About Northfield Bancorp, Inc. (Staten Island, NY)

Northfield Bancorp, Inc. operates as the bank holding company for Northfield Bank (the bank) that provides various financial products and services to meet the needs of the communities that the company serves. The company’s principal business consists of originating commercial real estate loans (primarily loans secured by multifamily properties), construction and land loans, commercial and industrial loans, and home equity loans and lines of credit. From time to time, it will also purchase loan participations and pools of loans. For liquidity and other financial reasons, it will also purchase investment securities, including mortgage-backed securities and corporate bonds, and to a lesser extent deposit funds in other financial institutions, including the Federal Reserve Bank of New York, and the Federal Home Loan Bank (FHLB) of New York (FHLBNY). The company offers a variety of deposit accounts, including certificates of deposit, passbook, statement, and money market savings accounts, transaction deposit accounts (negotiable orders of withdrawal (NOW) accounts and interest and non-interest bearing demand accounts), individual retirement accounts, and, to a lesser extent, when it is deemed cost effective, brokered deposits. Deposits are the company’s primary source of funds for its lending and investing activities. The company also borrows funds, principally through FHLBNY advances and repurchase agreements with brokers. The company owns 100% of NSB Services Corp., which, in turn, owns 100% of the voting common stock of a real estate investment trust, NSB Realty Trust, which holds primarily mortgage loans. In addition, it refers its customers to independent third parties that provide non-deposit investment products, merchant processing services, and one-to-four family residential mortgage products. Market Area The company’s commercial and retail banking network consists of multiple delivery channels, including full-service banking offices, automated teller machines and telephone and internet banking capabilities, including mobile banking and remote deposit capture. Lending Activities The company’s principal lending activity is the origination of multifamily real estate loans and, to a lesser extent, other commercial real estate loans (typically on office, retail, and industrial properties), in New York City, New Jersey, and eastern Pennsylvania. It also originates one-to-four family residential real estate loans (non-owner-occupied investment properties), construction and land loans, commercial and industrial loans, and home equity loans and lines of credit. Multifamily Real Estate Loans The company includes in this category properties having more than four residential units and a business or businesses where the majority of space is utilized for residential purposes, which it refers to as mixed-use. As of December 31, 2022, the company had 1,195 multifamily real estate loans. Commercial Real Estate Loans As of December 31, 2022, the company’s commercial real estate loan portfolio consisted of 726 loans. The company’s commercial real estate loans have interest rate floors equal to the interest rate on the date the loan is originated, and generally have prepayment penalties if the loan is repaid in the initial five-, seven-, or 10-year term. Loans that the company has purchased typically adjust to different market indexes. In underwriting commercial real estate loans, the company generally lends up to the lesser of 75% of either the property’s appraised value or purchase price. Although a significant portion of the company’s commercial real estate loans were referred to it by third-party loan brokers, it underwrites all commercial real estate loans in accordance with its underwriting standards. Construction and Land Loans As of December 31, 2022, the company had 28 construction and land loans. The company’s construction and land loans typically are interest-only loans with interest rates that are tied to the prime rate as published in The Wall Street Journal. The company also originates, to a lesser extent, 10- to 15-year fixed-rate, fully amortizing land loans. The company grants construction and land loans to experienced developers for the construction of single-family residences, including condominiums, and commercial properties. Construction and land loans also are made to individuals for the construction of their personal residences. Commercial and Industrial Loans As of December 31, 2022, the company had 921 commercial and industrial loans. The company makes various types of secured and unsecured commercial and industrial loans for the purpose of working capital and other general business purposes. The terms of these loans generally range from less than one year to a maximum of seven years; however, it could allow for a maximum of 10 years depending on industry or asset type. One-to-Four Family Residential Real Estate Loans As of December 31, 2022, the company had 539 one-to-four family residential real estate loans. The company no longer offers loans secured by owner-occupied, one-to-four family residential real estate, but may purchase them from time-to-time to meet its Community Reinvestment Act obligations. Since 2014, the company has purchased pools of one-to-four family residential real estate loans, a substantial amount of which are interest-only mortgage loans. Home Equity Loans and Lines of Credit As of December 31, 2022, the company had 2,281 home equity loans and lines of credit. The company offers home equity loans and home equity lines of credit that are secured by the borrower’s primary residence or second home. Home equity lines of credit are adjustable-rate loans tied to the prime rate as published in The Wall Street Journal adjusted for a margin, and have a maximum term of 25 years during which time the borrower is required to make principal payments based on a 30-year amortization. PCD Loans The company adopted current expected credit loss (CECL) using the prospective transition approach for purchased credit-deteriorated (PCD) loans that were previously classified as purchased credit-impaired (PCI) loans and accounted for under ASC Subtopic 310-30 - Accounting for Purchased Loans with Deteriorated Credit Quality (ASC 310-30). Upon adoption of CECL, the company elected to maintain pools of loans that were previously accounted for under ASC 310-30 and will continue to account for these pools as a unit of account. Loans are only removed from existing pools if they are written off, paid off, or sold. Upon adoption of CECL, the allowance for credit losses was determined for each pool and added to the pool's carrying amount to establish a new amortized cost basis. As of December 31, 2022, PCD loans consisted of approximately 9% one-to-four family residential loans, 28% commercial real estate loans, 53% commercial and industrial loans, and 10% in home equity loans. Investments The company’s investment policy permits investments in mortgage-backed securities, including pass-through securities and real estate mortgage investment conduits (REMICs). The investment policy also permits, with certain limitations, investments in debt securities issued by the U.S. Government, agencies of the U.S. Government or the U.S. Government-sponsored enterprises (GSEs), asset-backed securities, municipal obligations (including bonds, tax anticipation notes and bond anticipation notes), money market mutual funds, federal funds, investment grade corporate bonds, subordinated debt, reverse repurchase agreements, and certificates of deposit. Deposits The company offers a variety of deposit accounts to businesses, consumers and municipalities with a range of interest rates and terms. The company’s deposit accounts consist of transaction accounts (NOW and interest and non-interest-bearing checking accounts), savings accounts (money market, passbook, and statement savings), and certificates of deposit, including individual retirement accounts. Supervision and Regulation The company is subject to comprehensive regulation and examination by the Board of Governors of the Federal Reserve System (the FRB). The company is also subject to the rules and regulations of the Securities and Exchange Commission (SEC) under the federal securities laws. The bank is a federally chartered savings bank that is regulated, examined, and supervised by the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC). The bank is regulated to a lesser extent by the FRB, governing reserves to be maintained against deposits and other matters, including payments of dividends. The bank is also a member of and owns stock in the FHLBNY, which is one of the 11 regional banks in the FHLB System. The bank is a member of the Deposit Insurance Fund, which is administered by the FDIC. The bank’s operations are also subject to federal laws applicable to credit transactions, such as the Truth-In-Lending Act; Real Estate Settlement Procedures Act; Home Mortgage Disclosure Act; Equal Credit Opportunity Act and the Fair Housing Act; Fair Credit Reporting Act; Fair Debt Collection Act; Flood Disaster Protection Act; Servicemembers Civil Relief Act; and rules and regulations of the various federal agencies charged with the responsibility of implementing such federal laws. The operations of the bank are also subject to the Truth in Savings Act and Regulation DD; Regulation CC; Right to Financial Privacy Act; Electronic Funds Transfer Act; the USA PATRIOT Act; and the Gramm-Leach-Bliley Act. The company’s common stock is registered with the SEC under the Securities Exchange Act of 1934, as amended (the Exchange Act). The company is subject to the information, proxy solicitation, insider trading restrictions, and other requirements under the Securities Exchange Act of 1934. The company has policies, procedures and systems designed to comply with the Sarbanes-Oxley Act.