(10)Retirement Benefits

The Company has a 401(k) plan for its employees, which grants eligible employees (those salaried employees with at least three months of service) the opportunity to invest from 2% to 15% of their base compensation in certain investment alternatives. The Company contributes an amount equal to 25% of employee contributions on the first 6% of base compensation contributed by eligible employees for the first three years of participation. Subsequent years of participation in excess of three years will increase the Company matching contribution from 25% to 50% of an employee’s contributions, on the first 6% of base compensation contributed by eligible employees. A member becomes fully vested in the Company’s contributions upon (a) completion of five years of service, or (b) normal retirement, early retirement, permanent disability, or death. The Company’s contribution to this plan amounted to approximately $266,000, $226,000, and $218,000 for the years ended December 31, 2013, 2012, and 2011, respectively.

The Company also maintains a profit‑sharing plan in which the Company can contribute to the participant’s 401(k) account, at its discretion, up to the legal limit of the Internal Revenue Code. The Company did not contribute to the profit sharing plan during 2013, 2012 and 2011.

The Company maintains the Northfield Bank Employee Stock Ownership Plan (the ESOP). The ESOP is a tax-qualified plan designed to invest primarily in the Company’s common stock. The ESOP provides employees with the opportunity to receive a funded retirement benefit from the Bank, based primarily on the value of the Company’s common stock. The ESOP was authorized to, and did purchase, 2,463,884 shares of the Company’s common stock in the Company’s initial public offering at a price of $7.13 per share. This purchase was funded with a loan from Northfield Bancorp, Inc. to the ESOP. The first payment on the loan from the ESOP to the Company was due and paid on December 31, 2007, and the outstanding balance at December 31, 2013 and 2012, was $13.9 million and $14.5 million, respectively. The shares of the Company’s common stock purchased in the initial public offering are pledged as collateral for the loan. Shares are released for allocation to participants as loan payments are made. A total of 81,631 and 84,887 shares were released and allocated to participants for the ESOP years ended December 31, 2013 and 2012, respectively. ESOP compensation expense for the year ended December 31, 2013, 2012, and 2011 was $972,000, $856,000, and $790,000, respectively. Cash dividends on unallocated shares are utilized to satisfy required debt payments. Dividends on allocated shares are utilized to prepay debt which releases additional shares to participants.

Upon completion of the Company’s second-step conversion, a second ESOP was offered to employees in 2013; authorized to, and did purchase, 1,422,357 shares of the Company’s common stock at a price of $10.00 per share. The purchase was funded with a loan from Northfield Bancorp, Inc. to the second ESOP. The first payment on the loan from the ESOP to the Company was due and paid on December 31, 2013, and the outstanding balance at December 31, 2013 was $13.9 million. The shares of the Company’s common stock purchased in the second-step conversion are pledged as collateral for the loan. Shares are released for allocation to participants as loan payments are made. A total of 47,412 shares were released and allocated to participants for the second ESOP year ended December 31, 2013. The second ESOP compensation expense for the year ended December 31, 2013 was $568,000. Cash dividends on unallocated shares are utilized to satisfy required debt payments. Dividends on allocated shares are utilized to prepay debt which releases additional shares to participants.

The Company maintains a Supplemental Employee Stock Ownership Plan (the SESOP), a non-qualified plan, that provides supplemental benefits to certain executives who are prevented from receiving the full benefits contemplated by the ESOP’s benefit formula due to tax law limits for tax-qualified plans. The supplemental payments for the SESOP consist of cash payments representing the value of Company shares that cannot be allocated to participants under the ESOP due to legal limitations imposed on tax-qualified plans. The Company made a contribution to the SESOP plan of $38,000, $25,000, and $25,000 for the years ended December 31, 2013, 2012, and 2011, respectively.

The Company provides post retirement medical and life insurance to a limited number of retired individuals. The Company also provides retiree life insurance benefits to all qualified employees, up to certain limits. The following tables set forth the funded status and components of postretirement benefit costs at December 31 measurement dates (in thousands):



	2013	2012	2011
Accumulated postretirement benefit obligation beginning of year	$ 1,778	$ 1,697	$ 1,668
Service cost	9	7	6
Interest cost	56	66	80
Actuarial (gain) loss	(455)	115	47
Benefits paid	(94)	(107)	(104)
Accumulated postretirement benefit obligation end of year	1,294	1,778	1,697
Accrued liability (included in accrued expenses and other liabilities)	$ 1,294	$ 1,778	$ 1,697

The following table sets forth the amounts recognized in accumulated other comprehensive income (loss) (in thousands):



	December 31,
	2013	2012
Net (gain) loss	$ (116)	$ 376
Transition obligation	33	50
Prior service cost	74	90
(Gain) Loss recognized in accumulated other comprehensive income	$ (9)	$ 516

The estimated net gain, transition obligation, and prior service cost that will be amortized from accumulated other comprehensive income (loss) into net periodic cost in 2014 are $11,000, $17,000, and $25,000 respectively.

The following table sets forth the components of net periodic postretirement benefit costs for the years ended December 31, 2013, 2012, and 2011 (in thousands):



	December 31,
	2013	2012	2011
Service cost	$ 9	$ 7	$ 6
Interest cost	56	66	80
Amortization of transition obligation	17	17	17
Amortization of prior service costs	16	15	15
Amortization of unrecognized loss	36	28	25
Net postretirement benefit cost included in compensation and employee benefits	$ 134	$ 133	$ 143



	2013	2012	2011
Assumptions used to determine benefit obligation at period end:
Discount rate	4.25%	3.25%	4.00%
Rate of increase in compensation	4.00	4.00	4.00
Assumptions used to determine net periodic benefit cost for the year:
Discount rate	3.25	4.00	5.00
Rate of increase in compensation	4.00	4.00	4.00

At December 31, 2013, a medical cost trend rate of 8.75% decreasing 0.50% per year thereafter until an ultimate rate of 4.75% is reached, was used in the plan’s valuation. The Company’s healthcare cost trend rates are based, among other things, on the Company’s own experience and third-party analysis of recent and projected healthcare cost trends.

A one percentage-point change in assumed heath care cost trends would have the following effects (in thousands):



	One Percentage Point Increase		One Percentage Point Decrease
	2013	2012	2013	2012
Effect on benefits earned and interest cost	$ 5	$ 6	$ (4)	$ (5)
Effect on accumulated postretirement benefit obligation	89	136	(80)	(122)

A one percentage-point change in assumed heath care cost trends would have the following effects (in thousands):



	One Percentage Point Increase			One Percentage Point Decrease
	2013	2012	2011	2013	2012	2011
Aggregate of service and interest
components of net periodic cost (benefit)	$ 5	$ 6	$ 7	$ (4)	$ (5)	$ (5)

Benefit payments of approximately $94,000, $107,000, and $104,000 were made in 2013, 2012, and 2011, respectively. The benefits expected to be paid under the postretirement health benefits plan for the next five years are as follows: $98,000 in 2014; $101,000 in 2015; $103,000 in 2016; $105,000 in 2017 and $105,000 in 2018. The benefit payments expected to be paid in the aggregate for the years 2019 through 2023 are $505,000. The expected benefits are based on the same assumptions used to measure the Company’s benefit obligation at December 31, 2013, and include estimated future employee service.

The Medicare Prescription Drug, Improvement and Modernization Act of 2003, or Medicare Act, introduced both a Medicare prescription-drug benefit and a federal subsidy to sponsors of retiree health-care plans that provide a benefit at least “actuarially equivalent” to the Medicare benefit. The Company has evaluated the estimated potential subsidy available under the Medicare Act and the related costs associated with qualifying for the subsidy. Due to the limited number of participants in the plan, the Company has concluded that it is not cost beneficial to apply for the subsidy. Therefore, the accumulated postretirement benefit obligation information and related net periodic postretirement benefit costs do not reflect the effect of any potential subsidy.

The Company also maintained a defined benefit pension plan (the Plan) covering certain employees and individuals from the Merger, which was terminated in February 2014 and is further described in Note 17, Subsequent Events.

The following tables set forth the Plan’s funded status and components of postretirement benefit costs at December 31 measurement dates (in thousands):


	2013	2012
Accumulated postretirement benefit obligation beginning of year	$ 7,646	$ -
Service cost	-	-
Interest cost	225	38
Actuarial (gain)	(1,261)	-
Benefits paid	(247)	(38)
Acquisition	-	7,646
Accumulated postretirement benefit obligation end of year	6,363	7,646
Plan assets at fair value	6,763	7,030
Net asset (liability)	$ 400	$ (616)

The following table sets forth the amounts recognized in accumulated other comprehensive income (loss) (in thousands):


	December 31,
	2013	2012
Net (gain) recognized in accumulated other comprehensive income	$ (1,143)	$ (109)

The following table sets forth the components of net periodic postretirement benefit costs (in thousands):


	December 31,
	2013	2012
Service cost	$ -	$ -
Interest cost	225	38
Expected return on assets	(207)	$ (35)
Net postretirement benefit cost included in compensation and employee benefits	$ 18	$ 3

The assumed discount rate related to plan obligations reflects the weighted average of published market rates for high-quality corporate bonds with terms similar to those of the plans expected benefit payments, rounded to the nearest quarter percentage point. Additionally, the assumed long-term rate-of-return-on-assets reflects historical returns earned on equities and fixed income securities, adjusted to reflect expectations of future returns as applied to the plan’s target allocation of asset classes. The Company’s discount rate, long-term rate-of-return on plan assets, and amortization period are as follows:


	2013	2012
Assumptions used to determine benefit obligation at period end:
Discount rate	3.75%	3.00%
Assumptions used to determine net periodic benefit cost for the year:
Discount rate	3.00	3.00
Long term rate of return on plan assets	3.00	3.00
Amortization period	8.09	8.09

The fair values of the Plan’s assets by asset category are as follows:


	Fair Value Measurements at Reporting Date Using:
	December 31, 2013	Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
	(in thousands)
Assets measured on a recurring basis:
Common / Collective Trusts - Fixed Income
Market Duration Fixed (h)	$ 1,166	$ -	$ 1,166	$ -
Mutual Funds - Fixed Income
Intermediate Duration (k)	2,354	2,354	-	-
Cash Equivalents - Money market	$ 3,242	$ 3,242	$ -	$ -
Total	$ 6,762	$ 5,596	$ 1,166	$ -


	Fair Value Measurements at Reporting Date Using:
	December 31, 2012	Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
	(in thousands)
Assets measured on a recurring basis:
Mutual Funds - Equity
Large-Cap Value (a)	$ 664	$ 664	$ -	$ -
Small-Cap Core (b)	869	869	$ -	$ -
Large-Cap Growth (c)	490	490	$ -	$ -
International Core (d)	809	809	$ -	$ -
Common / Collective Trusts - Equity
Large-Cap Core (e)	778	-	778	-
Large-Cap Value (f)	389	-	389	-
Large-Cap Growth (g)	517	-	517	-
Common / Collective Trusts - Fixed Income
Market Duration Fixed (h)	2,514	-	2,514	-
Total	$ 7,030	$ 2,832	$ 4,198	$ -

(a)

This category consists of investments whose sector and industry exposures are maintained within a narrow band around Russell 1000 index. The portfolio holds approximately 150 stocks.

(b)

This category contains stocks whose sector weightings are maintained within a narrow band around those of the Russell 2000 index. The portfolio will typically hold more than 150 stocks.

(c)

This category consists of a mutual fund that seeks fast growth large-cap companies with sustainable franchises and positive price momentum. The portfolio holds 60- 90 stocks.

(d)

This category has investments in medium to large non-U.S. companies, including high quality, durable growth companies and companies based in countries with stable economic and political systems.

(e)

This fund tracks the performance of the S&P 500 Index by purchasing the securities represented in the Index in approximately the same weightings as the Index.

(f)

This category contains large-cap stocks with above-average yield. The portfolio typically holds between 60 and 70 stocks.

(g)

This category consists of a portfolio of between 35 and 55 stocks of fast-growing, predictable and cyclical large cap growth companies.

(h)

This category consists of an index fund that tracks the Barclays Capital U.S. Aggregate Bond Index. The fund invests in Treasury, agency, corporate, mortgage-backed and asset-backed securities.

The Company maintains a nonqualified plan to provide for the elective deferral of all or a portion of director fees by members of the participating board of directors, deferral of all or a portion of the compensation and/or annual incentive compensation payable to eligible employees of the Company, and to provide to certain officers of the Company benefits in excess of those permitted to be paid by the Company’s savings plan, ESOP, and profit‑sharing plan under the applicable Internal Revenue Code. The plan obligation was approximately $6.0 million and $4.7 million at December 31, 2013 and 2012, respectively, and is included in accrued expenses and other liabilities on the consolidated balance sheets. Expense under this plan was $963,000, $384,000, and $151,000 for the years ended December 31, 2013, 2012, and 2011, respectively. The Company invests to fund this future obligation, in various mutual funds designated as trading securities. The securities are marked-to-market through current period earnings as a component of non-interest income. Accrued obligations under this plan are credited or charged with the return on the trading securities portfolio as a component of compensation and benefits expense.

The Company entered into a supplemental retirement agreement with its former president and director in 2006. The agreement provides for 120 monthly payments of $17,450. The present value of the obligation, of approximately $1,625,000, was recorded in compensation and benefits expense in 2006. The present value of the obligation as of December 31, 2013 and 2012, was approximately $536,000 and $712,000, respectively.