F)ixed or (V)ariable Amortization Term $ 385,363 3.12% 62% 74 V 10 to 30 Years For the Six Months Ended June 30, 2020 Multifamily Originations Weighted Average Interest Rate Weighted Average LTV Ratio Weighted Average Months to Next Rate Change or Maturity for Fixed Rate Loans (F)ixed or (V)ariable Amortization Term $ 258,084 3.66% 60% 92 V 30 Years 1,500 4.40% 47% 180 F 15 Years $ 259,584 3.66% 60% There were no loans held-for-sale at June 30, 2021 compared to $19.9 million at December 31, 2020. At December 31, 2020, loans held-for-sale were comprised of commercial real estate and multifamily loans, primarily accommodation loans that were modified in the form of interest and/or principal payment deferrals due to COVID-19 related hardships, and had not returned to contractual payments after 180 days of relief. The sale of these loans was completed in March 2021.
PCD loans totaled $16.7 million at June 30, 2021, and $18.5 million at December 31, 2020. Upon adoption of the CECL accounting standard on January 1, 2021, the allowance for credit losses related to PCD loans was recorded through a gross-up that increased the amortized cost-basis of PCD loans by $6.8 million with a corresponding increase to the allowance for credit losses. The decrease in the PCD loan balance at June 30, 2021 was due to PCD loans being sold and paid off during the period. 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 $443,000 and $2.9 million attributable to PCD loans for the three and six months ended June 30, 2021, respectively, as compared to $717,000 and $1.5 million for the three and six months ended June 30, 2020, respectively. The increase in income accreted for the six months ended June 30, 2021, was related to the payoff of PCD loans. PCD loans had an allowance for credit losses of approximately $4.8 million at June 30, 2021.
The Company’s available-for-sale debt securities portfolio decreased by $167.4 million, or 13.2%, to $1.10 billion at June 30, 2021, from $1.26 billion at December 31, 2020. The decrease was primarily attributable to paydowns, maturities, calls, and sales. At June 30, 2021, $970.1 million 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 $2.8 million in U.S. Government agency securities, $124.4 million in corporate bonds, all of which were considered investment grade at June 30, 2021, and $78,000 in municipal bonds.
Total liabilities decreased $86.9 million, or 1.8%, to $4.67 billion at June 30, 2021, from $4.76 billion at December 31, 2020. The decrease was primarily attributable to a decrease in Federal Home Loan Bank and other borrowings of $96.5 million and a decrease in securities sold under agreements to repurchase of $25.0 million, partially offset by an increase in deposits of $31.7 million and an increase advance payments by borrowers for taxes and insurance of $4.5 million.Deposits increased $31.7 million, or 0.8%, to $4.11 billion at June 30, 2021, as compared to $4.08 billion at December 31, 2020. The increase was attributable to increases of $205.6 million in transaction accounts and $18.9 million in savings accounts, partially offset by a decrease of $184.2 million in money market accounts and $8.5 million in certificates of deposit. We continue to see balance runoff from high cost money market and certificates of deposit categories as we have strategically chosen not to compete on rate at this time.
Deposit account balances are summarized as follows (dollars in thousands):
June 30, 2021 March 31, 2021 December 31, 2020 Transaction: Non-interest bearing checking $ 826,823 $ 771,432 $ 695,831 Negotiable orders of withdrawal and interest-bearing checking 979,788 918,367 905,208 Total transaction 1,806,611 1,689,799 1,601,039 Savings and Money market: Savings 1,159,566 1,150,383 1,140,717 Money market 628,979 665,344 713,168 Brokered money market — — 100,000 Total savings 1,788,545 1,815,727 1,953,885 Certificates of deposit: Brokered deposits 103,533 181,827 47,827 $250,000 and under 324,480 357,803 374,344 Over $250,000 85,100 90,560 99,456 Total certificates of deposit 513,113 630,190 521,627 Total deposits $ 4,108,269 $ 4,135,716 $ 4,076,551 Included in the table above are business and municipal deposit account balances as follows (dollars in thousands):
June 30, 2021 March 31, 2021 December 31, 2020 Business customers $ 1,088,642 $ 1,023,970 $ 977,778 Municipal customers $ 547,920 $ 514,653 $ 501,040 Borrowings and securities sold under agreements to repurchase decreased to $470.3 million at June 30, 2021, from $591.8 million at December 31, 2020. Management utilizes borrowings to mitigate interest rate risk, for short-term liquidity, and to a lesser extent as part of leverage strategies.
The following is a table of term borrowing maturities (excluding capitalized leases and overnight borrowings) and the weighted average rate by year at June 30, 2021 (dollars in thousands):
Year Amount Weighted Average Rate 2021 $48,275 2.00% 2022 120,000 2.29% 2023 87,500 2.89% 2024 50,000 2.47% 2025 112,500 1.48% Thereafter 45,000 1.45% $463,275 2.11% Total stockholders’ equity decreased by $771,000 to $753.2 million at June 30, 2021, from $754.0 million at December 31, 2020. The decrease was attributable to $24.8 million in stock repurchases, $11.8 million in dividend payments, and a $2.7 million decrease in accumulated other comprehensive income associated with a reduction in unrealized gains on our debt securities available-for-sale portfolio, partially offset by net income of $38.5 million for the six months ended June 30, 2021, and a $3.2 million increase in equity award activity. The Company repurchased 1,643,094 shares of its common stock outstanding at an average price of $15.11 for a total of $24.8 million during the six months ended June 30, 2021, pursuant to the approved stock repurchase plans. As of June 30, 2021, the Company had approximately $36.7 million in remaining capacity under its current repurchase program. In connection with the adoption of CECL, effective January 1, 2021, the Company recognized a cumulative effect adjustment that reduced stockholders’ equity by $3.1 million, net of tax, to establish initial allowances against credit losses on loans and off-balance sheet credit exposures.
The Company continues to maintain a strong liquidity and capital position, despite the economic uncertainties presented by the COVID-19 pandemic. 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 FHLB and Federal Reserve Bank 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 had the following primary sources of liquidity at June 30, 2021 (dollars in thousands):
Cash and cash equivalents(1) $ 174,503 Corporate bonds $ 117,794 Multifamily loans(2) $ 1,426,296 Mortgage-backed securities (issued or guaranteed by the U.S. Government, Fannie Mae, or Freddie Mac)(2) $ 450,092 (1) Excludes $18,681 of cash at Northfield Bank.
(2) Represents remaining borrowing potential.The Company and the Bank elected to opt into the Community Bank Leverage Ratio (“CBLR”) framework, effective for the first quarter of 2020. The CBLR replaces the risk-based and leverage capital requirements in the generally applicable capital rules. At June 30, 2021, the Company and the Bank's estimated CBLR ratios were 12.77% and 11.37% respectively, which exceeded the minimum requirement to be considered well-capitalized of 8%. As a result of the COVID-19 pandemic the Federal Regulators have lowered the CBLR ratio to 8%, which will phase back to the original legislation of 9% by 2022.
Asset Quality
The following table details total non-accrual loans (excluding PCD), non-performing loans, non-performing assets, troubled debt restructurings on which interest is accruing, and accruing loans 30 to 89 days delinquent at June 30, 2021, March 31, 2021, and December 31, 2020 (dollars in thousands):
June 30, 2021 March 31, 2021 December 31, 2020 Non-accrual loans: Held-for-investment Real estate loans: Commercial $ 5,028 $ 4,961 $ 6,229 One-to-four family residential 320 805 906 Construction and land 1,107 1,150 — Multifamily 1,131 1,145 1,153 Home equity and lines of credit 128 187 191 Commercial and industrial 407 198 37 Other 3 — — Total non-accrual loans 8,124 8,446 8,516 Loans delinquent 90 days or more and still accruing: Held-for-investment Real estate loans: Commercial 216 219 500 One-to-four family residential 223 172 174 Multifamily — 516 — Home equity and lines of credit 98 — — Commercial and industrial 194 738 436 Other — 3 3 Total loans held-for-investment delinquent 90 days or more and still accruing 731 1,648 1,113 Non-performing loans held-for-sale — — 19,895 Total non-performing loans 8,855 10,094 29,524 Other real estate owned 100 100 — Total non-performing assets $ 8,955 $ 10,194 $ 29,524 Non-performing loans to total loans 0.23 % 0.26 % 0.77 % Non-performing assets to total assets 0.17 % 0.18 % 0.54 % Loans subject to restructuring agreements and still accruing $ 7,603 $ 7,326 $ 7,697 Accruing loans 30 to 89 days delinquent $ 5,884 $ 14,148 $ 13,982 Other Real Estate Owned
Other real estate owned is comprised of one property acquired during the six months ended June 30, 2021, as a result of foreclosure. The property is located in New Jersey and had a carrying value of approximately $100,000 and was included in other assets on the consolidated balance sheet at June 30, 2021.
Non-performing Loans Held-for-Sale
Non-performing loans held for sale at December 31, 2020, totaled $19.9 million and were comprised of high risk commercial real estate and multifamily loans, primarily accommodation loans that were modified in the form of interest and/or principal payment deferrals due to COVID-19 related hardships, and had not returned to contractual payments after 180 days of relief. The sale of these loans was completed in the first quarter of 2021.
Accruing Loans 30 to 89 Days Delinquent
Loans 30 to 89 days delinquent and on accrual status totaled $5.9 million, $14.1 million, and $14.0 million at June 30, 2021, March 31, 2021, and December 31, 2020, respectively. The following table sets forth delinquencies for accruing loans by type and by amount at June 30, 2021 and December 31, 2020 (dollars in thousands):
June 30, 2021 March 31, 2021 December 31, 2020 Held-for-investment Real estate loans: Commercial $ 2,654 $ 4,457 $ 8,792 One-to-four family residential 1,219 4,023 1,152 Multifamily 1,686 2,419 1,893 Construction and land — 390 994 Home equity and lines of credit 203 372 380 Commercial and industrial loans 122 2,480 760 Other loans — 7 11 Total delinquent accruing loans held-for-investment $ 5,884 $ 14,148 $ 13,982 PCD Loans (Held-for-Investment)
Under the CECL standard, the Company will continue to account 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 ($16.7 million at June 30, 2021 and $18.5 million at December 31, 2020) as accruing, even though they may be contractually past due. At June 30, 2021, 2.4% of PCD loans were past due 30 to 89 days, and 20.4% were past due 90 days or more, as compared to 9.6% and 35.2%, respectively, at December 31, 2020.
COVID-19 Exposure
Management continues to evaluate the Company's exposure to increased loan losses related to the COVID-19 pandemic, in particular the commercial real estate and multifamily loan portfolios. During the second quarter of 2020, the Company implemented a customer relief program to assist borrowers that may be experiencing financial hardship due to COVID-19 related challenges. The relief program grants principal and/or interest payment deferrals typically for a period of 90 days, which management may choose to extend for additional 90 days periods. At the peak of forbearance, June 2020, the Company had 286 loans approved for payment deferral representing $360.2 million, or approximately 10% of the Company's loan portfolio. As of June 30, 2021, the Company had approximately $21.5 million, or 21 outstanding loans remaining in deferral, representing approximately 0.6% of the Company’s outstanding loan portfolio (excluding PCD loans) as of that date. Loans currently in deferment status (“COVID-19 Modified Loans”) will continue to accrue interest during the deferment period unless otherwise classified as nonperforming. COVID-19 Modified Loans are required to make escrow payments for real estate taxes and insurance, if applicable. The COVID-19 Modified Loan agreements also require loans to be brought back to their fully contractual terms within 12 to 18 months and include covenants that prohibit distributions, bonuses, or payments of management fees to related entities until all deferred payments are made. Consistent with industry regulatory guidance, borrowers that were otherwise current on loan payments that were granted COVID-19 related financial hardship payment deferrals will continue to be reported as current loans throughout the agreed upon deferral period. Borrowers, which were delinquent in their payments to the Bank, prior to requesting a COVID-19 related financial hardship payment deferral are reviewed on a case by case basis for TDR classification and non-performing loan status.
The following table sets forth the property types collateralizing our loans held-for-investment (excluding PCD) in forbearance as of June 30, 2021 (dollars in thousands):
Loan Portfolio by Property Type at June 30, 2021 Loans in Forbearance for COVID Relief as of June 30, 2021 Number of Loans Amount Average Loan Size Weighted Average LTV Ratio % of Total Loans Number of Loans (2) Amount Average Loan Size Weighted Average LTV Ratio % of Portfolio by Property Type Commercial Real Estate and Multifamily Multifamily(1) 1,135 $ 2,496,614 $ 2,200 55% 65.7 % 4 $ 10,739 $ 2,685 34% 0.43 % Mixed use (majority of space is non-residential) 219 147,199 672 46% 3.9 % 1 2,890 2,890 37% 1.96 % Retail 86 144,399 1,679 48% 3.8 % 1 607 607 55% 0.42 % Office buildings 107 103,996 972 46% 2.7 % 1 551 551 46% 0.53 % Accommodations 9 51,545 5,727 37% 1.4 % 1 155 155 16% 0.30 % Nursing Home 5 27,501 5,500 57% 0.7 % — — — —% — % Medical Office Buildings 24 26,661 1,111 63% 0.7 % — — — —% — % Industrial and Manufacturing (Office and Plant) 21 17,552 836 44% 0.5 % — — — —% — % Warehousing 29 20,677 713 45% 0.5 % — — — —% — % Restaurant 22 12,831 583 51% 0.3 % — — — —% — % Religious 16 10,556 660 39% 0.3 % — — — —% — % Bank Branch 6 5,441 907 44% 0.1 % — — — —% — % Schools/Child Day care 6 5,531 922 36% 0.2 % — — — —% — % Automobile 18 6,384 355 52% 0.2 % — — — —% — % Funeral Home 2 1,756 878 62% — % — — — —% — % Recreational 5 7,044 1,409 47% 0.2 % 2 3,221 1,611 47% 45.73 % Car Wash 1 489 489 18% — % — — — —% — % Other 146 145,740 998 59% 3.8 % — — — —% — % Total commercial real estate and multifamily 1,857 3,231,916 1,740 54% 85.0 % 10 18,163 1,816 38% 0.56 % One-to-four family residential 614 193,976 316 35% 5.1 % 5 2,297 459 39% 1.18 % Home equity and lines of credit 1,829 99,816 55 47% 2.6 % 1 197 197 29% 0.20 % Construction and land 34 63,123 1,857 40% 1.7 % — — — —% — % Commercial and industrial loans 2,230 209,579 94 NM 5.5 % 5 850 170 NM 0.41 % Other 121 2,170 18 NM 0.1 % — — — —% — % Total loans (excluding PCD) 6,685 $ 3,800,580 569 100.0 % 21 $ 21,507 1,024 0.57 % (1) Property type is apartment units equal or greater than five units.
Of the loans currently in deferral as of June 30, 2021, two loans totaling $239,000 are in their first deferral period and 19 loans totaling $21.3 million are repeat deferrals. As of July 26, 2021, eight loans totaling $11.6 million in the table above had returned to contractual payments, including one multifamily loan totaling $9.4 million.
About Northfield Bank
Northfield Bank, founded in 1887, operates 38 full-service banking in Staten Island and Brooklyn, New York, and Hunterdon, Middlesex, Mercer, and Union counties, New Jersey. For more information about Northfield Bank, please visit www.eNorthfield.com.
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 as described in our SEC filings, including, but not limited to, those related to general economic conditions, particularly in the market areas in which the Company operates, the effects of the COVID-19 pandemic, including the effects of the steps taken to address the pandemic and their impact on the Company’s market and employees, competition among depository and other financial institutions, changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory fees and capital requirements, inflation and changes in the interest rate environment that reduce our margins or reduce the fair value of financial instruments, our ability to successfully integrate acquired entities, including Victory, and adverse changes in the securities markets. 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 conform these statements to actual events.
Company Contact:
William R. Jacobs
Chief Financial Officer
Tel: (732) 499-7200 ext. 2519NORTHFIELD BANCORP, INC.
SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA
(Dollars in thousands, except per share amounts) (unaudited)At or For the At or For the Three Months Ended Six Months Ended June 30, March 31, June 30, 2021 2020 2021 2021 2020 Selected Financial Ratios: Performance Ratios (1) Return on assets (ratio of net income to average total assets) (5) 1.44 % 0.85 % 1.36 % 1.40 % 0.61 % Return on equity (ratio of net income to average equity) (5) (6) (8) (9) 10.53 6.12 10.03 10.28 4.37 Average equity to average total assets 13.64 13.92 13.57 13.60 14.02 Interest rate spread 2.84 2.31 2.98 2.92 2.31 Net interest margin 2.96 2.53 3.10 3.03 2.55 Efficiency ratio (2) (5) 45.57 51.80 45.70 45.63 51.99 Non-interest expense to average total assets 1.44 1.41 1.43 1.43 1.34 Non-interest expense to average total interest-earning assets 1.52 1.50 1.51 1.52 1.42 Average interest-earning assets to average interest-bearing liabilities 134.73 125.21 132.26 133.49 124.31 Asset Quality Ratios: Non-performing assets to total assets 0.17 0.19 0.18 0.17 0.19 Non-performing loans (3) to total loans (4) 0.23 0.27 0.26 0.23 0.27 Allowance for credit losses to non-performing loans (6) 446.00 393.70 427.95 446.00 393.70 Allowance for credit losses to total loans held-for-investment, net (4) (6) (7) (8) 1.03 1.07 1.10 1.03 1.07 (1) Annualized when appropriate.
(2) The efficiency ratio represents non-interest expense divided by the sum of net interest income and non-interest income.
(3) Non-performing loans consist of non-accruing loans and loans 90 days or more past due and still accruing (excluding PCD loans), and are included in total loans held-for-investment, net.
(4) Includes originated loans held-for-investment, PCD loans, and acquired loans.
(5) The three and six months ended June 30, 2020, included merger-related expenses of $205,000 and $384,000, respectively.
(6) The three and six months ended June 30, 2020, included an allowance for loan losses of $1.8 million ($1.3 million after-tax) and $8.0 million ($5.9 million after-tax), respectively, related to additional factors considered for COVID-19.
(7) Excluding PPP loans (which are fully government guaranteed and do not carry any provision for losses) of $132.7 million, $167.9 million, and $105.7 million at June 30, 2021, March 31, 2021, and June 30, 2020, respectively, the allowance for loan losses to total loans held for investment, net, totaled 1.07%, 1.15%, and 1.11% respectively, at June 30, 2021, March 31, 2021, and June 30, 2020.
(8) The Company adopted the CECL accounting standard effective January 1, 2021, and recorded a $10.3 million increase to its allowance for loan losses, including reserves of $6.8 million related to PCD loans. Ratios as of June 30, 2020 do not reflect the adoption of CECL.
(9) In connection with the adoption of CECL, the Company recognized a cumulative effect adjustment that reduced stockholders’ equity by $3.1 million, net of tax.NORTHFIELD BANCORP, INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except share and per share amounts) (unaudited)June 30, 2021 March 31, 2021 December 31, 2020 ASSETS: Cash and due from banks $ 18,681 $ 15,920 $ 16,115 Interest-bearing deposits in other financial institutions 174,503 111,650 71,429 Total cash and cash equivalents 193,184 127,570 87,544 Trading securities 12,743 12,142 12,291 Debt securities available-for-sale, at estimated fair value 1,097,423 1,207,238 1,264,805 Debt securities held-to-maturity, at amortized cost 6,417 6,913 7,234 Equity securities 219 473 253 Loans held-for-sale — — 19,895 Loans held-for-investment, net 3,817,273 3,933,015 3,823,238 Allowance for credit losses (39,493 ) (43,197 ) (37,607 ) Net loans held-for-investment 3,777,780 3,889,818 3,785,631 Accrued interest receivable 14,521 14,753 14,690 Bank-owned life insurance 163,628 162,771 161,924 Federal Home Loan Bank of New York stock, at cost 24,508 28,641 28,641 Operating lease right-of-use assets 34,574 35,662 36,741 Premises and equipment, net 27,268 27,509 28,188 Goodwill 41,012 41,320 41,320 Other assets 33,633 22,114 25,387 Total assets $ 5,426,910 $ 5,576,924 $ 5,514,544 LIABILITIES AND STOCKHOLDERS’ EQUITY: LIABILITIES: Deposits $ 4,108,269 $ 4,135,716 $ 4,076,551 Securities sold under agreements to repurchase 50,000 75,000 75,000 Federal Home Loan Bank advances and other borrowings 420,329 517,170 516,789 Lease liabilities 40,721 42,067 42,734 Advance payments by borrowers for taxes and insurance 24,203 24,027 19,677 Accrued expenses and other liabilities 30,178 28,379 29,812 Total liabilities 4,673,700 4,822,359 4,760,563 STOCKHOLDERS’ EQUITY: Total stockholders’ equity 753,210 754,565 753,981 Total liabilities and stockholders’ equity $ 5,426,910 $ 5,576,924 $ 5,514,544 Total shares outstanding 50,843,651 51,638,582 52,209,897 Tangible book value per share (1) $ 14.00 $ 13.80 $ 13.64 (1) Tangible book value per share is calculated based on total stockholders' equity, excluding intangible assets (goodwill and core deposit intangibles), divided by total shares outstanding as of the balance sheet date. Core deposit intangibles were $540,000, $590,000, and $640,000 at June 30, 2021, March 31, 2021, and December 31, 2020, respectively, and are included in other assets.
NORTHFIELD BANCORP, INC.
CONSOLIDATED STATEMENT OF INCOME
(Dollars in thousands, except share and per share amounts) (unaudited)For the Three Months Ended For the Six Months Ended June 30, March 31, June 30, 2021 2020 2021 2021 2020 Interest income: Loans $ 39,699 $ 35,343 $ 41,277 $ 80,976 $ 70,680 Mortgage-backed securities 2,682 4,304 2,959 5,641 9,926 Other securities 484 777 424 908 1,801 FHLB of New York dividends 336 456 370 706 1,033 Deposits in other financial institutions 35 31 37 72 203 Total interest income 43,236 40,911 45,067 88,303 83,643 Interest expense: Deposits 1,671 7,473 1,870 3,541 16,752 Borrowings 2,878 3,208 3,021 5,899 6,728 Total interest expense 4,549 10,681 4,891 9,440 23,480 Net interest income 38,687 30,230 40,176 78,863 60,163 (Credit)/provision for loan losses (3,701 ) 1,921 (2,374 ) (6,075 ) 10,104 Net interest income after (credit)/provision for loan losses 42,388 28,309 42,550 84,938 50,059 Non-interest income: Fees and service charges for customer services 1,327 666 1,197 2,524 1,786 Income on bank-owned life insurance 857 865 848 1,705 1,741 Gains (losses) on available-for-sale debt securities, net 509 73 97 606 60 Gains (losses) on trading securities, net 807 1,626 364 1,171 (366 ) Gain on sale of loans 1,401 665 — 1,401 665 Other 15 343 130 145 460 Total non-interest income 4,916 4,238 2,636 7,552 4,346 Non-interest expense: Compensation and employee benefits 10,806 10,444 10,532 21,338 17,733 Occupancy 3,500 3,018 3,701 7,201 6,078 Furniture and equipment 442 349 437 879 682 Data processing 1,798 1,612 1,632 3,430 3,072 Professional fees 832 1,045 906 1,738 2,154 Advertising 684 343 465 1,149 1,161 Federal Deposit Insurance Corporation insurance 346 216 375 721 216 Other 1,463 828 1,515 2,978 2,441 Total non-interest expense 19,871 17,855 19,563 39,434 33,537 Income before income tax expense 27,433 14,692 25,623 53,056 20,868 Income tax expense 7,639 3,899 6,946 14,585 5,524 Net income $ 19,794 $ 10,793 $ 18,677 $ 38,471 $ 15,344 Net income per common share: Basic $ 0.40 $ 0.23 $ 0.38 $ 0.78 $ 0.33 Diluted $ 0.40 $ 0.23 $ 0.38 $ 0.78 $ 0.33 Basic average shares outstanding 48,907,585 46,837,473 49,528,419 49,216,157 46,814,647 Diluted average shares outstanding 49,307,661 46,871,490 49,633,644 49,468,808 46,927,504 NORTHFIELD BANCORP, INC.
ANALYSIS OF NET INTEREST INCOME
(Dollars in thousands) (unaudited)For the Three Months Ended June 30, 2021 March 31, 2021 June 30, 2020 Average Outstanding Balance Interest Average Yield/ Rate (1) Average Outstanding Balance Interest Average Yield/ Rate (1) Average Outstanding Balance Interest Average Yield/ Rate (1) Interest-earning assets: Loans (2) $ 3,948,136 $ 39,699 4.03 % $ 3,873,884 $ 41,277 4.32 % $ 3,587,772 $ 35,343 3.96 % Mortgage-backed securities (3) 967,526 2,682 1.11 1,116,281 2,959 1.08 913,203 4,304 1.90 Other securities (3) 141,475 484 1.37 101,523 424 1.69 128,818 777 2.43 Federal Home Loan Bank of New York stock 27,703 336 4.86 28,640 370 5.24 29,478 456 6.22 Interest-earning deposits in financial institutions 150,494 35 0.09 133,208 37 0.11 137,120 31 0.09 Total interest-earning assets 5,235,334 43,236 3.31 5,253,536 45,067 3.48 4,796,391 40,911 3.43 Non-interest-earning assets 295,768 310,681 300,511 Total assets $ 5,531,102 $ 5,564,217 $ 5,096,902 Interest-bearing liabilities: Savings, NOW, and money market accounts $ 2,754,346 845 0.12 % $ 2,768,816 $ 932 0.14 % $ 2,132,213 $ 2,894 0.55 % Certificates of deposit 574,899 826 0.58 611,267 938 0.62 1,023,276 4,579 1.80 Total interest-bearing deposits 3,329,245 1,671 0.20 3,380,083 1,870 0.22 3,155,489 7,473 0.95 Borrowed funds 556,682 2,878 2.07 591,993 3,021 2.07 675,109 3,208 1.91 Total interest-bearing liabilities 3,885,927 4,549 0.47 3,972,076 4,891 0.50 3,830,598 10,681 1.12 Non-interest bearing deposits 795,613 739,064 465,082 Accrued expenses and other liabilities 95,274 98,261 91,957 Total liabilities 4,776,814 4,809,401 4,387,637 Stockholders' equity 754,288 754,816 709,265 Total liabilities and stockholders' equity $ 5,531,102 $ 5,564,217 $ 5,096,902 Net interest income $ 38,687 $ 40,176 $ 30,230 Net interest rate spread (4) 2.84 % 2.98 % 2.31 % Net interest-earning assets (5) $ 1,349,407 $ 1,281,460 $ 965,793 Net interest margin (6) 2.96 % 3.10 % 2.53 % Average interest-earning assets to interest-bearing liabilities 134.73 % 132.26 % 125.21 % (1) Average yields and rates are annualized.
(2) Includes non-accruing loans.
(3) Securities available-for-sale and other securities are reported at amortized cost.
(4) 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.
(5) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.
(6) Net interest margin represents net interest income divided by average total interest-earning assets.For the Six Months Ended June 30, 2021 June 30, 2020 Average Outstanding Balance Interest Average Yield/ Rate (1) Average Outstanding Balance Interest Average Yield/ Rate (1) Interest-earning assets: Loans (2) $ 3,911,215 $ 80,976 4.18 % $ 3,529,569 $ 70,680 4.03 % Mortgage-backed securities (3) 1,041,493 5,641 1.09 934,114 9,926 2.14 Other securities (3) 121,609 908 1.51 142,446 1,801 2.54 Federal Home Loan Bank of New York stock 28,169 706 5.05 30,371 1,033 6.84 Interest-earning deposits in financial institutions 141,899 72 0.10 103,673 203 0.39 Total interest-earning assets 5,244,385 88,303 3.40 4,740,173 83,643 3.55 Non-interest-earning assets 303,183 295,218 Total assets $ 5,547,568 $ 5,035,391 Interest-bearing liabilities: Savings, NOW, and money market accounts $ 2,761,541 $ 1,777 0.13 % $ 2,067,140 $ 6,967 0.68 % Certificates of deposit 592,983 1,764 0.60 1,068,660 9,785 1.84 Total interest-bearing deposits 3,354,524 3,541 0.21 3,135,800 16,752 1.07 Borrowed funds 574,240 5,899 2.07 677,293 6,728 2.00 Total interest-bearing liabilities $ 3,928,764 9,440 0.48 $ 3,813,093 23,480 1.24 Non-interest bearing deposits 767,495 423,563 Accrued expenses and other liabilities 96,759 92,543 Total liabilities 4,793,018 4,329,199 Stockholders' equity 754,550 706,192 Total liabilities and stockholders' equity $ 5,547,568 $ 5,035,391 Net interest income $ 78,863 $ 60,163 Net interest rate spread (4) 2.92 % 2.31 % Net interest-earning assets (5) $ 1,315,621 $ 927,080 Net interest margin (6) 3.03 % 2.55 % Average interest-earning assets to interest-bearing liabilities 133.49 % 124.31 % (1) Average yields and rates are annualized.
(2) Includes non-accruing loans.
(3) Securities available-for-sale and other securities are reported at amortized cost.
(4) 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.
(5) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.
(6) Net interest margin represents net interest income divided by average total interest-earning assets.