þ
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the fiscal year ended December 31, 2007 | ||
or
|
||
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the transition period from to |
United States of America
(State or other jurisdiction of incorporation or organization) |
26-1384892
(I.R.S. Employer Identification No.) |
|
1410 St. Georges Avenue, Avenel, New Jersey
(Address of Principal Executive Offices) |
07001
Zip Code |
Title of Each Class
|
Name of Each Exchange on Which Registered
|
|||
Common Stock, par value $0.01 per share | The NASDAQ Stock Market, LLC |
Large accelerated
filer
o
|
Accelerated filer o | |
Non-accelerated
filer
þ
|
Smaller reporting company o | |
(Do not check if a smaller reporting company)
|
68
86
94
ITEM 1.
BUSINESS
statements of our goals, intentions, and expectations;
statements regarding our business plans and prospects and growth
and operating strategies;
statements regarding the asset quality of our loan and
investment portfolios; and
estimates of our risks and future costs and benefits.
significantly increased competition among depository and other
financial institutions;
inflation and changes in the interest rate environment that
reduce our interest margins or reduce the fair value of
financial instruments;
general economic conditions, either nationally or in our market
areas, that are worse than expected;
adverse changes in the securities markets;
legislative or regulatory changes that adversely affect our
business;
our ability to enter new markets successfully and take advantage
of growth opportunities, and the possible dilutive effect of
potential acquisitions or
de novo
branches, if any;
changes in consumer spending, borrowing and savings habits;
changes in accounting policies and practices, as may be adopted
by bank regulatory agencies, the Financial Accounting Standards
Board, or other promulgating authorities;
inability of third-party providers to perform their obligations
to us; and
changes in our organization, compensation, and benefit plans.
1
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At December 31,
2007
2006
2005
2004
2003
Amount
Percent
Amount
Percent
Amount
Percent
Amount
Percent
Amount
Percent
(Dollars in thousands)
$
243,902
57.50
%
$
207,680
50.75
%
$
165,657
42.72
%
$
125,033
38.98
%
$
81,497
28.84
%
95,246
22.45
107,572
26.29
127,477
32.87
131,358
40.95
154,702
54.75
44,850
10.57
52,124
12.74
52,890
13.64
27,898
8.70
6,129
2.17
14,164
3.34
13,276
3.24
14,105
3.64
12,506
3.90
17,267
6.11
12,797
3.02
13,922
3.40
16,105
4.15
17,027
5.31
18,485
6.54
11,397
2.69
11,022
2.70
8,068
2.08
2,864
0.89
511
0.18
1,842
0.43
3,597
0.88
3,510
0.90
4,058
1.27
3,972
1.41
424,198
100.00
%
409,193
100.00
%
387,812
100.00
%
320,744
100.00
%
282,563
100.00
%
131
(4
)
(345
)
(53
)
22
(5,636
)
(5,030
)
(4,795
)
(3,166
)
(2,755
)
$
418,693
$
404,159
$
382,672
$
317,525
$
279,830
3
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Commercial Real
One- to Four-Family
Construction and
Estate Loans
Residential Mortgage Loans
Land Loans
Multifamily Loans
Weighted
Weighted
Weighted
Weighted
Amount
Average Rate
Amount
Average Rate
Amount
Average Rate
Amount
Average Rate
(Dollars in thousands)
$
5,244
7.90
%
$
702
5.92
%
$
30,658
8.49
%
$
518
7.90
%
8,962
6.89
1,231
8.28
11,162
8.74
6.89
1,810
7.44
372
5.33
7.44
8,128
7.04
2,409
5.78
1,327
7.04
10,092
7.06
14,581
5.80
565
6.23
881
7.06
21,673
6.75
25,224
5.22
4,898
6.75
187,993
6.75
50,727
5.87
2,465
5.96
6,540
6.75
$
243,902
6.81
%
$
95,246
5.71
%
$
44,850
8.38
%
$
14,164
6.81
%
Home Equity Loans
Commercial and
and Lines of Credit
Industrial Loans
Other Loans
Total
Weighted
Weighted
Weighted
Weighted
Amount
Average Rate
Amount
Average Rate
Amount
Average Rate
Amount
Average Rate
(Dollars in thousands)
$
289
7.25
%
$
3,784
8.50
%
$
1,719
4.01
%
$
42,914
8.19
%
54
8.42
967
7.32
2
10.25
22,378
7.91
513
7.80
1,175
8.06
35
7.07
3,905
7.48
1,691
6.96
2,253
7.19
20
5.89
15,828
6.86
2,858
6.65
66
6.39
29,043
6.37
2,969
6.48
3,218
7.28
57,982
6.13
4,423
7.61
252,148
6.58
$
12,797
7.05
%
$
11,397
7.79
%
$
1,842
4.18
%
$
424,198
6.75
%
4
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Due After December 31, 2008
Fixed Rate
Adjustable Rate
Total
(In thousands)
$
28,863
$
209,795
$
238,658
55,517
39,027
94,544
3,325
10,867
14,192
2,259
11,387
13,646
6,370
6,138
12,508
2,448
5,165
7,613
111
12
123
$
98,893
$
282,391
$
381,284
5
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6
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7
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8
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9
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At December 31,
2007
2006
2005
2004
2003
(Dollars in thousands)
$
4,792
$
5,167
$
124
$
944
$
1,699
231
234
290
545
773
3,436
104
36
62
352
418
43
905
885
5
60
8,606
6,342
1,361
1,901
2,895
148
698
147
753
275
60
174
475
498
357
600
1,228
773
698
417
1,069
9,834
7,115
2,059
2,318
3,964
$
9,834
$
7,115
$
2,059
$
2,318
$
3,964
2.32
%
1.74
%
0.53
%
0.72
%
1.40
%
0.71
0.55
0.15
0.15
0.27
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Loans Delinquent for
60-89 Days
90 Days and Over(1)
Total
Number
Amount
Number
Amount
Number
Amount
(Dollars in thousands)
$
2
$
3,990
2
$
3,990
2
231
2
231
2
4,189
2
4,189
2
121
2
104
4
225
1
475
1
475
1
12
1
12
3
$
133
9
$
8,989
12
$
9,122
3
$
2,873
2
$
2,294
5
$
5,167
2
234
2
234
2
562
2
275
4
837
1
36
1
36
1
498
1
498
1
3
1
3
6
$
3,438
8
$
3,337
14
$
6,775
$
1
$
124
1
$
124
2
71
3
988
5
1,059
1
6
2
56
3
62
4
63
4
63
7
$
140
6
$
1,168
13
$
1,308
3
$
1,347
$
3
$
1,347
3
228
5
545
8
773
1
225
6
187
7
412
3
9
50
417
53
426
10
$
1,809
61
$
1,149
71
$
2,958
5
$
1,349
7
$
1,847
12
$
3,196
4
728
8
920
12
1,648
1
5
9
592
10
597
1
5
1
5
18
517
60
600
78
1,117
28
$
2,599
85
$
3,964
113
$
6,563
(1)
Amounts included in nonperforming loans may not equal total
loans delinquent 90 days or more as loans that are less
than 90 days delinquent may be on a non-accrual status.
11
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12
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changes in local, regional, national, and international economic
and business conditions and developments that affect the
collectibility of our portfolio, including the condition of
various market segments;
changes in the nature and volume of our portfolio and in the
terms of our loans;
changes in the experience, ability, and depth of lending
management and other relevant staff;
changes in the volume and severity of past due loans, the volume
of nonaccrual loans, and the volume and severity of adversely
classified or graded loans;
changes in the quality of our loan review system;
changes in the value of underlying collateral for
collateral-dependent loans;
the existence and effect of any concentrations of credit, and
changes in the level of such concentrations; and
the effect of other external factors such as competition and
legal and regulatory requirements on the level of estimated
credit losses in our existing portfolio.
13
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At or for the Years Ended December 31,
2007
2006
2005
2004
2003
(Dollars in thousands)
$
5,030
$
4,795
$
3,166
$
2,755
$
2,758
(814
)
(22
)
(8
)
(836
)
(8
)
1
5
1
5
(836
)
1
(3
)
1,442
235
1,629
410
$
5,636
$
5,030
$
4,795
$
3,166
$
2,755
0.20
%
%
%
%
%
57.31
70.70
232.88
136.58
69.50
1.33
1.23
1.24
0.99
0.98
14
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At December 31,
2007
2006
2005
Percent of
Percent of
Percent of
Loans in Each
Loans in Each
Loans in Each
Allowance for
Category to
Allowance for
Category to
Allowance for
Category to
Loan Losses
Total Loans
Loan Losses
Total Loans
Loan Losses
Total Loans
(Dollars in thousands)
$
3,456
57.50
%
$
2,421
50.75
%
$
1,624
42.72
%
60
22.45
189
26.29
319
32.87
1,461
10.57
1,303
12.74
1,848
13.64
99
3.34
113
3.24
71
3.64
38
3.02
46
3.40
81
4.15
484
2.69
891
2.70
849
2.08
38
0.43
25
0.88
3
0.90
5,636
100.00
%
4,988
100.00
%
4,795
100.00
%
42
$
5,636
$
5,030
$
4,795
At December 31,
2004
2003
Percent of
Percent of
Loans in Each
Loans in Each
Allowance for
Category to
Allowance for
Category to
Loan Losses
Total Loans
Loan Losses
Total Loans
(Dollars in thousands)
$
1,681
38.98
%
$
976
28.84
%
326
40.95
425
54.75
494
8.70
63
2.17
143
3.90
159
6.11
428
5.31
536
6.54
65
0.89
38
0.18
4
1.27
21
1.41
3,141
100.00
%
2,218
100.00
%
25
537
$
3,166
$
2,755
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17
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At December 31,
2007
2006
2005
Amortized
Estimated
Amortized
Estimated
Amortized
Estimated
Cost
Fair Value
Cost
Fair Value
Cost
Fair Value
(In thousands)
$
491,758
$
486,562
$
552,683
$
533,051
$
678,085
$
657,345
29,200
28,867
33,853
33,215
41,092
40,291
171,709
171,207
98,601
95,439
328
325
36,141
36,522
132,959
129,161
65,146
65,247
44,390
44,345
34,393
33,696
14,427
14,412
7,491
7,448
2,673
2,646
$
808,381
$
802,817
$
737,018
$
713,498
$
889,530
$
863,464
(1)
Consists of mutual funds.
At December 31,
2007
2006
2005
Amortized
Estimated
Amortized
Estimated
Amortized
Estimated
Cost
Fair Value
Cost
Fair Value
Cost
Fair Value
(In thousands)
$
9,202
$
9,315
$
12,734
$
12,688
$
16,683
$
16,753
4
5
5
6
11
12
10,480
10,120
13,430
12,825
18,147
17,320
$
19,686
$
19,440
$
26,169
$
25,519
$
34,841
$
34,085
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More than One Year
More than Five Years
One Year or Less
through Five Years
through Ten Years
More than Ten Years
Total
Weighted
Weighted
Weighted
Weighted
Weighted
Amortized
Average
Amortized
Average
Amortized
Average
Amortized
Average
Amortized
Fair
Average
Cost
Yield
Cost
Yield
Cost
Yield
Cost
Yield
Cost
Value
Yield
(Dollars in thousands)
$
%
$
15,762
4.94
%
$
317,737
4.36
%
$
158,259
4.31
%
$
491,758
$
486,562
4.36
%
%
%
%
29,200
4.72
%
29,200
28,867
4.72
%
%
10,090
4.62
%
54,186
4.71
%
107,433
4.35
%
171,709
171,207
4.48
%
%
%
%
36,141
5.65
%
36,141
36,522
5.65
%
14,427
4.35
%
%
%
%
14,427
14,412
4.35
%
56,727
5.49
%
%
8,419
3.60
%
%
65,146
65,247
5.25
%
$
71,154
5.26
%
$
25,852
4.81
%
$
380,342
4.39
%
$
331,033
4.51
%
$
808,381
$
802,817
4.53
%
$
%
$
7,634
5.45
%
$
%
$
1,568
5.69
%
$
9,202
$
9,315
5.49
%
%
4
6.75
%
%
%
4
5
6.75
%
%
%
%
%
%
%
%
%
10,480
3.82
%
10,480
10,120
3.82
%
$
%
$
7,638
5.45
%
$
%
$
12,048
4.06
%
$
19,686
$
19,440
4.60
%
19
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For the Year Ended December 31,
2007
2006
Weighted
Weighted
Average
Average
Average
Average
Balance
Percent
Rate
Balance
Percent
Rate
(Dollars in thousands)
$
96,796
9.57
%
%
$
89,989
8.99
%
%
49,209
4.87
1.93
37,454
3.74
0.93
401,003
39.64
0.65
398,852
39.86
0.70
464,552
45.92
4.35
474,313
47.41
3.96
$
1,011,560
100.00
%
2.35
%
$
1,000,608
100.00
%
2.19
%
For the Year Ended December 31, 2005
Weighted
Average
Average
Balance
Percent
Rate
(Dollars in thousands)
$
91,956
8.94
%
%
38,782
3.77
0.53
488,109
47.44
0.67
409,932
39.85
2.65
$
1,028,779
100.00
%
1.39
%
At
December 31,
2007
(In thousands)
$
85,057
37,820
20,797
2,900
1,049
$
147,623
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At or for the Years Ended December 31,
2007
2006
2005
(Dollars in thousands)
$
124,420
$
128,534
$
233,629
$
127,926
$
181,296
$
301,649
$
156,459
$
220,222
$
341,190
4.12
%
3.74
%
3.46
%
3.97
%
3.57
%
3.28
%
21
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22
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the total capital distributions for the applicable calendar year
exceed the sum of the savings banks net income for that
year to date plus the savings banks retained net income
for the preceding two years;
the savings bank would not be at least adequately capitalized
following the distribution;
the distribution would violate any applicable statute,
regulation, agreement, or Office of Thrift Supervision-imposed
condition; or
the savings bank is not eligible for expedited treatment of its
application or notice filings.
the savings bank would be undercapitalized following the
distribution;
the proposed capital distribution raises safety and soundness
concerns; or
the capital distribution would violate a prohibition contained
in any statute, regulation, or agreement.
23
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24
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well-capitalized (at least 5% leverage capital, 6% Tier 1
risk-based capital and 10% total risk-based capital);
adequately capitalized (at least 4% leverage capital, 4% Tier 1
risk-based capital and 8% total risk-based capital);
undercapitalized (less than 3% leverage capital, 4% Tier 1
risk-based capital or 8% total risk-based capital);
significantly undercapitalized (less than 3% leverage capital,
3% Tier 1 risk-based capital or 6% total risk-based
capital); and
critically undercapitalized (less than 2% tangible capital).
25
Table of Contents
Truth-In-Lending
Act, governing disclosures of credit terms to consumer borrowers;
Home Mortgage Disclosure Act, requiring financial institutions
to provide information to enable the public and public officials
to determine whether a financial institution is fulfilling its
obligation to help meet the housing needs of the community it
serves;
26
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Equal Credit Opportunity Act, prohibiting discrimination on the
basis of race, creed, or other prohibited factors in extending
credit;
Fair Credit Reporting Act, governing the use and provision of
information to credit reporting agencies;
Fair Debt Collection Act, governing the manner in which consumer
debts may be collected by collection agencies; and
rules and regulations of the various federal agencies charged
with the responsibility of implementing such federal laws.
Right to Financial Privacy Act, which imposes a duty to maintain
confidentiality of consumer financial records and prescribes
procedures for complying with administrative subpoenas of
financial records;
Electronic Funds Transfer Act and Regulation E promulgated
thereunder, that govern automatic deposits to and withdrawals
from deposit accounts and customers rights and liabilities
arising from the use of automated teller machines and other
electronic banking services;
Title III of The Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism Act of 2001 (referred to as the USA PATRIOT
Act), which significantly expanded the responsibilities of
financial institutions, in preventing the use of the
United States financial system to fund terrorist
activities. Among other things, the USA PATRIOT Act and the
related regulations of the Office of Thrift Supervision require
savings banks operating in the United States to develop new
anti-money laundering compliance programs, due diligence
policies and controls to ensure the detection and reporting of
money laundering. Such required compliance programs are intended
to supplement existing compliance requirements, also applicable
to financial institutions, under the Bank Secrecy Act and the
Office of Foreign Assets Control Regulations; and
The Gramm-Leach-Bliley Act, which placed limitations on the
sharing of consumer financial information by financial
institutions with unaffiliated third parties. Specifically, the
Gramm-Leach-Bliley Act requires all financial institutions
offering financial products or services to retail customers to
provide such customers with the financial institutions
privacy policy and provide such customers the opportunity to
opt out of the sharing of certain personal financial
information with unaffiliated third parties, if the financial
institution customarily shares such information.
27
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28
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29
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30
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31
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ITEM 1A.
RISK
FACTORS
ITEM 1B.
UNRESOLVED
STAFF COMMENTS
ITEM 2.
PROPERTIES
ITEM 3.
LEGAL
PROCEEDINGS
ITEM 4.
SUBMISSION
OF MATTERS TO A VOTE OF SECURITY HOLDERS
ITEM 5.
MARKET
FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS
AND ISSUER PURCHASES OF EQUITY SECURITIES
High
Low
Dividends
$
12.00
$
9.45
$
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Period Ending
Index
11/8/2007
11/30/2007
12/31/2007
$
100.00
102.50
96.93
100.00
98.70
98.38
100.00
102.20
103.54
33
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34
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ITEM 6.
SELECTED
FINANCIAL DATA
At December 31,
2007
2006
2005
2004
2003
(In thousands)
$
1,386,918
$
1,294,747
$
1,408,562
$
1,566,564
$
1,466,755
25,088
60,624
38,368
94,297
65,855
24,500
5,200
210
210
802,817
713,498
863,464
1,012,767
939,649
19,686
26,169
34,841
56,148
88,365
3,605
2,667
2,360
2,087
1,208
270
125
99
1,539
418,693
404,159
382,672
317,525
279,830
41,560
32,866
31,635
30,425
29,227
6,702
7,186
11,529
15,675
13,930
1,019,578
1,130,753
1,256,803
1,414,580
1,328,868
102,000
106,000
206,000
310,500
261,379
22,420
22,534
27,629
51,208
22,500
877,225
989,789
1,010,146
1,041,533
1,021,689
367,340
163,994
151,759
151,984
137,887
Years Ended December 31,
2007
2006
2005
2004
2003
(In thousands)
$
65,702
$
64,867
$
66,302
$
58,851
$
59,345
28,836
28,406
24,234
18,272
21,949
36,866
36,461
42,068
40,579
37,396
1,442
235
1,629
410
35,424
36,226
40,439
40,169
37,396
9,478
4,600
4,354
5,401
5,316
35,950
23,818
21,258
19,536
18,869
8,952
17,008
23,535
26,034
23,843
(1,555
)
6,166
10,376
9,668
8,830
$
10,507
$
10,842
$
13,159
$
16,366
$
15,013
$
(0.03
)
NA
NA
NA
NA
(1)
Net loss per share is calculated for the period that the
Companys shares of common stock were outstanding
(November 8, 2007 through December 31, 2007). The net
loss for this period was $1,501,000 and the weighted average
common shares outstanding were 43,076,586.
35
Table of Contents
At or For the Years Ended December 31,
2007
2006
2005
2004
2003
0.78
%
0.80
%
0.88
%
1.13
%
1.05
%
5.27
%
7.01
%
8.63
%
11.34
%
11.27
%
2.34
%
2.40
%
2.67
%
2.71
%
2.57
%
2.87
%
2.81
%
2.94
%
2.91
%
2.76
%
77.57
%
58.01
%
45.79
%
42.49
%
44.18
%
2.66
%
1.77
%
1.42
%
1.35
%
1.32
%
123.33
%
118.89
%
115.69
%
115.25
%
111.90
%
14.73
%
11.47
%
10.21
%
9.97
%
9.30
%
0.71
%
0.55
%
0.15
%
0.15
%
0.27
%
2.32
%
1.74
%
0.53
%
0.72
%
1.40
%
57.31
%
70.70
%
232.88
%
136.58
%
69.50
%
1.33
%
1.23
%
1.24
%
0.99
%
0.98
%
38.07
%
25.03
%
23.72
%
23.81
%
22.69
%
37.23
%
24.25
%
22.97
%
23.27
%
22.18
%
18.84
%
12.38
%
10.62
%
9.15
%
8.34
%
18
19
19
19
19
192
208
201
199
196
(1)
2007 performance ratios include the after-tax effect of: a
charge of $7.8 million due to the Companys
contribution to the Northfield Bank Foundation; a gain of
$2.4 million as a result of the sale of two branch
locations, and associated deposit relationships; net interest
income of approximately $0.8 million, for the year ended
December 31, 2007, as it relates to short-term investment
returns earned on subscription proceeds (net of interest paid
during the stock offering); and the reversal of state and local
tax liabilities of approximately $4.5 million, net of
federal taxes. 2006 performance ratios include the after tax
effect of a $0.9 million charge related to a supplemental
retirement agreement entered into by the Company with its former
president.
(2)
The net interest margin represents net interest income as a
percent of average interest-earning assets for the period.
(3)
The interest rate spread represents the difference between the
weighted-average yield on interest earning assets and the
weighted-average costs of interest-bearing liabilities.
(4)
The efficiency ratio represents non-interest expense divided by
the sum of net interest income and non-interest income.
(5)
Ratios for 2003 through 2006 were determined pursuant to Federal
Deposit Insurance Corporation regulations. Beginning
November 6, 2007, Northfield Bank became subject to the
capital requirements under Office of Thrift Supervision
regulations, While the capital regulations of these two agencies
are substantially similar, they are not identical.
36
Table of Contents
ITEM 7.
MANAGEMENTS
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
37
Table of Contents
38
Table of Contents
39
Table of Contents
40
Table of Contents
41
Table of Contents
42
Table of Contents
43
Table of Contents
44
Table of Contents
45
Table of Contents
46
Table of Contents
For the Years Ended December 31,
2007
2006
2005
Average
Average
Average
Average
Average
Average
Outstanding
Yield/
Outstanding
Yield/
Outstanding
Yield/
Balance
Interest
Rate
Balance
Interest
Rate
Balance
Interest
Rate
(Dollars in thousands)
$
423,947
$
28,398
6.70
%
$
407,068
$
27,522
6.76
%
$
366,677
$
22,926
6.25
%
718,279
30,576
4.26
799,244
32,764
4.10
993,266
40,733
4.10
45,077
2,100
4.66
51,883
2,397
4.62
44,510
1,727
3.88
6,486
519
8.00
9,582
592
6.18
14,091
648
4.60
92,202
4,109
4.46
30,435
1,592
5.23
14,230
268
1.88
1,285,991
65,702
5.11
1,298,212
64,867
5.00
1,432,774
66,302
4.63
66,614
49,564
61,021
$
1,352,605
$
1,347,776
$
1,493,795
$
49,209
951
1.93
$
37,454
349
0.93
$
38,782
205
0.53
401,003
2,600
0.65
398,852
2,788
0.70
488,109
3,289
0.67
464,552
20,212
4.35
474,313
18,797
3.96
409,932
10,857
2.65
914,764
23,763
2.60
910,619
21,934
2.41
936,823
14,351
1.53
104,927
4,202
4.00
154,855
5,501
3.55
241,563
8,311
3.44
22,999
871
3.79
26,441
971
3.67
60,086
1,572
2.62
1,042,690
28,836
2.77
1,091,915
28,406
2.60
1,238,472
24,234
1.96
96,796
89,989
91,956
13,905
11,261
10,904
1,153,391
1,193,165
1,341,332
199,214
154,611
152,463
$
1,352,605
$
1,347,776
$
1,493,795
$
36,866
$
36,461
$
42,068
2.34
%
2.40
%
2.67
%
$
243,301
$
206,297
$
194,302
2.87
%
2.81
%
2.94
%
123.33
%
118.89
%
115.69
%
(1)
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.
(2)
Net interest-earning assets represents total interest-earning
assets less total interest-bearing liabilities.
(3)
Net interest margin represents net interest income divided by
average total interest-earning assets.
47
Table of Contents
Year Ended December 31,
Year Ended December 31,
2007 vs. 2006
2006 vs. 2005
Increase (Decrease)
Total
Increase (Decrease)
Total
Due to
Increase
Due to
Increase
Volume
Rate
(Decrease)
Volume
Rate
(Decrease)
(In thousands)
$
1,128
$
(252
)
$
876
$
2,644
$
1,952
$
4,596
(3,524
)
1,336
(2,188
)
(7,954
)
(15
)
(7,969
)
(317
)
20
(297
)
311
359
670
(844
)
771
(73
)
763
(819
)
(56
)
2,715
(198
)
2,517
517
807
1,324
(842
)
1,677
835
(3,719
)
2,284
(1,435
)
136
466
602
(7
)
151
144
15
(203
)
(188
)
(630
)
129
(501
)
(377
)
1,792
1,415
1,909
6,031
7,940
(226
)
2,055
1,829
1,272
6,311
7,583
(2,147
)
848
(1,299
)
(3,090
)
280
(2,810
)
(132
)
32
(100
)
(2,153
)
1,552
(601
)
(2,505
)
2,935
430
(3,971
)
8,143
4,172
$
1,663
$
(1,258
)
$
405
$
252
$
(5,859
)
$
(5,607
)
48
Table of Contents
originate commercial real estate loans and multifamily loans
that generally tend to have interest rates that reset at five
years;
invest in shorter maturity investment grade corporate securities
and mortgage-backed securities; and
obtaining general financing through lower cost deposits and
Federal Home Loan Bank advances and repurchase agreements.
NPV
Net Interest Income
Change in
Increase (Decrease) in
Increase (Decrease) in
Interest Rates
Estimated NPV
Estimated Net
Estimated Net Interest Income
Estimated NPV(2)
Amount
Percent
Interest Income
Amount
Percent
(Dollars in thousands)
+200
$
382,916
$
(39,622
)
(9.38
)%
$
40,530
$
(2,333
)
(5.44
)%
+100
402,308
(20,230
)
(4.79
)
41,769
(1,094
)
(2.55
)
0
422,538
42,863
−100
439,886
17,348
4.11
42,897
34
0.08
−200
445,792
23,254
5.50
41,202
(1,661
)
(3.88
)
(1)
Assumes an instantaneous and sustained uniform change in
interest rates at all maturities.
(2)
NPV is the discounted present value of expected cash flows from
interest-earning assets and interest-bearing liabilities.
49
Table of Contents
expected loan demand;
expected deposit flows;
yields available on interest-earning deposits and
securities; and
the objectives of our asset/liability management program.
50
Table of Contents
51
Table of Contents
Payments Due by Period
Less Than
One to Three
Three to Five
More Than
One Year
Years
Years
Five Years
Total
(In thousands)
$
82,574
$
40,000
$
$
$
122,574
1,247
2,330
1,892
6,225
11,694
344
719
763
1,886
3,712
378,125
19,469
4,990
3
402,587
2,700
2,700
$
464,990
$
62,518
$
7,645
$
8,114
$
543,267
$
52,478
$
$
$
$
52,478
(1)
Includes Federal Home Loan Bank of New York advances, repurchase
agreements and accrued interest payable at December 31,
2007.
52
Table of Contents
53
Table of Contents
ITEM 7A.
QUANTITATIVE
AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
ITEM 8.
FINANCIAL
STATEMENTS AND SUPPLEMENTARY DATA
54
Table of Contents
55
Table of Contents
56
Table of Contents
Years Ended December 31,
2007
2006
2005
(In thousands, except share data)
$
28,398
27,522
22,926
30,576
32,764
40,733
2,100
2,397
1,727
519
592
648
4,109
1,592
268
65,702
64,867
66,302
23,763
21,934
14,351
5,073
6,472
9,883
28,836
28,406
24,234
36,866
36,461
42,068
1,442
235
1,629
35,424
36,226
40,439
3,132
3,114
2,964
1,694
1,231
1,210
71
191
119
4,308
273
64
61
9,478
4,600
4,354
12,685
13,451
11,053
3,062
3,074
2,836
852
810
847
2,425
2,382
2,159
1,218
1,073
1,189
11,952
3,756
3,028
3,174
35,950
23,818
21,258
8,952
17,008
23,535
(1,555
)
6,166
10,376
$
10,507
10,842
13,159
(0.03
)
NA
NA
(1)
Net loss per share is calculated for the period that the
Companys shares of common stock were outstanding
(November 8, 2007 through December 31, 2007). The net
loss for this period was $1,501,000 and the weighted average
common shares outstanding were 43,076,586.
57
Table of Contents
Years Ended December 31, 2007, 2006, and 2005
Unallocated
Accumulated
Common Stock
Other
Common Stock
Additional
Held by the
Comprehensive
Total
Par
Paid-In
Employee Stock
Retained
(Loss) Income,
Stockholders
Shares
Value
Capital
Ownership Plan
Earnings
Net of Tax
Equity
(In thousands except share data)
100
$
510
153,730
(2,256
)
151,984
13,159
13,159
(13,384
)
(13,384
)
(225
)
100
510
166,889
(15,640
)
151,759
10,842
10,842
1,564
1,564
(36
)
(36
)
12,370
(135
)
(135
)
100
$
510
177,731
(14,247
)
163,994
10,507
10,507
10,897
10,897
(5
)
(5
)
(180
)
(180
)
9
9
8
8
21,236
500
500
44,802,961
448
198,350
(246
)
198,552
(17,563
)
(17,563
)
35
586
621
44,803,061
$
448
199,395
(16,977
)
187,992
(3,518
)
367,340
58
Table of Contents
Years Ended December 31,
2007
2006
2005
(In thousands)
$
10,507
10,842
13,159
1,442
235
1,629
1,326
1,298
1,315
(60
)
781
4
171
214
245
(1,694
)
(1,231
)
(1,210
)
8,952
(60
)
(67
)
(81
)
6,265
1,109
6,175
(6,350
)
(1,251
)
(6,114
)
(71
)
(191
)
(119
)
(3,660
)
(648
)
(876
)
(176
)
(154
)
24
24
105
711
(122
)
1,304
(10,396
)
(526
)
462
5,443
(542
)
1,600
386
368
619
11,412
10,765
18,939
(16,029
)
(21,269
)
(66,529
)
484
4,343
4,146
(309,396
)
(40,532
)
(109,731
)
234,457
171,774
236,038
6,476
8,668
21,298
3,705
20,100
(50,500
)
(10,210
)
(200
)
31,200
5,220
200
(7,000
)
(897
)
(1,115
)
(713
)
1,473
20
(106,027
)
136,999
84,509
(3,560
)
(20,357
)
(31,387
)
(22,985
)
107,241
(17,563
)
60
(56
)
89
(114
)
(95
)
(79
)
83,000
5,000
81,000
(87,000
)
(105,000
)
(185,500
)
(5,000
)
(23,500
)
59,079
(125,508
)
(159,377
)
(35,536
)
22,256
(55,929
)
60,624
38,368
94,297
$
25,088
60,624
38,368
$
28,657
28,809
24,215
4,298
8,760
8,321
749
82,359
59
Table of Contents
(1)
Summary
of Significant Accounting Policies
(a)
Basis
of Presentation
(b)
Business
60
Table of Contents
(c)
Cash
Equivalents
(d)
Securities
(e)
Loans
61
Table of Contents
62
Table of Contents
(f)
Federal
Home Loan Bank Stock
(g)
Premises
and Equipment, Net
(h)
Bank
Owned Life Insurance
(i)
Goodwill
63
Table of Contents
(j)
Income
Taxes
(k)
Impairment
of Long-Lived Assets
(l)
Securities
Sold Under Agreements to Repurchase
(m)
Comprehensive
Income (Loss)
64
Table of Contents
(n)
Employee
Benefits
(o)
Segment
Reporting
(p)
Net
loss per Share
(q)
Stock
Offering
65
Table of Contents
(2)
Securities
Available-for-Sale
2007
Gross
Gross
Estimated
Amortized
Unrealized
Unrealized
Fair
Cost
Gains
Losses
Value
$
491,758
1,404
6,600
486,562
29,200
333
28,867
171,709
874
1,376
171,207
36,141
381
36,522
728,808
2,659
8,309
723,158
14,427
15
14,412
65,146
101
65,247
79,573
101
15
79,659
$
808,381
2,760
8,324
802,817
2006
Gross
Gross
Estimated
Amortized
Unrealized
Unrealized
Fair
Cost
Gains
Losses
Value
$
552,683
99
19,731
533,051
33,853
638
33,215
98,601
3,162
95,439
685,137
99
23,531
661,705
7,491
43
7,448
44,390
5
50
44,345
51,881
5
93
51,793
$
737,018
104
23,624
713,498
66
Table of Contents
Amortized
Estimated
Cost
Fair Value
$
56,727
56,797
8,419
8,450
65,146
65,247
December 31, 2007
Less Than 12 Months
12 Months or More
Total
Unrealized
Estimated
Unrealized
Estimated
Unrealized
Estimated
Losses
Fair Value
Losses
Fair Value
Losses
Fair Value
$
6
842
6,594
338,344
6,600
339,186
333
28,867
333
28,867
65
21,082
1,311
91,737
1,376
112,819
15
2,223
15
2,223
$
71
21,924
8,253
461,171
8,324
483,095
67
Table of Contents
December 31, 2006
Less Than 12 Months
12 Months or More
Total
Unrealized
Estimated
Unrealized
Estimated
Unrealized
Estimated
Losses
Fair Value
Losses
Fair Value
Losses
Fair Value
$
25
4,617
19,706
518,224
19,731
522,841
638
33,215
638
33,215
3,162
95,439
3,162
95,439
43
2,101
43
2,101
3
9,274
47
9,019
50
18,293
$
28
13,891
23,596
657,998
23,624
671,889
Table of Contents
(3)
Securities
Held-to-Maturity
2007
Gross
Gross
Estimated
Amortized
Unrealized
Unrealized
Fair
Cost
Gains
Losses
Value
$
9,202
138
25
9,315
4
1
5
10,480
360
10,120
$
19,686
139
385
19,440
2006
Gross
Gross
Estimated
Amortized
Unrealized
Unrealized
Fair
Cost
Gains
Losses
Value
$
12,734
15
61
12,688
5
1
6
13,430
605
12,825
$
26,169
16
666
25,519
69
Table of Contents
December 31, 2007
Less Than 12 Months
12 Months or More
Total
Unrealized
Estimated
Unrealized
Estimated
Unrealized
Estimated
Losses
Fair Value
Losses
Fair Value
Losses
Fair Value
$
25
1,193
25
1,193
360
10,120
360
10,120
$
385
11,313
385
11,313
December 31, 2006
Less Than 12 Months
12 Months or More
Total
Unrealized
Estimated
Unrealized
Estimated
Unrealized
Estimated
Losses
Fair Value
Losses
Fair Value
Losses
Fair Value
$
10
3,474
51
3,124
61
6,598
2
502
603
12,323
605
12,825
$
12
3,976
654
15,447
666
19,423
70
Table of Contents
(4)
Loans
December 31,
2007
2006
$
243,902
207,680
95,246
107,572
12,797
13,922
44,850
52,124
14,164
13,276
410,959
394,574
11,397
11,022
1,452
3,442
390
155
13,239
14,619
424,198
409,193
131
(4
)
424,329
409,189
(5,636
)
(5,030
)
$
418,693
404,159
December 31,
2007
2006
$
270
125
$
270
125
71
Table of Contents
December 31,
2007
2006
2005
$
5,030
4,795
3,166
1,442
235
1,629
(836
)
$
5,636
5,030
4,795
December 31, 2007
Allowance
Recorded
for Loan
Net
Investment
Losses
Investment
$
7,426
(1,030
)
6,396
$
7,426
(1,030
)
6,396
December 31, 2006
Allowance
Recorded
for Loan
Net
Investment
Losses
Investment
$
905
(460
)
445
3,989
(275
)
3,714
$
4,894
(735
)
4,159
72
Table of Contents
(5)
Premises
and Equipment, Net
December 31,
2007
2006
$
566
566
2,471
2,490
2,600
2,600
9,827
9,423
6,343
6,247
21,807
21,326
(14,080
)
(13,094
)
$
7,727
8,232
73
Table of Contents
(6)
Deposits
December 31,
2007
2006
Weighted
Weighted
Amount
Average Rate
Amount
Average Rate
$
63,589
2.38
%
40,852
1.31
99,208
95,339
162,797
0.93
136,191
0.39
12,571
0.75
14,258
0.75
299,270
0.66
342,927
0.68
311,841
0.66
357,185
0.68
254,964
4.10
304,448
4.31
147,623
4.22
191,965
4.56
402,587
4.14
496,413
4.41
$
877,225
2.31
%
989,789
2.51
December 31,
2007
$
378,125
14,987
4,482
1,774
3,219
$
402,587
74
Table of Contents
December 31,
2007
2006
2005
$
951
349
205
100
123
162
2,203
2,665
3,127
297
20,212
18,797
10,857
$
23,763
21,934
14,351
(7)
Securities
Sold Under Agreements to Repurchase and Other
Borrowings
December 31,
2007
2006
$
102,000
106,000
20,000
20,000
2,420
2,534
$
124,420
128,534
December 31,
2007
2006
$
104,927
154,855
134,000
189,000
4.00
%
3.55
4.17
3.74
December 31, 2007
FHLB
Repurchase
Advances
Agreements
$
10,000
72,000
30,000
10,000
$
20,000
102,000
75
Table of Contents
December 31, 2007
Maturing
Up to 30 Days
30 to 90 Days
Over 90 Days
Total
$
4,000
43,000
55,000
102,000
3.34
%
4.23
%
4.17
%
4.17
%
2,579
29,383
40,845
72,807
2,461
29,260
40,362
72,083
66,804
66,553
December 31,
2007
2006
2005
$
4,202
5,501
8,311
637
676
730
15
67
606
219
228
236
$
5,073
6,472
9,883
76
Table of Contents
(8)
Income
Taxes
December 31,
2007
2006
2005
$
8,964
6,635
8,922
(2,907
)
(868
)
(2,477
)
6,057
5,767
6,445
(123
)
57
992
(7,489
)
342
2,939
(7,612
)
399
3,931
$
(1,555
)
6,166
10,376
December 31,
2007
2006
2005
$
3,133
5,953
8,237
(4,947
)
259
2,555
(593
)
(430
)
(423
)
327
372
153
384
7
$
(1,555
)
6,166
10,376
77
Table of Contents
December 31,
2007
2006
$
1,270
730
9
13
1,146
1,174
4,339
2,216
1,975
252
451
477
248
116
2,343
9,408
2
1,062
480
517
69
63
1,313
335
82
293
253
14,512
16,124
306
867
175
233
4,552
268
207
309
43
78
302
351
1,301
6,390
1,076
1,062
$
12,135
8,672
78
Table of Contents
$
2,259
441
$
2,700
(9)
Retirement
Benefits
79
Table of Contents
80
Table of Contents
2007
2006
$
1,285
1,703
4
4
67
86
303
(417
)
(83
)
(91
)
1,576
1,285
$
1,576
1,285
December 31,
2007
2006
$
317
(83
)
(16
)
151
(16
)
183
comprehensive income (loss)
$
285
251
December 31,
2007
2006
2005
$
4
4
4
67
86
75
16
16
19
16
16
16
(15
)
35
1
$
88
157
115
81
Table of Contents
2007
2006
2005
6.25
%
5.75
5.25
4.50
4.50
4.00
5.75
%
5.25
5.75
4.50
4.00
4.25
One Percentage
One Percentage
Point Increase
Point Decrease
2007
2006
2007
2006
$
5
7
(5
)
(7
)
126
103
(111
)
(91
)
One Percentage
One Percentage
Point Increase
Point Decrease
2007
2006
2005
2007
2006
2005
$
5
7
6
(5
)
(7
)
(5
)
82
Table of Contents
(10)
Commitments
and Contingencies
$
38,986
13,492
403
83
Table of Contents
Rental
Rental
Rental
Payments
Payments
Receipts
Capitalized
Operating
Operating
Leases
Leases
Leases
$
344
1,247
169
354
1,174
169
365
1,156
169
376
1,008
169
387
884
169
1,886
6,225
1,826
$
3,712
11,694
2,671
84
Table of Contents
(11)
Regulatory
Requirements
OTS Requirements
For Well
Capitalized
For Capital
Under Prompt
Adequacy
Corrective
Actual
Purposes
Action Provisions
Amount
Ratio
Amount
Ratio
Amount
Ratio
$
257,274
18.84
%
20,484
1.50
NA
NA
257,274
18.84
54,622
4.00
68,278
5.00
263,114
38.07
55,286
8.00
69,107
10.00
85
Table of Contents
FDIC Requirements
For Well Capitalized
Under Prompt Corrective
Actual
For Capital Adequacy Purposes
Action Provisions
Amount
Ratio
Amount
Ratio
Amount
Ratio
$
160,726
12.38
%
51,927
4.00
64,909
5.00
160,726
24.25
26,516
4.00
39,773
6.00
165,931
25.03
53,031
8.00
66,289
10.00
(12)
Fair
Value of Financial Instruments
(a)
Cash,
Cash Equivalents, and Certificates of Deposit
Table of Contents
(b)
Securities
(c)
Federal
Home Loan Bank of New York Stock
(d)
Loans
(e)
Deposits
(f)
Commitments
to Extend Credit and Standby Letters of Credit
(g)
Borrowings
87
Table of Contents
(h)
Advance
Payments by Borrowers
December 31,
2007
2006
Estimated
Estimated
Carrying
Fair
Carrying
Fair
Value
Value
Value
Value
$
25,088
25,088
60,624
60,624
24,500
24,546
5,200
5,199
3,605
3,605
2,667
2,667
802,817
802,817
713,498
713,498
19,686
19,440
26,169
25,519
6,702
6,702
7,186
7,186
418,693
419,449
404,159
394,826
$
270
270
125
125
$
877,225
878,230
989,789
991,396
124,420
125,176
128,534
126,399
$
843
843
783
783
88
Table of Contents
(13)
Parent-only
Financial Information
December 31,
2007
2006
(In thousands)
$
68,424
6,500
270,738
163,994
16,358
27
5,339
$
367,386
163,994
$
46
367,340
163,994
$
367,386
163,994
Years Ended December 31,
2007
2006
2005
(In thousands)
$
195
62
79
18,083
10,842
13,159
18,419
10,842
13,159
11,952
11
(4,051
)
7,912
$
10,507
10,842
13,159
89
Table of Contents
December 31,
2007
2006
2005
(In thousands)
$
10,507
10,842
13,159
8,952
(27
)
(3,336
)
(1,287
)
(716
)
46
(18,083
)
(10,842
)
(13,159
)
(3,944
)
(94,874
)
(17,563
)
1,205
(6,500
)
(117,732
)
189,600
500
190,100
68,424
$
68,424
90
Table of Contents
2007 Quarter Ended
March 31
June 30
September 30
December 31
(Dollars in thousands)
$
15,502
15,644
16,637
17,919
7,244
7,397
7,478
6,717
8,258
8,247
9,159
11,202
440
97
200
705
7,818
8,150
8,959
10,497
5,602
1,370
1,288
1,218
6,026
5,997
5,327
18,600
7,394
3,523
4,920
(6,885
)
2,701
1,256
1,855
(7,367
)
$
4,693
2,267
3,065
482
n/a
n/a
n/a
(0.03
)
2006 Quarter Ended
March 31
June 30
September 30
December 31
(Dollars in thousands)
$
16,105
16,329
16,242
16,191
6,409
6,919
7,449
7,629
9,696
9,410
8,793
8,562
150
60
343
(318
)
9,546
9,350
8,450
8,880
1,129
954
1,291
1,226
5,645
5,653
7,228
5,292
5,030
4,651
2,513
4,814
1,850
1,690
872
1,754
$
3,180
2,961
1,641
3,060
n/a
n/a
n/a
n/a
(1)
Net loss per share is calculated for the period that the
Companys shares of common stock were outstanding
(November 8, 2007 through December 31, 2007). The net
loss for this period was $1,501,000 and the weighted average
common shares outstanding were 43,076,586.
91
Table of Contents
ITEM 9.
CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
ITEM 9A.
CONTROLS
AND PROCEDURES
ITEM 9A(T).
CONTROLS
AND PROCEDURES
ITEM 9B.
OTHER
INFORMATION
ITEM 10.
DIRECTORS,
EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
ITEM 11.
EXECUTIVE
COMPENSATION
92
Table of Contents
ITEM 12.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
AND RELATED STOCKHOLDER MATTERS
ITEM 13.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS, AND
DIRECTOR
INDEPENDENCE
ITEM 14.
PRINCIPAL
ACCOUNTING FEES AND SERVICES
3
.1
Charter of Northfield Bancorp, Inc.*
3
.2
Bylaws of Northfield Bancorp, Inc.*
4
Form of Common Stock Certificate of Northfield Bancorp, Inc.*
10
.1
Northfield Bank Employee Stock Ownership Plan
10
.2
Employment Agreement with Kenneth Doherty*
10
.3
Employment Agreement with Steven M. Klein*
10
.4
Northfield Bank Non-Qualified Supplemental Employee Stock
Ownership Plan
93
Table of Contents
10
.5
Northfield Bank 2007 Executive Incentive Compensation Plan
10
.6
Short Term Disability and Long Term Disability for Senior
Management*
10
.7
Amendments to Northfield Bank Non-Qualified Deferred
Compensation Plan
10
.8
Supplemental Executive Retirement Agreement with Albert J. Regen*
10
.9
Amended Employment Agreements with John W. Alexander**
10
.10
Amended Employment Agreements with Michael J. Widmer**
10
.11
Northfield Bancorp, Inc. 2008 Management Incentive Plan
21
Subsidiaries of Registrant*
23
Consent of KPMG LLP
31
.1
Certification of Chief Executive Officer pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
31
.2
Certification of Chief Financial Officer pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
32
Certification of Chief Executive Officer and Chief Financial
Officer pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002
*
Incorporated by reference to the Registration Statement on
Form S-1
of Northfield Bancorp, Inc. (File
No. 333-143643),
originally filed with the Securities and Exchange Commission on
June 11, 2007.
**
Incorporated by reference to Northfield Bancorp. Inc.s
Current Report on
Form 8-K,
dated January 3, 2008, filed with the Securities and
Exchange Commission on January 6, 2008 (File Number
001-33732).
Table of Contents
By:
Chairman, President and Chief Executive Officer (Principal
Executive Officer)
March 26, 2008
Executive Vice President and Chief Financial Officer (Principal
Financial and Accounting Officer)
March 26, 2008
Director
March 26, 2008
Director
March 26, 2008
Director
March 26, 2008
Director
March 26, 2008
Director
March 26, 2008
Director
March 26, 2008
Director
March 26, 2008
Director
March 26, 2008
Director
March 26, 2008
95
Page No. | ||||
Section 1. Plan Identity
|
1 | |||
1.1 Name
|
1 | |||
1.2 Purpose
|
1 | |||
1.3 Effective Date
|
1 | |||
1.4 Fiscal Period
|
1 | |||
1.5 Single Plan for All Employers
|
1 | |||
1.6 Interpretation of Provisions
|
1 | |||
Section 2. Definitions
|
1 | |||
Section 3. Eligibility for Participation
|
8 | |||
3.1 Initial Eligibility
|
8 | |||
3.2 Definition of Eligibility Year
|
9 | |||
3.3 Terminated Employees
|
9 | |||
3.4 Certain Employees Ineligible
|
9 | |||
3.5 Participation and Reparticipation
|
9 | |||
3.6 Omission of Eligible Employee
|
10 | |||
3.7 Inclusion of Ineligible Employee
|
10 | |||
Section 4. Contributions and Credits
|
10 | |||
4.1 Discretionary Contributions
|
10 | |||
4.2 Contributions for Stock Obligations
|
10 | |||
4.3 Conditions as to Contributions
|
11 | |||
4.4 Rollover Contributions
|
11 | |||
Section 5. Limitations on Contributions and Allocations
|
11 | |||
5.1 Limitation on Annual Additions
|
11 | |||
5.2 Effect of Limitations
|
13 | |||
5.3 Limitations as to Certain Participants
|
13 | |||
5.4 Erroneous Allocations
|
14 | |||
Section 6. Trust Fund and Its Investment
|
14 | |||
6.1 Creation of Trust Fund
|
14 | |||
6.2 Stock Fund and Investment Fund
|
14 | |||
6.3 Acquisition of Stock
|
14 | |||
6.4 Participants Option to Diversify
|
15 | |||
Section 7. Voting Rights and Dividends on Stock
|
16 | |||
7.1 Voting and Tendering of Stock
|
16 | |||
7.2 Application of Dividends
|
16 | |||
Section 8. Adjustments to Accounts
|
17 | |||
8.1 ESOP Allocations
|
17 | |||
8.2 Charges to Accounts
|
18 | |||
8.3 Stock Fund Account
|
18 | |||
8.4 Investment Fund Account
|
19 | |||
8.5 Adjustment to Value of Trust Fund
|
19 | |||
8.6 Participant Statements
|
19 | |||
Section 9. Vesting of Participants Interests
|
19 | |||
9.1 Deferred Vesting in Accounts
|
19 | |||
9.2 Computation of Vesting Years
|
19 | |||
9.3 Full Vesting Upon Certain Events
|
20 | |||
9.4 Full Vesting Upon Plan Termination
|
21 |
Page No. | ||||
9.5 Forfeiture, Repayment, and Restoral
|
21 | |||
9.6 Accounting for Forfeitures
|
22 | |||
9.7 Vesting and Nonforfeitability
|
22 | |||
Section 10. Payment of Benefits
|
22 | |||
10.1 Benefits for Participants
|
22 | |||
10.2 Time for Distribution
|
22 | |||
10.3 Marital Status
|
24 | |||
10.4 Delay in Benefit Determination
|
24 | |||
10.5 Accounting for Benefit Payments
|
24 | |||
10.6 Options to Receive and Sell Stock
|
24 | |||
10.7 Restrictions on Disposition of Stock
|
25 | |||
10.8 Continuing Loan Provisions; Creations of Protections and Rights
|
25 | |||
10.9 Direct Rollover of Eligible Distribution
|
25 | |||
10.10 Waiver of 30-Day Period After Notice of Distribution
|
26 | |||
Section 11. Rules Governing Benefit Claims and Review of Appeals
|
26 | |||
11.1 Claim for Benefits
|
26 | |||
11.2 Notification by Committee
|
26 | |||
11.3 Claims Review Procedure
|
26 | |||
Section 12. The Committee and its Functions
|
27 | |||
12.1 Authority of Committee
|
27 | |||
12.2 Identity of Committee
|
27 | |||
12.3 Duties of Committee
|
27 | |||
12.4 Valuation of Stock
|
28 | |||
12.5 Compliance with ERISA
|
28 | |||
12.6 Action by Committee
|
28 | |||
12.7 Execution of Documents
|
28 | |||
12.8 Adoption of Rules
|
28 | |||
12.9 Responsibilities to Participants
|
28 | |||
12.10 Alternative Payees in Event of Incapacity
|
28 | |||
12.11 Indemnification by Employers
|
28 | |||
12.12 Nonparticipation by Interested Member
|
29 | |||
Section 13. Adoption, Amendment, or Termination of the Plan
|
29 | |||
13.1 Adoption of Plan by Other Employers
|
29 | |||
13.2 Plan Adoption Subject to Qualification
|
29 | |||
13.3 Right to Amend or Terminate
|
29 | |||
Section 14. Miscellaneous Provisions
|
29 | |||
14.1 Plan Creates No Employment Rights
|
29 | |||
14.2 Nonassignability of Benefits
|
30 | |||
14.3 Limit of Employer Liability
|
30 | |||
14.4 Treatment of Expenses
|
30 | |||
14.5 Number and Gender
|
30 | |||
14.6 Nondiversion of Assets
|
30 | |||
14.7 Separability of Provisions
|
30 | |||
14.8 Service of Process
|
30 | |||
14.9 Governing State Law
|
30 | |||
14.10 Employer Contributions Conditioned on Deductibility
|
30 | |||
14.11 Unclaimed Accounts
|
30 | |||
14.12 Qualified Domestic Relations Order
|
31 | |||
14.13 Use of Electronic Mediums to Provide Notices and Make Participant Elections
|
31 |
(ii)
Page No. | ||||
Section 15. Top-Heavy Provisions
|
32 | |||
15.1 Top-Heavy Plan
|
32 | |||
15.2 Definitions
|
32 | |||
15.3 Top-Heavy Rules of Application
|
33 | |||
15.4 Minimum Contributions
|
34 | |||
15.5 Top-Heavy Provisions Control in Top-Heavy Plan
|
34 |
(iii)
-2-
-3-
-4-
-5-
-6-
-7-
(i) | to acquire qualifying Employer securities as defined in Treasury Regulations § 54.4975-12; | ||
(ii) | to repay such Stock Obligation; or | ||
(iii) | to repay a prior exempt loan. |
-8-
-9-
-10-
-11-
-12-
-13-
-14-
-15-
-16-
-17-
-18-
Vesting | Percentage of | |
Years | Interest Vested | |
Fewer than 2 | 0% | |
2 | 20% | |
3 | 40% | |
4 | 60% | |
5 | 80% | |
6 or more | 100% |
-19-
-20-
-21-
-22-
-23-
-24-
-25-
-26-
-27-
-28-
-29-
-30-
-31-
-32-
-33-
-34-
i. | Change in the ownership of the Bank . A change in the ownership of the Bank shall occur on the date that any one person, or more than one person acting as a group (as defined in Treasury Regulation Section 1.409A-3(i)(5)(v)(B)), acquires ownership of stock of the corporation that, together with stock held by such person or group, constitutes more than 50% of the total fair market value or total voting power of the stock of such corporation; or | ||
ii. | Change in the effective control of the Bank. A change in the effective control of the Bank shall occur on the date that either (i) any one person, or more than one person acting as a group (as defined in Treasury Regulation Section 1.409A-3(i)(5)(vi)(D)), acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) ownership of stock of the Bank possessing 30% or more of the total voting power of the stock of the Bank; or (ii) a majority of members of the Banks board of Directors is replaced during any 12-month period by Directors whose appointment or election is not endorsed by a majority of the members of the corporations board of Directors prior to the date of the appointment or election, provided that this sub-section (ii) is inapplicable where a majority shareholder of the Bank is another corporation; or | ||
iii. | Change in the ownership of a substantial portion of the Banks assets. A change in the ownership of a substantial portion of the Banks assets shall occur on the date that any one person, or more than one person acting as a group (as defined in Treasury Regulation Section 1.409A-3(i)(5)(vii)(C)), acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) assets from the Bank that have a total gross fair market value equal to or more than 40% of the total gross fair market value of all of the assets of the corporation immediately prior to such acquisition or acquisitions. For this purpose, gross fair market value means the value of the assets of the corporation, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets. There is no Change in Control event under this paragraph (iii) when there is a transfer to an entity that is controlled by the shareholders of the transferring corporation immediately after the transfer; or | ||
iv. | For all purposes hereunder, the definition of Change in Control shall be construed to be consistent with the requirements of Treasury Regulation Section 1.409A-3(i)(5), except to the extent modified herein. Notwithstanding anything herein to the contrary, a Change in Control shall not be deemed to occur as the result of the reorganization and second step conversion of the Company to a fully converted stock holding company. |
2
3
(a) | is the number of shares of Stock that would have been allocated to the account of the Participant for a Plan Year under the ESOP and the dividends and earnings thereon paid during the Plan Year, but for the Applicable Limitations, multiplied by the fair market value |
4
of such Stock on the last day of the Plan Year for which the allocation is made; and |
(b) | is the number of shares of Stock actually allocated to the account of the Participant for the relevant ESOP Plan Year, multiplied by the fair market value of such Stock on the last day of the Plan Year for which the allocation is made, and the dividends and earnings thereon paid during the Plan Year. |
(a) | the Participants Separation from Service, other than due to death or Disability; | ||
(b) | the Participants Disability; | ||
(c) | the Participants death; or | ||
(d) | a Change in Control of the Bank or the Company. |
5
(a) | the reason for denial, with specific reference to the Plan provisions on which the denial is based. | ||
(b) | a description of any additional material or information required and an explanation of why it is necessary. | ||
(c) | an explanation of the Plans claim review procedure. |
6
(i) | The Administrator may terminate the Plan within 12 months of a corporate dissolution taxed under Code Section 331, or with approval of a bankruptcy court pursuant to 11 U.S.C. §503(b)(1)(A), provided that the amounts deferred under the Plan are included in the Participants gross income in the latest of (i) the calendar year in which the Plan terminates; (ii) the calendar year in which the amount is no longer subject to a substantial risk of forfeiture; or (iii) the first calendar year in which the payment is administratively practicable. | ||
(ii) | The Board may terminate the Plan by Board action taken within the 30 days preceding a Change in Control (but not following a Change in Control), provided that the Plan shall only be treated as terminated if all substantially similar arrangements sponsored by the Bank are terminated so that the Participant and all participants under substantially similar arrangements are required to receive all amounts of compensation deferred under the terminated arrangements |
7
within 12 months of the date of the termination of the arrangements. For these purposes, Change in Control shall be defined in accordance with the Treasury Regulations under Code Section 409A. |
(iii) | The Board may terminate the Plan provided that (A) the termination and liquidation does not occur proximate to a downturn in the financial health of the Bank or Company, (B) all arrangements sponsored by the Bank that would be aggregated with this Plan under Treasury Regulations Section 1.409A-1(c) if the Participant covered by this Plan was also covered by any of those other arrangements are also terminated; (C) no payments other than payments that would be payable under the terms of the arrangement if the termination had not occurred are made within 12 months of the termination of the arrangement; (D) all payments are made within 24 months of the termination of the arrangements; and (E) the Bank does not adopt a new arrangement that would be aggregated with any terminated arrangement under Treasury Regulations Section 1.409A-1(c) if the Participant participated in both arrangements, at any time within three years following the date of termination of the arrangement. |
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(1) | Bank executives (executive vice president and above) are defined as Participants in the Plan and are eligible for base awards based upon the guidelines detailed below. | |
(2) | The maximum base award is 10 percent of an individual executives base salary. | |
(3) | The Compensation Committee has the discretion to recommend additional bonus payments for individual performance that is deemed to warrant additional recognition. | |
(4) | The Compensation Committee will review Participant performance and recommend all base awards and discretionary bonus payments for approval by the Board of Directors. |
(5) | The Banks performance goals, with the provided weighting in the evaluation, are listed below. Detailed items after each goal are key initiatives to attain the goal. |
1. | Removal of 2005 regulatory agreement (10% weighting) |
a. | Attain a satisfactory Safety and Soundness Examination-Alexander, Doherty, Widmer, Klein | ||
b. | Formalize a company-wide training program for BSA/AML- Widmer | ||
c. | Enhance BSA policies and procedures for updated regulatory guidance.-Widmer | ||
d. | Automate of BSA monitoring processes-Widmer |
2. | Attainment of 2007 net income at or better than 90% of board approved budget (70% weighting) |
a. | Evaluate Branch Staffing Efficiency Widmer | ||
b. | Established goals and targets for checking deposit and Invest product sales- Widmer, Alexander | ||
c. | Maintain deposit product pricing disciplines-Alexander, Klein, Doherty, Widmer | ||
d. | Expand Product Offerings- Demand Money Market Accounts-Widmer, Alexander |
3. | Completion of the Initial Pubic Offering (10% weighting) |
a. | Draft and review of S-1 Prospectus-Klein, Alexander, Doherty Widmer |
b. | Implement Stock Employee Benefit Plans (ESOP and 401(k)-Alexander, Klein, Doherty, Widmer | ||
c. | Revise Charters and By-Laws-Alexander, Klein, Doherty, Widmer | ||
d. | Establish Charitable Foundation-Alexander, Klein, Doherty, Widmer | ||
e. | Manage of Due Diligence Process-Widmer, Klein, Alexander, Doherty | ||
f. | Develop public company reporting infrastructure-Klein, Doherty, Widmer, Alexander | ||
g. | Develop Stock Information Center-Widmer, Klein | ||
h. | Review of Regulatory Business Plan-Alexander, Doherty, Klein, Widmer |
4. | Formalization of Strategic business plan (10% weighting) |
a. | Open Brooklyn Branch- Alexander, Widmer, Doherty, Klein | ||
b. | Create Staff Position for Corporate Governance and Investor Relations-Alexander, Klein | ||
c. | Create new Home Equity Loan Department-Doherty | ||
d. | Develop policies and procedures to implement regulatory guidance on commercial real estate concentration guidance-Doherty | ||
e. | Automate credit administration function-Doherty | ||
f. | Develop and Implement Remote Deposit Capture-Widmer, Alexander, Doherty, Klein | ||
g. | Identify de novo branch locations-Alexander, Widmer, Doherty, Klein | ||
h. | Identify appropriate space for corporate headquarters- Alexander, Widmer, Doherty, Klein |
| Align management compensation with Company performance. | |
| Provide clear focus on key strategic business objectives. | |
| Position the Companys total cash compensation to be competitive with market. | |
| Enable the Company to attract and retain the talent needed to drive success. | |
| Motivate and reward management for achieving/exceeding performance goals. | |
| Encourage teamwork across the Companys operating groups. |
| Eligibility will be limited to key members of management and key employees. Participants will be nominated by management and approved by the Compensation Committee. | |
| New employees must be hired by July 1 to participate in that years incentive. Incentive awards for employees hired between January 1 and July 1 will be pro-rated based on the employees date of hire (i.e. base salary actually earned in the year). Participants must maintain a satisfactory level of performance to be eligible for an incentive award. | |
| Participants must be an active employee as of the award payout date to receive an award, unless they are out on disability, in which case they will receive a pro-rata award. |
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Corporate | Individual/Division | |||||||
Role | Performance | Performance | ||||||
CEO
|
85 | % | 15 | % | ||||
EVP
|
75 | % | 25 | % | ||||
SVP
|
40% - 60 | % | 60% - 40 | % |
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Incentive Payout | ||||||
Performance | (for portion based on | |||||
Level | Performance Goal | Corporate performance) | ||||
Below Threshold
|
Less than 90% of budget | 0 | % | |||
Threshold
|
90% of budgeted NI before taxes | 50 | % | |||
Target
|
Budgeted NI before taxes | 100 | % | |||
Stretch
|
120% or greater of budgeted NI before taxes | 150 | % |
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Participant Goals | Performance and Payout | |||||||||||||||||||
Performance Goal | Payout | |||||||||||||||||||
Performance | threshold/target/stretch | Actual | Allocation | |||||||||||||||||
Measure | (may be absolute or relative) | Wt | $ | Performance | (0% - 150%) | Payout ($) | ||||||||||||||
Net Income
|
TBD | 75 | % | $ | 11,250 | Between Threshold and Target (i.e. 95% of goal) | 75 | % | $ | 8,437.50 | ||||||||||
Deposit Growth
|
TBD | 15 | % | $ | 2,250 | Threshold | 50 | % | $ | 1,125 | ||||||||||
Loan Growth
|
TBD | 10 | % | $ | 1,500 | Below Threshold | 0 | % | $ | 0 | ||||||||||
TOTAL | 100 | % | $ | 15,000 |
63.75% payout
|
$ | 9,562.50 |
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