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| 8-K - 8-K - Northfield Bancorp, Inc. | nfbkq420178-kearningsrelea.htm |
EXHIBIT 99
PRESS RELEASE DATED JANUARY 24, 2018
Company Contact:
William R. Jacobs
Chief Financial Officer
Tel: (732) 499-7200 ext. 2519
FOR IMMEDIATE RELEASE
NORTHFIELD BANCORP, INC. ANNOUNCES
FOURTH QUARTER AND YEAR END 2017 RESULTS
NOTABLE ITEMS INCLUDE:
• | FOURTH QUARTER 2017: |
◦ | NET LOSS OF $1.7 MILLION, OR $0.04 PER SHARE |
◦ | INCLUDES $10.5 MILLION, OR $0.23 PER SHARE, TAX EXPENSE RELATED TO THE RECENTLY ENACTED FEDERAL TAX REFORM |
◦ | COMPARES TO NET INCOME OF $8.1 MILLION, OR $0.17 PER DILUTED SHARE, FOR THE THIRD QUARTER OF 2017, AND $8.2 MILLION, OR $0.18, PER DILUTED SHARE, FOR THE FOURTH QUARTER OF 2016 |
◦ | NET INTEREST MARGIN REMAINS STABLE, DECREASING ONE BASIS POINT TO 2.96% FOR THE FOURTH QUARTER 2017, AS COMPARED TO 2.97% FOR BOTH THE THIRD QUARTER OF 2017 AND FOURTH QUARTER OF 2016 |
◦ | EFFICIENCY RATIO DECREASES TO 53.9% FOR THE FOURTH QUARTER OF 2017, AS COMPARED TO 56.2% FOR THE THIRD QUARTER OF 2017, AND 56.5% FOR THE FOURTH QUARTER OF 2016 |
◦ | ORIGINATED LOANS HELD-FOR-INVESTMENT, NET, INCREASED 2.7% IN THE FOURTH QUARTER OF 2017 |
◦ | DEPOSITS, EXCLUDING BROKERED, INCREASED 3.5% IN THE FOURTH QUARTER OF 2017 |
• | FULL YEAR 2017: |
◦ | NET INCOME FOR THE FULL YEAR 2017 WAS $24.8 MILLION, OR $0.53 PER DILUTED SHARE, COMPARED TO $26.1 MILLION, OR $0.57 PER DILUTED SHARE IN 2016, AND INCLUDED: |
•THE AFOREMENTIONED TAX CHARGE OF $10.5 MILLION, OR $0.23 PER DILUTED SHARE, IN 2017
•$3.8 MILLION, OR $0.08 PER DILUTED SHARE, IN TAX BENEFITS FROM THE ADOPTION OF ACCOUNTING STANDARDS UPDATE NO. 2016-09 RELATED TO STOCK COMPENSATION, AND INCOME FROM BANK OWNED LIFE INSURANCE PROCEEDS IN EXCESS OF THE CASH SURRENDER VALUE OF THE POLICIES IN 2017
•MERGER-RELATED EXPENSES OF $2.4 MILLION, NET OF TAX, OR $0.05 PER DILUTED SHARE IN 2016, RELATED TO THE ACQUISITION OF HOPEWELL VALLEY COMMUNITY BANK (“HOPEWELL VALLEY”)
◦ | NET INTEREST MARGIN INCREASED ONE BASIS POINT TO 2.99% AS COMPARED TO 2.98% IN 2016 |
◦ | EFFICIENCY RATIO DECREASED TO 55.9% FOR 2017 AS COMPARED TO 64.3% IN 2016 |
◦ | ORIGINATED LOANS HELD-FOR-INVESTMENT, NET, INCREASED 13.1% |
◦ | DEPOSITS, EXCLUDING BROKERED, INCREASED 2.7% |
◦ | CAPITAL REMAINS STRONG AT 16.0% |
◦ | CASH DIVIDEND OF $0.10 PER SHARE OF COMMON STOCK DECLARED PAYABLE FEBRUARY 21, 2018, TO STOCKHOLDERS OF RECORD AS OF FEBRUARY 7, 2018 |
WOODBRIDGE, NEW JERSEY, JANUARY 24, 2018....NORTHFIELD BANCORP, INC. (the “Company”) (NASDAQ:NFBK), the holding company for Northfield Bank, reported a loss per common share of $0.04 for the quarter ended December 31, 2017 and diluted earnings per common share of $0.53 for the year ended December 31, 2017, compared to diluted earnings per common share of $0.18 and $0.57 for the quarter and year ended December 31, 2016, respectively. Earnings for the quarter and year ended December 31, 2017, include an estimated tax charge of $10.5 million, or $0.23 per diluted share, related to the recently enacted federal tax reform (the “Tax Reform Act”). Beginning in 2018, the Tax Reform Act, among other things, reduces the federal corporate income tax rate from 35% to 21%. As a result of the lower corporate tax rate, during the fourth
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quarter of 2017, the Company recorded an adjustment of $10.5 million to reduce its net deferred tax assets, with a corresponding charge to income tax expense. In addition, earnings for the year ended December 31, 2017, were also affected by the adoption of Accounting Standards Update No. 2016-09, Compensation - Stock Compensation (Topic 718) (“ASU 2016-09”), which resulted in a $2.3 million, or $0.05 per diluted share, reduction in income tax expense, and a $1.5 million, or $0.03 per diluted share, benefit of tax-exempt income from bank owned life insurance proceeds in excess of the cash surrender value of the policies, recorded in the first quarter of 2017. Earnings for the year ended December 31, 2016, included merger-related expenses associated with the acquisition of Hopewell Valley of approximately $2.4 million, net of tax, or $0.05 per diluted share.
Commenting on the fourth quarter and annual results, Steven M. Klein, the Company’s President and Chief Executive Officer noted, “We remain focused on the fundamentals of disciplined loan and deposit generation, asset quality, and managing our net interest margin and efficiency ratio. Pre-tax income increased 10% for the quarter as compared to the third quarter of 2017, and 12% as compared to the fourth quarter of 2016. Originated loans grew 2.7% for the quarter and 13.1% for the year, and deposits, excluding broker deposits, increased 3.5% for the quarter, and 2.7% for the year. Although we continue to experience pricing pressure on both sides of the balance sheet, our net interest margin remained stable for the quarter with a one basis point decrease to 2.96%, compared to the prior quarter and prior year quarter. Expense management is critical to our operating model and our efficiency ratio continued to improve to 53.9% for the fourth quarter as compared to 56.2% for the prior quarter, and 56.5% for the prior year fourth quarter.”
Mr. Klein continued, “The fourth quarter results included a non-cash charge of approximately $10.5 million as a result of federal income tax reform enacted in December of 2017. Our capital remains strong, and we believe we are well positioned to execute on our strategic plan, and the benefits from the lower Federal income tax rates will allow us to further invest in our communities, our customers and our employees to continue to build shareholder value.” Mr. Klein further noted, “I’m pleased to announce that The Board of Directors has declared a cash dividend of $0.10 per common share payable on February 21, 2018, to stockholders of record on February 7, 2018.”
Results of Operations
Comparison of Operating Results for the Year Ended December 31, 2017 and 2016
Net income was $24.8 million and $26.1 million for the years ended December 31, 2017 and 2016, respectively. Significant variances from the prior year are as follows: a $5.6 million increase in net interest income, a $776,000 increase in the provision for loan losses, a $1.6 million increase in non-interest income, a $5.6 million decrease in non-interest expense, and a $13.3 million increase in income tax expense. Net income for the year ended December 31, 2017 includes an estimated tax charge of approximately $10.5 million related to the enactment of the Tax Reform Act in the fourth quarter of 2017. Beginning in 2018, the Tax Reform Act, among other things, reduces the federal corporate income tax rate from 35% to 21%, which resulted in a reduction in our net deferred tax assets and a corresponding charge to income tax expense of approximately $10.5 million.
Net interest income for the year ended December 31, 2017, increased $5.6 million, or 5.4%, to $108.9 million, from $103.3 million for the year ended December 31, 2016, primarily due to a $182.5 million, or 5.3%, increase in our average interest-earning assets, and a one basis point increase in our net interest margin to 2.99%. The increase in average interest-earning assets was primarily attributable to increases in average loans outstanding of $271.1 million and other securities of $11.9 million, partially offset by decreases in average mortgage-backed securities of $91.2 million and interest-earning deposits in financial institutions of $10.0 million. The increase in average loans was primarily due to originated loan growth. Net interest income for the year ended December 31, 2017, included loan prepayment income of $1.4 million, compared to $1.9 million for the year ended December 31, 2016. Yields earned on interest-earning assets increased three basis points to 3.64% for the year ended December 31, 2017, from 3.61% for the year ended December 31, 2016, driven by higher yields on securities, Federal Home Loan Bank of New York stock and interest-earning deposits in financial institutions, partially offset by lower yields on loans. The cost of interest-bearing liabilities increased five basis points to 0.85% for the year ended December 31, 2017, as compared to 0.80% for the prior year, primarily due to higher rates on certificates of deposit and borrowed funds.
The provision for loan losses increased $776,000 to $1.4 million for the year ended December 31, 2017, from $635,000 for the year ended December 31, 2016, primarily due to growth in the loan portfolio, partially offset by declines in non-performing loans, and net recoveries during the year ended December 31, 2017. Net recoveries were $154,000 for the year ended December 31, 2017, compared to net charge-offs of $810,000 for the year ended December 31, 2016.
Non-interest income increased $1.6 million, or 15.6%, to $11.6 million for the year ended December 31, 2017, from $10.1 million for the year ended December 31, 2016, primarily due to an increase of $1.5 million in income on bank owned life insurance, attributable to insurance proceeds in excess of the related cash surrender value of the policies, and an increase of $470,000 in gains
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on securities transactions, net. Partially offsetting these increases was a decrease in fees and service charges for customer services of $232,000. Securities gains, net, in 2017, included gains of $1.1 million related to the Company’s trading portfolio, compared to gains of $507,000 in the comparative prior year. 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.
Non-interest expense decreased $5.6 million, or 7.6%, to $67.4 million for the year ended December 31, 2017, from $72.9 million for the year ended December 31, 2016. The decrease was primarily due to a $4.0 million reduction in merger-related expenses which were associated with the Hopewell Valley acquisition reflected in 2016. Compensation and employee benefits expense decreased $1.5 million, due primarily to a reduction in severance, retention, and change-in-control compensation associated with the Hopewell Valley acquisition in the prior year, partially offset by annual merit-related salary increases and an increase in expenses related to the Company’s deferred compensation plan, which is described above, and which has no effect on net income. Data processing fees decreased $1.5 million, primarily due to non-recurring conversion costs and contract termination costs associated with the Hopewell Valley acquisition incurred in the prior year. Professional fees decreased $687,000 primarily due to non-recurring merger-related professional fees associated with the Hopewell Valley acquisition incurred in the prior year. FDIC insurance expense decreased by $430,000 due to a reduction in the FDIC's assessment rates for depository institutions with less than $10.0 billion in assets, which became effective in the quarter ended September 30, 2016. Other expense decreased by $1.0 million, primarily due to lower directors' equity award expense, related to the retirement of three directors.
The Company recorded income tax expense of $27.0 million for the year ended December 31, 2017, compared to $13.7 million for the year ended December 31, 2016. The effective tax rate for the year ended December 31, 2017, was 52.1%, compared to 34.3% for the year ended December 31, 2016. The effective tax rate for the year ended December 31, 2017 was affected by (i) an estimated tax charge of $10.5 million related to the Tax Reform Act as noted above; (ii) the adoption of ASU 2016-09 in the first quarter of 2017, which resulted in a $2.3 million reduction in income tax expense related to the exercise or vesting of equity awards, which were previously recorded through equity as an adjustment to additional paid in capital; and (iii) $1.5 million of tax-exempt income from bank owned life insurance proceeds in excess of the cash surrender value of the policies. The effective tax rate for the year ended December 31, 2016, was affected by $211,000 of non-deductible merger related expenses.
Comparison of Operating Results for the Three Months Ended December 31, 2017 and 2016
The Company recorded a net loss of $1.7 million for the quarter ended December 31, 2017 as compared to net income of $8.2 million for the quarter ended December 31, 2016. Significant variances from the comparable prior quarter are as follows: a $1.3 million increase in net interest income, a $240,000 decrease in the provision for loan losses, a $200,000 decrease in non-interest income, a $188,000 decrease in non-interest expense, and an $11.4 million increase in income tax expense, which includes an estimated tax charge of $10.5 million related to the impact of the Tax Reform Act, discussed above.
Net interest income for the quarter ended December 31, 2017, increased $1.3 million, or 4.8%, primarily due to an increase in our average interest-earning assets of $168.5 million, or 4.7%, partially offset by a one basis point decrease in our net interest margin to 2.96%. The increase in average interest-earning assets was primarily attributable to an increase in average loans outstanding of $192.1 million and an increase in other securities of $21.9 million, partially offset by a decrease in average mortgage-backed securities of $43.0 million. The increase in average loans was primarily due to originated loan growth. The quarter ended December 31, 2017, included loan prepayment income of $558,000 as compared to $539,000 for the quarter ended December 31, 2016. Yields earned on interest-earning assets increased nine basis points to 3.67% for the quarter ended December 31, 2017, from 3.58% for the quarter ended December 31, 2016, driven by higher yields on all asset classes. The cost of interest-bearing liabilities increased 13 basis points to 0.91% for the current quarter as compared to 0.78% for the comparable prior year quarter, attributable to higher rates on deposits and borrowed funds.
The provision for loan losses decreased by $240,000 to $40,000 for the quarter ended December 31, 2017, from $280,000 for the quarter ended December 31, 2016, primarily due to an improvement in asset quality indicators, including declines in non-performing loans and net recoveries, partially offset by the increase in provision related to growth in the portfolio. Net recoveries were $21,000 for the quarter ended December 31, 2017, compared to net charge-offs of $25,000 for the quarter ended December 31, 2016.
Non-interest income decreased by $200,000 or 7.6%, to $2.4 million for the quarter ended December 31, 2017, from $2.6 million for the quarter ended December 31, 2016, primarily due to a decrease in fees and service charges for customers of $168,000.
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Non-interest expense remained relatively stable at $16.4 million for the quarter ended December 31, 2017, as compared to $16.6 million for the comparable prior year quarter.
The Company recorded income tax expense of $15.7 million for the quarter ended December 31, 2017, compared to $4.3 million for the quarter ended December 31, 2016. The effective tax rate for the quarter ended December 31, 2017, was 112.3%, as compared to 34.3% for the quarter ended December 31, 2016. As noted above, income tax expense for the quarter ended December 31, 2017, includes an estimated tax charge of $10.5 million related to the Tax Reform Act.
Comparison of Operating Results for the Three Months Ended December 31, 2017, and September 30, 2017
The Company recorded a net loss of $1.7 million for the quarter ended December 31, 2017, compared to net income of $8.1 million for the quarter ended September 30, 2017. Significant variances from the prior quarter are as follows: a $603,000 increase in net interest income, a $448,000 decrease in the provision for loan losses, a $172,000 decrease in non-interest income, a $440,000 decrease in non-interest expense, and an $11.2 million increase in income tax expense which includes an estimated tax charge of $10.5 million related to the impact of the Tax Reform Act, discussed above.
Net interest income for the quarter ended December 31, 2017, increased $603,000, or 2.2%, due to an $87.2 million, or 2.4%, increase in average interest-earning assets, partially offset by a one basis point decrease in the net interest margin to 2.96%. The increase in average interest-earning assets was primarily attributable to increases in average loans outstanding of $61.1 million, and average mortgage-backed securities of $29.4 million. The quarter ended December 31, 2017, included loan prepayment income of $558,000 as compared to $366,000 for the quarter ended September 30, 2017. Yields earned on interest-earning assets increased three basis points to 3.67% for the quarter ended December 31, 2017, as compared to 3.64% for the quarter ended September 30, 2017, primarily driven by higher yields on loans. The cost of interest-bearing liabilities increased five basis points to 0.91% for the current quarter as compared to 0.86% for the quarter ended September 30, 2017, attributable to higher rates on deposits and borrowed funds.
The provision for loan losses decreased by $448,000 to $40,000 for the quarter ended December 31, 2017, from $488,000 for the quarter ended September 30, 2017, primarily due to an improvement in asset quality indicators. Net recoveries were $21,000 for the quarter ended December 31, 2017, compared to net recoveries of $6,000 for the quarter ended September 30, 2017.
Non-interest income decreased by $172,000 or 6.6%, to $2.4 million for the quarter ended December 31, 2017, from $2.6 million for the quarter ended September 30, 2017, primarily due to decreases in fees and service charges for customers of $99,000 and gains on securities transactions, net, of $55,000.
Non-interest expense decreased $440,000, or 2.6%, to $16.4 million for the quarter ended December 31, 2017, from $16.8 million for the quarter ended September 30, 2017, primarily due to a decrease of $695,000 in compensation and employee benefits, partially offset by an increase in professional fees of $171,000.
The Company recorded income tax expense of $15.7 million for the quarter ended December 31, 2017, compared to $4.5 million for the quarter ended September 30, 2017. The effective tax rate for the quarter ended December 31, 2017, was 112.3%, as compared to 35.8% for the quarter ended September 30, 2017. Income tax expense for the quarter ended December 31, 2017, includes an estimated tax charge of $10.5 million related to the Tax Reform Act discussed above.
Financial Condition
Total assets increased $141.3 million, or 3.7%, to $3.99 billion at December 31, 2017, from $3.85 billion at December 31, 2016. The increase was primarily attributable to an increase in loans held-for-investment, net, of $172.7 million, and an increase in our securities portfolio of $17.7 million, partially offset by decreases in cash and cash equivalents of $38.2 million and other assets of $11.7 million.
As of December 31, 2017, we estimate that our non-owner occupied commercial real estate concentration (as defined by regulatory guidance issued in 2006) to total risk-based capital was approximately 412.2%. 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 our commercial real estate concentration risk, the Bank’s regulators could require us to implement additional policies and procedures or could require us to maintain higher levels of regulatory capital, which might adversely affect our loan originations, ability to pay dividends, and profitability.
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Loans held-for-investment, net, increased $172.7 million to $3.14 billion at December 31, 2017, as compared to $2.97 billion at December 31, 2016. Originated loans held-for-investment, net, totaled $2.43 billion at December 31, 2017, as compared to $2.14 billion at December 31, 2016. The increase was primarily due to an increase in multifamily real estate loans of $229.4 million, or 15.2%, to $1.74 billion at December 31, 2017, from $1.51 billion at December 31, 2016, and to a lesser extent, increases of $32.6 million, or 7.9%, in commercial real estate loans, and $20.5 million, or 145.6%, in construction and land loans. The following tables detail our multifamily real estate originations for the years ended December 31, 2017 and 2016 (dollars in thousands):
Year Ended December 31, 2017 | ||||||||||||
Originations | Weighted Average Interest Rate | Weighted Average Loan-to-Value Ratio | Weighted Average Months to Next Rate Change or Maturity for Fixed Rate Loans | (F)ixed or (V)ariable | Amortization Term | |||||||
$ | 352,031 | 3.64% | 61% | 80 | V | 15-30 Years | ||||||
750 | 5.07% | 48% | 1 | V | 25 Years | |||||||
16,640 | 3.95% | 44% | 180 | F | 15 Years | |||||||
$ | 369,421 | 3.65% | 60% | |||||||||
Year Ended December 31, 2016 | ||||||||||||
Originations | Weighted Average Interest Rate | Weighted Average Loan-to-Value Ratio | Weighted Average Months to Next Rate Change or Maturity for Fixed Rate Loans | (F)ixed or (V)ariable | Amortization Term | |||||||
$ | 312,716 | 3.41% | 62% | 80 | V | 30 Years | ||||||
11,821 | 3.76% | 40% | 140 | F | 7- 20 Years | |||||||
$ | 324,537 | 3.42% | 62% | |||||||||
Acquired loans decreased by $100.4 million to $692.8 million at December 31, 2017, from $793.2 million at December 31, 2016, primarily due to paydowns, partially offset by purchases of one-to-four family residential mortgage and multifamily real estate loan pools totaling $63.6 million during the year ended December 31, 2017. The geographic locations of the properties collateralizing the loans are as follows: 55.3% in New York, 15.9% in New Jersey, 9.2% in California, and 19.6% in other states.
The following table provides the details of the loans purchased during the year ended December 31, 2017 (dollars in thousands):
Year Ended December 31, 2017 | ||||||||||||||
Purchase Amount | Loan Type | Weighted Average Interest Rate(1) | Weighted Average Loan-to-Value Ratio(2) | Weighted Average Months to Next Rate Change or Maturity for Fixed Rate Loans(2) | (F)ixed or (V)ariable | Original Amortization Term | ||||||||
$ | 29,286 | Residential | 2.89% | 57% | 1 | V | 30 Years | |||||||
4,812 | Residential | 3.46% | 62% | 286 | F | 15-30 Years | ||||||||
18,774 | Multifamily | 3.35% | 55% | 53 | V | 30 Years | ||||||||
3,399 | Multifamily | 3.40% | 58% | 46 | F | 30 Years | ||||||||
7,280 | Multifamily | 3.35% | 51% | 58 | V | 30 Years | ||||||||
$ | 63,551 | 3.15% | 56% | |||||||||||
(1) Net of servicing fee.
(2) At time of purchase.
Purchased credit-impaired (PCI) loans totaled $22.7 million at December 31, 2017, as compared to $30.5 million at December 31, 2016. The majority of the PCI loan balance consists of loans acquired as part of a Federal Deposit Insurance Corporation-assisted transaction. The Company accreted interest income of $1.4 million and $5.5 million attributable to PCI loans for the three months and year ended December 31, 2017, respectively, as compared to $1.2 million and $5.2 million for the three months and year-ended December 31, 2016, respectively.
The Company’s available-for-sale securities portfolio totaled $515.1 million at December 31, 2017, compared to $498.9 million at December 31, 2016. At December 31, 2017, $445.2 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 $68.1 million in corporate bonds, all of which were considered investment grade at December 31, 2017, and other securities of $1.8 million (including $323,000 of equity investments in money market mutual funds).
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Total liabilities increased $123.6 million, or 3.8%, to $3.35 billion at December 31, 2017, from $3.23 billion at December 31, 2016. The increase was primarily attributable to increases in deposits of $123.4 million and other borrowings of $4.3 million, partially offset by a decrease in securities sold under agreements to repurchase of $6.0 million.
Deposits increased $123.4 million, or 4.5%, to $2.84 billion at December 31, 2017, from $2.71 billion at December 31, 2016. The increase was attributable to increases of $202.9 million in certificate of deposit accounts, and $14.5 million in transaction accounts, partially offset by decreases of $76.1 million in savings accounts and $17.8 million in money market accounts.
Borrowings and securities sold under agreements to repurchase decreased by $1.7 million, or 0.4%, to $471.5 million at December 31, 2017, from $473.2 million at December 31, 2016. 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 December 31, 2017 (dollars in thousands):
Year | Amount | Weighted Average Rate | ||
2018 | $162,715 | 1.64% | ||
2019 | 123,502 | 1.48% | ||
2020 | 90,000 | 1.65% | ||
2021 | 70,000 | 1.80% | ||
2022 | 20,000 | 1.97% | ||
$466,217 | 1.64% | |||
Total stockholders’ equity increased by $17.7 million to $638.9 million at December 31, 2017, from $621.2 million at December 31, 2016. This increase was primarily attributable to net income of $24.8 million for year ended December 31, 2017, and an $8.8 million increase related to equity award activity, partially offset by dividend payments of $15.6 million.
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Asset Quality
The following table details total originated and acquired (but excluding PCI) non-accruing loans, non-performing loans, non-performing assets, troubled debt restructurings on which interest is accruing, and accruing loans 30 to 89 days delinquent at December 31, 2017, and December 31, 2016 (dollars in thousands):
December 31, 2017 | December 31, 2016 | ||||||
Non-accrual loans: | |||||||
Real estate loans: | |||||||
Commercial | $ | 4,087 | $ | 5,513 | |||
One-to-four family residential | 774 | 1,629 | |||||
Multifamily | 417 | 43 | |||||
Home equity and lines of credit | 156 | 127 | |||||
Commercial and industrial | 74 | 9 | |||||
Total non-accrual loans: | 5,508 | 7,321 | |||||
Loans delinquent 90 days or more and still accruing: | |||||||
Real estate loans: | |||||||
One-to-four family residential | 27 | 52 | |||||
Home equity and lines of credit | — | 8 | |||||
Other loans | 1 | — | |||||
Total loans delinquent 90 days or more and still accruing | 28 | 60 | |||||
Total non-performing loans | 5,536 | 7,381 | |||||
Other real estate owned | 850 | 850 | |||||
Total non-performing assets | $ | 6,386 | $ | 8,231 | |||
Non-performing loans to total loans held-for-investment, net | 0.18 | % | 0.25 | % | |||
Non-performing assets to total assets | 0.16 | % | 0.21 | % | |||
Loans subject to restructuring agreements and still accruing | $ | 18,003 | $ | 20,628 | |||
Accruing loans 30-89 days delinquent | $ | 12,044 | $ | 10,100 | |||
Accruing Loans 30 to 89 Days Delinquent
Loans 30 to 89 days delinquent and on accrual status totaled $12.0 million and $10.1 million at December 31, 2017, and December 31, 2016, respectively. The following table sets forth delinquencies for accruing loans by type and by amount at December 31, 2017, and December 31, 2016 (dollars in thousands):
December 31, 2017 | December 31, 2016 | ||||||
Real estate loans: | |||||||
Commercial | $ | 4,347 | $ | 4,578 | |||
One-to-four family residential | 4,162 | 3,621 | |||||
Construction and land | 6 | — | |||||
Multifamily | 3,298 | 1,440 | |||||
Home equity and lines of credit | — | 263 | |||||
Commercial and industrial loans | 202 | 148 | |||||
Other loans | 29 | 50 | |||||
Total delinquent accruing loans | $ | 12,044 | $ | 10,100 | |||
PCI Loans (Held-for-Investment)
At December 31, 2017, based on contractual principal, 10.8% of PCI loans were past due 30 to 89 days, and 17.1% were past due 90 days or more, as compared to 6.6% and 19.3%, respectively, at December 31, 2016.
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About Northfield Bank
Northfield Bank, founded in 1887, operates 39 full-service banking offices 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," "adjust" "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, 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, if any, 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.
(Tables to follow)
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NORTHFIELD BANCORP, INC.
SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA
At or For the Three Months Ended | At or For the Year Ended | ||||||||
December 31, | September 30, | December 31, | |||||||
2017 | 2016 | 2017 | 2017 | 2016 | |||||
Selected Financial Ratios: | |||||||||
Performance Ratios(1): | |||||||||
Return on assets (ratio of net (loss) income to average total assets) (8) (9) (11) | (0.17)% | 0.85% | 0.82% | 0.63% | 0.70% | ||||
Return on equity (ratio of net (loss) income to average equity) (8) (9) (11) | (1.05) | 5.24 | 5.01 | 3.88 | 4.26 | ||||
Average equity to average total assets | 16.22 | 16.14 | 16.42 | 16.31 | 16.44 | ||||
Interest rate spread | 2.76 | 2.80 | 2.78 | 2.79 | 2.80 | ||||
Net interest margin | 2.96 | 2.97 | 2.97 | 2.99 | 2.98 | ||||
Efficiency ratio(2) (9) (10) | 53.91 | 56.52 | 56.16 | 55.90 | 64.34 | ||||
Non-interest expense to average total assets(10) | 1.63 | 1.71 | 1.70 | 1.72 | 1.95 | ||||
Non-interest expense to average total interest-earning assets(10) | 1.74 | 1.85 | 1.83 | 1.85 | 2.11 | ||||
Average interest-earning assets to average interest-bearing liabilities | 128.99 | 128.53 | 128.51 | 128.71 | 128.68 | ||||
Asset Quality Ratios: | |||||||||
Non-performing assets to total assets | 0.16 | 0.21 | 0.16 | 0.16 | 0.21 | ||||
Non-performing loans(3) to total loans(4) | 0.18 | 0.25 | 0.18 | 0.18 | 0.25 | ||||
Allowance for loan losses to non-performing loans held-for-investment(5) | 472.63 | 333.23 | 463.40 | 472.63 | 333.23 | ||||
Allowance for loan losses to originated loans held-for-investment, net(6) | 1.04 | 1.10 | 1.07 | 1.04 | 1.10 | ||||
Allowance for loan losses to total loans held-for-investment, net(7) | 0.83 | 0.83 | 0.83 | 0.83 | 0.83 | ||||
(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 PCI loans), and are included in total loans held-for-investment, net, and non-performing loans held-for-sale. |
(4) | Includes originated loans held-for-investment, PCI loans, acquired loans and non-performing loans held-for-sale (where applicable). |
(5) | Excludes nonperforming loans held-for-sale (where applicable), carried at lower of aggregate cost or estimated fair value, less costs to sell. |
(6) | Excludes PCI loans, acquired loans held-for-investment and loans held-for-sale (where applicable) and related reserve balances. |
(7) | Includes PCI and acquired loans held-for-investment. |
(8) The three months and year ended December 31, 2017, includes an estimated tax charge of $10.5 million as a result of the enactment in the fourth quarter of 2017 of the Tax Reform Act, primarily attributable to the revaluation of our net deferred tax assets at the lower federal corporate income tax rate of 21%. The year ended December 31, 2017, also includes a $2.3 million reduction in income tax expense from the adoption of ASU 2016-09 related to the exercise or vesting of equity awards which were previously recorded through equity as an adjustment to additional paid in capital.
(9) The year ended December 31, 2017, includes $1.5 million of tax-exempt income from bank owned life insurance proceeds in excess of the cash surrender value of the policies.
(10) The year ended December 31, 2016, includes merger-related pre-tax charges of $4.0 million associated with the acquisition of Hopewell Valley.
(11) The year ended December 31, 2016, includes merger-related charges of $2.4 million, net of tax, associated with the acquisition of Hopewell Valley.
9
NORTHFIELD BANCORP, INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except share and per share amounts) (unaudited)
December 31, 2017 | September 30, 2017 | December 31, 2016 | |||||||||
ASSETS: | |||||||||||
Cash and due from banks | $ | 17,446 | $ | 15,007 | $ | 18,412 | |||||
Interest-bearing deposits in other financial institutions | 40,393 | 88,234 | 77,673 | ||||||||
Total cash and cash equivalents | 57,839 | 103,241 | 96,085 | ||||||||
Trading securities | 9,597 | 9,225 | 7,857 | ||||||||
Securities available-for-sale, at estimated fair value | 515,121 | 482,626 | 498,897 | ||||||||
Securities held-to-maturity, at amortized cost | 9,931 | 9,983 | 10,148 | ||||||||
Loans held-for-sale | — | 1,506 | — | ||||||||
Originated loans held-for-investment, net | 2,425,275 | 2,360,864 | 2,144,346 | ||||||||
Loans acquired | 692,803 | 745,063 | 793,240 | ||||||||
Purchased credit-impaired (PCI) loans held-for-investment | 22,741 | 25,960 | 30,498 | ||||||||
Loans held-for-investment, net | 3,140,819 | 3,131,887 | 2,968,084 | ||||||||
Allowance for loan losses | (26,160 | ) | (26,099 | ) | (24,595 | ) | |||||
Net loans held-for-investment | 3,114,659 | 3,105,788 | 2,943,489 | ||||||||
Accrued interest receivable | 10,713 | 10,249 | 9,714 | ||||||||
Bank owned life insurance | 150,604 | 149,657 | 148,047 | ||||||||
Federal Home Loan Bank of New York stock, at cost | 25,046 | 29,771 | 25,123 | ||||||||
Premises and equipment, net | 25,746 | 25,504 | 26,910 | ||||||||
Goodwill | 38,411 | 38,411 | 38,411 | ||||||||
Other real estate owned | 850 | 850 | 850 | ||||||||
Other assets | 32,900 | 40,017 | 44,563 | ||||||||
Total assets | $ | 3,991,417 | $ | 4,006,828 | $ | 3,850,094 | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY: | |||||||||||
Deposits | $ | 2,836,979 | $ | 2,735,402 | $ | 2,713,587 | |||||
Securities sold under agreements to repurchase | 2,000 | 4,000 | 8,000 | ||||||||
Federal Home Loan Bank advances and other borrowings | 469,549 | 579,690 | 465,206 | ||||||||
Advance payments by borrowers for taxes and insurance | 14,798 | 14,265 | 12,331 | ||||||||
Accrued expenses and other liabilities | 29,214 | 28,422 | 29,774 | ||||||||
Total liabilities | 3,352,540 | 3,361,779 | 3,228,898 | ||||||||
Total stockholders’ equity (1) | 638,877 | 645,049 | 621,196 | ||||||||
Total liabilities and stockholders’ equity | $ | 3,991,417 | $ | 4,006,828 | $ | 3,850,094 | |||||
Total shares outstanding | 48,803,885 | 48,880,772 | 48,526,658 | ||||||||
Tangible book value per share (2) | $ | 12.28 | $ | 12.38 | $ | 11.97 | |||||
(1) Based on an estimated tax charge of $10.5 million recorded in the fourth quarter of 2017 as a result of the enactment of the Tax Reform Act, which was signed into law on December 22, 2017. The final impact of the Tax Reform Act may differ from these estimates, due to, among other things, changes in interpretations and assumptions made by the Company, additional guidance that may be issued by the U.S. Department of the Treasury, and actions that the Company may take.
(2) | 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 $1.4 million, $1.5 million, and $1.7 million at December 31, 2017, September 30, 2017, and December 31, 2016, respectively, and are included in other assets. |
10
NORTHFIELD BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(Dollars in thousands, except share and per share amounts) (unaudited)
Three Months Ended | Year Ended | ||||||||||||||||||
December 31, | September 30, | December 31, | |||||||||||||||||
2017 | 2016 | 2017 | 2017 | 2016 | |||||||||||||||
Interest income: | |||||||||||||||||||
Loans | $ | 31,255 | $ | 28,984 | $ | 30,424 | $ | 120,340 | $ | 111,776 | |||||||||
Mortgage-backed securities | 2,383 | 2,510 | 2,175 | 9,174 | 10,832 | ||||||||||||||
Other securities | 405 | 246 | 370 | 1,310 | 908 | ||||||||||||||
Federal Home Loan Bank of New York dividends | 400 | 310 | 365 | 1,461 | 1,171 | ||||||||||||||
Deposits in other financial institutions | 172 | 60 | 191 | 584 | 285 | ||||||||||||||
Total interest income | 34,615 | 32,110 | 33,525 | 132,869 | 124,972 | ||||||||||||||
Interest expense: | |||||||||||||||||||
Deposits | 4,699 | 3,615 | 4,168 | 16,386 | 14,287 | ||||||||||||||
Borrowings | 1,961 | 1,811 | 2,005 | 7,590 | 7,381 | ||||||||||||||
Total interest expense | 6,660 | 5,426 | 6,173 | 23,976 | 21,668 | ||||||||||||||
Net interest income | 27,955 | 26,684 | 27,352 | 108,893 | 103,304 | ||||||||||||||
Provision for loan losses | 40 | 280 | 488 | 1,411 | 635 | ||||||||||||||
Net interest income after provision for loan losses | 27,915 | 26,404 | 26,864 | 107,482 | 102,669 | ||||||||||||||
Non-interest income: | |||||||||||||||||||
Fees and service charges for customer services | 1,139 | 1,307 | 1,238 | 4,702 | 4,934 | ||||||||||||||
Income on bank owned life insurance | 948 | 997 | 970 | 5,386 | 3,998 | ||||||||||||||
Gains on securities transactions, net | 282 | 201 | 337 | 1,283 | 813 | ||||||||||||||
Other | 74 | 138 | 70 | 271 | 327 | ||||||||||||||
Total non-interest income | 2,443 | 2,643 | 2,615 | 11,642 | 10,072 | ||||||||||||||
Non-interest expense: | |||||||||||||||||||
Compensation and employee benefits | 8,898 | 8,889 | 9,593 | 38,237 | 39,780 | ||||||||||||||
Occupancy | 2,810 | 2,814 | 2,807 | 11,270 | 11,411 | ||||||||||||||
Furniture and equipment | 270 | 347 | 279 | 1,141 | 1,421 | ||||||||||||||
Data processing | 1,149 | 1,135 | 1,155 | 4,585 | 6,054 | ||||||||||||||
Professional fees | 740 | 840 | 569 | 2,774 | 3,461 | ||||||||||||||
FDIC insurance | 269 | 276 | 279 | 1,064 | 1,494 | ||||||||||||||
Other | 2,252 | 2,275 | 2,146 | 8,307 | 9,325 | ||||||||||||||
Total non-interest expense | 16,388 | 16,576 | 16,828 | 67,378 | 72,946 | ||||||||||||||
Income before income tax expense | 13,970 | 12,471 | 12,651 | 51,746 | 39,795 | ||||||||||||||
Income tax expense(1) | 15,686 | 4,273 | 4,525 | 26,978 | 13,665 | ||||||||||||||
Net (loss) income | $ | (1,716 | ) | $ | 8,198 | $ | 8,126 | $ | 24,768 | $ | 26,130 | ||||||||
Net (loss) income per common share: | |||||||||||||||||||
Basic | $ | (0.04 | ) | $ | 0.18 | $ | 0.18 | $ | 0.55 | $ | 0.59 | ||||||||
Diluted | $ | (0.04 | ) | $ | 0.18 | $ | 0.17 | $ | 0.53 | $ | 0.57 | ||||||||
Basic average shares outstanding | 45,528,498 | 44,647,550 | 45,492,713 | 45,325,445 | 44,374,389 | ||||||||||||||
Diluted average shares outstanding | 45,528,498 | 46,203,185 | 46,741,222 | 46,875,730 | 45,717,887 | ||||||||||||||
(1) The quarter and year ended December 31, 2017, includes an estimated tax charge of $10.5 million recorded in the fourth quarter of 2017 as a result of the enactment of the Tax Reform Act, which was signed into law on December 22, 2017. The final impact of the Tax Reform Act may differ from these estimates, due to, among other things, changes in interpretations and assumptions made by the Company, additional guidance that may be issued by the U.S. Department of the Treasury, and actions that the Company may take.
11
NORTHFIELD BANCORP, INC.
ANALYSIS OF NET INTEREST INCOME
(Dollars in thousands) (unaudited)
For the Three Months Ended | ||||||||||||||||||||||||||||||||
December 31, 2017 | September 30, 2017 | December 31, 2016 | ||||||||||||||||||||||||||||||
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) | $ | 3,126,273 | $ | 31,255 | 3.97 | % | $ | 3,065,206 | $ | 30,424 | 3.94 | % | $ | 2,934,208 | $ | 28,984 | 3.93 | % | ||||||||||||||
Mortgage-backed securities (3) | 443,012 | 2,383 | 2.13 | 413,627 | 2,175 | 2.09 | 486,004 | 2,510 | 2.05 | |||||||||||||||||||||||
Other securities (3) | 79,728 | 405 | 2.02 | 77,170 | 370 | 1.90 | 57,866 | 246 | 1.69 | |||||||||||||||||||||||
Federal Home Loan Bank of New York stock | 25,256 | 400 | 6.28 | 26,422 | 365 | 5.48 | 26,138 | 310 | 4.72 | |||||||||||||||||||||||
Interest-earning deposits in financial institutions | 66,958 | 172 | 1.02 | 71,606 | 191 | 1.06 | 68,510 | 60 | 0.35 | |||||||||||||||||||||||
Total interest-earning assets | 3,741,227 | 34,615 | 3.67 | 3,654,031 | 33,525 | 3.64 | 3,572,726 | 32,110 | 3.58 | |||||||||||||||||||||||
Non-interest-earning assets | 254,238 | 265,652 | 284,255 | |||||||||||||||||||||||||||||
Total assets | $ | 3,995,465 | $ | 3,919,683 | $ | 3,856,981 | ||||||||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||||||||||||
Savings, NOW, and money market accounts | $ | 1,701,835 | $ | 2,091 | 0.49 | % | $ | 1,686,677 | $ | 2,033 | 0.48 | % | $ | 1,694,190 | $ | 1,985 | 0.47 | % | ||||||||||||||
Certificates of deposit | 716,958 | 2,608 | 1.44 | 653,512 | 2,135 | 1.30 | 586,171 | 1,630 | 1.11 | |||||||||||||||||||||||
Total interest-bearing deposits | 2,418,793 | 4,699 | 0.77 | 2,340,189 | 4,168 | 0.71 | 2,280,361 | 3,615 | 0.63 | |||||||||||||||||||||||
Borrowed funds | 481,665 | 1,961 | 1.62 | 503,240 | 2,005 | 1.58 | 499,254 | 1,811 | 1.44 | |||||||||||||||||||||||
Total interest-bearing liabilities | 2,900,458 | 6,660 | 0.91 | 2,843,429 | 6,173 | 0.86 | 2,779,615 | 5,426 | 0.78 | |||||||||||||||||||||||
Non-interest bearing deposits | 399,888 | 378,191 | 389,303 | |||||||||||||||||||||||||||||
Accrued expenses and other liabilities | 46,903 | 54,278 | 65,669 | |||||||||||||||||||||||||||||
Total liabilities | 3,347,249 | 3,275,898 | 3,234,587 | |||||||||||||||||||||||||||||
Stockholders' equity | 648,216 | 643,785 | 622,394 | |||||||||||||||||||||||||||||
Total liabilities and stockholders' equity | $ | 3,995,465 | $ | 3,919,683 | $ | 3,856,981 | ||||||||||||||||||||||||||
Net interest income | $ | 27,955 | $ | 27,352 | $ | 26,684 | ||||||||||||||||||||||||||
Net interest rate spread (4) | 2.76 | % | 2.78 | % | 2.80 | % | ||||||||||||||||||||||||||
Net interest-earning assets (5) | $ | 840,769 | $ | 810,602 | $ | 793,111 | ||||||||||||||||||||||||||
Net interest margin (6) | 2.96 | % | 2.97 | % | 2.97 | % | ||||||||||||||||||||||||||
Average interest-earning assets to interest-bearing liabilities | 128.99 | % | 128.51 | % | 128.53 | % | ||||||||||||||||||||||||||
(1) | Average yields and rates are annualized. |
(2) | Includes non-accruing loans. |
(3) | Securities available-for-sale 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. |
12
NORTHFIELD BANCORP, INC.
ANALYSIS OF NET INTEREST INCOME
(Dollars in thousands) (unaudited)
For the Years Ended | |||||||||||||||||||||
December 31, 2017 | December 31, 2016 | ||||||||||||||||||||
Average Outstanding Balance | Interest | Average Yield/ Rate | Average Outstanding Balance | Interest | Average Yield/ Rate | ||||||||||||||||
Interest-earning assets: | |||||||||||||||||||||
Loans (1) | $ | 3,052,410 | $ | 120,340 | 3.94 | % | $ | 2,781,336 | $ | 111,776 | 4.02 | % | |||||||||
Mortgage-backed securities (2) | 434,166 | 9,174 | 2.11 | 525,355 | 10,832 | 2.06 | |||||||||||||||
Other securities (2) | 69,163 | 1,310 | 1.89 | 57,240 | 908 | 1.59 | |||||||||||||||
Federal Home Loan Bank of New York stock | 26,155 | 1,461 | 5.59 | 25,405 | 1,171 | 4.61 | |||||||||||||||
Interest-earning deposits in financial institutions | 64,868 | 584 | 0.90 | 74,892 | 285 | 0.38 | |||||||||||||||
Total interest-earning assets | 3,646,762 | 132,869 | 3.64 | 3,464,228 | 124,972 | 3.61 | |||||||||||||||
Non-interest-earning assets | 270,161 | 268,154 | |||||||||||||||||||
Total assets | $ | 3,916,923 | $ | 3,732,382 | |||||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||||||
Savings, NOW, and money market accounts | $ | 1,713,863 | $ | 8,233 | 0.48 | % | $ | 1,619,250 | $ | 7,758 | 0.48 | % | |||||||||
Certificates of deposit | 625,067 | 8,153 | 1.30 | 580,973 | 6,529 | 1.12 | |||||||||||||||
Total interest-bearing deposits | 2,338,930 | 16,386 | 0.70 | 2,200,223 | 14,287 | 0.65 | |||||||||||||||
Borrowed funds | 494,361 | 7,590 | 1.54 | 491,802 | 7,381 | 1.50 | |||||||||||||||
Total interest-bearing liabilities | 2,833,291 | 23,976 | 0.85 | 2,692,025 | 21,668 | 0.80 | |||||||||||||||
Non-interest bearing deposits | 385,891 | 372,946 | |||||||||||||||||||
Accrued expenses and other liabilities | 59,034 | 53,808 | |||||||||||||||||||
Total liabilities | 3,278,216 | 3,118,779 | |||||||||||||||||||
Stockholders' equity | 638,707 | 613,603 | |||||||||||||||||||
Total liabilities and stockholders' equity | $ | 3,916,923 | $ | 3,732,382 | |||||||||||||||||
Net interest income | $ | 108,893 | $ | 103,304 | |||||||||||||||||
Net interest rate spread (3) | 2.79 | % | 2.81 | % | |||||||||||||||||
Net interest-earning assets (4) | $ | 813,471 | $ | 772,203 | |||||||||||||||||
Net interest margin (5) | 2.99 | % | 2.98 | % | |||||||||||||||||
Average interest-earning assets to interest-bearing liabilities | 128.71 | % | 128.68 | % | |||||||||||||||||
(1) | Includes non-accruing loans. |
(2) | Securities available-for-sale are reported at amortized cost. |
(3) | 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. |
(4) | Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities. |
(5) | Net interest margin represents net interest income divided by average total interest-earning assets. |
13