Northfield Bancorp, Inc. Announces Fourth Quarter and Year End 2024 Results

NOTABLE ITEMS FOR THE QUARTER:

• DILUTED EARNINGS PER SHARE OF $0.27 FOR THE FOURTH QUARTER OF 2024, COMPARED TO $0.16 FOR THE TRAILING QUARTER, AND $0.19 FOR THE FOURTH QUARTER OF 2023.
  • Fourth Quarter 2024 results included a gain of $0.06 per share on the sale and consolidation of a Staten Island branch in December 2024.
• NET INTEREST MARGIN INCREASED BY 10 BASIS POINTS TO 2.18% FOR THE CURRENT QUARTER, AS COMPARED TO 2.08% FOR THE TRAILING QUARTER.
• THE AVERAGE COST OF INTEREST-BEARING LIABILITIES DECREASED 10 BASIS POINTS TO 2.85% FOR THE CURRENT QUARTER AS COMPARED TO 2.95% FOR THE TRAILING QUARTER.
• DEPOSITS (EXCLUDING BROKERED) INCREASED BY $81.6 MILLION, OR 8.6% ANNUALIZED, COMPARED TO SEPTEMBER 30, 2024, AND INCREASED $96.6 MILLION, OR 2.6%, FROM DECEMBER 31, 2023.
• COST OF DEPOSITS (EXCLUDING BROKERED) AT DECEMBER 31, 2024 WAS 1.95% AS COMPARED TO 2.07% AT SEPTEMBER 30, 2024.
• LOANS DECLINED BY $36.9 MILLION, OR 3.6% ON AN ANNUALIZED BASIS, FROM SEPTEMBER 30, 2024, WITH DECREASES IN MULTIFAMILY AND COMMERCIAL AND INDUSTRIAL LOANS, OFFSET BY INCREASES IN COMMERCIAL REAL ESTATE, HOME EQUITY, AND CONSTRUCTION AND LAND LOANS.
• ASSET QUALITY REMAINS STRONG WITH NON-PERFORMING LOANS TO TOTAL LOANS AT 0.51% COMPARED TO 0.75% AT SEPTEMBER 30, 2024.
• THE COMPANY MAINTAINED STRONG LIQUIDITY WITH APPROXIMATELY $683 MILLION IN UNPLEDGED AVAILABLE-FOR-SALE SECURITIES AND LOANS READILY AVAILABLE-FOR-PLEDGE OF APPROXIMATELY $935 MILLION.
• CASH DIVIDEND OF $0.13 PER SHARE, PAYABLE FEBRUARY 19, 2025, TO STOCKHOLDERS OF RECORD AS OF FEBRUARY 5, 2025.

WOODBRIDGE, N.J., Jan. 22, 2025 (GLOBE NEWSWIRE) -- NORTHFIELD BANCORP, INC. (the "Company”) (Nasdaq:NFBK), the holding company for Northfield Bank, reported net income of $11.3 million, or $0.27 per diluted share, for the quarter ended December 31, 2024, as compared to $6.5 million, or $0.16 per diluted share, for the quarter ended September 30, 2024, and $8.2 million, or $0.19 per diluted share, for the quarter ended December 31, 2023. For the year ended December 31, 2024, net income totaled $29.9 million, or $0.72 per diluted share, compared to $37.7 million, or $0.86 per diluted share, for the year ended December 31, 2023. For the quarter ended December 31, 2024, net income reflected a $3.4 million, or $0.06 per share, gain on sale of property. The year ended December 31, 2024 also included additional tax expense of $795,000, or $0.02 per share, related to options that expired in June 2024, and severance expense of $683,000, or $0.01 per share, related to staffing realignments. For the year ended December 31, 2023, net income reflected $440,000, or $0.01 per share of severance expense.

Commenting on the quarter and year, Steven M. Klein, the Company's Chairman, President and Chief Executive Officer stated, "We delivered solid financial performance for the quarter, increasing our net interest income and net interest margin, prudently managing our operating expenses, maintaining strong asset quality, and managing our strong capital levels. While significant economic and market risks remain, recent decreases in short-term market interest rates, and other factors, should provide our marketplace and the Company with growth opportunities in the new year.”

Mr. Klein concluded, "I am pleased to announce that the Board of Directors has declared a cash dividend of $0.13 per share, payable February 19, 2025, to stockholders of record on February 5, 2025.”

Results of Operations

Comparison of Operating Results for the Years Ended December 31, 2024 and 2023

Net income was $29.9 million and $37.7 million for the years ended December 31, 2024 and December 31, 2023, respectively. Significant variances from the prior year are as follows: a $10.2 million decrease in net interest income, a $2.9 million increase in the provision for credit losses on loans, a $4.9 million increase in non-interest income, a $3.1 million increase in non-interest expense, and a $3.5 million decrease in income tax expense.

Net interest income for the year ended December 31, 2024, decreased $10.2 million, or 8.2%, to $114.5 million, from $124.7 million for the year ended December 31, 2023, due to a $39.3 million increase in interest expense, which was partially offset by a $29.1 million increase in interest income. The increase in interest expense was largely driven by the cost of interest-bearing liabilities, which increased by 80 basis points to 2.91% for the year ended December 31, 2024, from 2.11% for the year ended December 31, 2023, driven primarily by a 96 basis point increase in the cost of interest-bearing deposits from 1.61% to 2.57% for the year ended December 31, 2024, and, to a lesser extent, a 27 basis point increase in the cost of borrowings from 3.58% to 3.85% due to rising market interest rates, a shift in the composition of the deposit portfolio towards higher-costing certificates of deposit and a greater reliance on borrowings. The increase in interest expense was also due to a $249.1 million, or 6.2%, increase in the average balance of interest-bearing liabilities, including an increase of $161.2 million in the average balance of interest-bearing deposits and an $87.8 million in the average balance of borrowed funds. The increase in interest income was primarily due to a $151.7 million, or 2.9%, increase in the average balance of interest-earning assets coupled with a 43 basis point increase in yields on interest-earning assets, which increased to 4.36% for the year ended December 31, 2024, from 3.93% for the year ended December 31, 2023, due to the rising rate environment. The increase in the average balance of interest-earning assets was primarily due to increases in the average balance of mortgage-backed securities of $149.3 million, the average balance of interest-earning deposits in financial institutions of $91.4 million, and the average balance of other securities of $55.1 million, partially offset by a decrease in the average balance of loans of $141.7 million.

Net interest margin decreased by 25 basis points to 2.10% for the year ended December 31, 2024 from 2.35% for the year ended December 31, 2023. The decrease in net interest margin was primarily due to interest-bearing liabilities repricing faster than interest-earning assets. The net interest margin was negatively affected by approximately 10 basis points due to a $300 million low risk leverage strategy implemented in the first quarter of 2024. In January 2024, the Company borrowed $300 million from the Federal Reserve Bank through the Bank Term Funding Program ("BTFP”) at favorable terms and conditions and invested the proceeds at higher rates. These borrowings were repaid in full as of December 31, 2024. The Company accreted interest income related to purchased credit-deteriorated ("PCD”) loans of $1.3 million for both years ended December 31, 2024 and December 31, 2023. Net interest income for the year ended December 31, 2024, included loan prepayment income of $863,000 as compared to $1.6 million for the year ended December 31, 2023.

The provision for credit losses on loans increased by $2.9 million to $4.3 million for the year ended December 31, 2024, compared to $1.4 million for the year ended December 31, 2023, primarily due to an increase in the specific reserve component of the allowance for credit losses, which was partially offset by a decrease in the general reserve component of the allowance for credit losses. The increase in the specific reserve was primarily related to an increase in reserves related to commercial and industrial loans. The decline in the general reserve component of the allowance for credit losses resulted from a decline in loan balances and an improvement in the macroeconomic forecast for the current period within our Current Expected Credit Loss ("CECL”) model, partially offset by an increase in reserves related to changes in model assumptions, including the slowing of prepayment speeds, and an increase in reserves in the commercial and industrial portfolio related to an increase in non-performing loans and higher loan balances in that portfolio. Net charge-offs were $6.6 million for the year ended December 31, 2024, as compared to net charge-offs of $6.4 million for the year ended December 31, 2023, and included charge-offs of $5.5 million and $6.2 million on small business unsecured commercial and industrial loans for the years ended December 31, 2024 and 2023, respectively. Management continues to monitor the small business unsecured commercial and industrial loan portfolio, which totaled $28.9 million at December 31, 2024.

Non-interest income increased $4.9 million, or 41.4%, to $16.8 million for the year ended December 31, 2024, from $11.9 million for the year ended December 31, 2023, primarily due to a $3.4 million gain on sale of property, a $951,000 increase in fees and service charges for customer services, related to an increase in overdraft fees and service charges on deposit accounts, and a $585,000 increase in income on bank owned life insurance.

Non-interest expense increased $3.1 million, or 3.7%, to $86.5 million for the year ended December 31, 2024, compared to $83.5 million for the year ended December 31, 2023. The increase was primarily due to a $2.8 million increase in employee compensation and benefits, primarily attributable to higher salary expense related to annual merit increases and higher medical expense. Partially offsetting the increase was a $461,000 decrease in stock compensation expense related to performance stock awards not expected to vest. Employee compensation and benefits expense also included severance expense of $683,000 for the year ended December 31, 2024, as compared to $440,000 for the year ended December 31, 2023. During the second quarter of 2024, due to current economic conditions, the Company implemented a workforce reduction plan which included modest layoffs and staffing realignments. Additionally, non-interest expense included an $837,000 increase in credit loss expense/(benefit) for off-balance sheet exposure due to a provision of $282,000 recorded during the year ended December 31, 2024, as compared to a benefit of $555,000 for the year ended December 31, 2023. The benefit in the prior year period was attributable to a decrease in the pipeline of loans committed and awaiting closing. Partially offsetting the increases was a $602,000 decrease in advertising expense due to a change in marketing strategy and the timing of specific deposit and lending campaigns.

The Company recorded income tax expense of $10.6 million for the year ended December 31, 2024, compared to $14.1 million for the year ended December 31, 2023, with the decrease due to lower taxable income. The effective tax rate for the year ended December 31, 2024, was 26.1%, compared to 27.2% for the year ended December 31, 2023.

Comparison of Operating Results for the Three Months Ended December 31, 2024 and 2023

Net income was $11.3 million and $8.2 million for the quarters ended December 31, 2024, and December 31, 2023, respectively. Significant variances from the comparable prior year quarter are as follows: a $767,000 increase in net interest income, a $1.7 million increase in the provision for credit losses on loans, a $3.4 million increase in non-interest income, a $158,000 decrease in non-interest expense, and a $398,000 decrease in income tax expense.

Net interest income for the quarter ended December 31, 2024, increased $767,000, or 2.7%, to $29.7 million, from $28.9 million for the quarter ended December 31, 2023, due to a $5.3 million increase in interest income partially offset by a $4.5 million increase in interest expense. The increase in interest income was primarily due to an increase in the average balance of interest earning assets of $138.4 million, or 2.6%, coupled with a 29 basis point increase in the yield on interest-earning assets to 4.39% for the quarter ended December 31, 2024, from 4.10% for the quarter ended December 31, 2023, primarily due to higher yields on loans and securities due to the rising rate environment. The increase in the average balance of interest-earning assets was due to increases in the average balance of mortgage-backed securities of $329.9 million and the average balance of interest-earning deposits in financial institutions of $31.1 million, partially offset by decreases in the average balance of loans outstanding of $166.6 million, the average balance of other securities of $53.7 million, and the average balance of Federal Home Loan Bank of New York ("FHLBNY”) stock of $2.4 million. The increase in interest expense was largely driven by the impact of rising market interest rates and a $165.9 million, or 4.12%, increase in the average balance of interest-bearing liabilities, including a $262.7 million increase in the average balance of interest-bearing deposits, partially offset by a decrease of $96.8 million in the average balance of borrowed funds. The cost of interest-bearing liabilities increased by 33 basis points to 2.85% for the quarter ended December 31, 2024, from 2.52% for the quarter ended December 31, 2023, driven primarily by a 10 basis point increase in the cost of borrowed funds from 3.58% to 3.68%, and a 45 basis point increase in the cost of interest-bearing deposits from 2.16% to 2.61%.

Net interest margin increased by one basis point to 2.18% for the quarter ended December 31, 2024 from 2.17% for the quarter ended December 31, 2023. Net interest income for the quarter ended December 31, 2024, included loan prepayment income of $215,000, as compared to $253,000 for the quarter ended December 31, 2023. The Company accreted interest income related to PCD loans of $568,000 for the quarter ended December 31, 2024, as compared to $330,000 for quarter ended December 31, 2023.

The provision for credit losses on loans increased by $1.7 million to $1.9 million for the quarter ended December 31, 2024, from $271,000 for the quarter ended December 31, 2023, primarily due to an increase in the specific reserve component of the allowance for credit losses, which was partially offset by a decrease in the general reserve component of the allowance for credit losses. The increase in the specific reserve was primarily related to an increase in reserves related to commercial and industrial loans. The decline in the general reserve component of the allowance for credit losses resulted from a decline in loan balances and an improvement in the macroeconomic forecast for the current period within our CECL model, partially offset by an increase in reserves related to changes in model assumptions, including the slowing of prepayment speeds, and an increase in reserves in the commercial and industrial portfolio related to an increase in non-performing loans and higher loan balances in that portfolio. Net charge-offs were $2.0 million for the quarter ended December 31, 2024, compared to net charge-offs of $1.2 million for the quarter ended December 31, 2023, and included $1.6 million and $992,000 in charge-offs on small business unsecured commercial and industrial loans, for the quarters ended December 31, 2024 and 2023, respectively.

Non-interest income increased by $3.4 million, or 93.1%, to $7.0 million for the quarter ended December 31, 2024, from $3.6 million for the quarter ended. The increase was primarily due to a $3.4 million gain on sale of property, and, to a lesser extent, increases of $325,000 of income on bank owned life insurance and $419,000 of other income, primarily higher swap fee income. Partially offsetting the increases, was a decrease of $930,000 in gains on trading securities, net. For the quarter ended December 31, 2024, gains on trading securities, net, were $68,000, compared to gains of $998,000 in the comparable prior year quarter. The trading portfolio is utilized to fund the Company's deferred compensation obligation to certain employees and directors of the plan. The participants of this plan, at their election, defer a portion of their compensation. Gains and losses on trading securities have no effect on net income since participants benefit from, and bear the full risk of changes in the trading securities market values. Therefore, the Company records an equal and offsetting amount in compensation expense, reflecting the change in the Company's obligations under the plan.

Non-interest expense decreased by $158,000, or 0.8%, to $20.8 million for the quarter ended December 31, 2024, from $21.0 million for the quarter ended December 31, 2023. The decrease was primarily due to a $425,000 decrease in compensation and employee benefits partially offset by a $110,000 increase in the credit loss (benefit)/expense for off-balance sheet exposures, which was due to a benefit of $55,000 recorded during the quarter ended December 31, 2024, compared to a benefit of $165,000 recorded in the prior year quarter.

The Company recorded income tax expense of $2.7 million for the quarter ended December 31, 2024, compared to $3.1 million for the quarter ended December 31, 2023. The effective tax rate for the quarter ended December 31, 2024, was 19.2% compared to 27.2% for quarter ended December 31, 2023.

Comparison of Operating Results for the Three Months Ended December 31, 2024 and September 30, 2024

Net income was $11.3 million and $6.5 million for the quarters ended December 31, 2024 and September 30, 2024, respectively. Significant variances from the prior quarter are as follows: a $1.5 million increase in net interest income, a $600,000 decrease in provision for credit losses on loans, a $3.4 million increase in non-interest income, a $444,000 increase in non-interest expense, and a $310,000 increase in income tax expense.

Net interest income for the quarter ended December 31, 2024 increased by $1.5 million, or 5.2%, to $29.7 million, from $28.2 million for the quarter ended September 30, 2024, due to a $1.1 million decrease in interest expense on deposits and borrowings and a $404,000 increase in interest income. The decrease in interest expense on deposits and borrowings was primarily due to a decrease in the cost of borrowed funds (as discussed further below), partially offset by a $2.0 million, or 0.1%, increase in the average balance of interest-bearing liabilities, which was due to $234.5 million, or 7.5%, increase in the average balance of interest-bearing deposits, partially offset by a decrease of $232.6 million, or 23.1%, in the average balance of borrowed funds. The increase in interest income was primarily due to a one basis point increase in the yield on interest-earning assets and a $21.6 million, or 0.4%, 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 interest-bearing deposits in financial institutions of $104.3 million and in the average balance of mortgage-backed securities of $49.3 million. The increases were partially offset by decreases in the average balance of other securities of $95.9 million, in the average balance of loans outstanding of $35.2 million, and the average balance of FHLBNY stock of $1.0 million.

Net interest margin increased by 10 basis points to 2.18% from 2.08% for the quarter ended September 30, 2024, primarily due to the decrease in the cost of interest-bearing liabilities. The cost of interest-bearing liabilities decreased by 10 basis points to 2.85% for the quarter ended December 31, 2024, from 2.95% for the quarter ended September 30, 2024, driven primarily by lower cost of borrowed funds which decreased by 25 basis points to 3.68% for the quarter ended December 31, 2024, as compared to 3.93% for the quarter ended September 30, 2024, due to the lower interest rate environment. Net interest income for the quarter ended December 31, 2024, included loan prepayment income of $215,000 as compared to $87,000 for the quarter ended September 30, 2024. The Company accreted interest income related to PCD loans of $568,000 for the quarter ended December 31, 2024, as compared to $327,000 for the quarter ended September 30, 2024.

The provision for credit losses on loans decreased by $600,000 to $1.9 million for the quarter ended December 31, 2024, from $2.5 million for the quarter ended September 30, 2024. The decrease in the provision was primarily due to a decrease in loan balances. Net charge-offs were $2.0 million for the quarter ended December 31, 2024, as compared to net charge-offs of $2.1 million for the quarter ended September 30, 2024.

Non-interest income increased by $3.4 million, or 95.8%, to $7.0 million for the quarter ended December 31, 2024, from $3.6 million for the quarter ended September 30, 2024. The increase was primarily due to a $3.4 million gain on sale of property.

Non-interest expense increased by $444,000, or 2.2%, to $20.8 million for the quarter ended December 31, 2024, from $20.4 million for the quarter ended September 30, 2024. The increase was primarily due to a $337,000 increase in compensation and employee benefits, a $223,000 increase in occupancy expense, a $141,000 increase in data processing costs, and a $140,000 increase in other non-interest expense. Partially offsetting the increases was a $181,000 decrease in professional fees and a $206,000 decrease in credit loss expense for off-balance sheet exposures.

The Company recorded income tax expense of $2.7 million for the quarter ended December 31, 2024, compared to $2.4 million for the quarter ended September 30, 2024. The effective tax rate for the quarter ended December 31, 2024, was 19.2% compared to 26.6% for the quarter ended September 30, 2024.

Financial Condition

Total assets increased by $68.0 million, or 1.2%, to $5.67 billion at December 31, 2024, from $5.60 billion at December 31, 2023. The increase was primarily due to an increase in available-for-sale debt securities of $305.4 million, or 38.4%, partially offset by decreases in loans receivable of $181.4 million, or 4.3%, and cash and cash equivalents of $61.8 million, or 26.9%.

Cash and cash equivalents decreased by $61.8 million, or 26.9%, to $167.7 million at December 31, 2024, from $229.5 million at December 31, 2023. 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. During the fourth quarter the Company paid off its borrowings under the BTFP which included $94.5 million at December 31, 2023.

Loans held for investment, net, decreased by $181.4 million to $4.02 billion at December 31, 2024, from $4.20 billion at December 31, 2023, primarily due to a decrease in multifamily loans and commercial real estate loans, partially offset by an increase in home equity and lines of credit, commercial and industrial, and construction and land loans. The Company continues to focus on the credit needs of its customers, and to a lesser extent, the development of new business notwithstanding the uncertain economic environment. Multifamily loans decreased $153.5 million, or 5.6%, to $2.60 billion at December 31, 2024 from $2.75 billion at December 31, 2023, commercial real estate loans decreased $39.8 million, or 4.3%, to $889.8 million at December 31, 2024 from $929.6 million at December 31, 2023, and one-to-four family residential loans decreased $10.6 million, or 6.6%, to $150.2 million at December 31, 2024 from $160.8 million at December 31, 2023. Partially offsetting these decreases were increases in home equity and lines of credit loans of $10.5 million, or 6.4%, to $174.1 million at December 31, 2024 from $163.5 million at December 31, 2023, commercial and industrial loans of $8.2 million, or 5.3%, to $163.4 million at December 31, 2024 from $155.3 million at December 31, 2023, and construction and land loans of $4.9 million, or 15.9%, to $35.9 million at December 31, 2024 from $31.0 million at December 31, 2023.

As of December 31, 2024, non-owner occupied commercial real estate loans (as defined by regulatory guidance) to total risk-based capital was estimated at approximately 434%. Management believes that Northfield Bank (the "Bank”) has implemented appropriate risk management practices, including risk assessments, board-approved underwriting policies and related procedures, which include 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 State subject to some form of rent regulation limiting increases for rent stabilized multifamily properties. At December 31, 2024, office-related loans represented $184.0 million, or approximately 5% of our total loan portfolio, with an average balance of $1.8 million (although we have originated these types of loans in amounts substantially greater than this average) and a weighted average loan-to-value ratio of 59%. Approximately 42% were owner-occupied. The geographic locations of the properties collateralizing our office-related loans are as follows: 49.9% in New York, 48.6% in New Jersey and 1.5% in Pennsylvania. At December 31, 2024, our largest office-related loan had a principal balance of $90.0 million (with a net active principal balance for the Bank of $30.0 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 December 31, 2024, multifamily loans that have some form of rent stabilization or rent control totaled approximately $437.7 million, or approximately 11% 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 51%. At December 31, 2024, our largest rent-regulated loan had a principal balance of $16.8 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 $9.2 million and $9.9 million at December 31, 2024 and December 31, 2023, 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 $568,000 and $1.3 million attributable to PCD loans for the quarter and year ended December 31, 2024, respectively, as compared to $330,000 and $1.3 million for the quarter and year ended December 31, 2023, respectively. PCD loans had an allowance for credit losses of approximately $2.9 million at December 31, 2024.

Loan balances are summarized as follows (dollars in thousands):

The Company's available-for-sale debt securities portfolio increased by $305.4 million, or 38.4%, to $1.10 billion at December 31, 2024, from $795.5 million at December 31, 2023. The increase was primarily attributable to purchases of securities, partially offset by paydowns, maturities, and calls. At December 31, 2024, $989.0 million 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 $75.3 million in U.S. Government agency securities, $35.8 million in corporate bonds, substantially all of which were considered investment grade, and $685,000 in municipal bonds at December 31, 2024. Gross unrealized losses, net of tax, on available-for-sale debt securities and held-to-maturity securities approximated $21.8 million and $400,000, respectively, at December 31, 2024, and $32.5 million and $279,000, respectively, at December 31, 2023.

Equity securities were $14.3 million at December 31, 2024 and $10.6 million at December 31, 2023. Equity securities are primarily comprised of an investment in a Small Business Administration Loan Fund. This investment is utilized by the Bank as part of its Community Reinvestment Act program. The increase in equity securities was primarily due to an increase in money market mutual funds.

Total liabilities increased $62.7 million, or 1.3%, to $4.96 billion at December 31, 2024 as compared to $4.90 billion at December 31, 2023, as the increase in total deposits of $260.0 million was largely offset by a decrease in FHLB advances, other borrowings and securities sold under agreements to repurchase of $192.6 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 increased $260.0 million, or 6.70%, to $4.14 billion at December 31, 2024, as compared to $3.88 billion at December 31, 2023. Brokered deposits increased by $163.4 million, or 163.4%, which were used as a lower-cost alternative to borrowings. Deposits, excluding brokered deposits, increased $96.6 million, or 2.6%. The increase in deposits, excluding brokered deposits, was attributable to increases of $81.9 million in time deposits and $66.3 million in transaction accounts, partially offset by decreases of $30.0 million in money market accounts and $21.6 million in savings accounts. Estimated gross uninsured deposits at December 31, 2024 were $1.82 billion. This total includes fully collateralized uninsured government deposits and intercompany deposits of $923.8 million, leaving estimated uninsured deposits of approximately $896.5 million, or 21.7%, of total deposits as of December 31, 2024. At December 31, 2023, estimated uninsured deposits totaled $869.9 million, or 22.4% of total deposits.

Deposit account balances are summarized as follows (dollars in thousands):