SECOND QUARTER 20171
- GAAP diluted EPS was $0.44, up 4.8% QoQ but down 58.1% YoY, largely due to net gain on sale of buildings in 2Q16
- Record core diluted EPS was $0.46, up 17.9% YoY and 15.0% QoQ
- Record net interest income of $43.6 million, an improvement of 4.1% YoY and 0.5% QoQ
- Net interest margin was 2.95%, unchanged QoQ
- GAAP and core ROAE improved to 9.6% and 10.2%, compared with 9.5% and 9.1% in 1Q17
- GAAP and core ROAA was 0.8% and 0.9%, compared with 0.8% for both in 1Q17
UNIONDALE, N.Y., July 25, 2017 (GLOBE NEWSWIRE) -- Flushing Financial Corporation (the “Company”) (Nasdaq:FFIC), the parent holding company for Flushing Bank (the “Bank”), today announced its financial results for the three and six months ended June 30, 2017.
John R. Buran, President and Chief Executive Officer, stated, “We are pleased to report record core earnings for the second quarter of 2017 driven by record net interest income and our continued discipline regarding non-interest expense. Credit quality continued to improve, as our non-performing assets have decreased by over 29% since the end of 2016 and net charge-offs remain minimal. We saw tangible results from our strategy change announced in mid-2016 to focus origination efforts on higher yielding loans. The yield on recent quarter loan production increased 19 basis points over the prior quarter and 33 basis points from the comparable quarter of 2016. For the first time since 2010, quarterly new loan yields exceed that quarter’s average yield on total interest-earning assets. Our total loan portfolio, including loans held for sale, grew 2% during the recent quarter and 5% for the first six months of 2017 while meeting our strong underwriting standards.”
“We continue to implement our strategy of enhancing operational scalability and efficiency by converting our branch network to the more cost effective Universal Banker model. We expect to convert half of our 19 branches by the end of 2017. Although total deposits increased 8% year-over-year, deposits declined 3% quarter-over-quarter primarily caused by seasonal government deposit outflows, which we anticipate returning in the fourth quarter.”
“As a result of recent rate increases by the Federal Reserve, we have started to experience some rate pressure on liabilities. During the recent quarter, our cost of funds increased 4 basis points due to a combination of an increase in the rates we pay on some of our deposit products to stay competitive within our market and the funding mix, as seasonal government deposit outflows were replaced by slightly more expensive borrowed funds.”
The Company retains its focus on preserving strong risk management practices, including conservative underwriting standards and improving yields to achieve improved risk-adjusted returns.
- In the second quarter, multi-family, commercial real estate, and commercial business loan originations and purchases represented 24%, 47%, and 19%, respectively, of all originations while maintaining conservative loan-to-values, debt coverage ratios, and increasing yield.
- The average interest rate obtained for second quarter originations and purchases improved to 4.04% compared to 3.85% for 1Q17 and 3.71% for 2Q16.
- The average rate of mortgage loan applications in the pipeline totaled 4.17% at June 30, 2017, as compared to 4.20% at December 31, 2016 and 3.94% at June 30, 2016.
- Multi-family (excluding underlying co-operative mortgages), commercial real estate, and one-to-four family mixed-use property mortgage loans originated during the second quarter of 2017 had an increased yield of 4.19% compared to 4.01% for the previous quarter and 3.81% for the same quarter in 2016. While the yields have been increasing, we have kept our asset quality as these loans had a low average loan-to-value ratio of 46.2% and an average debt coverage ratio of 198%.
Mr. Buran concluded, “Overall, we remain well capitalized and positioned to deliver profitable growth and long-term value to our shareholders as we continue to execute on our strategic objectives.”
_____________________
1 See the table entitled “Reconciliation of Non-GAAP Financial Measures.”
Summary of Strategic Objectives
- Increase core deposits and continue to improve funding mix
- Increase net interest income by leveraging loan pricing opportunities and portfolio mix
- Enhance core earnings power by improving scalability and efficiency
- Manage credit risk
- Maintain well capitalized levels under all stress test scenarios
Earnings Summary:
Quarter ended June 30, 2017 (2Q17) compared to the quarters ended June 30, 2016 (2Q16) and March 31, 2017 (1Q17).
June 30, 2017 compared to March 31, 2017 (“QoQ”); June 30, 2017 compared to June 30, 2016 (“YoY”).
Net Interest Income
Net interest income for 2Q17 was $43.6 million, an increase of 4.1% YoY and 0.5% QoQ.
- Net interest margin of 2.95%, decreased 4bps YoY but remains unchanged QoQ
- Net interest spread of 2.83%, decreased 5bps YoY and 1bp QoQ
- Net interest income includes prepayment penalty income from loans of $1.0 million in 2Q17 compared with $1.4 million in 2Q16 and $1.1 million in 1Q17, and recovered interest from nonaccrual loans of $0.3 million in 2Q17 compared with $0.2 million in 2Q16 and $0.5 million in 1Q17
- Net interest income includes $0.4 million in accelerated accretion of discount upon the call of CLO securities totaling $27.5 million
- Excluding prepayment penalty income, accelerated accretion of discount and recovered interest from nonaccrual loans, the yield on interest-earning assets would have improved to 3.82% in 2Q17, compared with 3.81% in 2Q16 and 3.80% in 1Q17, and the net interest margin would have decreased to 2.83% in 2Q17, compared with 2.87% in 2Q16 and 2.85% in 1Q17
- Average balance of total interest-earning assets of $5,919.0 million, increased $306.0 million, or 5.5% YoY and increased $45.2 million, or 0.8% QoQ
- Yield on interest-earning assets of 3.94%, increased 1bp YoY and 4bps QoQ
- Cost of interest-bearing liabilities of 1.11%, increased 6bps YoY and 5bps QoQ
- Cost of funds of 1.05%, increased 6bps YoY and 4bps QoQ, driven by an increase in rates paid on our core deposits and short-term borrowings
Non-interest Income
Non-interest income for 2Q17 was $1.9 million, a decrease of $35.8 million YoY and $1.7 million QoQ.
- Non-interest income included net losses from fair value adjustments of $1.2 million in 2Q17, $1.1 million in 2Q16 and $0.4 million in 1Q17
- 2Q16 included a gain of $33.8 million recorded from the sale of one of our properties in Flushing, Queens and a gain on the sale of securities of $2.4 million and 1Q17 included a gain from life insurance proceeds of $1.2 million
- Absent the above items non-interest income was $3.1 million, an increase of $0.5 million YoY and $0.2 million QoQ
Non-interest Expense
Non-interest expense for 2Q17 was $26.1 million, a decrease of $2.4 million, or 8.4%, YoY and $3.5 million, or 11.8% QoQ.
- 2Q16 included a non-recurring penalty of $2.1 million on the prepayment of $38.0 million in repurchase agreements and a write-down of $0.8 million on one OREO property. Absent these two items, non-interest expense increased $0.5 million, or 1.9% YoY, driven by increased salaries and benefits from annual salary increases and additions in staffing, partially offset by reductions in FDIC insurance expense, due to lower assessment rates, and decreased foreclosure expense due to continued improvement in asset quality
- Lower costs associated with FDIC insurance and foreclosure expense should be sustainable
- 1Q17 included the impact of annual grants of employee and director restricted stock unit awards totaling $3.3 million. Absent this item in 1Q17, non-interest expense decreased $0.2 million or 0.8%, primarily driven by decreased foreclosure expense
- The efficiency ratio improved to 55.8% from 57.1% in 2Q16 and 64.0% in 1Q17
Provision for Income Taxes
The provision for income taxes in 2Q17 was $6.8 million, a decrease of $13.9 million YoY but an increase of $1.5 million QoQ.
- Pre-tax income decreased by $31.7 million, or 61.9% YoY but increased $2.0 million, or 11.3% QoQ
- The effective tax rates were 34.7% in 2Q17, 40.5% in 2Q16 and 30.0% in 1Q17
- The improvement in the Company’s effective tax rate compared to 2Q16 was primarily due to a change in the accounting treatment of deductible stock compensation expense from prior years; in prior years, the tax impact of deductible stock compensation expense flowed through additional paid-in-capital and did not have an impact on the Company’s effective tax rate
- The increase in the Company’s effective tax rate compared to 1Q17 was primarily due to the requirement that stock compensation be treated, for tax purposes, as a discrete tax item in the period the shares vest; our stock awards generally vest in the first quarter, therefore reducing 1Q17 effective tax rate
- We anticipate the effective tax rate to approximate the 2Q17 rate for the remainder of the year
Financial Condition Summary:
Loans:
- Net loans held for investment were $5,023.5 million reflecting an increase of 1.4% QoQ (not annualized) and 4.4% year-to-date as we continue to focus on the origination of multi-family, commercial real estate and commercial business loans with a full relationship
- Loan originations and purchases of multi-family, commercial real estate and commercial business loans totaled $236.3 million for 2Q17, or 90.5% of loan production
- Loan pipeline was $279.1 million at June 30, 2017, compared to $303.1 million at March 31, 2017 and $329.8 million at June 30, 2016
- The loan-to-value ratio on our portfolio of real estate dependent loans as of June 30, 2017 totaled 39.8%
The following table shows the average rate received from loan originations and purchases for the periods indicated:
For the three months ended | |||||||||
June 30, | March 31, | June 30, | |||||||
Loan type | 2017 | 2017 | 2016 | ||||||
Mortgage loans | 4.01 | % | 3.78 | % | 3.53 | % | |||
Non-mortgage loans | 4.13 | % | 4.02 | % | 4.29 | % | |||
Total loans | 4.04 | % | 3.85 | % | 3.71 | % | |||
Credit Quality:
- Non-performing loans totaled $15.5 million, a decrease of $6.0 million, or 27.8%, from $21.4 million at December 31, 2016
- Classified assets totaled $44.7 million, an increase of $0.7 million, or 1.7%, from $44.0 million at December 31, 2016, primarily due to an increase in substandard taxi medallion loans, partially offset by reductions in non-performing assets
- Loans classified as troubled debt restructured (TDR) totaled $21.4 million, an increase of $3.9 million, or 22.6%, from $17.4 million at December 31, 2016, attributable to the addition of five taxi medallion TDRs
- We anticipate continued low loss content in the portfolio, as our strong underwriting standards coupled with our practice of obtaining updated appraisals and recording charge-offs early in the delinquency process has resulted in a 38.5% average loan-to-value for non-performing loans collateralized by real estate at June 30, 2017
- No provision for loan losses was recorded in the six months ended June 30, 2017 or all of 2016 due to continued strong credit quality, with net charge-offs totaling $0.1 million for the six months ended June 30, 2017 and net recoveries of $0.7 million for all of 2016
Capital Management:
- The Company and Bank are subject to the same regulatory requirements and at June 30, 2017, both were well capitalized under all applicable regulatory requirements
- During six months ended June 30, 2017, stockholders’ equity increased $20.2 million, or 3.9%, to $534.1 million due to net income of $25.0 million and $1.8 million of other comprehensive income, partially offset by the declaration and payment of dividends on the Company’s common stock
- During the six months ended June 30, 2017, the Company repurchased 10,000 treasury shares at an average cost of $27.80 per share; as of June 30, 2017, up to 485,905 shares may be repurchased under the current authorized stock repurchase program, which has no expiration or maximum dollar limit
- Book value per common share increased to $18.54 at June 30, 2017, from $17.95 at December 31, 2016 and $17.77 at June 30, 2016
- Tangible book value per common share, a non-GAAP measure, increased to $18.00 at June 30, 2017, from $17.40 at December 31, 2016 and $17.22 at June 30, 2016
Inaugural Conference Call Information:
- John R. Buran, President and Chief Executive Officer, and Susan K. Cullen, Senior Executive Vice President and Chief Financial Officer, will host a conference call on Wednesday, July 26, 2017 at 9:30 AM (ET) to discuss the Company’s strategy and results for the second quarter of 2017
- Dial-in for Live Call: 1-888-317-6016
- Webcast: https://services.choruscall.com/links/ffic170726.html
- Dial-in for Replay: 1-877-344-7529
- The conference call will be simultaneously webcast and archived through 5:00 PM (ET) on September 30, 2017
About Flushing Financial Corporation
Flushing Financial Corporation is the holding company for Flushing Bank, a New York State-chartered commercial bank insured by the Federal Deposit Insurance Corporation. The Bank serves consumers, businesses, and public entities by offering a full complement of deposit, loan, and cash management services through its 19 banking offices located in Queens, Brooklyn, Manhattan, and Nassau County. As a leader in real estate lending, the Bank’s experienced lending team creates mortgage solutions for real estate owners and property managers both within and outside the New York City metropolitan area. The Bank also operates an online banking division, iGObanking.com®, which offers competitively priced deposit products to consumers nationwide.
Additional information on Flushing Financial Corporation may be obtained by visiting the Company’s website at http://www.flushingbank.com.
“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, 2016 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”, “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.
- Statistical Tables Follow -
FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Dollars in thousands, except per share data) (Unaudited) | |||||||||||||||||||||
For the three months ended | For the six months ended | ||||||||||||||||||||
June 30, | March 31, | June 30, | June 30, | ||||||||||||||||||
2017 | 2017 | 2016 | 2017 | 2016 | |||||||||||||||||
Interest and Dividend Income | |||||||||||||||||||||
Interest and fees on loans | $ | 51,631 | $ | 50,885 | $ | 48,413 | $ | 102,516 | $ | 95,971 | |||||||||||
Interest and dividends on securities: | |||||||||||||||||||||
Interest | 6,432 | 6,095 | 6,510 | 12,527 | 13,102 | ||||||||||||||||
Dividends | 123 | 121 | 120 | 244 | 239 | ||||||||||||||||
Other interest income | 129 | 153 | 48 | 282 | 142 | ||||||||||||||||
Total interest and dividend income | 58,315 | 57,254 | 55,091 | 115,569 | 109,454 | ||||||||||||||||
Interest Expense | |||||||||||||||||||||
Deposits | 9,510 | 8,980 | 8,097 | 18,490 | 16,070 | ||||||||||||||||
Other interest expense | 5,188 | 4,885 | 5,105 | 10,073 | 10,362 | ||||||||||||||||
Total interest expense | 14,698 | 13,865 | 13,202 | 28,563 | 26,432 | ||||||||||||||||
Net Interest Income | 43,617 | 43,389 | 41,889 | 87,006 | 83,022 | ||||||||||||||||
Provision for loan losses | - | - | - | - | - | ||||||||||||||||
Net Interest Income After Provision for Loan Losses | 43,617 | 43,389 | 41,889 | 87,006 | 83,022 | ||||||||||||||||
Non-interest Income | |||||||||||||||||||||
Banking services fee income | 1,014 | 874 | 973 | 1,888 | 1,949 | ||||||||||||||||
Net gain on sale of securities | - | - | 2,363 | - | 2,363 | ||||||||||||||||
Net gain on sale of loans | 34 | 210 | 3 | 244 | 344 | ||||||||||||||||
Net gain on sale of buildings | - | - | 33,814 | - | 33,814 | ||||||||||||||||
Net loss from fair value adjustments | (1,159 | ) | (378 | ) | (1,115 | ) | (1,537 | ) | (2,102 | ) | |||||||||||
Federal Home Loan Bank of New York stock dividends | 643 | 823 | 582 | 1,466 | 1,205 | ||||||||||||||||
Gains from life insurance proceeds | 6 | 1,161 | - | 1,167 | 411 | ||||||||||||||||
Bank owned life insurance | 807 | 795 | 694 | 1,602 | 1,389 | ||||||||||||||||
Other income | 603 | 204 | 403 | 807 | 884 | ||||||||||||||||
Total non-interest income | 1,948 | 3,689 | 37,717 | 5,637 | 40,257 | ||||||||||||||||
Non-interest Expense | |||||||||||||||||||||
Salaries and employee benefits | 15,424 | 17,104 | 13,968 | 32,528 | 30,229 | ||||||||||||||||
Occupancy and equipment | 2,654 | 2,496 | 2,352 | 5,150 | 4,722 | ||||||||||||||||
Professional services | 1,919 | 1,996 | 2,027 | 3,915 | 4,177 | ||||||||||||||||
FDIC deposit insurance | 503 | 326 | 940 | 829 | 1,844 | ||||||||||||||||
Data processing | 1,321 | 1,203 | 1,199 | 2,524 | 2,290 | ||||||||||||||||
Depreciation and amortization | 1,155 | 1,165 | 1,062 | 2,320 | 2,094 | ||||||||||||||||
Other real estate owned/foreclosure (income) expense | (96 | ) | 351 | 405 | 255 | 558 | |||||||||||||||
Prepayment penalty on borrowings | - | - | 2,082 | - | 2,082 | ||||||||||||||||
Other operating expenses | 3,185 | 4,923 | 4,419 | 8,108 | 8,955 | ||||||||||||||||
Total non-interest expense | 26,065 | 29,564 | 28,454 | 55,629 | 56,951 | ||||||||||||||||
Income Before Income Taxes | 19,500 | 17,514 | 51,152 | 37,014 | 66,328 | ||||||||||||||||
Provision for Income Taxes | |||||||||||||||||||||
Federal | 5,576 | 4,749 | 15,203 | 10,325 | 19,950 | ||||||||||||||||
State and local | 1,199 | 505 | 5,514 | 1,704 | 6,382 | ||||||||||||||||
Total taxes | 6,775 | 5,254 | 20,717 | 12,029 | 26,332 | ||||||||||||||||
Net Income | $ | 12,725 | $ | 12,260 | $ | 30,435 | $ | 24,985 | $ | 39,996 | |||||||||||
Basic earnings per common share | $ | 0.44 | $ | 0.42 | $ | 1.05 | $ | 0.86 | $ | 1.38 | |||||||||||
Diluted earnings per common share | $ | 0.44 | $ | 0.42 | $ | 1.05 | $ | 0.86 | $ | 1.38 | |||||||||||
Dividends per common share | $ | 0.18 | $ | 0.18 | $ | 0.17 | $ | 0.36 | $ | 0.34 | |||||||||||
FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Dollars in thousands, except per share data) (Unaudited) | ||||||||||||||
June 30, | March 31, | December 31, | ||||||||||||
2017 | 2017 | 2016 | ||||||||||||
ASSETS | ||||||||||||||
Cash and due from banks | $ | 48,539 | $ | 51,215 | $ | 35,857 | ||||||||
Securities held-to-maturity: | ||||||||||||||
Mortgage-backed securities | 7,983 | - | - | |||||||||||
Other securities | 24,451 | 36,406 | 37,735 | |||||||||||
Securities available for sale: | ||||||||||||||
Mortgage-backed securities | 520,012 | 537,905 | 516,476 | |||||||||||
Other securities | 317,693 | 346,238 | 344,905 | |||||||||||
Loans held for sale | 30,565 | - | - | |||||||||||
Loans: | ||||||||||||||
Multi-family residential | 2,243,643 | 2,261,946 | 2,178,504 | |||||||||||
Commercial real estate | 1,349,634 | 1,268,770 | 1,246,132 | |||||||||||
One-to-four family ― mixed-use property | 556,906 | 561,355 | 558,502 | |||||||||||
One-to-four family ― residential | 181,213 | 184,201 | 185,767 | |||||||||||
Co-operative apartments | 7,069 | 7,216 | 7,418 | |||||||||||
Construction | 16,842 | 12,413 | 11,495 | |||||||||||
Small Business Administration | 10,591 | 10,519 | 15,198 | |||||||||||
Taxi medallion | 18,303 | 18,832 | 18,996 | |||||||||||
Commercial business and other | 644,262 | 632,503 | 597,122 | |||||||||||
Net unamortized premiums and unearned loan fees | 17,217 | 16,836 | 16,559 | |||||||||||
Allowance for loan losses | (22,157 | ) | (22,211 | ) | (22,229 | ) | ||||||||
Net loans | 5,023,523 | 4,952,380 | 4,813,464 | |||||||||||
Interest and dividends receivable | 21,439 | 20,602 | 20,228 | |||||||||||
Bank premises and equipment, net | 26,592 | 26,026 | 26,561 | |||||||||||
Federal Home Loan Bank of New York stock | 66,630 | 57,384 | 59,173 | |||||||||||
Bank owned life insurance | 130,631 | 129,824 | 132,508 | |||||||||||
Goodwill | 16,127 | 16,127 | 16,127 | |||||||||||
Other assets | 51,051 | 57,378 | 55,453 | |||||||||||
Total assets | $ | 6,285,236 | $ | 6,231,485 | $ | 6,058,487 | ||||||||
LIABILITIES | ||||||||||||||
Due to depositors: | ||||||||||||||
Non-interest bearing | $ | 349,302 | $ | 344,028 | $ | 333,163 | ||||||||
Interest-bearing: | ||||||||||||||
Certificate of deposit accounts | 1,332,377 | 1,411,819 | 1,372,115 | |||||||||||
Savings accounts | 325,815 | 254,822 | 254,283 | |||||||||||
Money market accounts | 837,565 | 851,129 | 843,370 | |||||||||||
NOW accounts | 1,368,441 | 1,487,120 | 1,362,484 | |||||||||||
Total interest-bearing deposits | 3,864,198 | 4,004,890 | 3,832,252 | |||||||||||
Mortgagors' escrow deposits | 41,303 | 61,828 | 40,216 | |||||||||||
Borrowed funds | 1,425,779 | 1,227,852 | 1,266,563 | |||||||||||
Other liabilities | 70,563 | 67,485 | 72,440 | |||||||||||
Total liabilities | 5,751,145 | 5,706,083 | 5,544,634 | |||||||||||
STOCKHOLDERS' EQUITY | ||||||||||||||
Preferred stock (5,000,000 shares authorized; none issued) | - | - | - | |||||||||||
Common stock ($0.01 par value; 100,000,000 shares authorized; 31,530,595 shares | ||||||||||||||
issued at June 30, 2017, March 31, 2017 and December 31, 2016; 28,803,937 | ||||||||||||||
shares, 28,811,160 shares and 28,632,904 shares outstanding at June 30, 2017, | ||||||||||||||
March 31, 2017 and December 31, 2016, respectively) | 315 | 315 | 315 | |||||||||||
Additional paid-in capital | 216,447 | 215,501 | 214,462 | |||||||||||
Treasury stock (2,726,658 shares, 2,719,435 shares and 2,897,691 shares at | ||||||||||||||
June 30, 2017, March 31, 2017 and December 31, 2016, respectively) | (51,483 | ) | (51,224 | ) | (53,754 | ) | ||||||||
Retained earnings | 375,388 | 367,944 | 361,192 | |||||||||||
Accumulated other comprehensive loss, net of taxes | (6,576 | ) | (7,134 | ) | (8,362 | ) | ||||||||
Total stockholders' equity | 534,091 | 525,402 | 513,853 | |||||||||||
Total liabilities and stockholders' equity | $ | 6,285,236 | $ | 6,231,485 | $ | 6,058,487 | ||||||||
FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES SELECTED CONSOLIDATED FINANCIAL DATA (Dollars in thousands, except per share data) (Unaudited) | ||||||||||||||||
At or for the three months ended | At or for the six months ended | |||||||||||||||
June 30, | March 31, | June 30, | June 30, | |||||||||||||
2017 | 2017 | 2016 | 2017 | 2016 | ||||||||||||
Per Share Data | ||||||||||||||||
Basic earnings per share | $ | 0.44 | $ | 0.42 | $ | 1.05 | $ | 0.86 | $ | 1.38 | ||||||
Diluted earnings per share | $ | 0.44 | $ | 0.42 | $ | 1.05 | $ | 0.86 | $ | 1.38 | ||||||
Average number of shares outstanding for: | ||||||||||||||||
Basic earnings per common share computation | 29,135,339 | 29,019,070 | 29,022,122 | 29,077,526 | 29,059,393 | |||||||||||
Diluted earnings per common share computation | 29,135,945 | 29,022,745 | 29,034,454 | 29,080,182 | 29,072,813 | |||||||||||
Shares outstanding | 28,803,937 | 28,811,160 | 28,631,243 | 28,803,937 | 28,631,243 | |||||||||||
Book value per common share (1) | $ | 18.54 | $ | 18.24 | $ | 17.77 | $ | 18.54 | $ | 17.77 | ||||||
Tangible book value per common share (2) | $ | 18.00 | $ | 17.69 | $ | 17.22 | $ | 18.00 | $ | 17.22 | ||||||
Stockholders' Equity | ||||||||||||||||
Stockholders' equity | 534,091 | 525,402 | 508,883 | 534,091 | 508,883 | |||||||||||
Tangible stockholders' equity | 518,355 | 509,666 | 493,163 | 518,355 | 493,163 | |||||||||||
Average Balances | ||||||||||||||||
Total loans, net | $ | 4,962,734 | $ | 4,868,048 | $ | 4,567,019 | $ | 4,915,652 | $ | 4,478,175 | ||||||
Total interest-earning assets | 5,918,981 | 5,873,799 | 5,612,935 | 5,896,514 | 5,551,825 | |||||||||||
Total assets | 6,218,072 | 6,168,848 | 5,897,858 | 6,193,596 | 5,836,304 | |||||||||||
Total due to depositors | 4,065,810 | 4,088,031 | 3,779,256 | 4,076,859 | 3,762,762 | |||||||||||
Total interest-bearing liabilities | 5,287,720 | 5,254,640 | 5,046,162 | 5,271,271 | 5,002,863 | |||||||||||
Stockholders' equity | 529,451 | 517,800 | 486,261 | 523,658 | 482,843 | |||||||||||
Performance Ratios (3) | ||||||||||||||||
Return on average assets | 0.82 | % | 0.79 | % | 2.06 | % | 0.81 | % | 1.37 | % | ||||||
Return on average equity | 9.61 | 9.47 | 25.04 | 9.54 | 16.57 | |||||||||||
Yield on average interest-earning assets | 3.94 | 3.90 | 3.93 | 3.92 | 3.94 | |||||||||||
Cost of average interest-bearing liabilities | 1.11 | 1.06 | 1.05 | 1.08 | 1.06 | |||||||||||
Interest rate spread during period | 2.83 | 2.84 | 2.88 | 2.84 | 2.88 | |||||||||||
Net interest margin | 2.95 | 2.95 | 2.99 | 2.95 | 2.99 | |||||||||||
Non-interest expense to average assets | 1.68 | 1.92 | 1.93 | 1.80 | 1.95 | |||||||||||
Efficiency ratio (4) | 55.80 | 63.98 | 57.09 | 59.87 | 60.78 | |||||||||||
Average interest-earning assets to average | ||||||||||||||||
interest-bearing liabilities | 1.12 | X | 1.12 | X | 1.11 | X | 1.12 | X | 1.11 | X |
(1) | Calculated by dividing stockholders’ equity by shares outstanding. |
(2) | Calculated by dividing tangible stockholders’ common equity, a non-GAAP measure by shares outstanding. Tangible stockholders’ common equity is stockholders’ equity less intangible assets (goodwill, net of deferred taxes). See “Calculation of Tangible Stockholders’ Common Equity to Tangible Assets”. |
(3) | Ratios are presented on an annualized basis, where appropriate. |
(4) | Efficiency ratio, a non-GAAP measure, was calculated by dividing non-interest expense (excluding OREO expense, prepayment penalties from the extinguishment of debt and the net gain/loss from the sale of OREO) by the total of net interest income and non-interest income (excluding net gains and losses from fair value adjustments, net gain and losses from the sale of securities, life insurance proceeds, and sale of buildings). |
FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES SELECTED CONSOLIDATED FINANCIAL DATA (Dollars in thousands) (Unaudited) | ||||||||||||||
At or for the six | At or for the year | At or for the six | ||||||||||||
months ended | ended | months ended | ||||||||||||
June 30, 2017 | December 31, 2016 | June 30, 2016 | ||||||||||||
Selected Financial Ratios and Other Data | ||||||||||||||
Regulatory capital ratios (for Flushing Financial Corporation): | ||||||||||||||
Tier 1 capital | $ | 558,756 | $ | 539,228 | $ | 516,551 | ||||||||
Common equity Tier 1 capital | 524,830 | 506,432 | 490,015 | |||||||||||
Total risk-based capital | 655,913 | 636,457 | 538,749 | |||||||||||
Tier 1 leverage capital (well capitalized = 5%) | 9.00 | % | 9.00 | % | 8.80 | % | ||||||||
Common equity Tier 1 risk-based capital (well capitalized = 6.5%) | 11.43 | 11.79 | 11.45 | |||||||||||
Tier 1 risk-based capital (well capitalized = 8.0%) | 12.17 | 12.56 | 12.07 | |||||||||||
Total risk-based capital (well capitalized = 10.0%) | 14.29 | 14.82 | 12.59 | |||||||||||
Regulatory capital ratios (for Flushing Bank only): | ||||||||||||||
Tier 1 capital | $ | 624,074 | $ | 607,033 | $ | 522,961 | ||||||||
Common equity Tier 1 capital | 624,074 | 607,033 | 522,961 | |||||||||||
Total risk-based capital | 646,231 | 629,262 | 545,159 | |||||||||||
Tier 1 leverage capital (well capitalized = 5%) | 10.04 | % | 10.12 | % | 8.89 | % | ||||||||
Common equity Tier 1 risk-based capital (well capitalized = 6.5%) | 13.58 | 14.12 | 12.20 | |||||||||||
Tier 1 risk-based capital (well capitalized = 8.0%) | 13.58 | 14.12 | 12.20 | |||||||||||
Total risk-based capital (well capitalized = 10.0%) | 14.07 | 14.64 | 12.72 | |||||||||||
Capital ratios: | ||||||||||||||
Average equity to average assets | 8.45 | % | 8.40 | % | 8.27 | % | ||||||||
Equity to total assets | 8.50 | 8.48 | 8.50 | |||||||||||
Tangible common equity to tangible assets (1) | 8.27 | 8.24 | 8.26 | |||||||||||
Asset quality: | ||||||||||||||
Non-accrual loans (2) | $ | 14,130 | $ | 21,030 | $ | 20,381 | ||||||||
Non-performing loans | 15,459 | 21,416 | 21,923 | |||||||||||
Non-performing assets | 15,459 | 21,949 | 25,591 | |||||||||||
Net charge-offs/ (recoveries) | 72 | (694 | ) | (663 | ) | |||||||||
Asset quality ratios: | ||||||||||||||
Non-performing loans to gross loans | 0.31 | % | 0.44 | % | 0.47 | % | ||||||||
Non-performing assets to total assets | 0.25 | 0.36 | 0.43 | |||||||||||
Allowance for loan losses to gross loans | 0.44 | 0.46 | 0.47 | |||||||||||
Allowance for loan losses to non-performing assets | 143.33 | 101.28 | 86.74 | |||||||||||
Allowance for loan losses to non-performing loans | 143.33 | 103.80 | 101.25 | |||||||||||
Full-service customer facilities | 19 | 19 | 19 |
(1) | See “Calculation of Tangible Stockholders’ Common Equity to Tangible Assets”. |
(2) | Excludes performing non-accrual TDR loans. |
FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES NET INTEREST MARGIN (Dollars in thousands) (Unaudited) | ||||||||||||||||||
For the three months ended | ||||||||||||||||||
June 30, 2017 | March 31, 2017 | June 30, 2016 | ||||||||||||||||
Average | Yield/ | Average | Yield/ | Average | Yield/ | |||||||||||||
Balance | Interest | Cost | Balance | Interest | Cost | Balance | Interest | Cost | ||||||||||
Interest-earning Assets: | ||||||||||||||||||
Mortgage loans, net | $ | 4,297,697 | $ | 44,879 | 4.18 | % | $ | 4,213,482 | $ | 44,429 | 4.22 | % | $ | 3,983,615 | $ | 42,969 | 4.31 | % |
Other loans, net | 665,037 | 6,752 | 4.06 | 654,566 | 6,456 | 3.95 | 583,404 | 5,444 | 3.73 | |||||||||
Total loans, net (1) | 4,962,734 | 51,631 | 4.16 | 4,868,048 | 50,885 | 4.18 | 4,567,019 | 48,413 | 4.24 | |||||||||
Taxable securities: | ||||||||||||||||||
Mortgage-backed | ||||||||||||||||||
securities | 532,938 | 3,420 | 2.57 | 529,942 | 3,367 | 2.54 | 599,247 | 3,707 | 2.47 | |||||||||
Other securities | 217,599 | 2,361 | 4.34 | 239,345 | 2,072 | 3.46 | 249,956 | 2,133 | 3.41 | |||||||||
Total taxable securities | 750,537 | 5,781 | 3.08 | 769,287 | 5,439 | 2.83 | 849,203 | 5,840 | 2.75 | |||||||||
Tax-exempt securities: (2) | ||||||||||||||||||
Other securities | 145,812 | 774 | 2.12 | 146,502 | 777 | 2.12 | 147,230 | 790 | 2.15 | |||||||||
Total tax-exempt securities | 145,812 | 774 | 2.12 | 146,502 | 777 | 2.12 | 147,230 | 790 | 2.15 | |||||||||
Interest-earning deposits | ||||||||||||||||||
and federal funds sold | 59,898 | 129 | 0.86 | 89,962 | 153 | 0.68 | 49,483 | 48 | 0.39 | |||||||||
Total interest-earning | ||||||||||||||||||
assets | 5,918,981 | 58,315 | 3.94 | 5,873,799 | 57,254 | 3.90 | 5,612,935 | 55,091 | 3.93 | |||||||||
Other assets | 299,091 | 295,049 | 284,923 | |||||||||||||||
Total assets | $ | 6,218,072 | $ | 6,168,848 | $ | 5,897,858 | ||||||||||||
Interest-bearing Liabilities: | ||||||||||||||||||
Deposits: | ||||||||||||||||||
Savings accounts | $ | 279,723 | 399 | 0.57 | $ | 254,255 | $ | 307 | 0.48 | $ | 265,856 | 306 | 0.46 | |||||
NOW accounts | 1,517,726 | 2,331 | 0.61 | 1,568,267 | 2,207 | 0.56 | 1,612,704 | 1,962 | 0.49 | |||||||||
Money market accounts | 858,066 | 1,651 | 0.77 | 860,779 | 1,499 | 0.70 | 483,317 | 681 | 0.56 | |||||||||
Certificate of deposit | ||||||||||||||||||
accounts | 1,410,295 | 5,099 | 1.45 | 1,404,730 | 4,940 | 1.41 | 1,417,379 | 5,121 | 1.45 | |||||||||
Total due to depositors | 4,065,810 | 9,480 | 0.93 | 4,088,031 | 8,953 | 0.88 | 3,779,256 | 8,070 | 0.85 | |||||||||
Mortgagors' escrow | ||||||||||||||||||
accounts | 73,838 | 30 | 0.16 | 54,616 | 27 | 0.20 | 67,728 | 27 | 0.16 | |||||||||
Total interest-bearing | ||||||||||||||||||
deposits | 4,139,648 | 9,510 | 0.92 | 4,142,647 | 8,980 | 0.87 | 3,846,984 | 8,097 | 0.84 | |||||||||
Borrowings | 1,148,072 | 5,188 | 1.81 | 1,111,993 | 4,885 | 1.76 | 1,199,178 | 5,105 | 1.70 | |||||||||
Total interest-bearing | ||||||||||||||||||
liabilities | 5,287,720 | 14,698 | 1.11 | 5,254,640 | 13,865 | 1.06 | 5,046,162 | 13,202 | 1.05 | |||||||||
Non interest-bearing | ||||||||||||||||||
demand deposits | 336,036 | 330,215 | 296,597 | |||||||||||||||
Other liabilities | 64,865 | 66,193 | 68,838 | |||||||||||||||
Total liabilities | 5,688,621 | 5,651,048 | 5,411,597 | |||||||||||||||
Equity | 529,451 | 517,800 | 486,261 | |||||||||||||||
Total liabilities and | ||||||||||||||||||
equity | $ | 6,218,072 | $ | 6,168,848 | $ | 5,897,858 | ||||||||||||
Net interest income / | ||||||||||||||||||
net interest rate spread | $ | 43,617 | 2.83 | % | $ | 43,389 | 2.84 | % | $ | 41,889 | 2.88 | % | ||||||
Net interest-earning assets / | ||||||||||||||||||
net interest margin | $ | 631,261 | 2.95 | % | $ | 619,159 | 2.95 | % | $ | 566,773 | 2.99 | % | ||||||
Ratio of interest-earning | ||||||||||||||||||
assets to interest-bearing | ||||||||||||||||||
liabilities | 1.12 | X | 1.12 | X | 1.11 | X |
(1) | Loan interest income includes loan fee income (which includes net amortization of deferred fees and costs, late charges, and prepayment penalties) of approximately $0.3 million, $0.6 million and $1.0 million for the three months ended June 30, 2017, March 31, 2017 and June 30, 2016, respectively. |
(2) | Interest income on tax-exempt securities does not include the tax benefit of the tax-exempt securities. |
FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES NET INTEREST MARGIN (Dollars in thousands) (Unaudited) | |||||||||||||
For the six months ended | |||||||||||||
June 30, 2017 | June 30, 2016 | ||||||||||||
Average | Yield/ | Average | Yield/ | ||||||||||
Balance | Interest | Cost | Balance | Interest | Cost | ||||||||
Interest-earning Assets: | |||||||||||||
Mortgage loans, net | $ | 4,255,822 | $ | 89,308 | 4.20 | % | $ | 3,911,470 | $ | 85,423 | 4.37 | % | |
Other loans, net | 659,830 | 13,208 | 4.00 | 566,705 | 10,548 | 3.72 | |||||||
Total loans, net (1) | 4,915,652 | 102,516 | 4.17 | 4,478,175 | 95,971 | 4.29 | |||||||
Taxable securities: | |||||||||||||
Mortgage-backed | |||||||||||||
securities | 531,448 | 6,787 | 2.55 | 629,006 | 7,881 | 2.51 | |||||||
Other securities | 228,412 | 4,433 | 3.88 | 239,973 | 3,878 | 3.23 | |||||||
Total taxable securities | 759,860 | 11,220 | 2.95 | 868,979 | 11,759 | 2.71 | |||||||
Tax-exempt securities: (2) | |||||||||||||
Other securities | 146,155 | 1,551 | 2.12 | 137,293 | 1,582 | 2.30 | |||||||
Total tax-exempt securities | 146,155 | 1,551 | 2.12 | 137,293 | 1,582 | 2.30 | |||||||
Interest-earning deposits | |||||||||||||
and federal funds sold | 74,847 | 282 | 0.75 | 67,378 | 142 | 0.42 | |||||||
Total interest-earning | |||||||||||||
assets | 5,896,514 | 115,569 | 3.92 | 5,551,825 | 109,454 | 3.94 | |||||||
Other assets | 297,082 | 284,479 | |||||||||||
Total assets | $ | 6,193,596 | $ | 5,836,304 | |||||||||
Interest-bearing Liabilities: | |||||||||||||
Deposits: | |||||||||||||
Savings accounts | $ | 267,059 | 706 | 0.53 | $ | 264,150 | 604 | 0.46 | |||||
NOW accounts | 1,542,857 | 4,538 | 0.59 | 1,617,241 | 3,884 | 0.48 | |||||||
Money market accounts | 859,415 | 3,150 | 0.73 | 470,606 | 1,287 | 0.55 | |||||||
Certificate of deposit | |||||||||||||
accounts | 1,407,528 | 10,039 | 1.43 | 1,410,765 | 10,242 | 1.45 | |||||||
Total due to depositors | 4,076,859 | 18,433 | 0.90 | 3,762,762 | 16,017 | 0.85 | |||||||
Mortgagors' escrow | |||||||||||||
accounts | 64,280 | 57 | 0.18 | 58,838 | 53 | 0.18 | |||||||
Total interest-bearing | |||||||||||||
deposits | 4,141,139 | 18,490 | 0.89 | 3,821,600 | 16,070 | 0.84 | |||||||
Borrowings | 1,130,132 | 10,073 | 1.78 | 1,181,263 | 10,362 | 1.75 | |||||||
Total interest-bearing | |||||||||||||
liabilities | 5,271,271 | 28,563 | 1.08 | 5,002,863 | 26,432 | 1.06 | |||||||
Non interest-bearing | |||||||||||||
demand deposits | 333,142 | 285,267 | |||||||||||
Other liabilities | 65,525 | 65,331 | |||||||||||
Total liabilities | 5,669,938 | 5,353,461 | |||||||||||
Equity | 523,658 | 482,843 | |||||||||||
Total liabilities and | |||||||||||||
equity | $ | 6,193,596 | $ | 5,836,304 | |||||||||
Net interest income / | |||||||||||||
net interest rate spread | $ | 87,006 | 2.84 | % | $ | 83,022 | 2.88 | % | |||||
Net interest-earning assets / | |||||||||||||
net interest margin | $ | 625,243 | 2.95 | % | $ | 548,962 | 2.99 | % | |||||
Ratio of interest-earning | |||||||||||||
assets to interest-bearing | |||||||||||||
liabilities | 1.12 | X | 1.11 | X |
(1) | Loan interest income includes loan fee income (which includes net amortization of deferred fees and costs, late charges, and prepayment penalties) of approximately $1.0 million and $2.5 million for the six months ended June 30, 2017 and 2016, respectively. |
(2) | Interest income on tax-exempt securities does not include the tax benefit of the tax-exempt securities. |
FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES DEPOSIT COMPOSITION (Unaudited) | |||||||||||||||||||||||
June 2017 vs. | June 2017 vs. | ||||||||||||||||||||||
June 30, | March 31, | December 31, | December 2016 | September 30, | June 30, | June 2016 | |||||||||||||||||
(Dollars in thousands) | 2017 | 2017 | 2016 | % Change | 2016 | 2016 | % Change | ||||||||||||||||
Deposits | |||||||||||||||||||||||
Non-interest bearing | $ | 349,302 | $ | 344,028 | $ | 333,163 | 4.8 | % | $ | 320,060 | $ | 317,112 | 10.2 | % | |||||||||
Interest bearing: | |||||||||||||||||||||||
Certificate of deposit | |||||||||||||||||||||||
accounts | 1,332,377 | 1,411,819 | 1,372,115 | -2.9 | % | 1,384,551 | 1,411,550 | -5.6 | % | ||||||||||||||
Savings accounts | 325,815 | 254,822 | 254,283 | 28.1 | % | 258,058 | 260,528 | 25.1 | % | ||||||||||||||
Money market accounts | 837,565 | 851,129 | 843,370 | -0.7 | % | 733,361 | 452,589 | 85.1 | % | ||||||||||||||
NOW accounts | 1,368,441 | 1,487,120 | 1,362,484 | 0.4 | % | 1,296,475 | 1,453,540 | -5.9 | % | ||||||||||||||
Total interest-bearing | |||||||||||||||||||||||
deposits | 3,864,198 | 4,004,890 | 3,832,252 | 0.8 | % | 3,672,445 | 3,578,207 | 8.0 | % | ||||||||||||||
Total deposits | $ | 4,213,500 | $ | 4,348,918 | $ | 4,165,415 | 1.2 | % | $ | 3,992,505 | $ | 3,895,319 | 8.2 | % |
FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES LOANS (Unaudited) | |||||||||||||||
Loan Origination and Purchases | |||||||||||||||
For the three months | For the six months ended | ||||||||||||||
June 30, | March 31, | June 30, | June 30, | ||||||||||||
(In thousands) | 2017 | 2017 | 2016 | 2017 | 2016 | ||||||||||
Multi-family residential | $ | 63,469 | $ | 126,708 | $ | 162,364 | $ | 190,177 | $ | 232,007 | |||||
Commercial real estate | 123,559 | 35,732 | 114,007 | 159,291 | 176,144 | ||||||||||
One-to-four family – mixed-use property | 13,656 | 18,542 | 11,630 | 32,198 | 29,875 | ||||||||||
One-to-four family – residential | 4,860 | 5,920 | 4,195 | 10,780 | 13,688 | ||||||||||
Co-operative apartments | - | - | 470 | - | 470 | ||||||||||
Construction | 4,429 | 2,544 | 2,427 | 6,973 | 4,114 | ||||||||||
Small Business Administration | 1,870 | 641 | 314 | 2,511 | 6,315 | ||||||||||
Taxi medallion | - | - | - | - | - | ||||||||||
Commercial business and other | 49,312 | 76,484 | 92,456 | 125,796 | 154,490 | ||||||||||
Total | $ | 261,155 | $ | 266,571 | $ | 387,863 | $ | 527,726 | $ | 617,103 |
Loan Composition | ||||||||||||||||||||||||||||||
June 30, 2017 vs. | June 2017 vs. | |||||||||||||||||||||||||||||
June 30, | March 31, | December 31, | December 2016 | September 30, | June 30, | June 2016 | ||||||||||||||||||||||||
(Dollars in thousands) | 2017 | 2017 | 2016 | % Change | 2016 | 2016 | % Change | |||||||||||||||||||||||
Loans held for investment: | ||||||||||||||||||||||||||||||
Multi-family residential | $ | 2,243,643 | $ | 2,261,946 | $ | 2,178,504 | 3.0 | % | $ | 2,171,289 | $ | 2,159,138 | 3.9 | % | ||||||||||||||||
Commercial real estate | 1,349,634 | 1,268,770 | 1,246,132 | 8.3 | % | 1,195,266 | 1,146,400 | 17.7 | % | |||||||||||||||||||||
One-to-four family ― | ||||||||||||||||||||||||||||||
mixed-use property | 556,906 | 561,355 | 558,502 | -0.3 | % | 555,691 | 566,702 | -1.7 | % | |||||||||||||||||||||
One-to-four family ― residential | 181,213 | 184,201 | 185,767 | -2.5 | % | 183,993 | 190,251 | -4.8 | % | |||||||||||||||||||||
Co-operative apartments | 7,069 | 7,216 | 7,418 | -4.7 | % | 7,494 | 7,571 | -6.6 | % | |||||||||||||||||||||
Construction | 16,842 | 12,413 | 11,495 | 46.5 | % | 11,250 | 9,899 | 70.1 | % | |||||||||||||||||||||
Small Business Administration | 10,591 | 10,519 | 15,198 | -30.3 | % | 14,339 | 14,718 | -28.0 | % | |||||||||||||||||||||
Taxi medallion | 18,303 | 18,832 | 18,996 | -3.6 | % | 20,536 | 20,641 | -11.3 | % | |||||||||||||||||||||
Commercial business and other | 644,262 | 632,503 | 597,122 | 7.9 | % | 564,972 | 564,084 | 14.2 | % | |||||||||||||||||||||
Net unamortized premiums | ||||||||||||||||||||||||||||||
and unearned loan fees | 17,217 | 16,836 | 16,559 | 4.0 | % | 16,447 | 16,875 | 2.0 | % | |||||||||||||||||||||
Allowance for loan losses | (22,157 | ) | (22,211 | ) | (22,229 | ) | -0.3 | % | (21,795 | ) | (22,198 | ) | -0.2 | % | ||||||||||||||||
Net loans | $ | 5,023,523 | $ | 4,952,380 | $ | 4,813,464 | 4.4 | % | $ | 4,719,482 | $ | 4,674,081 | 7.5 | % |
Loans Held for Investment Activity | ||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||
June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||||||||
(In thousands) | 2017 | 2017 | 2016 | 2016 | 2016 | |||||||||||||||
Loans originated and purchased | $ | 261,155 | $ | 266,571 | $ | 282,592 | $ | 233,243 | $ | 387,863 | ||||||||||
Principal reductions | (143,195 | ) | (122,897 | ) | (187,780 | ) | (183,583 | ) | (149,308 | ) | ||||||||||
Loans transferred to held-for-sale | (30,565 | ) | - | - | - | - | ||||||||||||||
Loans sold | (16,337 | ) | (4,874 | ) | - | (3,693 | ) | (2,310 | ) | |||||||||||
Loan charged-offs | (350 | ) | (179 | ) | (370 | ) | (541 | ) | (101 | ) | ||||||||||
Foreclosures | - | - | (138 | ) | - | - | ||||||||||||||
Net change in deferred (fees) and costs | 381 | 277 | 112 | (428 | ) | 1,594 | ||||||||||||||
Net change in the allowance for loan losses | 54 | 18 | (434 | ) | 403 | (205 | ) | |||||||||||||
Total loan activity | $ | 71,143 | $ | 138,916 | $ | 93,982 | $ | 45,401 | $ | 237,533 |
FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES NON-PERFORMING ASSETS and NET CHARGE-OFFS (Unaudited) | |||||||||||||||||||||
June 30, | March 31, | December 31, | September 30, | June 30, | |||||||||||||||||
(Dollars in thousands) | 2017 | 2017 | 2016 | 2016 | 2016 | ||||||||||||||||
Loans 90 Days Or More Past Due | |||||||||||||||||||||
and Still Accruing: | |||||||||||||||||||||
Multi-family residential | $ | - | $ | - | $ | - | $ | - | $ | 574 | |||||||||||
Commercial real estate | - | 75 | - | 1,183 | 320 | ||||||||||||||||
One-to-four family - mixed-use property | - | - | 386 | 470 | 635 | ||||||||||||||||
One-to-four family - residential | - | - | - | - | 13 | ||||||||||||||||
Construction | 602 | 602 | - | - | - | ||||||||||||||||
Taxi medallion | 727 | - | - | - | - | ||||||||||||||||
Commercial business and other | - | - | - | - | - | ||||||||||||||||
Total | 1,329 | 677 | 386 | 1,653 | 1,542 | ||||||||||||||||
Non-accrual Loans: | |||||||||||||||||||||
Multi-family residential | 1,537 | 1,354 | 1,837 | 1,649 | 3,162 | ||||||||||||||||
Commercial real estate | 1,948 | 1,462 | 1,148 | 1,157 | 2,299 | ||||||||||||||||
One-to-four family - mixed-use property | 2,971 | 3,328 | 4,025 | 4,534 | 6,005 | ||||||||||||||||
One-to-four family - residential | 7,616 | 7,847 | 8,241 | 8,340 | 8,406 | ||||||||||||||||
Small Business Administration | 53 | 58 | 1,886 | 2,132 | 185 | ||||||||||||||||
Taxi medallion | - | 3,771 | 3,825 | 3,971 | 196 | ||||||||||||||||
Commercial business and other | 5 | 38 | 68 | 99 | 128 | ||||||||||||||||
Total | 14,130 | 17,858 | 21,030 | 21,882 | 20,381 | ||||||||||||||||
Total Non-performing Loans | 15,459 | 18,535 | 21,416 | 23,535 | 21,923 | ||||||||||||||||
Other Non-performing Assets: | |||||||||||||||||||||
Real estate acquired through foreclosure | - | - | 533 | 2,839 | 3,668 | ||||||||||||||||
Total | - | - | 533 | 2,839 | 3,668 | ||||||||||||||||
Total Non-performing Assets | $ | 15,459 | $ | 18,535 | $ | 21,949 | $ | 26,374 | $ | 25,591 | |||||||||||
Non-performing Assets to Total Assets | 0.25 | % | 0.30 | % | 0.36 | % | 0.44 | % | 0.43 | % | |||||||||||
Allowance For Loan Losses to Non-performing Loans | 143.3 | % | 119.8 | % | 103.8 | % | 92.6 | % | 101.3 | % |
Net Charge-Offs (Recoveries) | ||||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||||
June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||||||||||
(In thousands) | 2017 | 2017 | 2016 | 2016 | 2016 | |||||||||||||||||
Multi-family residential | $ | (53 | ) | $ | (16 | ) | $ | (103 | ) | $ | 79 | $ | (183 | ) | ||||||||
Commercial real estate | 4 | (68 | ) | - | (11 | ) | - | |||||||||||||||
One-to-four family – mixed-use property | (67 | ) | 34 | (520 | ) | 24 | 36 | |||||||||||||||
One-to-four family – residential | 170 | - | 40 | - | 7 | |||||||||||||||||
Small Business Administration | 14 | 26 | 186 | 317 | (42 | ) | ||||||||||||||||
Taxi medallion | - | 54 | 142 | - | - | |||||||||||||||||
Commercial business and other | (14 | ) | (12 | ) | (179 | ) | (6 | ) | (23 | ) | ||||||||||||
Total net loan charge-offs (recoveries) | $ | 54 | $ | 18 | $ | (434 | ) | $ | 403 | $ | (205 | ) | ||||||||||
Core Diluted EPS, Core ROAE, Core ROAA, 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 in tabular form at the end of this release. The Company believes that these measures are useful for both investors and management to understand the effects of certain non-interest 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 these are measures 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 (Dollars in thousands, except per share data) (Unaudited) | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
June 30, | March 31, | June 30, | June 30, | June 30, | |||||||||||||
2017 | 2017 | 2016 | 2017 | 2016 | |||||||||||||
GAAP income before income taxes | $ | 19,500 | $ | 17,514 | $ | 51,152 | $ | 37,014 | $ | 66,328 | |||||||
Net loss from fair value adjustments | 1,159 | 378 | 1,115 | 1,537 | 2,102 | ||||||||||||
Net gain on sale of securities | - | - | (2,363 | ) | - | (2,363 | ) | ||||||||||
Gain from life insurance proceeds | (6 | ) | (1,161 | ) | - | (1,167 | ) | (411 | ) | ||||||||
Net gain on sale of buildings | - | - | (33,814 | ) | - | (33,814 | ) | ||||||||||
Prepayment penalty on borrowings | - | - | 2,082 | - | 2,082 | ||||||||||||
Core income before taxes | 20,653 | 16,731 | 18,172 | 37,384 | 33,924 | ||||||||||||
Provision for income taxes for core income | 7,129 | 5,020 | 6,851 | 12,149 | 12,892 | ||||||||||||
Core net income | $ | 13,524 | $ | 11,711 | $ | 11,321 | $ | 25,235 | $ | 21,032 | |||||||
GAAP diluted earnings per common share | $ | 0.44 | $ | 0.42 | $ | 1.05 | $ | 0.86 | $ | 1.38 | |||||||
Net (gain) loss from fair value adjustments, net of tax | 0.02 | 0.01 | 0.02 | 0.04 | 0.04 | ||||||||||||
Net gain on sale of securities, net of tax | - | - | (0.05 | ) | - | (0.05 | ) | ||||||||||
Gain from life insurance proceeds | - | (0.04 | ) | - | (0.04 | ) | (0.01 | ) | |||||||||
Net gain on sale of buildings, net of tax | - | - | (0.67 | ) | - | (0.67 | ) | ||||||||||
Prepayment penalty on borrowings | - | - | 0.04 | - | 0.04 | ||||||||||||
Core diluted earnings per common share* | $ | 0.46 | $ | 0.40 | $ | 0.39 | $ | 0.87 | $ | 0.72 | |||||||
Core net income, as calculated above | $ | 13,524 | $ | 11,711 | $ | 11,321 | $ | 25,235 | $ | 21,032 | |||||||
Average assets | 6,218,072 | 6,168,848 | 5,897,858 | 6,193,596 | 5,836,304 | ||||||||||||
Average equity | 529,451 | 517,800 | 486,261 | 523,658 | 482,843 | ||||||||||||
Core return on average assets** | 0.87 | % | 0.76 | % | 0.77 | % | 0.81 | % | 0.72 | % | |||||||
Core return on average equity** | 10.22 | % | 9.05 | % | 9.31 | % | 9.64 | % | 8.71 | % | |||||||
* Core diluted earnings per common share may not foot due to rounding. | |||||||||||||||||
** Ratios are calculated on an annualized basis. |
FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES CALCULATION OF TANGIBLE STOCKHOLDERS’ COMMON EQUITY to TANGIBLE ASSETS (Unaudited) | ||||||||||||||
June 30, | December 31, | June 30, | ||||||||||||
(Dollars in thousands) | 2017 | 2016 | 2016 | |||||||||||
Total Equity | $ | 534,091 | $ | 513,853 | $ | 508,883 | ||||||||
Less: | ||||||||||||||
Goodwill | (16,127 | ) | (16,127 | ) | (16,127 | ) | ||||||||
Intangible deferred tax liabilities | 391 | 389 | 407 | |||||||||||
Tangible Stockholders' Common Equity | $ | 518,355 | $ | 498,115 | $ | 493,163 | ||||||||
Total Assets | $ | 6,285,236 | $ | 6,058,487 | $ | 5,986,727 | ||||||||
Less: | ||||||||||||||
Goodwill | (16,127 | ) | (16,127 | ) | (16,127 | ) | ||||||||
Intangible deferred tax liabilities | 391 | 389 | 407 | |||||||||||
Tangible Assets | $ | 6,269,500 | $ | 6,042,749 | $ | 5,971,007 | ||||||||
Tangible Stockholders' Common Equity to Tangible Assets | 8.27 | % | 8.24 | % | 8.26 | % | ||||||||