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On Thursday, DA Davidson analyst Rissell Gunther adjusted the price target for Northfield Bancorp (NASDAQ:NFBK) shares, bringing it down to $13.00 from the previous $14.00, while maintaining a Neutral rating on the stock. Currently trading at $12.09, the stock sits within the analyst target range of $13-14. The revision follows Northfield Bancorp’s recent financial performance which highlighted a positive pre-provision net revenue (PPNR) influenced by improved net interest income (NII) and fee revenue, despite facing some operational expenditure challenges.Want deeper insights? InvestingPro subscribers have access to over 30 additional financial metrics and exclusive analysis tools to make informed investment decisions.
Northfield Bancorp demonstrated a robust deposit growth of 27% quarter over quarter and a net interest margin (NIM) expansion of 10 basis points. The bank, with a market capitalization of $520 million, has maintained dividend payments for 18 consecutive years, currently offering a 4.3% yield. The PPNR beat and NIM expansion have been favorable for the stock, with shares increasing by 3% compared to the KRX index since the earnings announcement.
Gunther anticipates NIM expansion and a rebound in loan growth for Northfield Bancorp in 2025. Nonetheless, he notes that growth is slow to pick up momentum. The analyst has also adjusted earnings per share (EPS) projections downward, based on a more conservative NIM forecast that accounts for fewer rate cuts than previously expected. This outlook takes into consideration the bank’s liability sensitivity and its strategy of managing growth to conserve capital, which currently stands at a tangible common equity (TCE) ratio of 11.8%.
Despite the lower price target, the firm’s reiteration of a Neutral rating indicates a belief in a modest 8% potential upside for Northfield Bancorp shares. Gunther’s comments reflect a cautious but stable outlook for the bank’s financial performance in the near term.
In other recent news, Northfield Bancorp has announced new equity awards for its directors and employees as part of its 2019 Equity Incentive Plan. The board of directors approved a total of 238,008 restricted shares and 59,735 performance-based, restricted stock units. These awarded shares are part of a long-term incentive plan designed to align the interests of the company’s directors and employees with those of its shareholders. The time-based restricted shares for employees will vest over three years, while the performance-based units for executive officers will vest contingent upon achieving a specified goal over the same period. The awards for directors will vest fully on or after a specified date. These recent developments, which were disclosed in a filing with the SEC, are part of Northfield Bancorp’s broader strategy to incentivize and retain key personnel.
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