Commenting on the quarter, Steven M. Klein, the Company’s Chairman and Chief Executive Officer noted, “Our team continues to build upon our financial performance, focusing on the expansion of both net interest income and non-interest income while prudently managing our non-interest expenses to generate higher levels of operating income and capital to meet the financial products and services needs of our communities and providing greater stockholder returns.” Mr. Klein further noted, “I’m pleased to report the declaration of a quarterly cash dividend of $0.13 per common share, payable November 19, 2025, to stockholders of record on November 5, 2025.”
Comparison of Operating Results for the Nine Months Ended September 30, 2025 and 2024
Net income was $28.2 million and $18.7 million for the nine months ended September 30, 2025 and September 30, 2024, respectively. Significant variances from the comparable prior year period are as follows: a $15.9 million increase in net interest income, a $3.4 million increase in the provision for credit losses on loans, a $2.5 million increase in non-interest income, a $2.1 million increase in non-interest expense, and a $3.4 million increase in income tax expense.
Net interest income for the nine months ended September 30, 2025, increased $15.9 million, or 18.7%, to $100.7 million, from $84.8 million for the nine months ended September 30, 2024 due to an $8.6 million decrease in interest expense and a $7.3 million increase in interest income. The decrease in interest expense was primarily due to a decrease in the average balance of interest-bearing liabilities of $107.7 million, or 2.5%, as well as a decrease in the cost of interest-bearing liabilities, which decreased by 20 basis points to 2.73% for the nine months ended September 30, 2025, from 2.93% for the nine months ended September 30, 2024. The average balance of interest-bearing liabilities decreased primarily due to a $309.9 million, or 29.4%, decrease in the average balance of borrowed funds, partially offset by a $202.0 million, or 6.4%, increase in the average balance of interest-bearing deposits, primarily in certificates of deposit. The decrease in the cost of interest-bearing liabilities was driven primarily by a 14 basis point decrease in the cost of interest-bearing deposits to 2.42% from 2.56%, partially offset by a three basis point increase in the cost of borrowings to 3.92% from 3.89%. The increase in interest income was primarily due to a 25 basis point increase in the yield on interest-earning assets, which increased to 4.60% for the nine months ended September 30, 2025, from 4.35% for the nine months ended September 30, 2024, due to higher yields on mortgage-backed securities and loans, partially offset by an $86.3 million, or 1.6%, decrease in the average balance of interest-earning assets. The decrease was primarily due to decreases in the average balance of loans of $173.0 million, the average balance of other securities of $257.4 million, and the average balance of interest-earning deposits in financial institutions of $90.4 million, partially offset by an increase in the average balance of mortgage-backed securities of $434.1 million. The changes reflect the purchase of higher-yielding mortgage-related securities with excess cash and proceeds from the maturities of other securities and paydown of lower-yielding multifamily loans.
Net interest margin increased by 43 basis points to 2.50% for the nine months ended September 30, 2025, from 2.07% for the nine months ended September 30, 2024. The increase in net interest margin was primarily due to higher yields on loans and mortgage-backed securities, coupled with a decrease in the cost of interest-bearing liabilities. Net interest income for the nine months ended September 30, 2025, included $609,000 of interest income related to the settlement of a non-accrual loan in May 2025. The Company accreted interest income related to purchased credit-deteriorated (“PCD”) loans of $710,000 for the nine months ended September 30, 2025, as compared to $1.1 million for the nine months ended September 30, 2024. Net interest income for the nine months ended September 30, 2025, also included loan prepayment income of $872,000 as compared to $648,000 for the nine months ended September 30, 2024.
The provision for credit losses on loans increased by $3.4 million to $5.7 million for the nine months ended September 30, 2025, compared to $2.3 million for the nine months ended September 30, 2024, primarily due to an increase in general reserves related to a worsening macroeconomic forecast in the current period within our Current Expected Credit Loss (“CECL”) model, and an increase in non-performing loans, partially offset by a decline in loan balances. Net charge-offs were $4.0 million for the nine months ended September 30, 2025, primarily due to $3.5 million in net charge-offs on small business unsecured commercial and industrial loans, as compared to net charge-offs of $4.7 million for the nine months ended September 30, 2024. Management continues to closely monitor the small business unsecured commercial and industrial loan portfolio, which totaled $22.4 million at September 30, 2025.
Non-interest income increased by $2.5 million, or 25.0%, to $12.3 million for the nine months ended September 30, 2025, compared to $9.8 million for the nine months ended September 30, 2024. The increase was primarily due to an increase in income on bank-owned life insurance of $2.3 million, primarily related to the exchange of certain policies in the fourth quarter of 2024, which have higher yields. Additionally, there was a $301,000 increase in fees and service charges for customer services, primarily higher overdraft fees.
Non-interest expense increased by $2.1 million, or 3.2%, to $67.8 million for the nine months ended September 30, 2025, compared to $65.7 million for the nine months ended September 30, 2024. The increase was primarily due to a $1.4 million increase in employee compensation and benefits, primarily due to higher salary expense related to annual merit increases and an increase in headcount, and higher stock compensation expense as the prior year included a credit of $461,000 related to performance stock awards not expected to vest. Partially offsetting this increase was a decrease of $683,000 related to severance expense recorded in the nine months ended September 30, 2024. Additionally, there was an $859,000 increase in data processing costs attributable to an increase in core system expenses commensurate with deposit account growth and digital banking system conversion expenses, and a $402,000 increase in professional fees related to outsourced audit services and recruitment fees. Partially offsetting the increases was a $428,000 decrease in advertising expense attributable to a change in marketing strategy and the timing of specific deposit and lending campaigns, and a $171,000 decrease in credit loss expense/(benefit) for off-balance sheet exposure. The decrease in credit loss expense/(benefit) for off-balance sheet exposure was due to a provision of $166,000 recorded during the nine months ended September 30, 2025, as compared to a provision of $337,000 recorded during the nine months ended September 30, 2024, due to a decrease in the pipeline of loans committed and awaiting closing.
The Company recorded income tax expense of $11.3 million for the nine months ended September 30, 2025, compared to $7.9 million for the nine months ended September 30, 2024. The effective tax rate for the nine months ended September 30, 2025, was 28.5% compared to 29.7% for the nine months ended September 30, 2024. In May 2025, options granted in 2015 expired and resulted in additional tax expense of $580,000 for the nine months ended September 30, 2025, as compared to options granted in 2014 that expired in June 2024 and resulted in additional tax expense of $795,000 for the nine months ended September 30, 2024.
Comparison of Operating Results for the Three Months Ended September 30, 2025 and 2024
Net income was $10.8 million and $6.5 million for the quarters ended September 30, 2025 and September 30, 2024, respectively. Significant variances from the comparable prior year quarter are as follows: a $6.3 million increase in net interest income, a $1.5 million decrease in the provision for credit losses on loans, a $1.1 million increase in non-interest income, a $3.0 million increase in non-interest expense, and a $1.7 million increase in income tax expense.
Net interest income for the quarter ended September 30, 2025, increased $6.3 million, or 22.3%, to $34.5 million, from $28.2 million for the quarter ended September 30, 2024, due to a $3.6 million increase in interest income and a $2.7 million decrease in interest expense. The increase in interest income was primarily due to a 25 basis point increase in the yield on interest-earning assets, which increased to 4.63% for the quarter ended September 30, 2025, from 4.38% for the quarter ended September 30, 2024, due to higher yields on mortgage-backed securities and loans, partially offset by a $3.8 million, or 0.1%, decrease in the average balance of interest-earning assets. The decrease was primarily due to decreases in the average balance of other securities of $221.1 million, the average balance of loans of $167.7 million, and the average balance of interest-earning deposits in financial institutions of $15.8 million, partially offset by an increase in the average balance of mortgage-backed securities of $395.4 million. The changes reflect the purchase of higher-yielding mortgage-related securities with excess cash and proceeds from the maturities of other securities. The decrease in interest expense was primarily due to a decrease in the average balance of interest-bearing liabilities of $40.9 million, or 1.0%, as well as a decrease in the cost of interest-bearing liabilities, which decreased by 23 basis points to 2.72% for the three months ended September 30, 2025, from 2.95% for the three months ended September 30, 2024. The average balance of interest-bearing liabilities decreased primarily due to a $173.9 million, or 17.2%, decrease in the average balance of borrowed funds, partially offset by a $132.8 million, or 4.3%, increase in the average balance of interest-bearing deposits. The decrease in the cost of interest-bearing liabilities was driven by a 27 basis point decrease in the cost of interest-bearing deposits to 2.32% from 2.59%, partially offset by a 15 basis point increase in the cost of borrowed funds to 4.08% from 3.93%.
Net interest margin increased by 46 basis points to 2.54% for the quarter ended September 30, 2025, from 2.08% for the quarter ended September 30, 2024. The increase in net interest margin was primarily due to higher yields on loans and mortgage-backed securities, coupled with a decrease in the cost of interest-bearing liabilities. The Company accreted interest income related to PCD loans of $241,000 for the quarter ended September 30, 2025, as compared to $327,000 for the quarter ended September 30, 2024. Net interest income for the quarter ended September 30, 2025, included loan prepayment income of $106,000, as compared to $87,000 for the quarter ended September 30, 2024.
The provision for credit losses on loans decreased by $1.5 million to $1.1 million for the quarter ended September 30, 2025, from $2.5 million for the quarter ended September 30, 2024, primarily due to lower net charge-offs and a decline in loan balances, partially offset by an increase in general reserves related to a worsening macroeconomic forecast in the current quarter within our CECL model and an increase in non-performing loans. Net charge-offs were $299,000 for the quarter ended September 30, 2025, as compared to net charge-offs of $2.1 million for the quarter ended September 30, 2024. The decrease was primarily due to lower net charge-offs on small business unsecured commercial and industrial loans.
Non-interest income increased by $1.1 million, or 32.1%, to $4.7 million for the quarter ended September 30, 2025, from $3.6 million for the quarter ended September 30, 2024. The increase was primarily due to an increase of $864,000 in income on bank-owned life insurance, primarily related to the exchange of certain policies in the fourth quarter of 2024 which have higher yields, and a $181,000 increase in fees and service charges for customer services, primarily higher overdraft fees.
Non-interest expense increased by $3.0 million, or 14.7%, to $23.4 million for the quarter ended September 30, 2025, from $20.4 million for the quarter ended September 30, 2024, primarily due to a $2.1 million increase in employee compensation and benefits, attributable to higher salary expense related to annual merit increases and an increase in headcount, as well as an increase in medical benefits expense. Additionally, there was an increase of $659,000 in data processing costs attributable to an increase in core system expenses commensurate with deposit account growth and digital banking system conversion expenses.
The Company recorded income tax expense of $4.0 million for the quarter ended September 30, 2025, compared to $2.4 million for the quarter ended September 30, 2024. The effective tax rate for the quarter ended September 30, 2025, was 27.3% compared to 26.6% for the quarter ended September 30, 2024.
Comparison of Operating Results for the Three Months Ended September 30, 2025 and June 30, 2025
Net income was $10.8 million and $9.6 million for the quarters ended September 30, 2025, and June 30, 2025, respectively. Significant variances from the prior quarter are as follows: a $116,000 increase in net interest income, a $1.0 million decrease in the provision for credit losses on loans, a $200,000 increase in non-interest income, a $412,000 increase in non-interest expense, and a $259,000 decrease in income tax expense.
Net interest income for the quarter ended September 30, 2025, increased by $116,000, or 0.3%, to $34.5 million, from $34.4 million for the quarter ended June 30, 2025, due to a $521,000 increase in interest income, partially offset by a $405,000 increase in interest expense. The increase in interest income was primarily due to a $23.5 million increase in the average balance of interest-earning assets. The increase in the average balance of interest-earning assets was primarily due to increases in the average balance of mortgage-backed securities of $49.6 million and the average balance of Federal Home Loan Bank of New York stock of $6.2 million, partially offset by a decrease in the average balance of loans of $32.5 million. The increase in interest expense was primarily due to a $30.3 million, or 0.7%, increase in the average balance of interest-bearing liabilities, attributable to a $137.6 million increase in the average balance of borrowed funds partially offset by a $107.3 million decrease in the average balance of interest-bearing deposits.
Net interest margin decreased by three basis points to 2.54% for the quarter ended September 30, 2025, from 2.57% for the quarter ended June 30, 2025. Net interest income for the quarter ended September 30, 2025, included loan prepayment income of $106,000 as compared to $522,000 for the quarter ended June 30, 2025. Net interest income for the quarter ended June 30, 2025, also included $609,000 of interest income related to the settlement of a non-accrual loan in May 2025. The Company accreted interest income related to PCD loans of $241,000 for the quarter ended September 30, 2025, as compared to $247,000 for the quarter ended June 30, 2025.
The provision for credit losses on loans decreased by $1.0 million to $1.1 million for the quarter ended September 30, 2025, from $2.1 million for the quarter ended June 30, 2025. The decrease in the provision for the current quarter was primarily due to lower net charge-offs and a decline in loan balances, partially offset by an increase in non-performing loans. Net charge-offs were $299,000 for the quarter ended September 30, 2025, as compared to net charge-offs of $887,000 for the quarter ended June 30, 2025. The decrease was primarily due to lower net charge-offs on small business unsecured commercial and industrial loans.
Non-interest income remained relatively stable at $4.7 million for the quarter ended September 30, 2025, as compared to $4.5 million for the quarter ended June 30, 2025.
Non-interest expense increased by $412,000, or 1.8%, to $23.4 million for the quarter ended September 30, 2025, from $23.0 million for the quarter ended June 30, 2025. The increase was primarily due to increases of $764,000 in other expense and $169,000 in credit loss expense/(benefit) for off-balance sheet exposure, partially offset by decreases of $247,000 in occupancy expense and $206,000 in compensation and employee benefits. The increase in other expense was driven by higher general operating costs. The increase in credit loss expense/(benefit) for off-balance sheet exposure was due to a provision of $116,000 recorded during the quarter ended September 30, 2025, as compared to a benefit of $53,000 recorded during the quarter ended June 30, 2025.
The Company recorded income tax expense of $4.0 million for the quarter ended September 30, 2025, compared to $4.3 million for the quarter ended June 30, 2025. The effective tax rate for the quarter ended September 30, 2025 was 27.3%, compared to 31.0% for the quarter ended June 30, 2025. During the quarter ended June 30, 2025, options granted in 2015 expired and resulted in additional tax expense of $580,000, contributing to the higher effective tax rate.
Financial Condition
Total assets increased by $59.1 million, or 1.0%, to $5.73 billion at September 30, 2025, from $5.67 billion at December 31, 2024. The increase was primarily due to an increase in available-for-sale debt securities of $230.1 million, or 20.9%, partially offset by decreases in loans held-for-investment, net, of $126.8 million, or 3.1%, cash and cash equivalents of $36.0 million, or 21.5% and other assets of $8.3 million, or 17.8%.
Cash and cash equivalents decreased by $36.0 million, or 21.5%, to $131.7 million at September 30, 2025, from $167.7 million at December 31, 2024, as excess liquidity was deployed into purchasing higher-yielding mortgage-backed securities. Balances fluctuate based on the timing of receipt of security and loan repayments and the redeployment of cash into higher-yielding assets such as loans and securities, or the funding of deposit outflows or borrowing maturities.
Loans held-for-investment, net, decreased by $121.9 million, or 3.0%, to $3.90 billion at September 30, 2025 from $4.02 billion at December 31, 2024, primarily due to a decrease in multifamily real estate loans, partially offset by increases in one-to-four family residential mortgage and home equity and lines of credit loans. The decrease in multifamily loan balances reflects the Company’s continued strategic focus on managing concentration risk within its commercial and multifamily real estate loan portfolios, while maintaining disciplined loan pricing. Multifamily loans decreased $157.0 million, or 6.0%, to $2.44 billion at September 30, 2025 from $2.60 billion at December 31, 2024, construction and land loans decreased $1.5 million, or 4.3%, to $34.4 million at September 30, 2025 from $35.9 million at December 31, 2024, and commercial and industrial loans decreased $1.4 million, or 0.8%, to $162.1 million at September 30, 2025 from $163.4 million at December 31, 2024. Partially offsetting these decreases were increases in home equity and lines of credit of $19.2 million, or 11.1%, to $193.3 million at September 30, 2025 from $174.1 million at December 31, 2024, one-to-four family residential loans of $15.8 million, or 10.5%, to $166.0 million at September 30, 2025 from $150.2 million at December 31, 2024, and commercial real estate loans of $4.7 million, or 0.5%, to $894.5 million at September 30, 2025 from $889.8 million at December 31, 2024.
Loan balances are summarized as follows (dollars in thousands):
As of September 30, 2025, non-owner occupied commercial real estate loans (as defined by regulatory guidance) to total risk-based capital was estimated at approximately 406%. Management believes that Northfield Bank (the “Bank”) maintains appropriate risk management practices including risk assessments, board-approved underwriting policies and related procedures, which includes monitoring Bank portfolio performance, performing market analysis (economic and real estate), and stressing of the Bank’s commercial real estate portfolio under severe, adverse economic conditions. Although management believes the Bank has implemented appropriate policies and procedures to manage its commercial real estate concentration risk, the Bank’s regulators could require it to implement additional policies and procedures or could require it to maintain higher levels of regulatory capital, which might adversely affect its loan originations, the Company’s ability to pay dividends, and overall profitability.
Our real estate portfolio includes credit risk exposure to loans collateralized by office buildings and multifamily properties in New York subject to some form of rent regulation limiting rent increases for rent stabilized multifamily properties. At September 30, 2025, office-related loans represented $175.6 million, or 4.5%, of our total loan portfolio, with an average balance of $1.7 million (although we have originated these type of loans in amounts substantially greater than this average) and a weighted average loan-to-value ratio of 58%. Approximately 38% were owner-occupied. The geographic locations of the properties collateralizing our office-related loans are: 49.5% in New York, 49.0% in New Jersey and 1.5% in Pennsylvania. At September 30, 2025, our largest office-related loan had a principal balance of $90.0 million (with a net active principal balance for the Bank of $29.0 million as we have a 33.3% participation interest), was secured by an office facility located in Staten Island, New York, and was performing in accordance with its original contractual terms. At September 30, 2025, multifamily loans that have some form of rent stabilization or rent control totaled $423.7 million, or 10.8% of our total loan portfolio, with an average balance of $1.7 million (although we have originated these type of loans in amounts substantially greater than this average) and a weighted average loan-to-value ratio of 50%. At September 30, 2025, our largest rent-regulated loan had a principal balance of $16.5 million, was secured by an apartment building located in Staten Island, New York, and was performing in accordance with its original contractual terms. Management continues to closely monitor its office and rent-regulated portfolios. For further details on our rent-regulated multifamily portfolio see “Asset Quality”.
PCD loans totaled $8.4 million and $9.2 million at September 30, 2025 and December 31, 2024, respectively. The majority of the remaining PCD loan balance consists of loans acquired as part of a Federal Deposit Insurance Corporation-assisted transaction. The Company accreted interest income of $241,000 and $710,000 attributable to PCD loans for the three and nine months ended September 30, 2025, respectively, compared to $327,000 and $1.1 million for the three and nine months ended September 30, 2024, respectively. PCD loans had an allowance for credit losses of approximately $2.7 million at September 30, 2025.
The Company’s available-for-sale debt securities portfolio increased by $230.1 million, or 20.9%, to $1.33 billion at September 30, 2025, from $1.10 billion at December 31, 2024. The increase was primarily attributable to purchases of securities, partially offset by paydowns and maturities. At September 30, 2025, $1.30 billion of the portfolio consisted of residential mortgage-backed securities issued or guaranteed by Fannie Mae, Freddie Mac, or Ginnie Mae. In addition, the Company held $30.0 million in corporate bonds, substantially all of which were investment grade, $484,000 in municipal bonds and $556,000 in U.S. Government agency securities at September 30, 2025. Unrealized losses, net of tax, on available-for-sale debt securities and held-to-maturity securities approximated $12.2 million and $234,000, respectively, at September 30, 2025, and $21.8 million and $400,000, respectively, at December 31, 2024.
Equity securities were $5.0 million at September 30, 2025 and $14.3 million at December 31, 2024. Equity securities are comprised of an investment in a Small Business Administration (“SBA”) Loan Fund. This investment is utilized by the Bank as part of its Community Reinvestment Act program. The decrease in equity securities was primarily due to a redemption, at par, of $5.0 million of our investment in the SBA Loan Fund during the quarter ended June 30, 2025.
Other assets decreased by $8.3 million, or 17.8%, to $38.6 million at September 30, 2025, from $46.9 million at December 31, 2024. The decrease was primarily attributable to a decrease in deferred tax assets primarily due to a decrease in unrealized losses on the securities available-for-sale portfolio.
Total liabilities increased $44.2 million, or 0.9%, to $5.01 billion at September 30, 2025, from $4.96 billion at December 31, 2024. The increase was primarily attributable to an increase in borrowings of $213.7 million, partially offset by a decrease in deposits of $164.7 million. The Company routinely utilizes brokered deposits and borrowed funds to manage interest rate risk, the cost of interest-bearing liabilities, and funding needs related to loan originations and deposit activity.
Deposits decreased $164.7 million, or 4.0%, to $3.97 billion at September 30, 2025 as compared to $4.14 billion at December 31, 2024. Brokered deposits decreased by $233.4 million, or 88.6%, as the Company placed less reliance on brokered deposits, which were used as a lower-cost alternative to borrowings in the quarter ended December 31, 2024. Deposits, excluding brokered deposits, increased $68.7 million, or 1.8%. The increase in deposits, excluding brokered deposits, was primarily attributable to an increase of $101.7 million in transaction accounts, partially offset by decreases of $16.2 million in time deposits, $15.4 million in savings accounts, and $1.4 million in money market accounts. Growth in transaction accounts was primarily due to new municipal relationships and new commercial customer relationships.
Estimated gross uninsured deposits at September 30, 2025 were $1.93 billion which included fully collateralized uninsured governmental deposits and intercompany deposits of $989.0 million, leaving estimated uninsured deposits of approximately $944.6 million, or 23.8%, of total deposits. At December 31, 2024, estimated uninsured deposits, excluding fully collateralized uninsured governmental deposits and intercompany deposits, totaled $896.5 million, or 21.7% of total deposits.
Deposit account balances are summarized as follows (dollars in thousands):
Included in the table above are business and municipal deposit account balances as follows (dollars in thousands):
Borrowed funds increased to $941.7 million at September 30, 2025, from $727.8 million at December 31, 2024. The increase in borrowings for the period was primarily due to a $213.7 million increase in other borrowings, which were used in lieu of higher costing brokered deposits. Management utilizes borrowings to mitigate interest rate risk, for short-term liquidity, and to a lesser extent from time to time, as part of leverage strategies.
The following table sets forth borrowing maturities (excluding overnight borrowings and subordinated debt) and the weighted average rate by year at September 30, 2025 (dollars in thousands):
Total stockholders’ equity increased by $14.9 million to $719.6 million at September 30, 2025, from $704.7 million at December 31, 2024. The increase was attributable to net income of $28.2 million for the nine months ended September 30, 2025, a $14.7 million decrease in accumulated other comprehensive loss associated with an increase in the estimated fair value of our debt securities available-for-sale portfolio, and a $2.9 million increase in equity award activity, partially offset by $15.0 million in stock repurchases and $15.9 million in dividend payments. On February 26, 2025, the Board of Directors of the Company approved a $5.0 million stock repurchase program, and on April 23, 2025, the Board of Directors approved a $10.0 million stock repurchase program. During the nine months ended September 30, 2025, the Company repurchased 1.3 million shares of its common stock outstanding at an average price of $11.52 for a total of $15.0 million pursuant to the approved stock repurchase plans. As of September 30, 2025, the Company had no outstanding repurchase program.
The Company’s most liquid assets are cash and cash equivalents, corporate bonds, and unpledged mortgage-related securities issued or guaranteed by the U.S. Government, Fannie Mae, or Freddie Mac, that we can either borrow against or sell. We also have the ability to surrender bank-owned life insurance contracts. The surrender of these contracts would subject the Company to income taxes and penalties for increases in the cash surrender values over the original premium payments. We also have the ability to obtain additional funding from the Federal Home Loan Bank and Federal Reserve Bank of New York utilizing unencumbered and unpledged securities and multifamily loans. The Company expects to have sufficient funds available to meet current commitments in the normal course of business. The Company’s on-hand liquidity ratio as of September 30, 2025 was 17.1%.
The Company had the following primary sources of liquidity at September 30, 2025 (dollars in thousands):
The Company and the Bank utilize the Community Bank Leverage Ratio (“CBLR”) framework. At September 30, 2025, the Company’s and the Bank’s estimated CBLR ratios were 12.15% and 12.64%, respectively, which exceeded the minimum requirement to be considered well-capitalized of 9%.
Asset Quality
The following table details total non-accrual loans (excluding PCD), non-performing assets, loans over 90 days delinquent on which interest is accruing, and accruing loans 30 to 89 days delinquent at September 30, 2025, June 30, 2025 and December 31, 2024 (dollars in thousands):
The increase in non-accrual loans from June 30, 2025, was largely due to one commercial real estate relationship with an outstanding balance of $1.3 million which was put on non-accrual status during the current quarter due to business operational issues. The loan was current as of September 30, 2025, was individually evaluated for impairment with no reserve and is considered well secured by collateral property with an estimated fair value of $2.3 million and is in the process of collection. In addition, five home equity and lines of credit loans totaling $688,000 were put on non-accrual status during the quarter. The loans are deemed to have an adequate loss reserve and considered well secured by second liens on collateral properties with an aggregate value of $4.1 million, and are in the process of collection.
The increase in loans delinquent 90 days or more and still accruing from June 30, 2025, was driven by one commercial and industrial relationship with an outstanding balance of $2.9 million, which was past maturity at September 30, 2025. The Bank has been working with the borrower to renew the loan which was renewed subsequent to the quarter end.
The decrease in non-performing loans held-for-sale from December 31, 2024, was due to repayment of the loans in full from a settlement agreement in bankruptcy.
Accruing Loans 30 to 89 Days Delinquent
Loans 30 to 89 days delinquent and on accrual status totaled $16.7 million, $4.1 million and $9.3 million at September 30, 2025, June 30, 2025 and December 31, 2024, respectively. The following table sets forth delinquencies for accruing loans by type and by amount at September 30, 2025, June 30, 2025 and December 31, 2024 (dollars in thousands):
The increase in loans 30 to 89 days delinquent and on accrual status at September 30, 2025, as compared to June 30, 2025, was largely due to a number of loans which were exactly 30 days past due at September 30, 2025. Of the delinquent loans above $12.3 million, or approximately 74%, made at least one contractual payment subsequent to September 30, 2025.
PCD Loans (Held-for-Investment)
The Company accounts for PCD loans at estimated fair value using discounted expected future cash flows deemed to be collectible on the date acquired. Based on its detailed review of PCD loans and experience in loan workouts, management believes it has a reasonable expectation about the amount and timing of future cash flows and accordingly has classified PCD loans ($8.4 million at September 30, 2025 and $9.2 million at December 31, 2024, respectively) as accruing, even though they may be contractually past due. At September 30, 2025, 2.6% of PCD loans were past due 30 to 89 days, and 25.0% were past due 90 days or more, as compared to 2.1% and 24.9%, respectively, at December 31, 2024.
Our multifamily loan portfolio at September 30, 2025 totaled $2.44 billion, or 63% of our total loan portfolio, of which $423.7 million, or 10.8%, of our total loan portfolio included loans collateralized by properties in New York with units subject to some percentage of rent regulation. The table below sets forth details about our multifamily loan portfolio in New York (dollars in thousands).
The table below sets forth our New York rent-regulated loans by county (dollars in thousands).
* Weighted Average
None of the loans that are rent-regulated in New York are interest-only. During the remainder of 2025, six loans with an aggregate principal balance of $18.6 million will re-price.
About Northfield Bank
Northfield Bank, founded in 1887, operates 37 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 http://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, competition and demand for financial services in our market area, competition among depository and other financial institutions, including with respect to fees and interest rates, fluctuations in residential and commercial real estate values and market conditions, changes in the size and composition of our deposit portfolio and the percentage of uninsured deposits in the portfolio, changes in liquidity and our ability to access cost-effective funding, changes in laws or government regulations or policies affecting financial institutions, including changes in the monetary and fiscal policies of the U.S. Treasury and the Board of Governors of the Federal Reserve System, the imposition of tariffs or other domestic or international governmental policies and retaliatory responses, an extended U.S. government shutdown, changes in the quality and/or composition of our loan and securities portfolios, prepayment speeds, charge-offs and/or credit loss provisions, changes in the value of our goodwill or other intangible assets, changes in regulatory fees, assessments and capital requirements, inflation and changes in the interest rate environment that reduce our margins, reduce the fair value of financial instruments or reduce our ability to originate loans, the failure to maintain current technologies and to successfully implement future information technology enhancements, cyber security and fraud risks against our information technology and those of our third-party providers, the ability of third-party providers to perform their obligations to us, the effects of war, conflict, and acts of terrorism, our ability to successfully integrate acquired entities, 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 follow)
Company Contact:
William R. Jacobs
Chief Financial Officer
Tel: (732) 499-7200 ext. 2519
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