THIRD QUARTER 20171
- GAAP diluted EPS was $0.35, down 20.5% QoQ and 5.4% YoY, largely due to pre-tax provision for losses of $3.3 million, or $0.07 diluted EPS, after-tax, primarily related to the taxi medallion portfolio
- Core diluted EPS was $0.37, down 19.6% QoQ and 5.1% YoY
- Net interest income was $43.0 million, an improvement of 3.2% YoY, but a reduction of 1.3% QoQ
- Net interest margin was 2.90%, down 5bps QoQ and 4bps YoY
- GAAP and core ROAE were 7.6% and 5.1%, compared with 9.6% and 10.2%, respectively in 2Q17
- GAAP and core ROAA were both 0.7% for 3Q17 compared with 0.8% and 0.9%, respectively in 2Q17
- Yield on quarterly loan originations and purchases exceeded yield on the loan portfolio, net of prepayment penalties and interest recovered from delinquent loans, for the first time since 4Q08
UNIONDALE, N.Y., Oct. 31, 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 nine months ended September 30, 2017.
John R. Buran, President and Chief Executive Officer, stated, “During the third quarter of 2017, we recognized a provision for loan losses totaling $3.3 million related to our taxi medallion loan portfolio. The vast majority of loans in this portfolio are performing and over 80% of taxi medallion loans have been restructured by reducing interest rates and/or extending maturities. The taxi medallion loan classified as non-performing is due to one loan being past its maturity date; however, the loan continues to make required payments. This is the first provision we have taken since the fourth quarter of 2015. The net effect of the provision for loan losses was a $0.07 reduction of diluted earnings per share. The provision resulted from a reduction in the estimated fair value of the collateral underlying our performing taxi medallion portfolio to a net carrying value of approximately $304,000 per New York City corporate medallion. At September 30, 2017, we have allocated $6.0 million of the allowance to the taxi medallion portfolio which equals 33.0% of the outstanding principal.”
“For many months following the current cycle of interest rate increases, we have been able to keep our government deposit costs considerably below market rates. However, due to competitive pressures we were compelled to move these rates to match competition by a weighted average of 33 basis points. The full impact of this increase was recorded in the recent quarter as the cost to total deposits increased 14 basis points versus the second quarter of 2017. For the fourth quarter of 2017, we expect to raise an additional $200 million in low cost government deposits to replace higher costing borrowings on our balance sheet.”
“The loan to deposit ratio improved for the quarter to 113.7% from 118.2% due to increasing branch based money market balances and the growth or our internet based eco-friendly, socially conscious, healthier lifestyle community internet brand, Bank Purely. Bank Purely had balances in excess of $80 million at quarter end. We look to further improve the loan to deposit ratio in the coming quarter as we increase business development efforts in the lucrative Flushing market consistent with the relocation and modernization of two branches.”
“In order to reduce the impact of rising interest rates on the net interest margin, we continued our strategy of focusing our origination efforts on higher yielding loans. This effort provided a 21bps improvement in the yield received on loan originations and purchases in the third quarter of 2017 to 4.25%, which is 51bps greater than the yield on originated and purchased loans for the third quarter of 2016. This yield is 16bps greater than the quarterly average yield of our total loan portfolio, net of prepayment penalty and recovered interest from delinquent loans. Our total loan portfolio increased 5%, with an average LTV of 41.2% for loans secured by real estate, during the nine months ended September 30, 2017, while maintaining our strong underwriting standards. Similar to the activity noted in the third quarter of 2016, we experienced a delay in closing loans during the recent quarter. Consequently, the loan pipeline increased to $417.0 million from $279.1 million at June 30, 2017, the highest level since March 2016. Given the level of the pipeline, we are expecting strong loan growth in the fourth quarter of 2017.”
Mr. Buran continued, “We remain disciplined regarding credit quality. Credit quality improved as our non-performing assets have decreased by 37% since the end of 2016 and net charge-offs remain minimal. Additionally, total delinquencies have decreased 15% since December 31, 2016. The percentage of allowance for loan losses to gross loans has increased to 0.50% from 0.46% at December 31, 2016 while the percentage of allowance for loan losses to non-performing loans increased to 182% from 104% at the end of 2016. The LTV on our non-performing real estate loans at September 30, 2017 is 34.9%.”
“We continued to convert our branch network to the more cost effective Universal Banker model and remain on track to convert half of our brick and mortar branches by the end of 2017.”
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 third quarter, multi-family, commercial real estate, and commercial business loan originations and purchases represented 35%, 14%, and 38%, respectively, of all originations, which were made while maintaining conservative loan-to-values, debt coverage ratios, and increasing yield.
- The average interest rate obtained for third quarter originations and purchases improved to 4.25% compared to 4.04% for 2Q17 and 3.74% for 3Q16.
- The average rate of mortgage loan applications in the pipeline totaled 4.04% at September 30, 2017, as compared to 4.17% at June 30, 2017 and 4.05% at September 30, 2016.
- Multi-family (excluding underlying co-operative mortgages), commercial real estate, and one-to-four family mixed-use property mortgage loans originated during 3Q17 had an increased yield of 4.86% from 4.19% for 2Q17 and 3.53% for 3Q16. While the yields increased, we have maintained our asset quality as these loans had an average loan-to-value ratio of 41.2% and an average debt coverage ratio of 187%.
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:
Net Interest Income
Net interest income for 3Q17 was $43.0 million, an increase of 3.2% YoY (September 30, 2017 compared to September 30, 2016) and decrease of 1.3% QoQ (September 30, 2017 compared to June 30, 2017).
- Net interest margin of 2.90%, decreased 4bps YoY and 5bps QoQ
- Net interest spread of 2.77%, decreased 5bps YoY and 6bps QoQ
- Net interest income includes prepayment penalty income from loans of $1.6 million in 3Q17 compared with $1.5 million in 3Q16 and $1.0 million in 2Q17, and recovered interest from delinquent loans of $0.3 million in each of 3Q17, 3Q16 and 2Q17
- Excluding prepayment penalty income, accelerated accretion of discount and recovered interest from nonaccrual loans, the yield on interest-earning assets was 3.87% in 3Q17, improved from 3.78% in 3Q16 and 3.82% in 2Q17, and the net interest margin was 2.77% in 3Q17, decreased from 2.81% in 3Q16 and 2.83% in 2Q17
- Average balance of total interest-earning assets of $5,936.1 million, increased $251.7 million, or 4.4% YoY and increased $17.1 million, or 0.3% QoQ
- Yield on interest-earning assets of 4.0%, increased 9bps YoY and 6bps QoQ
- Cost of interest-bearing liabilities of 1.23%, increased 14bps YoY and 12bps QoQ
- Cost of funds of 1.15%, increased 13bps YoY and 10bps QoQ, driven by an increase in rates paid on our government deposits and short-term borrowings resulting from the increase in the Fed Fund rate during 2017
Provision for loan losses
Provision for loan losses for 3Q17 was $3.3 million compared to none in 3Q16 and 2Q17.
- Provision driven by a reduction in the estimated fair value of NYC taxi medallions based on most recent sales data
Non-interest Income
Non-interest income for 3Q17 was $1.7 million, a decrease of $0.2 million, or 10.4%, YoY and $0.3 million, or 14.7%, QoQ.
- Non-interest income included net losses from fair value adjustments of $1.3 million in 3Q17, $0.8 million in 3Q16 and $1.2 million in 2Q17
- 3Q17 included a loss on the sale of securities of $0.2 million and a gain from insurance proceeds of $0.2 million
- Absent the above items, non-interest income was $2.9 million, an increase of $0.3 million YoY and decrease of $0.2 million QoQ
Non-interest Expense
Non-interest expense for 3Q17 was $26.0 million, a decrease of $0.3 million, or 1.2%, YoY and $0.1 million, or 0.4% QoQ.
- 3Q16 included a write-down of $0.8 million on one OREO property; absent this item, non-interest expense increased $0.5 million, or 2.0% YoY, driven by increased salaries and benefits from annual salary increases and additions in staffing and increased data processing costs, partially offset by decreased foreclosure expense due to continued improvement in asset quality and a reduction in FDIC insurance expense, due to lower assessment rates
- Lower costs associated with FDIC insurance and foreclosure expense should be sustainable
- The efficiency ratio was 56.5% in 3Q17 compared to 57.4% in 3Q16 and 55.8% in 2Q17
Provision for Income Taxes
The provision for income taxes in 3Q17 was $5.3 million, a decrease of $1.4 million, or 20.5%, YoY and $1.5 million, or 21.9%, QoQ.
- Pre-tax income decreased by $1.8 million, or 10.5%, YoY and $4.0 million, or 20.7%, QoQ
- The effective tax rates were 34.2% in 3Q17, 38.5% in 3Q16 and 34.7% in 2Q17
- The improvement in the Company’s effective tax rate compared to 3Q16 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
- We anticipate the effective tax rate to approximate the 3Q17 rate for the remainder of the year
Financial Condition Summary:
Loans:
- Net loans held for investment were $5,045.1 million reflecting an increase of 0.4% QoQ (not annualized) and 4.8% 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 while emphasizing rate over volume
- Loan originations and purchases of multi-family, commercial real estate and commercial business loans totaled $159.3 million for 3Q17, or 87.1% of loan production
- Loan pipeline was $417.0 million at September 30, 2017, compared to $279.1 million at June 30, 2017 and $289.3 million at September 30, 2016
- The loan-to-value ratio on our portfolio of real estate dependent loans as of September 30, 2017 totaled 39.4%
The following table shows the average rate received from loan originations and purchases for the periods indicated:
| For the three months ended | |||||||||
| September 30, | June 30, | September 30, | |||||||
| Loan type | 2017 | 2017 | 2016 | ||||||
| Mortgage loans | 4.13 | % | 4.01 | % | 3.52 | % | |||
| Non-mortgage loans | 4.43 | % | 4.13 | % | 4.12 | % | |||
| Total loans | 4.25 | % | 4.04 | % | 3.74 | % | |||
Credit Quality:
- Non-performing loans totaled $13.9 million, a decrease of $7.5 million, or 35.1%, from $21.4 million at December 31, 2016
- Classified assets totaled $41.3 million, a decrease of $2.7 million, or 6.1%, from $44.0 million at December 31, 2016, primarily due to reductions in non-performing assets, partially offset by an increase in substandard taxi medallion loans
- Loans classified as troubled debt restructured (TDR) totaled $22.5 million, an increase of $5.1 million, or 29.0%, from $17.4 million at December 31, 2016, attributable to the addition of nine 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 34.9% average loan-to-value for non-performing loans collateralized by real estate at September 30, 2017
- Provision for loan losses of $3.3 million was recorded during the nine months ended September 30, 2017, as the estimated fair value of NYC taxi medallions were lowered based on most recent sales data, while no provision for loan losses was recorded during 2016; net charge-offs totaled $0.2 million during the nine months ended September 30, 2017 compared to net recoveries of $0.7 million for all of 2016
- For taxi medallion loans, an allowance for loan losses is allocated in the amount by which the outstanding loan balance exceeds the estimated fair value of the taxi medallion, which allowance totaled $6.0 million at September 30, 2017
Capital Management:
- The Company and Bank, at September 30, 2017, were both well capitalized under all applicable regulatory requirements
- During the nine months ended September 30, 2017, stockholders’ equity increased $25.8 million, or 5.0%, to $539.6 million due to net income of $35.2 million and $1.7 million of other comprehensive income, partially offset by the declaration and payment of dividends on the Company’s common stock
- During the nine months ended September 30, 2017, the Company repurchased 10,000 treasury shares at an average cost of $27.80 per share; as of September 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 $18.72 at September 30, 2017, from $17.95 at December 31, 2016
- Tangible book value per common share, a non-GAAP measure, increased to $18.18 at September 30, 2017, from $17.40 at December 31, 2016
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, November 1, 2017 at 9:30 AM (ET) to discuss the Company’s strategy and results for the third quarter of 2017
- Dial-in for Live Call: 1-888-317-6016
- Webcast: https://services.choruscall.com/links/ffic171101.html
- Dial-in for Replay: 1-877-344-7529
- Replay Access Code: 10112013
- The conference call will be simultaneously webcast and archived through 5:00 PM (ET) on December 31, 2017
About Flushing Financial Corporation
Flushing Financial Corporation (Nasdaq:FFIC) 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, professionals, corporate clients, and public entities by offering a full complement of deposit, loan, and cash management services through its 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 Bank and 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 nine months ended | |||||||||||||||||||
| September 30, | June 30, | September 30, | September 30, | |||||||||||||||||
| 2017 | 2017 | 2016 | 2017 | 2016 | ||||||||||||||||
| Interest and Dividend Income | ||||||||||||||||||||
| Interest and fees on loans | $ | 53,318 | $ | 51,631 | $ | 49,181 | $ | 155,834 | $ | 145,152 | ||||||||||
| Interest and dividends on securities: | ||||||||||||||||||||
| Interest | 5,850 | 6,432 | 6,173 | 18,377 | 19,275 | |||||||||||||||
| Dividends | 30 | 123 | 121 | 274 | 360 | |||||||||||||||
| Other interest income | 121 | 129 | 49 | 403 | 191 | |||||||||||||||
| Total interest and dividend income | 59,319 | 58,315 | 55,524 | 174,888 | 164,978 | |||||||||||||||
| Interest Expense | ||||||||||||||||||||
| Deposits | 10,655 | 9,510 | 8,520 | 29,145 | 24,590 | |||||||||||||||
| Other interest expense | 5,623 | 5,188 | 5,291 | 15,696 | 15,653 | |||||||||||||||
| Total interest expense | 16,278 | 14,698 | 13,811 | 44,841 | 40,243 | |||||||||||||||
| Net Interest Income | 43,041 | 43,617 | 41,713 | 130,047 | 124,735 | |||||||||||||||
| Provision for loan losses | 3,266 | - | - | 3,266 | - | |||||||||||||||
| Net Interest Income After Provision for Loan Losses | 39,775 | 43,617 | 41,713 | 126,781 | 124,735 | |||||||||||||||
| Non-interest Income | ||||||||||||||||||||
| Banking services fee income | 885 | 1,014 | 826 | 2,773 | 2,775 | |||||||||||||||
| Net (loss) gain on sale of securities | (186 | ) | - | - | (186 | ) | 2,363 | |||||||||||||
| Net gain on sale of loans | 152 | 34 | 240 | 396 | 584 | |||||||||||||||
| Net gain on sale of buildings | - | - | - | - | 33,814 | |||||||||||||||
| Net loss from fair value adjustments | (1,297 | ) | (1,159 | ) | (823 | ) | (2,834 | ) | (2,925 | ) | ||||||||||
| Federal Home Loan Bank of New York stock dividends | 740 | 643 | 665 | 2,206 | 1,870 | |||||||||||||||
| Gains from life insurance proceeds | 238 | 6 | 47 | 1,405 | 458 | |||||||||||||||
| Bank owned life insurance | 816 | 807 | 707 | 2,418 | 2,096 | |||||||||||||||
| Other income | 313 | 603 | 191 | 1,120 | 1,075 | |||||||||||||||
| Total non-interest income | 1,661 | 1,948 | 1,853 | 7,298 | 42,110 | |||||||||||||||
| Non-interest Expense | ||||||||||||||||||||
| Salaries and employee benefits | 15,310 | 15,424 | 14,795 | 47,838 | 45,024 | |||||||||||||||
| Occupancy and equipment | 2,502 | 2,654 | 2,576 | 7,652 | 7,298 | |||||||||||||||
| Professional services | 1,763 | 1,919 | 1,730 | 5,678 | 5,907 | |||||||||||||||
| FDIC deposit insurance | 499 | 503 | 536 | 1,328 | 2,380 | |||||||||||||||
| Data processing | 1,349 | 1,321 | 939 | 3,873 | 3,229 | |||||||||||||||
| Depreciation and amortization | 1,173 | 1,155 | 1,169 | 3,493 | 3,263 | |||||||||||||||
| Other real estate owned/foreclosure (income) expense | 121 | (96 | ) | 273 | 376 | 831 | ||||||||||||||
| Net loss (gain) from sales of real estate owned | - | - | 829 | (50 | ) | 1,726 | ||||||||||||||
| Prepayment penalty on borrowings | - | - | - | - | 2,082 | |||||||||||||||
| Other operating expenses | 3,249 | 3,185 | 3,430 | 11,407 | 11,488 | |||||||||||||||
| Total non-interest expense | 25,966 | 26,065 | 26,277 | 81,595 | 83,228 | |||||||||||||||
| Income Before Income Taxes | 15,470 | 19,500 | 17,289 | 52,484 | 83,617 | |||||||||||||||
| Provision for Income Taxes | ||||||||||||||||||||
| Federal | 4,680 | 5,576 | 5,568 | 15,005 | 25,518 | |||||||||||||||
| State and local | 611 | 1,199 | 1,087 | 2,315 | 7,469 | |||||||||||||||
| Total taxes | 5,291 | 6,775 | 6,655 | 17,320 | 32,987 | |||||||||||||||
| Net Income | $ | 10,179 | $ | 12,725 | $ | 10,634 | $ | 35,164 | $ | 50,630 | ||||||||||
| Basic earnings per common share | $ | 0.35 | $ | 0.44 | $ | 0.37 | $ | 1.21 | $ | 1.75 | ||||||||||
| Diluted earnings per common share | $ | 0.35 | $ | 0.44 | $ | 0.37 | $ | 1.21 | $ | 1.75 | ||||||||||
| Dividends per common share | $ | 0.18 | $ | 0.18 | $ | 0.17 | $ | 0.54 | $ | 0.51 | ||||||||||
| FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES | ||||||||||||||
| CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION | ||||||||||||||
| (Dollars in thousands, except per share data) | ||||||||||||||
| (Unaudited) | ||||||||||||||
| September 30, | June 30, | December 31, | ||||||||||||
| 2017 | 2017 | 2016 | ||||||||||||
| ASSETS | ||||||||||||||
| Cash and due from banks | $ | 60,161 | $ | 48,539 | $ | 35,857 | ||||||||
| Securities held-to-maturity: | ||||||||||||||
| Mortgage-backed securities | 7,978 | 7,983 | - | |||||||||||
| Other securities | 22,952 | 24,451 | 37,735 | |||||||||||
| Securities available for sale: | ||||||||||||||
| Mortgage-backed securities | 519,861 | 520,012 | 516,476 | |||||||||||
| Other securities | 276,698 | 317,693 | 344,905 | |||||||||||
| Loans held for sale | - | 30,565 | - | |||||||||||
| Loans: | ||||||||||||||
| Multi-family residential | 2,236,173 | 2,243,643 | 2,178,504 | |||||||||||
| Commercial real estate | 1,352,775 | 1,349,634 | 1,246,132 | |||||||||||
| One-to-four family ― mixed-use property | 556,723 | 556,906 | 558,502 | |||||||||||
| One-to-four family ― residential | 177,578 | 181,213 | 185,767 | |||||||||||
| Co-operative apartments | 7,035 | 7,069 | 7,418 | |||||||||||
| Construction | 15,811 | 16,842 | 11,495 | |||||||||||
| Small Business Administration | 14,485 | 10,591 | 15,198 | |||||||||||
| Taxi medallion | 18,165 | 18,303 | 18,996 | |||||||||||
| Commercial business and other | 674,706 | 644,262 | 597,122 | |||||||||||
| Net unamortized premiums and unearned loan fees | 16,925 | 17,217 | 16,559 | |||||||||||
| Allowance for loan losses | (25,269 | ) | (22,157 | ) | (22,229 | ) | ||||||||
| Net loans | 5,045,107 | 5,023,523 | 4,813,464 | |||||||||||
| Interest and dividends receivable | 21,076 | 21,439 | 20,228 | |||||||||||
| Bank premises and equipment, net | 28,389 | 26,592 | 26,561 | |||||||||||
| Federal Home Loan Bank of New York stock | 55,228 | 66,630 | 59,173 | |||||||||||
| Bank owned life insurance | 131,047 | 130,631 | 132,508 | |||||||||||
| Goodwill | 16,127 | 16,127 | 16,127 | |||||||||||
| Other assets | 76,758 | 51,051 | 55,453 | |||||||||||
| Total assets | $ | 6,261,382 | $ | 6,285,236 | $ | 6,058,487 | ||||||||
| LIABILITIES | ||||||||||||||
| Due to depositors: | ||||||||||||||
| Non-interest bearing | $ | 362,509 | $ | 349,302 | $ | 333,163 | ||||||||
| Interest-bearing: | ||||||||||||||
| Certificate of deposit accounts | 1,404,555 | 1,332,377 | 1,372,115 | |||||||||||
| Savings accounts | 323,186 | 325,815 | 254,283 | |||||||||||
| Money market accounts | 991,706 | 837,565 | 843,370 | |||||||||||
| NOW accounts | 1,308,821 | 1,368,441 | 1,362,484 | |||||||||||
| Total interest-bearing deposits | 4,028,268 | 3,864,198 | 3,832,252 | |||||||||||
| Mortgagors' escrow deposits | 53,671 | 41,303 | 40,216 | |||||||||||
| Borrowed funds | 1,200,682 | 1,425,779 | 1,266,563 | |||||||||||
| Other liabilities | 76,643 | 70,563 | 72,440 | |||||||||||
| Total liabilities | 5,721,773 | 5,751,145 | 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 September 30, 2017, June 30, 2017 and December 31, 2016; 28,819,891 | ||||||||||||||
| shares, 28,803,937 shares and 28,632,904 shares outstanding at September 30, 2017, | ||||||||||||||
| June 30, 2017 and December 31, 2016, respectively) | 315 | 315 | 315 | |||||||||||
| Additional paid-in capital | 216,929 | 216,447 | 214,462 | |||||||||||
| Treasury stock (2,710,704 shares, 2,726,658 shares and 2,897,691 shares at | ||||||||||||||
| September 30, 2017, June 30, 2017 and December 31, 2016, respectively) | (51,287 | ) | (51,483 | ) | (53,754 | ) | ||||||||
| Retained earnings | 380,316 | 375,388 | 361,192 | |||||||||||
| Accumulated other comprehensive loss, net of taxes | (6,664 | ) | (6,576 | ) | (8,362 | ) | ||||||||
| Total stockholders' equity | 539,609 | 534,091 | 513,853 | |||||||||||
| Total liabilities and stockholders' equity | $ | 6,261,382 | $ | 6,285,236 | $ | 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 nine months ended | |||||||||||||||
| September 30, | June 30, | September 30, | September 30, | |||||||||||||
| 2017 | 2017 | 2016 | 2017 | 2016 | ||||||||||||
| Per Share Data | ||||||||||||||||
| Basic earnings per share | $ | 0.35 | $ | 0.44 | $ | 0.37 | $ | 1.21 | $ | 1.75 | ||||||
| Diluted earnings per share | $ | 0.35 | $ | 0.44 | $ | 0.37 | $ | 1.21 | $ | 1.75 | ||||||
| Average number of shares outstanding for: | ||||||||||||||||
| Basic earnings per common share computation | 29,119,753 | 29,135,339 | 28,861,101 | 29,091,756 | 28,992,813 | |||||||||||
| Diluted earnings per common share computation | 29,120,356 | 29,135,945 | 28,874,979 | 29,093,723 | 29,006,423 | |||||||||||
| Shares outstanding | 28,819,891 | 28,803,937 | 28,632,796 | 28,819,891 | 28,632,796 | |||||||||||
| Book value per common share (1) | $ | 18.72 | $ | 18.54 | $ | 17.90 | $ | 18.72 | $ | 17.90 | ||||||
| Tangible book value per common share (2) | $ | 18.18 | $ | 18.00 | $ | 17.35 | $ | 18.18 | $ | 17.35 | ||||||
| Stockholders' Equity | ||||||||||||||||
| Stockholders' equity | 539,609 | 534,091 | 512,621 | 539,609 | 512,621 | |||||||||||
| Tangible stockholders' equity | 523,873 | 518,355 | 496,901 | 523,873 | 496,901 | |||||||||||
| Average Balances | ||||||||||||||||
| Total loans, net | $ | 5,033,666 | $ | 4,962,734 | $ | 4,686,593 | $ | 4,955,423 | $ | 4,548,154 | ||||||
| Total interest-earning assets | 5,936,129 | 5,918,981 | 5,684,413 | 5,909,866 | 5,596,342 | |||||||||||
| Total assets | 6,239,321 | 6,218,072 | 5,976,725 | 6,209,005 | 5,883,453 | |||||||||||
| Total due to depositors | 3,972,663 | 4,065,810 | 3,673,731 | 4,041,744 | 3,732,869 | |||||||||||
| Total interest-bearing liabilities | 5,275,937 | 5,287,720 | 5,059,620 | 5,272,842 | 5,021,921 | |||||||||||
| Stockholders' equity | 536,468 | 529,451 | 508,974 | 527,975 | 491,617 | |||||||||||
| Performance Ratios (3) | ||||||||||||||||
| Return on average assets | 0.65 | % | 0.82 | % | 0.71 | % | 0.76 | % | 1.15 | % | ||||||
| Return on average equity | 7.59 | 9.61 | 8.36 | 8.88 | 13.73 | |||||||||||
| Yield on average interest-earning assets | 4.00 | 3.94 | 3.91 | 3.95 | 3.93 | |||||||||||
| Cost of average interest-bearing liabilities | 1.23 | 1.11 | 1.09 | 1.13 | 1.07 | |||||||||||
| Cost of funds | 1.15 | 1.05 | 1.02 | 1.07 | 1.01 | |||||||||||
| Interest rate spread during period | 2.77 | 2.83 | 2.82 | 2.82 | 2.86 | |||||||||||
| Net interest margin | 2.90 | 2.95 | 2.94 | 2.93 | 2.97 | |||||||||||
| Non-interest expense to average assets | 1.66 | 1.68 | 1.76 | 1.75 | 1.89 | |||||||||||
| Efficiency ratio (4) | 56.51 | 55.80 | 57.37 | 58.76 | 59.64 | |||||||||||
| Average interest-earning assets to average | ||||||||||||||||
| interest-bearing liabilities | 1.13 | X | 1.12 | X | 1.12 | 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 nine | At or for the year | At or for the nine | ||||||||||
| months ended | ended | months ended | ||||||||||
| September 30, 2017 | December 31, 2016 | September 30, 2016 | ||||||||||
| Selected Financial Ratios and Other Data | ||||||||||||
| Regulatory capital ratios (for Flushing Financial Corporation): | ||||||||||||
| Tier 1 capital | $ | 565,265 | $ | 539,228 | $ | 523,428 | ||||||
| Common equity Tier 1 capital | 530,442 | 506,432 | 496,605 | |||||||||
| Total risk-based capital | 665,534 | 636,457 | 545,223 | |||||||||
| Tier 1 leverage capital (well capitalized = 5%) | 9.07 | % | 9.00 | % | 8.80 | % | ||||||
| Common equity Tier 1 risk-based capital (well capitalized = 6.5%) | 11.84 | 11.79 | 11.72 | |||||||||
| Tier 1 risk-based capital (well capitalized = 8.0%) | 12.61 | 12.56 | 12.35 | |||||||||
| Total risk-based capital (well capitalized = 10.0%) | 14.85 | 14.82 | 12.87 | |||||||||
| Regulatory capital ratios (for Flushing Bank only): | ||||||||||||
| Tier 1 capital | $ | 629,748 | $ | 607,033 | $ | 528,168 | ||||||
| Common equity Tier 1 capital | 629,748 | 607,033 | 528,168 | |||||||||
| Total risk-based capital | 655,017 | 629,262 | 549,963 | |||||||||
| Tier 1 leverage capital (well capitalized = 5%) | 10.10 | % | 10.12 | % | 8.88 | % | ||||||
| Common equity Tier 1 risk-based capital (well capitalized = 6.5%) | 14.04 | 14.12 | 12.44 | |||||||||
| Tier 1 risk-based capital (well capitalized = 8.0%) | 14.04 | 14.12 | 12.44 | |||||||||
| Total risk-based capital (well capitalized = 10.0%) | 14.60 | 14.64 | 12.96 | |||||||||
| Capital ratios: | ||||||||||||
| Average equity to average assets | 8.50 | % | 8.40 | % | 8.36 | % | ||||||
| Equity to total assets | 8.62 | 8.48 | 8.54 | |||||||||
| Tangible common equity to tangible assets (1) | 8.39 | 8.24 | 8.30 | |||||||||
| Asset quality: | ||||||||||||
| Non-accrual loans (2) | $ | 12,161 | $ | 21,030 | $ | 21,882 | ||||||
| Non-performing loans | 13,890 | 21,416 | 23,535 | |||||||||
| Non-performing assets | 13,890 | 21,949 | 26,374 | |||||||||
| Net charge-offs/ (recoveries) | 226 | (694 | ) | (260 | ) | |||||||
| Asset quality ratios: | ||||||||||||
| Non-performing loans to gross loans | 0.27 | % | 0.44 | % | 0.50 | % | ||||||
| Non-performing assets to total assets | 0.22 | 0.36 | 0.44 | |||||||||
| Allowance for loan losses to gross loans | 0.50 | 0.46 | 0.46 | |||||||||
| Allowance for loan losses to non-performing assets | 181.92 | 101.28 | 82.64 | |||||||||
| Allowance for loan losses to non-performing loans | 181.92 | 103.80 | 92.61 | |||||||||
| 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 | ||||||||||||||||||
| September 30, 2017 | June 30, 2017 | September 30, 2016 | ||||||||||||||||
| Average | Yield/ | Average | Yield/ | Average | Yield/ | |||||||||||||
| Balance | Interest | Cost | Balance | Interest | Cost | Balance | Interest | Cost | ||||||||||
| Interest-earning Assets: | ||||||||||||||||||
| Mortgage loans, net | $ | 4,350,338 | $ | 46,121 | 4.24 | % | $ | 4,297,697 | $ | 44,879 | 4.18 | % | $ | 4,093,240 | $ | 43,777 | 4.28 | % |
| Other loans, net | 683,328 | 7,197 | 4.21 | 665,037 | 6,752 | 4.06 | 593,353 | 5,404 | 3.64 | |||||||||
| Total loans, net (1) | 5,033,666 | 53,318 | 4.24 | 4,962,734 | 51,631 | 4.16 | 4,686,593 | 49,181 | 4.20 | |||||||||
| Taxable securities: | ||||||||||||||||||
| Mortgage-backed | ||||||||||||||||||
| securities | 520,889 | 3,335 | 2.56 | 532,938 | 3,420 | 2.57 | 554,515 | 3,350 | 2.42 | |||||||||
| Other securities | 189,957 | 1,787 | 3.76 | 217,599 | 2,361 | 4.34 | 245,477 | 2,160 | 3.52 | |||||||||
| Total taxable securities | 710,846 | 5,122 | 2.88 | 750,537 | 5,781 | 3.08 | 799,992 | 5,510 | 2.76 | |||||||||
| Tax-exempt securities: (2) | ||||||||||||||||||
| Other securities | 142,899 | 758 | 2.12 | 145,812 | 774 | 2.12 | 148,004 | 784 | 2.12 | |||||||||
| Total tax-exempt securities | 142,899 | 758 | 2.12 | 145,812 | 774 | 2.12 | 148,004 | 784 | 2.12 | |||||||||
| Interest-earning deposits | ||||||||||||||||||
| and federal funds sold | 48,718 | 121 | 0.99 | 59,898 | 129 | 0.86 | 49,824 | 49 | 0.39 | |||||||||
| Total interest-earning | ||||||||||||||||||
| assets | 5,936,129 | 59,319 | 4.00 | 5,918,981 | 58,315 | 3.94 | 5,684,413 | 55,524 | 3.91 | |||||||||
| Other assets | 303,192 | 299,091 | 292,312 | |||||||||||||||
| Total assets | $ | 6,239,321 | $ | 6,218,072 | $ | 5,976,725 | ||||||||||||
| Interest-bearing Liabilities: | ||||||||||||||||||
| Deposits: | ||||||||||||||||||
| Savings accounts | $ | 330,316 | 583 | 0.71 | $ | 279,723 | $ | 399 | 0.57 | $ | 258,884 | 306 | 0.47 | |||||
| NOW accounts | 1,340,228 | 2,468 | 0.74 | 1,517,726 | 2,331 | 0.61 | 1,384,368 | 1,979 | 0.57 | |||||||||
| Money market accounts | 927,067 | 2,337 | 1.01 | 858,066 | 1,651 | 0.77 | 601,709 | 990 | 0.66 | |||||||||
| Certificate of deposit | ||||||||||||||||||
| accounts | 1,375,052 | 5,218 | 1.52 | 1,410,295 | 5,099 | 1.45 | 1,428,770 | 5,213 | 1.46 | |||||||||
| Total due to depositors | 3,972,663 | 10,606 | 1.07 | 4,065,810 | 9,480 | 0.93 | 3,673,731 | 8,488 | 0.92 | |||||||||
| Mortgagors' escrow | ||||||||||||||||||
| accounts | 54,236 | 49 | 0.36 | 73,838 | 30 | 0.16 | 48,840 | 32 | 0.26 | |||||||||
| Total interest-bearing | ||||||||||||||||||
| deposits | 4,026,899 | 10,655 | 1.06 | 4,139,648 | 9,510 | 0.92 | 3,722,571 | 8,520 | 0.92 | |||||||||
| Borrowings | 1,249,038 | 5,623 | 1.80 | 1,148,072 | 5,188 | 1.81 | 1,337,049 | 5,291 | 1.58 | |||||||||
| Total interest-bearing | ||||||||||||||||||
| liabilities | 5,275,937 | 16,278 | 1.23 | 5,287,720 | 14,698 | 1.11 | 5,059,620 | 13,811 | 1.09 | |||||||||
| Non interest-bearing | ||||||||||||||||||
| demand deposits | 354,149 | 336,036 | 318,188 | |||||||||||||||
| Other liabilities | 72,767 | 64,865 | 89,943 | |||||||||||||||
| Total liabilities | 5,702,853 | 5,688,621 | 5,467,751 | |||||||||||||||
| Equity | 536,468 | 529,451 | 508,974 | |||||||||||||||
| Total liabilities and | ||||||||||||||||||
| equity | $ | 6,239,321 | $ | 6,218,072 | $ | 5,976,725 | ||||||||||||
| Net interest income / | ||||||||||||||||||
| net interest rate spread | $ | 43,041 | 2.77 | % | $ | 43,617 | 2.83 | % | $ | 41,713 | 2.82 | % | ||||||
| Net interest-earning assets / | ||||||||||||||||||
| net interest margin | $ | 660,192 | 2.90 | % | $ | 631,261 | 2.95 | % | $ | 624,793 | 2.94 | % | ||||||
| Ratio of interest-earning | ||||||||||||||||||
| assets to interest-bearing | ||||||||||||||||||
| liabilities | 1.13 | X | 1.12 | X | 1.12 | 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 $0.9 million, $0.3 million and $0.9 million for the three months ended September 30, 2017, June 30, 2017 and September 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 nine months ended | |||||||||||||
| September 30, 2017 | September 30, 2016 | ||||||||||||
| Average | Yield/ | Average | Yield/ | ||||||||||
| Balance | Interest | Cost | Balance | Interest | Cost | ||||||||
| Interest-earning Assets: | |||||||||||||
| Mortgage loans, net | $ | 4,287,674 | $ | 135,429 | 4.21 | % | $ | 3,972,502 | $ | 129,200 | 4.34 | % | |
| Other loans, net | 667,749 | 20,405 | 4.07 | 575,652 | 15,952 | 3.69 | |||||||
| Total loans, net (1) | 4,955,423 | 155,834 | 4.19 | 4,548,154 | 145,152 | 4.26 | |||||||
| Taxable securities: | |||||||||||||
| Mortgage-backed | |||||||||||||
| securities | 527,890 | 10,122 | 2.56 | 603,994 | 11,231 | 2.48 | |||||||
| Other securities | 215,453 | 6,220 | 3.85 | 241,821 | 6,038 | 3.33 | |||||||
| Total taxable securities | 743,343 | 16,342 | 2.93 | 845,815 | 17,269 | 2.72 | |||||||
| Tax-exempt securities: (2) | |||||||||||||
| Other securities | 145,058 | 2,309 | 2.12 | 140,889 | 2,366 | 2.24 | |||||||
| Total tax-exempt securities | 145,058 | 2,309 | 2.12 | 140,889 | 2,366 | 2.24 | |||||||
| Interest-earning deposits | |||||||||||||
| and federal funds sold | 66,042 | 403 | 0.81 | 61,484 | 191 | 0.41 | |||||||
| Total interest-earning | |||||||||||||
| assets | 5,909,866 | 174,888 | 3.95 | 5,596,342 | 164,978 | 3.93 | |||||||
| Other assets | 299,139 | 287,111 | |||||||||||
| Total assets | $ | 6,209,005 | $ | 5,883,453 | |||||||||
| Interest-bearing Liabilities: | |||||||||||||
| Deposits: | |||||||||||||
| Savings accounts | $ | 288,376 | 1,289 | 0.60 | $ | 262,382 | 910 | 0.46 | |||||
| NOW accounts | 1,474,572 | 7,006 | 0.63 | 1,539,050 | 5,863 | 0.51 | |||||||
| Money market accounts | 882,213 | 5,487 | 0.83 | 514,626 | 2,277 | 0.59 | |||||||
| Certificate of deposit | |||||||||||||
| accounts | 1,396,583 | 15,257 | 1.46 | 1,416,811 | 15,455 | 1.45 | |||||||
| Total due to depositors | 4,041,744 | 29,039 | 0.96 | 3,732,869 | 24,505 | 0.88 | |||||||
| Mortgagors' escrow | |||||||||||||
| accounts | 60,895 | 106 | 0.23 | 55,481 | 85 | 0.20 | |||||||
| Total interest-bearing | |||||||||||||
| deposits | 4,102,639 | 29,145 | 0.95 | 3,788,350 | 24,590 | 0.87 | |||||||
| Borrowings | 1,170,203 | 15,696 | 1.79 | 1,233,571 | 15,653 | 1.69 | |||||||
| Total interest-bearing | |||||||||||||
| liabilities | 5,272,842 | 44,841 | 1.13 | 5,021,921 | 40,243 | 1.07 | |||||||
| Non interest-bearing | |||||||||||||
| demand deposits | 340,221 | 296,321 | |||||||||||
| Other liabilities | 67,967 | 73,594 | |||||||||||
| Total liabilities | 5,681,030 | 5,391,836 | |||||||||||
| Equity | 527,975 | 491,617 | |||||||||||
| Total liabilities and | |||||||||||||
| equity | $ | 6,209,005 | $ | 5,883,453 | |||||||||
| Net interest income / | |||||||||||||
| net interest rate spread | $ | 130,047 | 2.82 | % | $ | 124,735 | 2.86 | % | |||||
| Net interest-earning assets / | |||||||||||||
| net interest margin | $ | 637,024 | 2.93 | % | $ | 574,421 | 2.97 | % | |||||
| 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 $1.9 million and $3.4 million for the nine months ended September 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) | |||||||||||||||||||||||
| September 2017 vs. | September 2017 vs. | ||||||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | December 2016 | September 30, | September 2016, | |||||||||||||||||
| (Dollars in thousands) | 2017 | 2017 | 2017 | 2016 | % Change | 2016 | % Change | ||||||||||||||||
| Deposits | |||||||||||||||||||||||
| Non-interest bearing | $ | 362,509 | $ | 349,302 | $ | 344,028 | $ | 333,163 | 8.8 | % | $ | 320,060 | 13.3 | % | |||||||||
| Interest bearing: | |||||||||||||||||||||||
| Certificate of deposit | |||||||||||||||||||||||
| accounts | 1,404,555 | 1,332,377 | 1,411,819 | 1,372,115 | 2.4 | % | 1,384,551 | 1.4 | % | ||||||||||||||
| Savings accounts | 323,186 | 325,815 | 254,822 | 254,283 | 27.1 | % | 258,058 | 25.2 | % | ||||||||||||||
| Money market accounts | 991,706 | 837,565 | 851,129 | 843,370 | 17.6 | % | 733,361 | 35.2 | % | ||||||||||||||
| NOW accounts | 1,308,821 | 1,368,441 | 1,487,120 | 1,362,484 | -3.9 | % | 1,296,475 | 1.0 | % | ||||||||||||||
| Total interest-bearing | |||||||||||||||||||||||
| deposits | 4,028,268 | 3,864,198 | 4,004,890 | 3,832,252 | 5.1 | % | 3,672,445 | 9.7 | % | ||||||||||||||
| Total deposits | $ | 4,390,777 | $ | 4,213,500 | $ | 4,348,918 | $ | 4,165,415 | 5.4 | % | $ | 3,992,505 | 10.0 | % | |||||||||
| FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES | |||||||||||||||
| LOANS | |||||||||||||||
| (Unaudited) | |||||||||||||||
| Loan Originations and Purchases | |||||||||||||||
| For the three months | For the nine months ended | ||||||||||||||
| September 30, | June 30, | September 30, | September 30, | ||||||||||||
| (In thousands) | 2017 | 2017 | 2016 | 2017 | 2016 | ||||||||||
| Multi-family residential | $ | 64,551 | $ | 63,469 | $ | 61,378 | $ | 254,728 | $ | 293,385 | |||||
| Commercial real estate | 25,385 | 123,559 | 68,970 | 184,676 | 245,114 | ||||||||||
| One-to-four family – mixed-use property | 13,136 | 13,656 | 12,618 | 45,334 | 42,493 | ||||||||||
| One-to-four family – residential | 5,843 | 4,860 | 3,362 | 16,623 | 17,050 | ||||||||||
| Co-operative apartments | 232 | - | - | 232 | 470 | ||||||||||
| Construction | 148 | 4,429 | 1,920 | 7,121 | 6,034 | ||||||||||
| Small Business Administration | 4,276 | 1,870 | 470 | 6,787 | 6,785 | ||||||||||
| Taxi medallion | - | - | - | - | - | ||||||||||
| Commercial business and other | 69,354 | 49,312 | 84,525 | 195,150 | 239,015 | ||||||||||
| Total | $ | 182,925 | $ | 261,155 | $ | 233,243 | $ | 710,651 | $ | 850,346 | |||||
| Loan Composition | |||||||||||||||||||||||||||
| September 2017 vs. | September 2017 vs. | ||||||||||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | December 2016 | September 30, | September 2016 | |||||||||||||||||||||
| (Dollars in thousands) | 2017 | 2017 | 2017 | 2016 | % Change | 2016 | % Change | ||||||||||||||||||||
| Loans held for investment: | |||||||||||||||||||||||||||
| Multi-family residential | $ | 2,236,173 | $ | 2,243,643 | $ | 2,261,946 | $ | 2,178,504 | 2.6 | % | $ | 2,171,289 | 3.0 | % | |||||||||||||
| Commercial real estate | 1,352,775 | 1,349,634 | 1,268,770 | 1,246,132 | 8.6 | % | 1,195,266 | 13.2 | % | ||||||||||||||||||
| One-to-four family ― | |||||||||||||||||||||||||||
| mixed-use property | 556,723 | 556,906 | 561,355 | 558,502 | -0.3 | % | 555,691 | 0.2 | % | ||||||||||||||||||
| One-to-four family ― residential | 177,578 | 181,213 | 184,201 | 185,767 | -4.4 | % | 183,993 | -3.5 | % | ||||||||||||||||||
| Co-operative apartments | 7,035 | 7,069 | 7,216 | 7,418 | -5.2 | % | 7,494 | -6.1 | % | ||||||||||||||||||
| Construction | 15,811 | 16,842 | 12,413 | 11,495 | 37.5 | % | 11,250 | 40.5 | % | ||||||||||||||||||
| Small Business Administration | 14,485 | 10,591 | 10,519 | 15,198 | -4.7 | % | 14,339 | 1.0 | % | ||||||||||||||||||
| Taxi medallion | 18,165 | 18,303 | 18,832 | 18,996 | -4.4 | % | 20,536 | -11.5 | % | ||||||||||||||||||
| Commercial business and other | 674,706 | 644,262 | 632,503 | 597,122 | 13.0 | % | 564,972 | 19.4 | % | ||||||||||||||||||
| Net unamortized premiums | |||||||||||||||||||||||||||
| and unearned loan fees | 16,925 | 17,217 | 16,836 | 16,559 | 2.2 | % | 16,447 | 2.9 | % | ||||||||||||||||||
| Allowance for loan losses | (25,269 | ) | (22,157 | ) | (22,211 | ) | (22,229 | ) | 13.7 | % | (21,795 | ) | 15.9 | % | |||||||||||||
| Net loans | $ | 5,045,107 | $ | 5,023,523 | $ | 4,952,380 | $ | 4,813,464 | 4.8 | % | $ | 4,719,482 | 6.9 | % | |||||||||||||
| Loans Held for Investment Activity | ||||||||||||||||||||
| Three Months Ended | ||||||||||||||||||||
| September, 30 | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||
| (In thousands) | 2017 | 2017 | 2017 | 2016 | 2016 | |||||||||||||||
| Loans originated and purchased | $ | 182,925 | $ | 261,155 | $ | 266,571 | $ | 282,592 | $ | 233,243 | ||||||||||
| Principal reductions | (155,007 | ) | (143,195 | ) | (122,897 | ) | (187,780 | ) | (183,583 | ) | ||||||||||
| Loans transferred to held-for-sale | - | (30,565 | ) | - | - | - | ||||||||||||||
| Loans sold | (2,606 | ) | (16,337 | ) | (4,874 | ) | - | (3,693 | ) | |||||||||||
| Loan charged-offs | (324 | ) | (350 | ) | (179 | ) | (370 | ) | (541 | ) | ||||||||||
| Foreclosures | - | - | - | (138 | ) | - | ||||||||||||||
| Net change in deferred (fees) and costs | (292 | ) | 381 | 277 | 112 | (428 | ) | |||||||||||||
| Net change in the allowance for loan losses | (3,112 | ) | 54 | 18 | (434 | ) | 403 | |||||||||||||
| Total loan activity | $ | 21,584 | $ | 71,143 | $ | 138,916 | $ | 93,982 | $ | 45,401 | ||||||||||
| FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES | |||||||||||||||||||||
| NON-PERFORMING ASSETS and NET CHARGE-OFFS | |||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||||
| (Dollars in thousands) | 2017 | 2017 | 2017 | 2016 | 2016 | ||||||||||||||||
| Loans 90 Days Or More Past Due | |||||||||||||||||||||
| and Still Accruing: | |||||||||||||||||||||
| Multi-family residential | $ | 415 | $ | - | $ | - | $ | - | $ | - | |||||||||||
| Commercial real estate | 38 | - | 75 | - | 1,183 | ||||||||||||||||
| One-to-four family - mixed-use property | 129 | - | - | 386 | 470 | ||||||||||||||||
| Construction | - | 602 | 602 | - | - | ||||||||||||||||
| Taxi medallion | 1,147 | 727 | - | - | - | ||||||||||||||||
| Total | 1,729 | 1,329 | 677 | 386 | 1,653 | ||||||||||||||||
| Non-accrual Loans: | |||||||||||||||||||||
| Multi-family residential | 1,309 | 1,537 | 1,354 | 1,837 | 1,649 | ||||||||||||||||
| Commercial real estate | 1,147 | 1,948 | 1,462 | 1,148 | 1,157 | ||||||||||||||||
| One-to-four family - mixed-use property | 2,217 | 2,971 | 3,328 | 4,025 | 4,534 | ||||||||||||||||
| One-to-four family - residential | 7,434 | 7,616 | 7,847 | 8,241 | 8,340 | ||||||||||||||||
| Small Business Administration | 50 | 53 | 58 | 1,886 | 2,132 | ||||||||||||||||
| Taxi medallion | - | - | 3,771 | 3,825 | 3,971 | ||||||||||||||||
| Commercial business and other | 4 | 5 | 38 | 68 | 99 | ||||||||||||||||
| Total | 12,161 | 14,130 | 17,858 | 21,030 | 21,882 | ||||||||||||||||
| Total Non-performing Loans | 13,890 | 15,459 | 18,535 | 21,416 | 23,535 | ||||||||||||||||
| Other Non-performing Assets: | |||||||||||||||||||||
| Real estate acquired through foreclosure | - | - | - | 533 | 2,839 | ||||||||||||||||
| Total | - | - | - | 533 | 2,839 | ||||||||||||||||
| Total Non-performing Assets | $ | 13,890 | $ | 15,459 | $ | 18,535 | $ | 21,949 | $ | 26,374 | |||||||||||
| Non-performing Assets to Total Assets | 0.22 | % | 0.25 | % | 0.30 | % | 0.36 | % | 0.44 | % | |||||||||||
| Allowance For Loan Losses to Non-performing Loans | 181.9 | % | 143.3 | % | 119.8 | % | 103.8 | % | 92.6 | % | |||||||||||
| Net Charge-Offs (Recoveries) | |||||||||||||||||||||
| Three Months Ended | |||||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||||
| (In thousands) | 2017 | 2017 | 2017 | 2016 | 2016 | ||||||||||||||||
| Multi-family residential | $ | 224 | $ | (53 | ) | $ | (16 | ) | $ | (103 | ) | $ | 79 | ||||||||
| Commercial real estate | (25 | ) | 4 | (68 | ) | - | (11 | ) | |||||||||||||
| One-to-four family – mixed-use property | 1 | (67 | ) | 34 | (520 | ) | 24 | ||||||||||||||
| One-to-four family – residential | (58 | ) | 170 | - | 40 | - | |||||||||||||||
| Small Business Administration | (17 | ) | 14 | 26 | 186 | 317 | |||||||||||||||
| Taxi medallion | - | - | 54 | 142 | - | ||||||||||||||||
| Commercial business and other | 29 | (14 | ) | (12 | ) | (179 | ) | (6 | ) | ||||||||||||
| Total net loan charge-offs (recoveries) | $ | 154 | $ | 54 | $ | 18 | $ | (434 | ) | $ | 403 | ||||||||||
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 | Nine Months Ended | ||||||||||||||||
| September 30, | June 30, | September 30, | September 30, | September 30, | |||||||||||||
| 2017 | 2017 | 2016 | 2017 | 2016 | |||||||||||||
| GAAP income before income taxes | $ | 15,470 | $ | 19,500 | $ | 17,289 | $ | 52,484 | $ | 83,617 | |||||||
| Net loss from fair value adjustments | 1,297 | 1,159 | 823 | 2,834 | 2,925 | ||||||||||||
| Net loss (gain) on sale of securities | 186 | - | - | 186 | (2,363 | ) | |||||||||||
| Gain from life insurance proceeds | (238 | ) | (6 | ) | (47 | ) | (1,405 | ) | (458 | ) | |||||||
| Net gain on sale of buildings | - | - | - | - | (33,814 | ) | |||||||||||
| Prepayment penalty on borrowings | - | - | - | - | 2,082 | ||||||||||||
| Core income before taxes | 16,715 | 20,653 | 18,065 | 54,099 | 51,989 | ||||||||||||
| Provision for income taxes for core income | 5,812 | 7,129 | 6,736 | 17,961 | 19,628 | ||||||||||||
| Core net income | $ | 10,903 | $ | 13,524 | $ | 11,329 | $ | 36,138 | $ | 32,361 | |||||||
| GAAP diluted earnings per common share | $ | 0.35 | $ | 0.44 | $ | 0.37 | $ | 1.21 | $ | 1.75 | |||||||
| Net loss from fair value adjustments, net of tax | 0.03 | 0.02 | 0.03 | 0.07 | 0.06 | ||||||||||||
| Net loss (gain) on sale of securities, net of tax | - | - | - | - | (0.05 | ) | |||||||||||
| Gain from life insurance proceeds | (0.01 | ) | - | - | (0.05 | ) | (0.02 | ) | |||||||||
| Net gain on sale of buildings, net of tax | - | - | - | - | (0.67 | ) | |||||||||||
| Prepayment penalty on borrowings | - | - | - | - | 0.04 | ||||||||||||
| Core diluted earnings per common share* | $ | 0.37 | $ | 0.46 | $ | 0.39 | $ | 1.24 | $ | 1.12 | |||||||
| Core net income, as calculated above | $ | 10,903 | $ | 13,524 | $ | 11,329 | $ | 36,138 | $ | 32,361 | |||||||
| Average assets | 6,239,321 | 6,218,072 | 5,976,725 | 6,209,005 | 5,883,453 | ||||||||||||
| Average equity | 536,468 | 529,451 | 508,974 | 527,975 | 491,617 | ||||||||||||
| Core return on average assets** | 0.70 | % | 0.87 | % | 0.76 | % | 0.78 | % | 0.73 | % | |||||||
| Core return on average equity** | 8.13 | % | 10.22 | % | 8.90 | % | 9.13 | % | 8.78 | % | |||||||
| * | 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) | |||||||||||||
| September 30, | December 31, | September 30, | |||||||||||
| (Dollars in thousands) | 2017 | 2016 | 2016 | ||||||||||
| Total Equity | $ | 539,609 | $ | 513,853 | $ | 512,621 | |||||||
| Less: | |||||||||||||
| Goodwill | (16,127 | ) | (16,127 | ) | (16,127 | ) | |||||||
| Intangible deferred tax liabilities | 391 | 389 | 407 | ||||||||||
| Tangible Stockholders' Common Equity | $ | 523,873 | $ | 498,115 | $ | 496,901 | |||||||
| Total Assets | $ | 6,261,382 | $ | 6,058,487 | $ | 5,999,255 | |||||||
| Less: | |||||||||||||
| Goodwill | (16,127 | ) | (16,127 | ) | (16,127 | ) | |||||||
| Intangible deferred tax liabilities | 391 | 389 | 407 | ||||||||||
| Tangible Assets | $ | 6,245,646 | $ | 6,042,749 | $ | 5,983,535 | |||||||
| Tangible Stockholders' Common Equity to Tangible Assets | 8.39 | % | 8.24 | % | 8.30 | % | |||||||