"We take pride in what we believe is our low risk credit profile that has performed well over our 95-year history. While there have been increased concerns about commercial real estate loans, especially New York City office and rent regulated multifamily exposure, hallmarks of our risk averse credit culture are demonstrated by only $4,000 of net charge-offs, 24 bps of 30-89 day delinquencies to gross loans, and decreased criticized and classified loans of 23% and flat NPAs during 1Q24. The drivers of this excellent credit performance are centered in our conservative underwriting with 89% of the portfolio secured by real estate, average LTV ratios of less than 36%, multifamily and investor commercial real estate weighted average DCRs of 1.8x, and strong sponsor support. Our exposure to New York City office buildings is very low - approximately 0.5% of total loans, all of which are performing. Our multifamily portfolio has only 18 bps of NPLs, 41 bps of 30-89 day delinquencies, and 54 bps of criticized and classified loans. Additionally, over 99% of our real estate loans that repriced in 1Q24 are current. Our conservative lending profile has served us well. We believe the foundation for our long-term success is pillared by our four areas of focus, which include 1) increasing NIM and reducing volatility; 2) maintaining credit discipline; 3) preserving strong liquidity and capital; and 4) bending the expense curve. While there is more work to do, we continue to make progress and are committed to achieving these goals."
- John R. Buran, President and CEO
UNIONDALE, NY / ACCESSWIRE / April 23, 2024 / Growth in Average Deposits; GAAP and Core NIM Compress. The Company reported first quarter 2024 GAAP and Core EPS of $0.12 and $0.14, respectively, compared to $0.13, and $0.06, respectively, a year ago. 1Q24 GAAP and Core NIM were both 2.06%, down 21 bps and 19 bps YoY, and 23 bps and 25 bps QoQ, respectively. Absent episodic items1, the NIM was 2.01% in 1Q24 compared to 2.21% a year ago and 2.14% in the prior quarter. The expected NIM compression was driven by CD repricing, the absence of loan originations that met both our underwriting and pricing criteria, and increased cash from deposit growth. Average total deposits increased 4.0% YoY and 2.9% QoQ,
Credit Quality Improves; Capital Remains Solid. Criticized and classified loans to loans declined to 0.87% in 1Q24, compared to 1.11% in 4Q23, while nonperforming assets to total assets decreased to 53 bps compared to 54 bps in 4Q23. Net charge-offs were only $4,000 in 1Q24. Capital continues to be sound with TCE/TA2 of 7.40% at 1Q24 compared to 7.64% at 4Q23.
Key Financial Metrics3
| 1Q24 | 4Q23 | 3Q23 | 2Q23 | 1Q23 | ||||||||||||
GAAP: | ||||||||||||||||
EPS | $ | 0.12 | $ | 0.27 | $ | 0.26 | $ | 0.29 | $ | 0.13 | ||||||
ROAA (%) | 0.17 | 0.38 | 0.37 | 0.41 | 0.19 | |||||||||||
ROAE (%) | 2.20 | 4.84 | 4.64 | 5.16 | 2.37 | |||||||||||
NIM FTE4 (%) | 2.06 | 2.29 | 2.22 | 2.18 | 2.27 | |||||||||||
Core: | ||||||||||||||||
EPS | $ | 0.14 | $ | 0.25 | $ | 0.25 | $ | 0.26 | $ | 0.06 | ||||||
ROAA (%) | 0.20 | 0.35 | 0.36 | 0.37 | 0.09 | |||||||||||
ROAE (%) | 2.58 | 4.51 | 4.49 | 4.70 | 1.11 | |||||||||||
Core NIM FTE (%) | 2.06 | 2.31 | 2.13 | 2.17 | 2.25 | |||||||||||
Credit Quality: | ||||||||||||||||
NPAs/Loans & OREO (%) | 0.68 | 0.67 | 0.56 | 0.58 | 0.61 | |||||||||||
ACLs/Loans (%) | 0.60 | 0.58 | 0.57 | 0.57 | 0.56 | |||||||||||
ACLs/NPLs (%) | 164.13 | 159.55 | 225.38 | 207.08 | 182.89 | |||||||||||
NCOs/Avg Loans (%) | - | - | - | 0.09 | 0.54 | |||||||||||
Balance Sheet: | ||||||||||||||||
Avg Loans ($B) | $ | 6.8 | $ | 6.9 | $ | 6.8 | $ | 6.8 | $ | 6.9 | ||||||
Avg Dep ($B) | $ | 7.1 | $ | 6.9 | $ | 6.8 | $ | 6.9 | $ | 6.8 | ||||||
Book Value/Share | $ | 23.04 | $ | 23.21 | $ | 23.06 | $ | 23.14 | $ | 22.80 | ||||||
Tangible BV/Share | $ | 22.39 | $ | 22.54 | $ | 22.39 | $ | 22.47 | $ | 22.14 | ||||||
TCE/TA (%) | 7.40 | 7.64 | 7.56 | 7.70 | 7.72 |
Note: In certain circumstances, reclassifications have been made to prior periods to conform to the current presentation.
1 Episodic items include prepayment penalty income, customer swap termination fees, net reversals and recovered interest from nonaccrual loans, net gain/loss from fair value on qualifying hedges, and purchase accounting adjustments 2 Tangible Common Equity ("TCE")/Total Assets ("TA") 3 See "Reconciliation of GAAP Earnings and Core Earnings", "Reconciliation of GAAP Revenue and Pre-Provision Pre-Tax Net Revenue", and "Reconciliation of GAAP Net Interest Margin to Core Net Interest Income and Net Interest Margin." 4 Net Interest Margin ("NIM") Fully Taxable Equivalent ("FTE").
1Q24 Highlights
- Net interest margin FTE decreased 21 bps YoY and 23 bps QoQ to 2.06%; Core net interest margin FTE decreased 19 bps YoY and 25 bps QoQ to 2.06%; absent prepayment penalty income, customer swap termination fees, net reversals and recoveries of interest from nonaccrual loans, net gains and losses from fair value adjustments on qualifying hedges, and purchase accounting accretion the NIM was 2.01% in 1Q24 compared to 2.21% in 1Q23 and 2.14% in 4Q23.
- Average total deposits increased 4.0% YoY and 2.9% QoQ to $7.1 billion; Average noninterest bearing deposits were 11.8% of total average deposits compared to 13.2% in 1Q23 and 12.7% in 4Q23. Average CDs were $2.4 billion, up 43.3% YoY and 2.8% QoQ; During March and April, new CD rates were lowered across most products.
- Period end net loans decreased 1.2% YoY and QoQ to $6.8 billion; Loan closings were $130.0 million down 25.1% YoY and 46.8% QoQ; The yields on closings increased 19 bps YoY, but decreased 49 bps QoQ to 7.20%; Back-to-back swap loan originations were $15.3 million compared to $121.6 million in 4Q23 and generated $0.2 million and $1.5 million of noninterest income, respectively; Loan pipeline decreased 34.6% YoY, but increased 6.7% QoQ to $173.9 million; Approximately 22% of the loan pipeline consists of back-to-back swap loans
- NPAs increased slightly to $46.3 million from $42.2 million a year ago and from $46.2 million in the prior quarter
- 1Q24 noninterest expense includes $1.6 million of seasonal compensation expense that are not expected to repeat in 2Q24
- Provision for credit losses was $0.6 million in 1Q24 compared to $7.5 million in 1Q23 and $1.0 million in 4Q23; Net charge-offs were $4,000 in 1Q24 compared to $9.2 million in 1Q23 and $60,000 in 4Q23
- Tangible Common Equity to Tangible Assets was 7.40% at March 31, 2024, compared to 7.64% at December 31, 2023; Tangible book value was $22.39 compared to $22.14 a year ago
Areas of Focus
Increase NIM and Reduce Volatility |
|
Maintain Credit Discipline |
|
Preserve Strong Liquidity and Capital |
|
Bend the Expense Curve |
|
1 Episodic items include prepayment penalty income, customer swap termination fees, net reversals and recovered interest from nonaccrual loans, net gain/loss from fair value on qualifying hedges, and purchase accounting adjustments, which totaled $1.0 million or 5 bps in 1Q24 compared to $3.0 million or 15 bps in 4Q23
Income Statemen
| YoY | QoQ | |||||||||||||||||||||
($000s, except EPS) | 1Q24 | 4Q23 | 3Q23 | 2Q23 | 1Q23 | Change | Change | |||||||||||||||
Net Interest Income | $ | 42,397 | $ | 46,085 | $ | 44,427 | $ | 43,378 | $ | 45,262 | (6.3 | )% | (8.0 | )% | ||||||||
Provision for Credit Losses | 592 | 998 | 596 | 1,416 | 7,508 | (92.1 | ) | (40.7 | ) | |||||||||||||
Noninterest Income | 3,084 | 7,402 | 3,309 | 5,020 | 6,857 | (55.0 | ) | (58.3 | ) | |||||||||||||
Noninterest Expense | 39,892 | 40,735 | 36,388 | 35,110 | 39,156 | 1.9 | (2.1 | ) | ||||||||||||||
Income Before Income Taxes | 4,997 | 11,754 | 10,752 | 11,872 | 5,455 | (8.4 | ) | (57.5 | ) | |||||||||||||
Provision for Income Taxes | 1,313 | 3,655 | 2,917 | 3,186 | 1,411 | (6.9 | ) | (64.1 | ) | |||||||||||||
Net Income | $ | 3,684 | $ | 8,099 | $ | 7,835 | $ | 8,686 | $ | 4,044 | (8.9 | ) | (54.5 | ) | ||||||||
Diluted EPS | $ | 0.12 | $ | 0.27 | $ | 0.26 | $ | 0.29 | $ | 0.13 | (7.7 | ) | (55.6 | ) | ||||||||
Avg. Diluted Shares (000s) | 29,742 | 29,650 | 29,703 | 30,090 | 30,265 | (1.7 | ) | 0.3 | ||||||||||||||
Core Net Income1 | $ | 4,312 | $ | 7,546 | $ | 7,571 | $ | 7,912 | $ | 1,889 | 128.3 | (42.9 | ) | |||||||||
Core EPS1 | $ | 0.14 | $ | 0.25 | $ | 0.25 | $ | 0.26 | $ | 0.06 | 133.3 | (44.0 | ) | |||||||||
1 See Reconciliation of GAAP Earnings and Core Earnings
Net interest income decreased YoY and QoQ.
- Net Interest Margin FTE of 2.06% decreased 21 bps YoY and 23 bps QoQ
- Prepayment penalty income, customer swap termination fees, net reversals and recoveries of interest from nonaccrual loans, net gains and losses from fair value adjustments on qualifying hedges, and purchase accounting accretion totaled $1.0 million (5 bps to the NIM) compared to $3.0 million (15 bps) in 4Q23, $2.6 million (13 bps to the NIM) in 3Q23, $0.5 million (3 bps) in 2Q23, and $1.1 million (6 bps) in 1Q23
- Excluding the items in the previous bullet, net interest margin was 2.01% in 1Q24, 2.14% in 4Q23, 2.09% in 3Q23, 2.15% in 2Q23, and 2.21% in 1Q23
The provision for credit losses decreased YoY and QoQ.
- Net charge-offs (recoveries) were $4,000 (less than 1 bp of average loans) in 1Q24 compared to $60,000 in 4Q23 (less than 1 bp of average loans), $(42,000) in 3Q23 (less than (1) bp of average loans), $1.6 million in 2Q23 (9 bps of average loans), and $9.2 million in 1Q23 (54 bps of average loans)
- 1Q23 net charge-offs were primarily related to a commercial business relationship that was placed on nonaccrual in 2Q22
Noninterest income decreased YoY and QoQ.
- Back-to-back swap loan closings of $15.3 million in 1Q24 (compared to $121.6 million in 4Q23 and none in 1Q23) and generated $0.2 million of fee income compared to $1.5 million in 4Q23
- Net gains (losses) from fair value adjustments were $(0.8) million in 1Q24 ($(0.02) per share, net of tax), $0.9 million in 4Q23 ($0.02 per share, net of tax), $(1.2) million in 3Q23 ($(0.03) per share, net of tax), $0.3 million in 2Q23 ($0.01 per share, net of tax), and $2.6 million in 1Q23 ($0.06 per share, net of tax)
- Life insurance proceeds were $0.7 million in 4Q23 ($0.02 per share), $23,000 in 3Q23 (less than $0.01 per share), and $0.6 million ($0.02 per share) in 2Q23
- Absent the items in the previous two bullets and other immaterial adjustments, core noninterest income was $3.9 million in 1Q24, down 7.6% YoY and 32.4% QoQ
- 4Q23 other fee income includes net realized gains on the sale of assets and other dividends from nonqualified plans that are expected to normalize in future periods
Noninterest expense increased slightly YoY but declined QoQ.
- Seasonal compensation expense was $1.6 million in 1Q24 compared to $4.1 million in 1Q23
- Excluding the effects of immaterial adjustments, core operating expenses were $39.8 million in 1Q24, up 1.9% YoY, but down 0.8% QoQ
- GAAP noninterest expense to average assets was 1.83% in 1Q24, 1.90% in 4Q23, 1.71% in 3Q23, 1.66% in 2Q23, and 1.85% in 1Q23
Provision for income taxes decreased YoY and QoQ.
- The effective tax rate was 26.3% in 1Q24, 31.1% in 4Q23, 27.1% in 3Q23, 26.8% in 2Q23, and 25.9% in 1Q23
- The 4Q23 effective tax rate increased as a result of preferential tax items having a smaller impact due to higher pre-tax income than estimated in 3Q23 and 2Q23
Balance Sheet, Credit Quality, and Capital Highlights
| YoY | QoQ | |||||||||||||||||||||
| 1Q24 | 4Q23 | 3Q23 | 2Q23 | 1Q23 | Change | Change | ||||||||||||||||
| Averages ($MM) | ||||||||||||||||||||||
Loans | $ | 6,804 | $ | 6,868 | $ | 6,813 | $ | 6,830 | $ | 6,871 | (1.0 | )% | (0.9 | )% | ||||||||
Total Deposits | 7,081 | 6,884 | 6,819 | 6,900 | 6,810 | 4.0 | 2.9 | |||||||||||||||
Credit Quality ($000s) | ||||||||||||||||||||||
Nonperforming Loans | $ | 24,829 | $ | 25,172 | $ | 17,405 | $ | 18,637 | $ | 21,176 | 17.3 | % | (1.4 | )% | ||||||||
Nonperforming Assets | 46,254 | 46,153 | 38,386 | 39,618 | 42,157 | 9.7 | 0.2 | |||||||||||||||
Criticized and Classified Loans | 59,021 | 76,719 | 74,169 | 48,675 | 58,130 | 1.5 | (23.1 | ) | ||||||||||||||
Criticized and Classified Assets | 80,446 | 97,700 | 95,150 | 69,656 | 79,111 | 1.7 | (17.7 | ) | ||||||||||||||
Allowance for Credit Losses/Loans (%) | 0.60 | 0.58 | 0.57 | 0.57 | 0.56 | 4 | bps | 2 | bps | |||||||||||||
Capital | ||||||||||||||||||||||
Book Value/Share | $ | 23.04 | $ | 23.21 | $ | 23.06 | $ | 23.14 | $ | 22.80 | 1.1 | % | (0.7 | )% | ||||||||
Tangible Book Value/Share | 22.39 | 22.54 | 22.39 | 22.47 | 22.14 | 1.1 | (0.7 | ) | ||||||||||||||
Tang. Common Equity/Tang. Assets (%) | 7.40 | 7.64 | 7.56 | 7.70 | 7.72 | (32 | )bps | (24 | )bps | |||||||||||||
Leverage Ratio (%) | 8.32 | 8.47 | 8.51 | 8.54 | 8.56 | (24 | ) | (15 | ) | |||||||||||||
Average loans decreased slightly YoY and QoQ.
- Period end net loans totaled $6.8 billion, down 1.2% YoY and QoQ
- Total loan closings were $130.0 million in 1Q24, $244.3 million in 4Q23, $241.5 million in 3Q23, $158.8 million in 2Q23, and $173.5 million in 1Q23; the loan pipeline was $173.9 million at March 31, 2024, down 34.6% YoY, but up 6.7% QoQ
- The diversified loan portfolio is approximately 89% collateralized by real estate with an average loan-to-value ratio of <36%
- Manhattan office buildings exposure is minimal at 0.5% of net loans with all loans performing
Average total deposits increased YoY and QoQ.
- Average noninterest bearing deposits decreased 6.9% YoY and 4.5% QoQ and comprised 11.8% of average total deposits in 1Q24 compared to 13.2% a year ago
- Average CDs totaled $2.4 billion, up 43.3% YoY and 2.8% QoQ; approximately $450 million of non-swapped CDs are due to mature at a rate of 4.15% in 2Q24
Credit Quality: Nonperforming loans increased YoY but declined QoQ.
- Criticized and classified loans were 87 bps of gross loans at 1Q24 compared to 111 bps at 4Q23, 108 bps at 3Q23, 71 bps at 2Q23, and 84 bps at 1Q23
- Allowance for credit losses were 164.1% of nonperforming loans at 1Q24 compared to 182.9% at 1Q23 and 159.5% at 4Q23
Capital: Book value per common share and tangible book value per common share, a non-GAAP measure, both increased 1.1% YoY to $23.04 and $22.39, respectively.
- The Company paid a dividend of $0.22 per share in 1Q24; 807,964 shares remaining subject to repurchase under the authorized stock repurchase program, which has no expiration or maximum dollar limit
- Tangible common equity to tangible assets was 7.40% at March 31, 2024, compared to 7.72% at March 31, 2023, and 7.64% at December 31, 2023
Conference Call Information
Conference Call Information:
- John R. Buran, President and Chief Executive Officer, and Susan K. Cullen, Senior Executive Vice President and Chief Financial Officer and Treasurer, will host a conference call on Wednesday, April 24, 2024, at 9:30 AM (ET) to discuss the Company's first quarter results and strategy.
- Dial-in for Live Call: 1-877-509-5836; Canada 855-669-9657
- Webcast: https://event.choruscall.com/mediaframe/webcast.html?webcastid=DCkbMHoc
- Dial-in for Replay: 1-877-344-7529; Canada 855-669-9658
- Replay Access Code: 7388314
- The conference call will be simultaneously webcast and archived
About Flushing Financial Corporation
Flushing Financial Corporation (Nasdaq:FFIC) is the holding company for Flushing Bank®, an FDIC insured, New York State-chartered commercial bank that operates banking offices in Queens, Brooklyn, Manhattan, and on Long Island. The Bank has been building relationships with families, business owners, and communities since 1929. Today, it offers the products, services, and conveniences associated with large commercial banks, including a full complement of deposit, loan, equipment finance, and cash management services. Rewarding customers with personalized attention and bankers that can communicate in the languages prevalent within these multicultural markets is what makes the Bank uniquely different. As an Equal Housing Lender and leader in real estate lending, the Bank's experienced lending teams create mortgage solutions for real estate owners and property managers both within and outside the New York City metropolitan area. The Bank also fosters relationships with consumers nationwide through its online banking division with the iGObanking® and BankPurely® brands.
Additional information on Flushing Bank and Flushing Financial Corporation may be obtained by visiting the Company's website at FlushingBank.com. Flushing Financial Corporation's earnings release and presentation slides will be available prior to the conference call at www.FlushingBank.com under Investor Relations.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this Press Release relating to plans, strategies, economic performance and trends, projections of results of specific activities or investments and other statements that are not descriptions of historical facts may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking information is inherently subject to risks and uncertainties, and actual results could differ materially from those currently anticipated due to a number of factors, which include, but are not limited to, risk factors discussed in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2023 and in other documents filed by the Company with the Securities and Exchange Commission from time to time. Forward-looking statements may be identified by terms such as "may", "will", "should", "could", "expects", "plans", "intends", "anticipates", "believes", "estimates", "predicts", "forecasts", "goals", "potential" or "continue" or similar terms or the negative of these terms. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. The Company has no obligation to update these forward-looking statements.
#FF - Statistical Tables Follow -FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
FINANCIAL HIGHLIGHTS
(Unaudited)
| At or for the three months ended | ||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||
(Dollars in thousands, except per share data) | 2024 | 2023 | 2023 | 2023 | 2023 | |||||||||||
Performance Ratios (1) | ||||||||||||||||
Return on average assets | 0.17 | % | 0.38 | % | 0.37 | % | 0.41 | % | 0.19 | % | ||||||
Return on average equity | 2.20 | 4.84 | 4.64 | 5.16 | 2.37 | |||||||||||
Yield on average interest-earning assets (2) | 5.32 | 5.39 | 5.19 | 4.84 | 4.61 | |||||||||||
Cost of average interest-bearing liabilities | 3.83 | 3.68 | 3.52 | 3.15 | 2.80 | |||||||||||
Cost of funds | 3.42 | 3.26 | 3.13 | 2.80 | 2.47 | |||||||||||
Net interest rate spread during period (2) | 1.49 | 1.71 | 1.67 | 1.69 | 1.81 | |||||||||||
Net interest margin (2) | 2.06 | 2.29 | 2.22 | 2.18 | 2.27 | |||||||||||
Noninterest expense to average assets | 1.83 | 1.90 | 1.71 | 1.66 | 1.85 | |||||||||||
Efficiency ratio (3) | 86.07 | 76.69 | 76.76 | 73.82 | 79.52 | |||||||||||
Average interest-earning assets to average interest-bearing liabilities | 1.17 | X | 1.19 | X | 1.18 | X | 1.18 | X | 1.19 | X | ||||||
Average Balances | ||||||||||||||||
Total loans, net | $ | 6,804,117 | $ | 6,867,927 | $ | 6,813,019 | $ | 6,829,648 | $ | 6,871,192 | ||||||
Total interest-earning assets | 8,235,160 | 8,076,991 | 8,023,237 | 7,991,756 | 8,002,376 | |||||||||||
Total assets | 8,707,505 | 8,569,002 | 8,505,346 | 8,462,442 | 8,468,317 | |||||||||||
Total deposits | 7,081,498 | 6,884,037 | 6,819,397 | 6,899,617 | 6,810,485 | |||||||||||
Total interest-bearing liabilities | 7,014,927 | 6,813,909 | 6,771,860 | 6,756,859 | 6,703,558 | |||||||||||
Stockholders' equity | 669,185 | 669,819 | 675,041 | 672,835 | 683,058 | |||||||||||
Per Share Data | ||||||||||||||||
Book value per common share (4) | $ | 23.04 | $ | 23.21 | $ | 23.06 | $ | 23.14 | $ | 22.80 | ||||||
Tangible book value per common share (5) | $ | 22.39 | $ | 22.54 | $ | 22.39 | $ | 22.47 | $ | 22.14 | ||||||
Stockholders' Equity | ||||||||||||||||
Stockholders' equity | $ | 669,827 | $ | 669,837 | $ | 666,521 | $ | 670,247 | $ | 672,345 | ||||||
Tangible stockholders' equity | 650,763 | 650,664 | 647,234 | 650,842 | 652,818 | |||||||||||
Consolidated Regulatory Capital Ratios | ||||||||||||||||
Tier 1 capital | $ | 734,192 | $ | 737,732 | $ | 736,744 | $ | 734,754 | $ | 736,024 | ||||||
Common equity Tier 1 capital | 687,458 | 691,754 | 690,294 | 688,820 | 689,732 | |||||||||||
Total risk-based capital | 965,796 | 967,627 | 965,532 | 962,784 | 964,270 | |||||||||||
Risk Weighted Assets | 6,664,496 | 6,750,301 | 6,804,478 | 6,650,222 | 6,660,145 | |||||||||||
Tier 1 leverage capital (well capitalized = 5%) | 8.32 | % | 8.47 | % | 8.51 | % | 8.54 | % | 8.56 | % | ||||||
Common equity Tier 1 risk-based capital (well capitalized = 6.5%) | 10.32 | 10.25 | 10.14 | 10.36 | 10.36 | |||||||||||
Tier 1 risk-based capital (well capitalized = 8.0%) | 11.02 | 10.93 | 10.83 | 11.05 | 11.05 | |||||||||||
Total risk-based capital (well capitalized = 10.0%) | 14.49 | 14.33 | 14.19 | 14.48 | 14.48 | |||||||||||
Capital Ratios | ||||||||||||||||
Average equity to average assets | 7.69 | % | 7.82 | % | 7.94 | % | 7.95 | % | 8.07 | % | ||||||
Equity to total assets | 7.61 | 7.85 | 7.77 | 7.91 | 7.93 | |||||||||||
Tangible common equity to tangible assets (6) | 7.40 | 7.64 | 7.56 | 7.70 | 7.72 | |||||||||||
Asset Quality | ||||||||||||||||
Nonaccrual loans | $ | 24,829 | $ | 23,709 | $ | 17,405 | $ | 18,637 | $ | 21,176 | ||||||
Nonperforming loans | 24,829 | 25,172 | 17,405 | 18,637 | 21,176 | |||||||||||
Nonperforming assets | 46,254 | 46,153 | 38,386 | 39,618 | 42,157 | |||||||||||
Net charge-offs (recoveries) | 4 | 60 | (42 | ) | 1,560 | 9,234 | ||||||||||
Asset Quality Ratios | ||||||||||||||||
Nonperforming loans to gross loans | 0.36 | % | 0.36 | % | 0.25 | % | 0.27 | % | 0.31 | % | ||||||
Nonperforming assets to total assets | 0.53 | 0.54 | 0.45 | 0.47 | 0.50 | |||||||||||
Allowance for credit losses to gross loans | 0.60 | 0.58 | 0.57 | 0.57 | 0.56 | |||||||||||
Allowance for credit losses to nonperforming assets | 88.10 | 87.02 | 102.19 | 97.41 | 91.87 | |||||||||||
Allowance for credit losses to nonperforming loans | 164.13 | 159.55 | 225.38 | 207.08 | 182.89 | |||||||||||
Net charge-offs (recoveries) to average loans | - | - | - | 0.09 | 0.54 | |||||||||||
Full-service customer facilities | 27 | 27 | 27 | 26 | 26 | |||||||||||
(1) Ratios are presented on an annualized basis, where appropriate.
(2) Yields are calculated on the tax equivalent basis using the statutory federal income tax rate of 21% for the periods presented.
(3) Efficiency ratio, a non-GAAP measure, was calculated by dividing core noninterest expense (excluding OREO expense and the net gain/loss from the sale of OREO) by the total of core net interest income and core noninterest income.
(4) Calculated by dividing stockholders' equity by shares outstanding.
(5) Calculated by dividing tangible stockholders' common equity, a non-GAAP measure, by shares outstanding. Tangible stockholders' common equity is stockholders' equity less intangible assets. See "Calculation of Tangible Stockholders' Common Equity to Tangible Assets".
(6) See "Calculation of Tangible Stockholders' Common Equity to Tangible Assets".
FLUSHING FINANCIAL CORPORATION and SUBSIDIARIE
CONSOLIDATED STATEMENTS OF INCOM
(Unaudited)
| For the three months ended | ||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||
(In thousands, except per share data) | 2024 | 2023 | 2023 | 2023 | 2023 | |||||||||||
Interest and Dividend Income | ||||||||||||||||
Interest and fees on loans | $ | 92,959 | $ | 95,616 | $ | 91,466 | $ | 85,377 | $ | 82,889 | ||||||
Interest and dividends on securities: | ||||||||||||||||
Interest | 12,541 | 10,803 | 10,383 | 9,172 | 7,240 | |||||||||||
Dividends | 33 | 34 | 33 | 30 | 29 | |||||||||||
Other interest income | 3,966 | 2,310 | 2,154 | 1,982 | 1,959 | |||||||||||
Total interest and dividend income | 109,499 | 108,763 | 104,036 | 96,561 | 92,117 | |||||||||||
Interest Expense | ||||||||||||||||
Deposits | 57,865 | 53,284 | 50,066 | 46,249 | 39,056 | |||||||||||
Other interest expense | 9,237 | 9,394 | 9,543 | 6,934 | 7,799 | |||||||||||
Total interest expense | 67,102 | 62,678 | 59,609 | 53,183 | 46,855 | |||||||||||
Net Interest Income | 42,397 | 46,085 | 44,427 | 43,378 | 45,262 | |||||||||||
Provision for credit losses | 592 | 998 | 596 | 1,416 | 7,508 | |||||||||||
Net Interest Income After Provision for Credit Losses | 41,805 | 45,087 | 43,831 | 41,962 | 37,754 | |||||||||||
Noninterest Income | ||||||||||||||||
Banking services fee income | 1,394 | 2,824 | 2,636 | 1,780 | 1,411 | |||||||||||
Net gain on sale of loans | 110 | - | - | 54 | 54 | |||||||||||
Net gain (loss) from fair value adjustments | (834 | ) | 906 | (1,246 | ) | 294 | 2,619 | |||||||||
Federal Home Loan Bank of New York stock dividends | 743 | 658 | 624 | 534 | 697 | |||||||||||
Life insurance proceeds | - | 697 | 23 | 561 | - | |||||||||||
Bank owned life insurance | 1,200 | 1,173 | 1,157 | 1,134 | 1,109 | |||||||||||
Other income | 471 | 1,144 | 115 | 663 | 967 | |||||||||||
Total noninterest income | 3,084 | 7,402 | 3,309 | 5,020 | 6,857 | |||||||||||
Noninterest Expense | ||||||||||||||||
Salaries and employee benefits | 22,113 | 23,359 | 20,346 | 19,690 | 22,562 | |||||||||||
Occupancy and equipment | 3,779 | 3,698 | 3,371 | 3,534 | 3,793 | |||||||||||
Professional services | 2,792 | 2,523 | 2,494 | 2,291 | 2,261 | |||||||||||
FDIC deposit insurance | 1,652 | 1,162 | 912 | 943 | 977 | |||||||||||
Data processing | 1,727 | 1,646 | 1,422 | 1,473 | 1,435 | |||||||||||
Depreciation and amortization | 1,457 | 1,491 | 1,482 | 1,482 | 1,510 | |||||||||||
Other real estate owned/foreclosure expense | 145 | 105 | 185 | 150 | 165 | |||||||||||
Other operating expenses | 6,227 | 6,751 | 6,176 | 5,547 | 6,453 | |||||||||||
Total noninterest expense | 39,892 | 40,735 | 36,388 | 35,110 | 39,156 | |||||||||||
Income Before Provision for Income Taxes | 4,997 | 11,754 | 10,752 | 11,872 | 5,455 | |||||||||||
Provision for income taxes | 1,313 | 3,655 | 2,917 | 3,186 | 1,411 | |||||||||||
Net Income | $ | 3,684 | $ | 8,099 | $ | 7,835 | $ | 8,686 | $ | 4,044 | ||||||
Basic earnings per common share | $ | 0.12 | $ | 0.27 | $ | 0.26 | $ | 0.29 | $ | 0.13 | ||||||
Diluted earnings per common share | $ | 0.12 | $ | 0.27 | $ | 0.26 | $ | 0.29 | $ | 0.13 | ||||||
Dividends per common share | $ | 0.22 | $ | 0.22 | $ | 0.22 | $ | 0.22 | $ | 0.22 | ||||||
Basic average shares | 29,742 | 29,650 | 29,703 | 30,090 | 30,265 | |||||||||||
Diluted average shares | 29,742 | 29,650 | 29,703 | 30,090 | 30,265 | |||||||||||
FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Unaudited)
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||
(Dollars in thousands) | 2024 | 2023 | 2023 | 2023 | 2023 | |||||||||||
ASSETS | ||||||||||||||||
Cash and due from banks | $ | 210,723 | $ | 172,157 | $ | 200,926 | $ | 160,053 | $ | 176,747 | ||||||
Securities held-to-maturity: | ||||||||||||||||
Mortgage-backed securities | 7,850 | 7,855 | 7,860 | 7,865 | 7,870 | |||||||||||
Other securities, net | 64,612 | 65,068 | 65,271 | 65,469 | 65,653 | |||||||||||
Securities available for sale: | ||||||||||||||||
Mortgage-backed securities | 509,527 | 354,344 | 337,879 | 365,911 | 380,110 | |||||||||||
Other securities | 667,156 | 520,409 | 505,784 | 503,645 | 431,818 | |||||||||||
Loans | 6,821,943 | 6,906,950 | 6,896,074 | 6,832,425 | 6,904,176 | |||||||||||
Allowance for credit losses | (40,752 | ) | (40,161 | ) | (39,228 | ) | (38,593 | ) | (38,729 | ) | ||||||
Net loans | 6,781,191 | 6,866,789 | 6,856,846 | 6,793,832 | 6,865,447 | |||||||||||
Interest and dividends receivable | 61,449 | 59,018 | 55,660 | 52,911 | 46,836 | |||||||||||
Bank premises and equipment, net | 20,102 | 21,273 | 21,302 | 22,182 | 21,567 | |||||||||||
Federal Home Loan Bank of New York stock | 24,845 | 31,066 | 43,821 | 36,168 | 38,779 | |||||||||||
Bank owned life insurance | 214,718 | 213,518 | 214,321 | 213,164 | 214,240 | |||||||||||
Goodwill | 17,636 | 17,636 | 17,636 | 17,636 | 17,636 | |||||||||||
Core deposit intangibles | 1,428 | 1,537 | 1,651 | 1,769 | 1,891 | |||||||||||
Right of use asset | 37,631 | 39,557 | 41,404 | 41,526 | 42,268 | |||||||||||
Other assets | 188,457 | 167,009 | 209,014 | 192,721 | 168,872 | |||||||||||
Total assets | $ | 8,807,325 | $ | 8,537,236 | $ | 8,579,375 | $ | 8,474,852 | $ | 8,479,734 | ||||||
LIABILITIES | ||||||||||||||||
Total deposits | $ | 7,253,207 | $ | 6,815,261 | $ | 6,681,509 | $ | 6,723,690 | $ | 6,734,090 | ||||||
Borrowed funds | 671,474 | 841,281 | 1,001,010 | 857,400 | 887,509 | |||||||||||
Operating lease liability | 38,674 | 40,822 | 43,067 | 44,402 | 45,353 | |||||||||||
Other liabilities | 174,143 | 170,035 | 187,268 | 179,113 | 140,437 | |||||||||||
Total liabilities | 8,137,498 | 7,867,399 | 7,912,854 | 7,804,605 | 7,807,389 | |||||||||||
STOCKHOLDERS' EQUITY | ||||||||||||||||
Preferred stock (5,000,000 shares authorized; none issued) | - | - | - | - | - | |||||||||||
Common stock ($0.01 par value; 100,000,000 shares authorized) | 341 | 341 | 341 | 341 | 341 | |||||||||||
Additional paid-in capital | 260,413 | 264,534 | 264,486 | 263,744 | 262,876 | |||||||||||
Treasury stock | (101,641 | ) | (106,070 | ) | (105,433 | ) | (104,574 | ) | (97,760 | ) | ||||||
Retained earnings | 546,530 | 549,683 | 548,058 | 546,755 | 544,672 | |||||||||||
Accumulated other comprehensive loss, net of taxes | (35,816 | ) | (38,651 | ) | (40,931 | ) | (36,019 | ) | (37,784 | ) | ||||||
Total stockholders' equity | 669,827 | 669,837 | 666,521 | 670,247 | 672,345 | |||||||||||
Total liabilities and stockholders' equity | $ | 8,807,325 | $ | 8,537,236 | $ | 8,579,375 | $ | 8,474,852 | $ | 8,479,734 | ||||||
(In thousands) | ||||||||||||||||
Issued shares | 34,088 | 34,088 | 34,088 | 34,088 | 34,088 | |||||||||||
Outstanding shares | 29,069 | 28,866 | 28,905 | 28,961 | 29,488 | |||||||||||
Treasury shares | 5,019 | 5,222 | 5,183 | 5,127 | 4,600 | |||||||||||
FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
AVERAGE BALANCE SHEETS
(Unaudited)
| For the three months ended | ||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||
(In thousands) | 2024 | 2023 | 2023 | 2023 | 2023 | |||||||||||
Interest-earning Assets: | ||||||||||||||||
Mortgage loans, net | $ | 5,353,606 | $ | 5,356,112 | $ | 5,314,215 | $ | 5,308,567 | $ | 5,333,274 | ||||||
Commercial Business loans, net | 1,450,511 | 1,511,815 | 1,498,804 | 1,521,081 | 1,537,918 | |||||||||||
Total loans, net | 6,804,117 | 6,867,927 | 6,813,019 | 6,829,648 | 6,871,192 | |||||||||||
Taxable securities: | ||||||||||||||||
Mortgage-backed securities | 462,934 | 426,612 | 436,181 | 448,620 | 457,911 | |||||||||||
Other securities, net | 590,204 | 527,316 | 528,091 | 471,600 | 411,723 | |||||||||||
Total taxable securities | 1,053,138 | 953,928 | 964,272 | 920,220 | 869,634 | |||||||||||
Tax-exempt securities: | ||||||||||||||||
Other securities | 65,939 | 66,242 | 66,438 | 66,632 | 66,828 | |||||||||||
Total tax-exempt securities | 65,939 | 66,242 | 66,438 | 66,632 | 66,828 | |||||||||||
Interest-earning deposits and federal funds sold | 311,966 | 188,894 | 179,508 | 175,256 | 194,722 | |||||||||||
Total interest-earning assets | 8,235,160 | 8,076,991 | 8,023,237 | 7,991,756 | 8,002,376 | |||||||||||
Other assets | 472,345 | 492,011 | 482,109 | 470,686 | 465,941 | |||||||||||
Total assets | $ | 8,707,505 | $ | 8,569,002 | $ | 8,505,346 | $ | 8,462,442 | $ | 8,468,317 | ||||||
Interest-bearing Liabilities: | ||||||||||||||||
Deposits: | ||||||||||||||||
Savings accounts | $ | 106,212 | $ | 110,316 | $ | 115,437 | $ | 124,041 | $ | 134,945 | ||||||
NOW accounts | 1,935,250 | 1,848,285 | 1,907,781 | 2,026,950 | 1,970,555 | |||||||||||
Money market accounts | 1,725,714 | 1,625,453 | 1,584,308 | 1,754,574 | 2,058,523 | |||||||||||
Certificate of deposit accounts | 2,406,283 | 2,340,115 | 2,290,669 | 2,046,960 | 1,679,517 | |||||||||||
Total due to depositors | 6,173,459 | 5,924,169 | 5,898,195 | 5,952,525 | 5,843,540 | |||||||||||
Mortgagors' escrow accounts | 73,822 | 86,592 | 69,525 | 97,410 | 70,483 | |||||||||||
Total interest-bearing deposits | 6,247,281 | 6,010,761 | 5,967,720 | 6,049,935 | 5,914,023 | |||||||||||
Borrowings | 767,646 | 803,148 | 804,140 | 706,924 | 789,535 | |||||||||||
Total interest-bearing liabilities | 7,014,927 | 6,813,909 | 6,771,860 | 6,756,859 | 6,703,558 | |||||||||||
Noninterest-bearing demand deposits | 834,217 | 873,276 | 851,677 | 849,682 | 896,462 | |||||||||||
Other liabilities | 189,176 | 211,998 | 206,768 | 183,066 | 185,239 | |||||||||||
Total liabilities | 8,038,320 | 7,899,183 | 7,830,305 | 7,789,607 | 7,785,259 | |||||||||||
Equity | 669,185 | 669,819 | 675,041 | 672,835 | 683,058 | |||||||||||
Total liabilities and equity | $ | 8,707,505 | $ | 8,569,002 | $ | 8,505,346 | $ | 8,462,442 | $ | 8,468,317 | ||||||
Net interest-earning assets | $ | 1,220,233 | $ | 1,263,082 | $ | 1,251,377 | $ | 1,234,897 | $ | 1,298,818 | ||||||
FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
NET INTEREST INCOME AND NET INTEREST MARGIN
(Unaudited)
| For the three months ended | ||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||
(Dollars in thousands) | 2024 | 2023 | 2023 | 2023 | 2023 | |||||||||||
Interest Income: | ||||||||||||||||
Mortgage loans, net | $ | 71,572 | $ | 72,505 | $ | 68,931 | $ | 63,688 | $ | 62,054 | ||||||
Commercial Business loans, net | 21,387 | 23,111 | 22,535 | 21,689 | 20,835 | |||||||||||
Total loans, net | 92,959 | 95,616 | 91,466 | 85,377 | 82,889 | |||||||||||
Taxable securities: | ||||||||||||||||
Mortgage-backed securities | 3,696 | 3,217 | 3,031 | 2,976 | 2,281 | |||||||||||
Other securities | 8,504 | 7,239 | 7,003 | 5,847 | 4,611 | |||||||||||
Total taxable securities | 12,200 | 10,456 | 10,034 | 8,823 | 6,892 | |||||||||||
Tax-exempt securities: | ||||||||||||||||
Other securities | 474 | 482 | 484 | 480 | 477 | |||||||||||
Total tax-exempt securities | 474 | 482 | 484 | 480 | 477 | |||||||||||
Interest-earning deposits and federal funds sold | 3,966 | 2,310 | 2,154 | 1,982 | 1,959 | |||||||||||
Total interest-earning assets | 109,599 | 108,864 | 104,138 | 96,662 | 92,217 | |||||||||||
Interest Expense: | ||||||||||||||||
Deposits: | ||||||||||||||||
Savings accounts | $ | 122 | $ | 124 | $ | 130 | $ | 140 | $ | 126 | ||||||
NOW accounts | 18,491 | 17,411 | 16,843 | 16,152 | 13,785 | |||||||||||
Money market accounts | 17,272 | 15,785 | 14,386 | 14,625 | 14,102 | |||||||||||
Certificate of deposit accounts | 21,918 | 19,917 | 18,639 | 15,281 | 11,007 | |||||||||||
Total due to depositors | 57,803 | 53,237 | 49,998 | 46,198 | 39,020 | |||||||||||
Mortgagors' escrow accounts | 62 | 47 | 68 | 51 | 36 | |||||||||||
Total interest-bearing deposits | 57,865 | 53,284 | 50,066 | 46,249 | 39,056 | |||||||||||
Borrowings | 9,237 | 9,394 | 9,543 | 6,934 | 7,799 | |||||||||||
Total interest-bearing liabilities | 67,102 | 62,678 | 59,609 | 53,183 | 46,855 | |||||||||||
Net interest income- tax equivalent | $ | 42,497 | $ | 46,186 | $ | 44,529 | $ | 43,479 | $ | 45,362 | ||||||
Included in net interest income above: | ||||||||||||||||
Prepayment penalty income, net reversals and recovered interest from nonaccrual loans, and customer swap terminations fees | $ | 928 | $ | 3,416 | $ | 857 | $ | 315 | $ | 680 | ||||||
Net gains/(losses) from fair value adjustments on qualifying hedges included in net interest income | (187 | ) | (872 | ) | 1,348 | (205 | ) | 100 | ||||||||
Purchase accounting adjustments | 271 | 461 | 347 | 340 | 306 | |||||||||||
Interest-earning Assets Yields: | ||||||||||||||||
Mortgage loans, net | 5.35 | % | 5.41 | % | 5.19 | % | 4.80 | % | 4.65 | % | ||||||
Commercial Business loans, net | 5.90 | 6.11 | 6.01 | 5.70 | 5.42 | |||||||||||
Total loans, net | 5.46 | 5.57 | 5.37 | 5.00 | 4.83 | |||||||||||
Taxable securities: | ||||||||||||||||
Mortgage-backed securities | 3.19 | 3.02 | 2.78 | 2.65 | 1.99 | |||||||||||
Other securities | 5.76 | 5.49 | 5.30 | 4.96 | 4.48 | |||||||||||
Total taxable securities | 4.63 | 4.38 | 4.16 | 3.84 | 3.17 | |||||||||||
Tax-exempt securities: (1) | ||||||||||||||||
Other securities | 2.88 | 2.91 | 2.91 | 2.88 | 2.86 | |||||||||||
Total tax-exempt securities | 2.88 | 2.91 | 2.91 | 2.88 | 2.86 | |||||||||||
Interest-earning deposits and federal funds sold | 5.09 | 4.89 | 4.80 | 4.52 | 4.02 | |||||||||||
Total interest-earning assets (1) | 5.32 | % | 5.39 | % | 5.19 | % | 4.84 | % | 4.61 | % | ||||||
Interest-bearing Liabilities Yields: | ||||||||||||||||
Deposits: | ||||||||||||||||
Savings accounts | 0.46 | % | 0.45 | % | 0.45 | % | 0.45 | % | 0.37 | % | ||||||
NOW accounts | 3.82 | 3.77 | 3.53 | 3.19 | 2.80 | |||||||||||
Money market accounts | 4.00 | 3.88 | 3.63 | 3.33 | 2.74 | |||||||||||
Certificate of deposit accounts | 3.64 | 3.40 | 3.25 | 2.99 | 2.62 | |||||||||||
Total due to depositors | 3.75 | 3.59 | 3.39 | 3.10 | 2.67 | |||||||||||
Mortgagors' escrow accounts | 0.34 | 0.22 | 0.39 | 0.21 | 0.20 | |||||||||||
Total interest-bearing deposits | 3.70 | 3.55 | 3.36 | 3.06 | 2.64 | |||||||||||
Borrowings | 4.81 | 4.68 | 4.75 | 3.92 | 3.95 | |||||||||||
Total interest-bearing liabilities | 3.83 | % | 3.68 | % | 3.52 | % | 3.15 | % | 2.80 | % | ||||||
Net interest rate spread (tax equivalent) (1) | 1.49 | % | 1.71 | % | 1.67 | % | 1.69 | % | 1.81 | % | ||||||
Net interest margin (tax equivalent) (1) | 2.06 | % | 2.29 | % | 2.22 | % | 2.18 | % | 2.27 | % | ||||||
Ratio of interest-earning assets to interest-bearing liabilities | 1.17 | X | 1.19 | X | 1.18 | X | 1.18 | X | 1.19 | X | ||||||
FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
DEPOSIT and LOAN COMPOSITION
(Unaudited)
Deposit Composition
| 1Q24 vs. | 1Q24 vs. | ||||||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | 4Q23 | 1Q23 | |||||||||||||||||
(Dollars in thousands) | 2024 | 2023 | 2023 | 2023 | 2023 | % Change | % Change | ||||||||||||||||
Noninterest bearing | $ | 815,937 | $ | 847,416 | $ | 874,420 | $ | 827,820 | $ | 872,254 | (3.7 | )% | (6.5 | )% | |||||||||
Interest bearing: | |||||||||||||||||||||||
Certificate of deposit accounts | 2,529,095 | 2,311,290 | 2,321,369 | 2,232,696 | 1,880,260 | 9.4 | 34.5 | ||||||||||||||||
Savings accounts | 105,147 | 108,605 | 112,730 | 118,886 | 128,245 | (3.2 | ) | (18.0 | ) | ||||||||||||||
Money market accounts | 1,717,298 | 1,726,404 | 1,551,176 | 1,594,637 | 1,855,781 | (0.5 | ) | (7.5 | ) | ||||||||||||||
NOW accounts | 2,003,649 | 1,771,164 | 1,749,802 | 1,891,834 | 1,918,977 | 13.1 | 4.4 | ||||||||||||||||
Total interest-bearing deposits | 6,355,189 | 5,917,463 | 5,735,077 | 5,838,053 | 5,783,263 | 7.4 | 9.9 | ||||||||||||||||
Total due to depositors | 7,171,126 | 6,764,879 | 6,609,497 | 6,665,873 | 6,655,517 | 6.0 | 7.7 | ||||||||||||||||
Mortgagors' escrow deposits | 82,081 | 50,382 | 72,012 | 57,817 | 78,573 | 62.9 | 4.5 | ||||||||||||||||
Total deposits | $ | 7,253,207 | $ | 6,815,261 | $ | 6,681,509 | $ | 6,723,690 | $ | 6,734,090 | 6.4 | % | 7.7 | % | |||||||||
Loan Composition
| 1Q24 vs. | 1Q24 vs. | ||||||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | 4Q23 | 1Q23 | |||||||||||||||||
(Dollars in thousands) | 2024 | 2023 | 2023 | 2023 | 2023 | % Change | % Change | ||||||||||||||||
Multifamily residential | $ | 2,622,737 | $ | 2,658,205 | $ | 2,614,219 | $ | 2,593,955 | $ | 2,601,174 | (1.3 | )% | 0.8 | % | |||||||||
Commercial real estate | 1,925,312 | 1,958,252 | 1,953,243 | 1,917,749 | 1,904,293 | (1.7 | ) | 1.1 | |||||||||||||||
One-to-four family - mixed use property | 516,198 | 530,243 | 537,744 | 542,368 | 549,207 | (2.6 | ) | (6.0 | ) | ||||||||||||||
One-to-four family - residential | 267,156 | 220,213 | 222,874 | 230,055 | 238,417 | 21.3 | 12.1 | ||||||||||||||||
Construction | 60,568 | 58,673 | 59,903 | 57,325 | 60,486 | 3.2 | 0.1 | ||||||||||||||||
Mortgage loans | 5,391,971 | 5,425,586 | 5,387,983 | 5,341,452 | 5,353,577 | (0.6 | ) | 0.7 | |||||||||||||||
Small Business Administration | 16,244 | 20,205 | 21,896 | 22,404 | 22,860 | (19.6 | ) | (28.9 | ) | ||||||||||||||
Commercial business and other | 1,411,725 | 1,452,518 | 1,487,775 | 1,466,358 | 1,518,756 | (2.8 | ) | (7.0 | ) | ||||||||||||||
Commercial Business loans | 1,427,969 | 1,472,723 | 1,509,671 | 1,488,762 | 1,541,616 | (3.0 | ) | (7.4 | ) | ||||||||||||||
Gross loans | 6,819,940 | 6,898,309 | 6,897,654 | 6,830,214 | 6,895,193 | (1.1 | ) | (1.1 | ) | ||||||||||||||
Net unamortized (premiums) and unearned loan (cost) fees (1) | 2,003 | 8,641 | (1,580 | ) | 2,211 | 8,983 | (76.8 | ) | (77.7 | ) | |||||||||||||
Allowance for credit losses | (40,752 | ) | (40,161 | ) | (39,228 | ) | (38,593 | ) | (38,729 | ) | 1.5 | 5.2 | |||||||||||
Net loans | $ | 6,781,191 | $ | 6,866,789 | $ | 6,856,846 | $ | 6,793,832 | $ | 6,865,447 | (1.2 | )% | (1.2 | )% | |||||||||
(1) Includes $3.6 million, $3.9 million, $4.4 million, $4.8 million, and $5.1 million of purchase accounting unamortized discount resulting from the acquisition of Empire Bancorp at March 31, 2024, December 31, 2023, September 30, 2023, June 30, 2023, and March 31, 2023, respectively.
FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
LOAN CLOSINGS and RATES
(Unaudited)
Loan Closings
| For the three months ended | ||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||
(In thousands) | 2024 | 2023 | 2023 | 2023 | 2023 | |||||||||||
Multifamily residential | $ | 11,805 | $ | 82,995 | $ | 75,655 | $ | 31,901 | $ | 42,164 | ||||||
Commercial real estate | 10,040 | 60,092 | 70,197 | 38,523 | 15,570 | |||||||||||
One-to-four family - mixed use property | 750 | 3,319 | 6,028 | 5,812 | 4,938 | |||||||||||
One-to-four family - residential | 52,539 | 1,454 | 1,070 | 63 | 4,296 | |||||||||||
Construction | 1,895 | 8,007 | 6,971 | 8,811 | 10,592 | |||||||||||
Mortgage loans | 77,029 | 155,867 | 159,921 | 85,110 | 77,560 | |||||||||||
Small Business Administration | - | 1,162 | - | 820 | 318 | |||||||||||
Commercial business and other | 52,955 | 87,255 | 81,549 | 72,850 | 95,668 | |||||||||||
Commercial Business loans | 52,955 | 88,417 | 81,549 | 73,670 | 95,986 | |||||||||||
Total Closings | $ | 129,984 | $ | 244,284 | $ | 241,470 | $ | 158,780 | $ | 173,546 | ||||||
Weighted Average Rate on Loan Closings
| For the three months ended | ||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||
Loan type | 2024 | 2023 | 2023 | 2023 | 2023 | |||||||||||
Mortgage loans | 6.46 | % | 7.55 | % | 7.22 | % | 6.62 | % | 6.30 | % | ||||||
Commercial Business loans | 8.29 | 7.93 | 8.00 | 7.76 | 7.58 | |||||||||||
Total loans | 7.20 | % | 7.69 | % | 7.48 | % | 7.14 | % | 7.01 | % | ||||||
FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
ASSET QUALITY
(Unaudited)
Allowance for Credit Losses
| For the three months ended | ||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||
(Dollars in thousands) | 2024 | 2023 | 2023 | 2023 | 2023 | |||||||||||
Allowance for credit losses - loans | ||||||||||||||||
Beginning balances | $ | 40,161 | $ | 39,228 | $ | 38,593 | $ | 38,729 | $ | 40,442 | ||||||
Net loan charge-off (recoveries): | ||||||||||||||||
Multifamily residential | - | (1 | ) | - | - | (1 | ) | |||||||||
Commercial real estate | - | - | - | 8 | - | |||||||||||
One-to-four family - mixed-use property | - | (1 | ) | - | - | - | ||||||||||
One-to-four family - residential | 13 | 9 | (6 | ) | 4 | (36 | ) | |||||||||
Small Business Administration | (5 | ) | (29 | ) | (48 | ) | (158 | ) | (6 | ) | ||||||
Commercial business and other | (4 | ) | 82 | 12 | 1,706 | 9,277 | ||||||||||
Total net loan charge-offs (recoveries) | 4 | 60 | (42 | ) | 1,560 | 9,234 | ||||||||||
Provision (benefit) for loan losses | 595 | 993 | 593 | 1,424 | 7,521 | |||||||||||
Ending balance | $ | 40,752 | $ | 40,161 | $ | 39,228 | $ | 38,593 | $ | 38,729 | ||||||
Gross charge-offs | $ | 58 | $ | 107 | $ | 21 | $ | 1,731 | $ | 9,298 | ||||||
Gross recoveries | 54 | 47 | 63 | 171 | 64 | |||||||||||
Allowance for credit losses - loans to gross loans | 0.60 | % | 0.58 | % | 0.57 | % | 0.57 | % | 0.56 | % | ||||||
Net loan charge-offs (recoveries) to average loans | - | - | - | 0.09 | 0.54 | |||||||||||
Nonperforming Assets
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||
(Dollars in thousands) | 2024 | 2023 | 2023 | 2023 | 2023 | |||||||||||
Loans 90 Days or More Past Due and Still Accruing: | ||||||||||||||||
Multifamily residential | $ | - | $ | 1,463 | $ | - | $ | - | $ | - | ||||||
Total Loans 90 Days or more past due and still accruing | - | 1,463 | - | - | - | |||||||||||
Nonaccrual Loans: | ||||||||||||||||
Multifamily residential | 4,669 | 3,206 | 3,206 | 3,206 | 3,628 | |||||||||||
One-to-four family - mixed-use property | 911 | 981 | 1,075 | 790 | 790 | |||||||||||
One-to-four family - residential | 3,768 | 5,181 | 4,161 | 5,218 | 4,961 | |||||||||||
Small Business Administration | 2,552 | 2,552 | 1,255 | 1,119 | 937 | |||||||||||
Commercial business and other | 12,929 | 11,789 | 7,708 | 8,304 | 10,860 | |||||||||||
Total Nonaccrual loans | 24,829 | 23,709 | 17,405 | 18,637 | 21,176 | |||||||||||
Total Nonperforming Loans (NPLs) | 24,829 | 25,172 | 17,405 | 18,637 | 21,176 | |||||||||||
Other Nonperforming Assets: | ||||||||||||||||
Real estate acquired through foreclosure | 665 | - | - | - | - | |||||||||||
Total Other nonperforming assets | 665 | - | - | - | - | |||||||||||
Total Nonaccrual HTM Securities | 20,760 | 20,981 | 20,981 | 20,981 | 20,981 | |||||||||||
Total Nonperforming Assets | $ | 46,254 | $ | 46,153 | $ | 38,386 | $ | 39,618 | $ | 42,157 | ||||||
Nonperforming Assets to Total Assets | 0.53 | % | 0.54 | % | 0.45 | % | 0.47 | % | 0.50 | % | ||||||
Allowance for Credit Losses to NPLs | 164.1 | % | 159.5 | % | 225.4 | % | 207.1 | % | 182.9 | % | ||||||
FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
RECONCILIATION OF GAAP EARNINGS and CORE EARNINGS
Non-cash Fair Value Adjustments to GAAP Earnings
The variance in GAAP and core earnings is partly driven by the impact of non-cash net gains and losses from fair value adjustments. These fair value adjustments relate primarily to borrowings carried at fair value under the fair value option.
Core Net Income, Core Diluted EPS, Core ROAE, Core ROAA, Pre-provision Pre-tax Net Revenue, Core Net Interest Income FTE, Core Net Interest Margin FTE, Core Interest Income and Yield on Total Loans, Core Noninterest Income, Core Noninterest Expense and Tangible Book Value per common share are each non-GAAP measures used in this release. A reconciliation to the most directly comparable GAAP financial measures appears below in tabular form. The Company believes that these measures are useful for both investors and management to understand the effects of certain interest and noninterest items and provide an alternative view of the Company's performance over time and in comparison, to the Company's competitors. These measures should not be viewed as a substitute for net income. The Company believes that tangible book value per common share is useful for both investors and management as this measure is commonly used by financial institutions, regulators, and investors to measure the capital adequacy of financial institutions. The Company believes these measures facilitate comparison of the quality and composition of the Company's capital over time and in comparison, to its competitors. These measures should not be viewed as a substitute for total shareholders' equity.
These non-GAAP measures have inherent limitations, are not required to be uniformly applied and are not audited. They should not be considered in isolation or as a substitute for analysis of results reported under GAAP. These non-GAAP measures may not be comparable to similarly titled measures reported by other companies.
FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
RECONCILIATION OF GAAP EARNINGS and CORE EARNINGS
(Unaudited)
| For the three months ended | ||||||||||||||||
(Dollars in thousands, | March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||
except per share data) | 2024 | 2023 | 2023 | 2023 | 2023 | |||||||||||
GAAP income before income taxes | $ | 4,997 | $ | 11,754 | $ | 10,752 | $ | 11,872 | $ | 5,455 | ||||||
Net (gain) loss from fair value adjustments (Noninterest income (loss)) | 834 | (906 | ) | 1,246 | (294 | ) | (2,619 | ) | ||||||||
Life insurance proceeds (Noninterest income (loss)) | - | (697 | ) | (23 | ) | (561 | ) | - | ||||||||
Net (gain) loss from fair value adjustments on qualifying hedges (Net interest income) | 187 | 872 | (1,348 | ) | 205 | (100 | ) | |||||||||
Net amortization of purchase accounting adjustments and intangibles (Various) | (169 | ) | (355 | ) | (237 | ) | (227 | ) | (188 | ) | ||||||
Miscellaneous expense (Professional services) | - | 526 | - | - | - | |||||||||||
Core income before taxes | 5,849 | 11,194 | 10,390 | 10,995 | 2,548 | |||||||||||
Provision for core income taxes | 1,537 | 3,648 | 2,819 | 3,083 | 659 | |||||||||||
Core net income | $ | 4,312 | $ | 7,546 | $ | 7,571 | $ | 7,912 | $ | 1,889 | ||||||
GAAP diluted earnings per common share | $ | 0.12 | $ | 0.27 | $ | 0.26 | $ | 0.29 | $ | 0.13 | ||||||
Net (gain) loss from fair value adjustments, net of tax | 0.02 | (0.02 | ) | 0.03 | (0.01 | ) | (0.06 | ) | ||||||||
Life insurance proceeds | - | (0.02 | ) | - | (0.02 | ) | - | |||||||||
Net (gain) loss from fair value adjustments on qualifying hedges, net of tax | - | 0.02 | (0.03 | ) | - | - | ||||||||||
Net amortization of purchase accounting adjustments, net of tax | - | (0.01 | ) | (0.01 | ) | (0.01 | ) | (0.01 | ) | |||||||
Miscellaneous expense, net of tax | - | 0.01 | - | - | - | |||||||||||
Core diluted earnings per common share(1) | $ | 0.14 | $ | 0.25 | $ | 0.25 | $ | 0.26 | $ | 0.06 | ||||||
Core net income, as calculated above | $ | 4,312 | $ | 7,546 | $ | 7,571 | $ | 7,912 | $ | 1,889 | ||||||
Average assets | 8,707,505 | 8,569,002 | 8,505,346 | 8,462,442 | 8,468,317 | |||||||||||
Average equity | 669,185 | 669,819 | 675,041 | 672,835 | 683,058 | |||||||||||
Core return on average assets(2) | 0.20 | % | 0.35 | % | 0.36 | % | 0.37 | % | 0.09 | % | ||||||
Core return on average equity(2) | 2.58 | % | 4.51 | % | 4.49 | % | 4.70 | % | 1.11 | % | ||||||
(1) Core diluted earnings per common share may not foot due to rounding.
(2) Ratios are calculated on an annualized basis.
FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
RECONCILIATION OF GAAP REVENUE and PRE-PROVISION
PRE-TAX NET REVENUE
(Unaudited)
| For the three months ended | ||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||
(Dollars in thousands) | 2024 | 2023 | 2023 | 2023 | 2023 | |||||||||||
GAAP Net interest income | $ | 42,397 | $ | 46,085 | $ | 44,427 | $ | 43,378 | $ | 45,262 | ||||||
Net (gain) loss from fair value adjustments on qualifying hedges | 187 | 872 | (1,348 | ) | 205 | (100 | ) | |||||||||
Net amortization of purchase accounting adjustments | (271 | ) | (461 | ) | (347 | ) | (340 | ) | (306 | ) | ||||||
Core Net interest income | $ | 42,313 | $ | 46,496 | $ | 42,732 | $ | 43,243 | $ | 44,856 | ||||||
GAAP Noninterest income | $ | 3,084 | $ | 7,402 | $ | 3,309 | $ | 5,020 | $ | 6,857 | ||||||
Net (gain) loss from fair value adjustments | 834 | (906 | ) | 1,246 | (294 | ) | (2,619 | ) | ||||||||
Life insurance proceeds | - | (697 | ) | (23 | ) | (561 | ) | - | ||||||||
Core Noninterest income | $ | 3,918 | $ | 5,799 | $ | 4,532 | $ | 4,165 | $ | 4,238 | ||||||
GAAP Noninterest expense | $ | 39,892 | $ | 40,735 | $ | 36,388 | $ | 35,110 | $ | 39,156 | ||||||
Net amortization of purchase accounting adjustments | (102 | ) | (106 | ) | (110 | ) | (113 | ) | (118 | ) | ||||||
Miscellaneous expense | - | (526 | ) | - | - | - | ||||||||||
Core Noninterest expense | $ | 39,790 | $ | 40,103 | $ | 36,278 | $ | 34,997 | $ | 39,038 | ||||||
Net interest income | $ | 42,397 | $ | 46,085 | $ | 44,427 | $ | 43,378 | $ | 45,262 | ||||||
Noninterest income | 3,084 | 7,402 | 3,309 | 5,020 | 6,857 | |||||||||||
Noninterest expense | (39,892 | ) | (40,735 | ) | (36,388 | ) | (35,110 | ) | (39,156 | ) | ||||||
Pre-provision pre-tax net revenue | $ | 5,589 | $ | 12,752 | $ | 11,348 | $ | 13,288 | $ | 12,963 | ||||||
Core: | ||||||||||||||||
Net interest income | $ | 42,313 | $ | 46,496 | $ | 42,732 | $ | 43,243 | $ | 44,856 | ||||||
Noninterest income | 3,918 | 5,799 | 4,532 | 4,165 | 4,238 | |||||||||||
Noninterest expense | (39,790 | ) | (40,103 | ) | (36,278 | ) | (34,997 | ) | (39,038 | ) | ||||||
Pre-provision pre-tax net revenue | $ | 6,441 | $ | 12,192 | $ | 10,986 | $ | 12,411 | $ | 10,056 | ||||||
Efficiency Ratio | 86.1 | % | 76.7 | % | 76.8 | % | 73.8 | % | 79.5 | % | ||||||
FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
RECONCILIATION OF GAAP NET INTEREST INCOME and NET INTEREST MARGIN
to CORE NET INTEREST INCOME
(Unaudited)
| For the three months ended | ||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||
(Dollars in thousands) | 2024 | 2023 | 2023 | 2023 | 2023 | |||||||||||
GAAP net interest income | $ | 42,397 | $ | 46,085 | $ | 44,427 | $ | 43,378 | $ | 45,262 | ||||||
Net (gain) loss from fair value adjustments on qualifying hedges | 187 | 872 | (1,348 | ) | 205 | (100 | ) | |||||||||
Net amortization of purchase accounting adjustments | (271 | ) | (461 | ) | (347 | ) | (340 | ) | (306 | ) | ||||||
Tax equivalent adjustment | 100 | 101 | 102 | 101 | 100 | |||||||||||
Core net interest income FTE | $ | 42,413 | $ | 46,597 | $ | 42,834 | $ | 43,344 | $ | 44,956 | ||||||
Prepayment penalties received on loans and securities, net of reversals and recoveries of interest from nonaccrual loans | (928 | ) | (3,416 | ) | (857 | ) | (315 | ) | (680 | ) | ||||||
Net interest income FTE excluding episodic items | $ | 41,485 | $ | 43,181 | $ | 41,977 | $ | 43,029 | $ | 44,276 | ||||||
Total average interest-earning assets (1) | $ | 8,238,395 | $ | 8,080,550 | $ | 8,027,201 | $ | 7,996,067 | $ | 8,006,970 | ||||||
Core net interest margin FTE | 2.06 | % | 2.31 | % | 2.13 | % | 2.17 | % | 2.25 | % | ||||||
Net interest margin FTE excluding episodic items | 2.01 | % | 2.14 | % | 2.09 | % | 2.15 | % | 2.21 | % | ||||||
GAAP interest income on total loans, net | $ | 92,959 | $ | 95,616 | $ | 91,466 | $ | 85,377 | $ | 82,889 | ||||||
Net (gain) loss from fair value adjustments on qualifying hedges - loans | 123 | 978 | (1,379 | ) | 157 | (101 | ) | |||||||||
Net amortization of purchase accounting adjustments | (295 | ) | (484 | ) | (358 | ) | (345 | ) | (316 | ) | ||||||
Core interest income on total loans, net | $ | 92,787 | $ | 96,110 | $ | 89,729 | $ | 85,189 | $ | 82,472 | ||||||
Average total loans, net (1) | $ | 6,807,944 | $ | 6,872,115 | $ | 6,817,642 | $ | 6,834,644 | $ | 6,876,495 | ||||||
Core yield on total loans | 5.45 | % | 5.59 | % | 5.26 | % | 4.99 | % | 4.80 | % | ||||||
(1) Excludes purchase accounting average balances for all periods presented.
FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
CALCULATION OF TANGIBLE STOCKHOLDERS'
COMMON EQUITY to TANGIBLE ASSETS
(Unaudited)
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||
(Dollars in thousands) | 2024 | 2023 | 2023 | 2023 | 2023 | |||||||||||
Total Equity | $ | 669,827 | $ | 669,837 | $ | 666,521 | $ | 670,247 | $ | 672,345 | ||||||
Less: | ||||||||||||||||
Goodwill | (17,636 | ) | (17,636 | ) | (17,636 | ) | (17,636 | ) | (17,636 | ) | ||||||
Core deposit intangibles | (1,428 | ) | (1,537 | ) | (1,651 | ) | (1,769 | ) | (1,891 | ) | ||||||
Tangible Stockholders' Common Equity | $ | 650,763 | $ | 650,664 | $ | 647,234 | $ | 650,842 | $ | 652,818 | ||||||
Total Assets | $ | 8,807,325 | $ | 8,537,236 | $ | 8,579,375 | $ | 8,474,852 | $ | 8,479,734 | ||||||
Less: | ||||||||||||||||
Goodwill | (17,636 | ) | (17,636 | ) | (17,636 | ) | (17,636 | ) | (17,636 | ) | ||||||
Core deposit intangibles | (1,428 | ) | (1,537 | ) | (1,651 | ) | (1,769 | ) | (1,891 | ) | ||||||
Tangible Assets | $ | 8,788,261 | $ | 8,518,063 | $ | 8,560,088 | $ | 8,455,447 | $ | 8,460,207 | ||||||
Tangible Stockholders' Common Equity to Tangible Assets | 7.40 | % | 7.64 | % | 7.56 | % | 7.70 | % | 7.72 | % | ||||||
SOURCE: Flushing Financial Corporation