AGM 2021

May 26, 2021

Good morning, and welcome to the 2021 Annual Meeting of Stockholders of Northfield Bancorp, Inc. I would now like to introduce our first speaker, Mr. John Alexander. Thank you, Peter. Good morning. This is John Alexander. I'm Chairman of Northfield Bancorp. It's my pleasure on behalf of the directors, officers and employees to extend a warm welcome to you and express our gratitude for your participation in today's meeting. We appreciate your understanding and accommodation as we work to keep everyone safe by conducting this meeting virtually. For purposes of this meeting, a copy of the rules of conduct that govern this meeting can be accessed by clicking on the materials button located in the bottom right corner of the web page. At this location, you can also access Northwell Bancorp's 2021 proxy statement, 2020 annual report, which was previously made available to stockholders of record with the close of business on March 29, 2021. These documents also are available on our website, thenorthfield.com under the Investor Relations tab. If you've logged into this meeting as a stockholder with your voting control number, you may vote on the proposals that are included in the proxy statement now and until the closing of the polls. Voting is accomplished by clicking the vote button located at the bottom right corner of the webpage and following the voting instructions. The polls will close after all proposals have been discussed. Please note that if you have already voted and do not wish to change your vote, it is not necessary to vote again. Additionally, if you log into this meeting as a stockholder with your voting control number, you may submit questions by clicking the Q and A button located at the bottom right of the web page. Type your questions and click the Submit button. I encourage you to include your name and contact information with the question. If a question isn't germane to the business of the meeting, we may not address it at this meeting, but we'll provide a response directly to the stockholder asking a question, if possible. Before we begin the formal business of today's meeting, I would like to recognize Northfield's Board of Directors Annette Catino, who also serves as Independent Lead Director Gil Chapman John Connors, Tim Harrison, Karen Kessler, Frank Battapio, Pat Ryan and Paul Stahl. Also participating in today's meeting are members of Northfield's executive team: Steve Klein, President and Chief Executive Officer Mr. Klein also is the Director of the company David Pasanella, Executive Vice President and Chief Lending Officer Tara French, Executive Vice President and Chief Risk Officer Bill Jacobs, Executive Vice President and Chief Financial Officer and Robin Lefkowitz, Executive Vice President. Branch operations, business development and deposit operations. There are others participating in today's meeting and others to recognize: Suzanne Andrews, Corporate Secretary of Northwell Bancorp, Inc Peter Daskovich of IOU Services, who has been appointed the Inspector of Election for today's meeting Michael Campanile, Keisha Hutchinson and Shawnee Lopez, partners with KPMG LLP, Northfield's independent registered public accounting firm and Ned Klint and Scott Brown, partners with the law firm of Bruce Gorman, which serves as our SEC counsel. The purpose of today's meeting is to consider and act on 3 proposals. The first proposal is the election of 3 directors, and they are Timothy G. Harrison, Karen J. Kessler and Patrick L. Ryan. The second proposal is an advisory non binding resolution to approve executive compensation described in the proxy statement. And the third proposal is ratification of the appointment of our independent registered public accounting firm for the year ending December 31, 2021. Ms. Andrews, has notice to this meeting been sent to all stockholders entitled to vote at this meeting? Yes, Mr. Chairman. I have here an affidavit sworn to by me and duly signed stating that notice has been delivered to each stockholder as required under the bylaws. In addition, resolutions were adopted by the Board of Directors of Northfield Bancorp Inc. Providing for the virtual location and time of the meeting. The Board also fixed March 29, 2021 as the record date for determining stockholders entitled to vote of and to vote entitled to notice of and to vote at this annual meeting. Thank you, Ms. Andrews. Please file a copy of the notice and affidavit of the mailing of the notice and the excerpts from the Board meeting, setting the date and time of the 2021 Annual Meeting of Stockholders with amendments of this meeting. Mr. Deskevic, will you please present your report of the attendance of this meeting so we may determine whether a quorum is present? Mr. Chairman, there were 51,583,020 shares entitled to vote as of the March 29, 2021, record date. The proxy committee of the Board of Directors is acting as proxy and representative of the holders of record of 42,760,504 shares of the common stock of the company. Thank you, Mr. Dziskovich. Based on the reports of the corporate secretary and the Inspector of Election, I find that proper notice has been given and that a majority of the outstanding shares entitled to vote are represented in person or by proxy. Therefore, a quorum is present. Accordingly, this meeting has been properly convened. As I previously stated, if you've already voted and do not wish to change your vote, it is not necessary to vote again. If you would like to vote now and have logged into this meeting as a stockholder with your voting control number, click the vote button located at the bottom right of the web page and follow the voting instructions. The polls will close after all proposals have been discussed. The proxies listed by the proxy committee of the Board of Directors can be tallied at one time even though they can contain 3 matters for discussion. Similarly, the ballot that anyone seeks to cast electronically today can be handled in that same manner. Accordingly, I intend to introduce each matter separately. After the 3 proposals have been presented for consideration, we will close the polls and gather the results. Ms. Andrews, were there any stockholder nominations or proposals for business for this meeting properly filed with U. S. Corporate Secretary? No, Mr. Chairman. Since no stockholder nominations or proposals were filed with the Corporate Secretary in advance of this meeting as provided in the bylaws, the business of this meeting is in accordance with the 3 matters stated in the proxy statement. As a reminder, the stockholder would like to ask a question on any of the proposals to be voted on today at today's meeting and have logged into this meeting as a stockholder, with your voting control number, you may ask a question at any time by clicking the Q and A button located at the bottom right of the web page. Type your question and click the Submit button. First matter we will consider today is the election of 3 directors. The Board of Directors has nominated Timothy C. Harrison, James A. Kessler and Patrick O. Ryan to serve as directors for terms of 3 years and until their successors are elected and qualified. All nominees are presently directed Northfield Bancorp, Inc. And its wholly owned subsidiary, Northfield Bank. Additional information concerning the principal occupations of the nominees, the service with Northfield Bancorp, Inc. And Northfield Bank and other matters that may be of interest are contained in the proxy statement. The second model that we consider at this meeting is an advisory non binding resolution to approve the executive compensation described in the proxy statement. The following resolution is proposed: Result with the compensation paid to the company's named executive officers as disclosed in the proxy statement pursuant to our 402 of the Securities and Exchange Commission Regulation SK, including the compensation discussion and analysis, compensation tables and narrative discussion is hereby approved. The 3rd and final matter to be considered at this meeting is the ratification of the appointment of KPMG LLP as the independent registered public accounting firm for the year ending December 31, 2021, and following resolution of this proposed. Resolve that the appointment of KPMG LLP as the independent Rest Republic Accounting firm with Northfield Bank Corping for the year ended December 31, 2021, having been presented to and considered at this meeting is hereby ratified in all respects. I would be glad to respond to any questions on these proposals. Seeing no questions, Mr. Dreviskovich, if you would please close the polls for voting. While the proxies are being touted, Mr. Jacobs, our Chief Financial Officer, will provide a brief review of the financial results for 2020 and the Q1 of 2021. Mr. Jacobs? Thank you, John. Prior to my overview of the financial results of 2020 and the Q1 of 2021, I will provide our disclosure on forward looking statements. This presentation and other items discussed during the annual meeting may constitute forward looking statements. These statements are subject to risks and uncertainties, including those described in our filings with the Securities and Exchange Commission. We have no duty to update and do not undertake to update any such forward looking statements. At this time, I will discuss our annual results for 2020. Net income for the year was $37,000,000 or $0.76 per share for 2020 compared to $40,200,000 or $0.85 per share for 2019. 2020 included merger related charges of $3,100,000 after tax as a result of the Victory State merger completed in July of 2020. The merger added approximately $400,000,000 in assets, $350,000,000 in deposits and $41,000,000 in equity. Additionally, 2020 included a $1,600,000 after tax charge related to closing of 5 branches in the 4th quarter. And lastly, it included an elevated credit expense of approximately $5,800,000 after taxes resulted in the pandemic. I'll just give a high level of what 2019 also included. 2019 was $3,400,000 of BOLI income as a result of insurance proceeds in excess of cash surrender and value of policies, a $1,600,000 recovery of our previously charged off loan and $755,000 after tax and charges related to closing of 3 branches. Now I will discuss the Q1 of 2021 results. Net income for the Q1 was $18,700,000 or $0.38 per share for the quarter ending March 31, 2021 compared to $4,600,000 or $0.10 per share for the quarter ending March 31, 2020. The quarter ending March 31, 2021 benefited from a couple of one time items that included a $1,900,000 of income on payoffs and 2 loans acquired as part of our FDIC bank assisted transaction from 2011. These loans were acquired at a significant discount for their outstanding principal balance. Additionally, we recorded income of $1,300,000 as a result of fees earned on PPP loans. Our net interest margin increased to 3.1 percent for the Q1 of 2021 compared to 2.57% for the Q1 of 2020. The 2021 margin benefited by approximately 25 basis points as a result of the acceleration of the PPP loan income and the payoffs of the loans as part of the FDIC transaction as previously discussed. The quarter ending March 31, 2020 included elevated credit expenses as a result of the pandemic. These elevated credit expenses resulted in a decrease of income of approximately $0.10 per share. Our deposits, which is key to our franchise, we continue to focus on increasing our non interest and lower interest bearing NOW accounts, which now represent over 40% of our deposits. The emphasis on these low cost deposits has resulted in a decrease of the cost of deposits by 88 basis points to 18 basis points for the Q1 of 2021 as compared to 1.06% for the Q1 of 2020. Additionally, our cost of deposits have declined 10 basis points from the Q4 of 2020. Currently, our loan portfolio is approximately 65.4 percent of multifamily loans, declining from the peak of approximately 67% at the end of 2019. Over the last several years, we've hired several lenders that have concentrated on originating business loans, which include commercial and industrial loans and owner occupied commercial real estate loans to diversify our loan portfolio. While 2020 we focused on PPP loans, now that the COVID-nineteen related disruptions are abating, we have turned our attention back to our strategic plan of growing our C and I and owner occupied CRE. As we continue to grow our loan portfolio, we also continue to underwrite quality assets. As you can see from the slide, we have performed our outperformed our peers in both non performing assets, total assets and average charge offs since 2016 with the exception of 2020. During the Q4 of 2020, we transferred approximately $19,900,000 net of charge offs of higher risk, predominantly accommodation loans that were modified as a result of COVID-nineteen to held for sale. The sale was completed in the Q1 of 2021. Absent these loans, our ratios would have been below peers. These are some of the performance indicators where smaller is better. This slide depicts utilization of capital from over 16.3% at the end of 2016 to approximately 13.5% at the end of the Q1 of 2021. We continue to evaluate strategies to deploy our capital through organic growth, share repurchases and increases in our dividends. We currently have approximately $43,400,000 remaining of our $54,200,000 share repurchase plan announced in March of this year. Additionally, we increased our quarterly dividend to $0.13 which was paid today. Thank you. Thanks, Bill. At this time, I'll turn it over to Steve Klein. All right. Steve Klein is President's Chief Executive Officer, and he's going to provide a business strategy update. Steve? Good morning, everyone, and thank you for joining us for Northfield's 14th Annual Meeting of Stockholders. I would like to take a moment on behalf of my fellow directors and employees to thank John Alexander for his over 20 years of leadership at Northfield. John's commitment, passion and compassion have made Northfield what it is today, a high performing institution focused on the people and businesses of the communities we serve. We wish John and his family all the best in the future. The pandemic presented significant challenges for all of us in 2020, but that did not stop or even slow down the Northfield team from our mission to serve our communities. We remained laser focused on our strategic objectives in 2020, continuing to grow our loan portfolio and providing a much needed helping hand to businesses and individuals in their time of need, including increasing our lending focus in the areas of C and I and owner occupied real estate to continue to diversify our loan portfolio. Our lending, business development and branch teams work closely together to serve our customers and grow our core deposits, especially in the areas of non interest bearing demand and transaction accounts. And our operations and technology teams continue to make prudent investments in technology and upgrades to ensure that we meet the needs of our customers, maintain compliance with ever changing rules and regulations and manage credit and other significant risks, all while improving the efficiencies and effectiveness of our processes. Our human resources team leads our training and development programs to ensure that our customers receive best in class service, while we develop our team members into the future leaders of our company and our marketing team focuses on our message and outreach to ensure that both internally and externally, we tell the story of Northfield and how important locally grown community banking is. Since 18/87, responsibility has been core to Northfield's mission of service to its communities. Our core values of trust, respect and excellence guide our mission of service and our commitment to environmental, social and governance matters. I encourage you to review our 2020 annual report to stockholders, which details just some of our grassroots efforts to make a meaningful positive impact on environmental sustainability, diversity, equity and inclusion. I began my remarks highlighting the challenges presented by the pandemic and how the Northfield team never stopped focusing on our customers and our communities. Our focus on the safety of our employees and customers, resiliency of our operations and adaptability of our processes ensure that we continue to serve the needs of our customers without exception. Whether it was around the clock processing of paycheck protection loans, developing processes to participate in the Federal Reserve's Main Street Lending Program or working with business and consumers to modify loan terms, waive fees or suspend transaction limits on savings and money market accounts. The Northfield team was there and I'm extremely proud of and grateful to each team member for their hard work and dedication. While challenges, risks and uncertainties will continue into the future and may very well increase, I'm confident that your company, which it has done since 18/87, will continue to be the locally grown choice for the community banking for community banking to both consumers and businesses. Thank you. Thank you, Steve. Excellent. Good year, a lot of challenges. We will now respond to questions submitted through the web portal from stockholders who had logged into this meeting with their voting control number. I will wait just a minute to see if anyone has any questions. You can submit those by clicking the Q and A button located at the bottom right of the web page. Type the question and click the submit button. And please include any contact, name and other information so we can respond if we don't address it here. See that we have done a fairly good job here with no questions. So with that, as Steve mentioned, I'm retiring after this meeting. I appreciate the kind words from Steve. It has been a privilege and honor to have served as Chairman and CEO for over 20 years. Before we hear the report of the Inspector of Election, I want to just thank the many folks who have supported me and helped make Northfield the great institution it is. That thank you starts with the Board of Directors for their excellent leadership, commitment to the organization and focus on our strategic direction. That plan is being executed by an experienced and knowledgeable management team that focuses on delivering value to our stockholders and supported by dedicated individuals throughout the organization that are customer concentric. Current members of the Board and management were recognized earlier, so I'm going to not do it again. But I wanted to especially mention the few individuals who preceded me in retirement and played an important role during my tenure: Paul Praske, former Chairman, CEO Al Regan, former President and Director Directors Stanley Applebaum John DiPiro Susan Lamberti John Bowen and executives Ken Dougherty, Michael Widmer, Madeleine Frank and probably too many others to mention here. Finally, a special thanks to you, our stockholders, who have been so supportive of every initiative we have undertaken. As I told the Board when I decided to retire, I have come to appreciate the value of our institution to the community. I'm proud of the caliber of our personnel and their commitment to providing quality service to all who pass through our doors. Steve Klein has been selected by the Board to succeed as Chairman. I wish Steve a great success and have every confidence he will remain the excellent leader I know him to be. With that, I will call on the Inspector of Election. Mr. Duscovich, Would you now present your report on the vote? Mr. Chairman, as it relates to the 3 proposals presented at today's Annual Meeting of Stockholders, 1, election of Directors Timothy C. Havison, Karen J. Kessler and Patrick L. Ryan 2, approval of an advisory non binding resolution to approve the executive compensation described in the proxy statement and 3, ratification of the appointment of KPMG LLP as independent registered public accounting firm for the year ending December 31, 2021. I am pleased to report that each of the proposals received an affirmative vote of more than 90% of the shares present and entitled to vote at today's meeting. Thank you, Mr. Daskowitz. In the report of the Inspector of Election, it is noted that all of the directors nominated by the Board have been duly elected. The advisory non binding resolution approved the executive compensation described in the proxy statement has been approved and the appointment of KPMG LLP, independent registered public accounting firm for the year ended December 31, 2021, has been ratified. The report of the Inspector of Election is accepted, subject to the final review and verification by Mr. Deskevich. Ms. Andrews, please safeguard the ballots, proxies, oath, certificate and final report of the Inspector of Election upon receipt and maintain them among the records of the company. This concludes the Northfield Bancorpion 2021 Annual Meeting of Stockholders. Thank you for your participation and commitment to our company. Thank you. Ending the 2021 Annual Meeting of Stockholders, Northfield Bancorp Incorporated. This