LAKE SUCCESS, N.Y., July 24, 2007 (PRIME NEWSWIRE) -- Flushing Financial Corporation (the "Company") (Nasdaq:FFIC), the parent holding company for Flushing Savings Bank, FSB (the "Bank"), today announced its financial results for the three and six months ended June 30, 2007.
John R. Buran, President and Chief Executive Officer, stated: "The Company achieved a significant milestone as it passed the $3.0 billion level in total assets during the second quarter. We are also pleased with the operating results we are reporting for the second quarter. While they represent a decline from the comparable prior year period, core earnings, which exclude the effects of SFAS No. 159, increased to $5.1 million, or $0.26 per diluted share, in the second quarter from $4.9 million, or $0.25 per diluted share, in the first quarter of 2007. The effect of changes in fair value recorded under SFAS No. 159 reduced GAAP earnings by $0.02 per diluted share for the second quarter, while increasing GAAP earnings by $0.02 per diluted share in the first quarter. Net interest income reached a record level of $18.1 million in the second quarter, as the net interest margin increased to 2.57% in the second quarter of 2007 from 2.56% in the first quarter of 2007. Operating expenses, excluding certain non-recurring expenses related to the annual grants of restricted stock units and the retirement of an executive, increased $0.1 million in the second quarter of 2007 from the first quarter of 2007.
"We had a record quarter of loan originations at $213.5 million, which contributed to our highest ever quarterly net interest income. Loans in process were $281.4 million at June 30, 2007, with $59.9 million resulting from new or expanded initiatives within our strategic plan.
"Our strategic initiatives contributed to the increase in core earnings. We continued to move the savings bank to a more 'commercial like' banking institution. In the recent quarter, we introduced our remote capture product, Desktop Direct, which has been well received and installed at depositors' business offices. Also in the recent quarter, we began the installation of a cash management suite of products, which will be introduced during the second half of 2007. We also grew commercial business loans by $10.3 million during the quarter. Our iGObanking.com(tm) internet bank is performing well, bringing in deposits at favorable interest rates.
"The second quarter saw the return of a positively sloped interest rate curve as long-term rates increased. The benefit we should see from this change in the yield curve has a lag as our interest-bearing liabilities continued to reprice upwards faster than our interest-earning assets on a year-over-year basis.
"In summary, we remain pleased with the direction and pace of change in the organization as we move to a more 'commercial-like' banking institution. We continue to expand and leverage our strengths in multicultural banking, and mixed-use and multi-family lending, as we remain focused on delivering long-term value to our shareholders."
Net income for the second quarter ended June 30, 2007 was $4.8 million, a decrease of $0.6 million, or 11.6%, from the $5.4 million earned in the second quarter of 2006. Diluted earnings per share for the second quarter was $0.24, a decrease of $0.06, or 20.0%, from the $0.30 earned in the comparable quarter a year ago.
Net income for the first half of 2007 was $10.2 million, a decrease of $1.2 million, or 10.2%, from the $11.3 million earned in the first half of 2006. Diluted earnings per share for the first half of 2007 was $0.51, a decrease of $0.12, or 19.0%, from the $0.63 earned in the comparable 2006 period.
Earnings Summary - Three Months Ended June 30, 2007
For the three months ended June 30, 2007, net interest income was $18.1 million, an increase of $1.4 million, or 8.5%, from $16.7 million for the three months ended June 30, 2006. An increase in the average balance of interest-earning assets of $483.5 million, to $2,810.4 million, was partially offset by a decrease in the net interest spread of 27 basis points to 2.35% for the quarter ended June 30, 2007 from 2.62% for the comparable period in 2006. The yield on interest-earning assets increased 29 basis points to 6.74% for the three months ended June 30, 2007 from 6.45% in the three months ended June 30, 2006. However, this was more than offset by an increase in the cost of funds of 56 basis points to 4.39% for the three months ended June 30, 2007 from 3.83% for the comparable prior year period. The net interest margin decreased 29 basis points to 2.57% for the three months ended June 30, 2007 from 2.86% for the three months ended June 30, 2006. Excluding prepayment penalty income, the net interest margin would have been 2.38% and 2.69% for the three month periods ended June 30, 2007 and 2006, respectively.
The increase in the yield of interest-earning assets is primarily due to an increase of $511.0 million in the average balance of the loan portfolio to $2,485.3 million, combined with an $11.8 million decrease in the average balance of the lower-yielding securities portfolios. The yield on the mortgage loan portfolio increased 16 basis points to 6.95% for the three months ended June 30, 2007 from 6.79% for the three months ended June 30, 2006. This increase is primarily due to the average rate on new loans originated during the past twelve months being above the average rate on the loan portfolio. In an effort to increase the yield on interest-earning assets, we continued to fund a portion of the growth in the higher-yielding mortgage loan portfolio through repayments received on the lower-yielding securities portfolio.
The increase in the cost of interest-bearing liabilities is primarily attributed to the Federal Reserve increasing overnight rates for seventeen consecutive meetings through June 2006. Although the overnight rate remained at 5.25% since June 2006, the prior increases resulted in an increase in our cost of funds. Certificates of deposit, savings accounts and money market accounts increased 64 basis points, 81 basis points and 55 basis points, respectively, for the three months ended June 30, 2007 compared to the three months ended June 30, 2006, resulting in an increase in the cost of deposits of 65 basis points to 4.21% for the three months ended June 30, 2007 compared to the three months ended June 30, 2006. The cost of borrowed funds also increased 35 basis points to 4.97% for the three months ended June 30, 2007 compared to the three months ended June 30, 2006. This was combined with the increase in the average balance of certificates of deposit of $200.7 million, while the average balance of borrowed funds increased $175.4 million. In addition, the combined average balances of lower-costing savings, money market and NOW accounts increased a total of $105.1 million.
The net interest margin for the three months ended June 30, 2007 increased one basis point to 2.57% from 2.56% for the quarter ended March 31, 2007. The yield on interest-earning assets increased 13 basis points during the quarter, while the cost of interest-bearing liabilities increased 12 basis points.
Non-interest income increased $0.2 million, or 6.1%, for the three months ended June 30, 2007 to $2.7 million, as compared to $2.6 million for the quarter ended June 30, 2006. This was attributed to increases of $0.3 million in dividends received on Federal Home Loan Bank of New York ("FHLB-NY") stock, $0.2 million in miscellaneous fees from loans which paid-in-full prior to maturity, and $0.3 million in Other Income, partially offset by a $0.6 million charge attributed to changes in fair value of financial assets and financial liabilities carried at fair value under SFAS No. 159.
Non-interest expense was $13.3 million for the three months ended June 30, 2007, an increase of $2.9 million, or 27.9%, from $10.4 million for the three months ended June 30, 2006. The increase from the comparable prior year period is primarily attributed to increases of: $1.4 million in employee salary and benefit expenses related to additional employees primarily related to five additional branches, additional employees for the business banking initiative and the internet banking division, $0.3 million in occupancy and equipment costs primarily related to increased rental expense, $0.2 million in depreciation primarily due to five additional locations, $0.2 million in professional services, $0.2 million in data processing expense, and $0.4 million in other operating expenses primarily related to the additional branches and employees. The efficiency ratio was 61.9% and 54.0% for the three month periods ended June 30, 2007 and 2006, respectively.
Net income for the three months ended June 30, 2007 was $4.8 million, a decrease of $0.6 million or 11.6%, as compared to $5.4 million for the three months ended June 30, 2006. Diluted earnings per share was $0.24 for the three months ended June 30, 2007, a decrease of $0.06, or 20.0%, from $0.30 in the three months ended June 30, 2006.
Return on average equity was 8.78% for the three months ended June 30, 2007 compared to 12.18% for the three months ended June 30, 2006. Return on average assets was 0.6% for the three months ended June 30, 2007 compared to 0.9% for the three months ended June 30, 2006.
Earnings Summary - Six Months Ended June 30, 2007
For the six months ended June 30, 2007, net interest income was $35.4 million, an increase of $1.8 million, or 5.4%, from $33.6 million for the six months ended June 30, 2006. An increase in the average balance of interest-earning assets of $462.4 million, to $2,759.9 million, was partially offset by a decrease in the net interest spread of 34 basis points to 2.35% for the six months ended June 30, 2007 from 2.69% for the comparable period in 2006. The yield on interest-earning assets increased 26 basis points to 6.68% for the six months ended June 30, 2007 from 6.42% in the six months ended June 30, 2006. However, this was more than offset by an increase in the cost of funds of 60 basis points to 4.33% for the six months ended June 30, 2007 from 3.73% for the comparable prior year period. The net interest margin decreased 36 basis points to 2.56% for the six months ended June 30, 2007 from 2.92% for the six months ended June 30, 2006. Excluding prepayment penalty income, the net interest margin would have been 2.42% and 2.76% for the six month periods ended June 30, 2007 and 2006, respectively.
The increase in the yield of interest-earning assets is primarily due to an increase of $485.8 million in the average balance of the loan portfolio to $2,429.2 million, combined with an $11.9 million decrease in the average balance of the lower-yielding securities portfolios. The yield on the mortgage loan portfolio increased 12 basis points to 6.89% for the six months ended June 30, 2007 from 6.77% for the six months ended June 30, 2006. This increase is primarily due to the average rate on new loans originated during the past twelve months being above the average rate on the loan portfolio. In an effort to increase the yield on interest-earning assets, we continued to fund a portion of the growth in the higher-yielding mortgage loan portfolio through repayments received on the lower-yielding securities portfolio.
The increase in the cost of interest-bearing liabilities is primarily attributed to the Federal Reserve increasing overnight rates for seventeen consecutive meetings through June 2006. Although the overnight rate remained at 5.25% since June 2006, the prior increases resulted in an increase in our cost of funds. Certificates of deposit, savings accounts and money market accounts increased 69 basis points, 63 basis points and 78 basis points, respectively, for the six months ended June 30, 2007 compared to the six months ended June 30, 2006, resulting in an increase in the cost of deposits of 73 basis points to 4.14% for the six months ended June 30, 2007 compared to the six months ended June 30, 2006. The cost of borrowed funds also increased 34 basis points to 4.91% for the six months ended June 30, 2007 compared to the six months ended June 30, 2006. This was combined with the increase in the average balance of certificates of deposit of $208.3 million, while the average balance of borrowed funds increased $157.4 million. In addition, the combined average balances of lower-costing savings, money market and NOW accounts increased a total of $98.3 million.
Non-interest income increased $1.6 million, or 33.4%, for the six months ended June 30, 2007 to $6.4 million, as compared to $4.8 million for the six months ended June 30, 2006. This was attributed to increases of: $0.2 million on BOLI due to the purchase of additional BOLI, $0.5 million in dividends received on Federal Home Loan Bank of New York ("FHLB-NY") stock, $0.3 million in miscellaneous fees from loans which paid-in-full prior to maturity, $0.6 million in Other Income, and $0.2 million attributed to changes in fair value of financial assets and financial liabilities carried at fair value under SFAS No. 159.
Non-interest expense was $25.8 million for the six months ended June 30, 2007, an increase of $6.0 million, or 30.2%, from $19.8 million for the six months ended June 30, 2006. The increase from the comparable prior year period is primarily attributed to increases of: $2.8 million in employee salary and benefit expenses related to additional employees primarily related to five additional branches, additional employees for the business banking initiative and the internet banking division, $0.9 million in occupancy and equipment costs primarily related to increased rental expense, $0.5 million in depreciation primarily due to five additional locations, $0.5 million in professional services, $0.4 million in data processing expense, and $1.0 million in other operating expenses primarily related to the additional branches and employees. The efficiency ratio was 62.1% and 51.8% for the three month periods ended June 30, 2007 and 2006, respectively.
Net income for the six months ended June 30, 2007 was $10.2 million, a decrease of $1.2 million or 10.2%, as compared to $11.3 million for the six months ended June 30, 2006. Diluted earnings per share was $0.51 for the six months ended June 30, 2007, a decrease of $0.12, or 19.0%, from $0.63 in the six months ended June 30, 2006.
Return on average equity was 9.40% for the six months ended June 30, 2007 compared to 12.79% for the six months ended June 30, 2006. Return on average assets was 0.7% for the six months ended June 30, 2007 compared to 0.9% for the six months ended June 30, 2006.
Balance Sheet Summary
Effective January 1, 2007, the Company elected the early adoption of SFAS No. 157 and 159. SFAS No. 159 permits entities to choose to measure many financial instruments and certain other items at fair value. Upon adoption, the Company selected the fair value measurement option for various pre-existing financial assets and financial liabilities, including mortgage-backed securities with a fair value of $139.4 million, mutual funds with a fair value of $20.6 million, common stock with a fair value of $0.6 million, FHLB borrowings with a fair value of $98.8 million, and junior subordinated debt (commonly known as trust preferred securities) with a fair value of $21.3 million. On a going-forward basis, the Company currently plans to carry the financial assets and financial liabilities which will replace the above noted items at fair value, and will evaluate other purchases of investments and acquisition of new debt to determine if they should be carried at cost or fair value. The initial fair value measurement of these items resulted in a reduction of stockholders' equity of $2.2 million as of January 1, 2007. This one-time charge is comprised of a $5.8 million cumulative-effect adjustment, net of tax, recorded as a reduction of retained earnings, partially offset by a $3.6 million reduction in accumulated other comprehensive loss related to the election of the fair value option for certain securities available for sale. The Bank's regulatory capital was reduced $5.4 million as of January 1, 2007 as a result of the adoption of SFAS No. 159. The Bank remains well-capitalized under regulatory capital requirements after the adoption of SFAS No. 159. During the quarter ended June 30, 2007, the Company elected to measure at fair value junior subordinated debt (commonly know as trust preferred securities) with a fair value of $41.4 million that was issued during June 2007.
At June 30, 2007, total assets were $3,040.7 million, an increase of $204.2 million, or 7.2%, from $2,836.5 million at December 31, 2006. Total loans, net increased $222.4 million, or 9.6%, during the six months ended June 30, 2007 to $2,547.1 million from $2,324.7 million at December 31, 2006. At June 30, 2007, loans in process totaled $281.4 million, compared to $185.3 million at June 30, 2006 and $291.9 million at December 31, 2006.
Loan originations were at a record level for a quarter as demand for our loan products remained strong. The following table shows loan originations and purchases for the periods indicated.
For the three months For the six months
ended June 30, ended June 30,
------------------- -------------------
(In thousands) 2007 2006 2007 2006
---------------------------------------------------------------------
Multi-family
residential $ 55,941 $ 30,629 $ 113,599 $ 64,659
Commercial real
estate 62,032 32,070 100,706 74,327
One-to-four family
- mixed-use
property 48,180 33,516 91,734 66,318
One-to-four family
- residential 10,293 2,357 17,538 6,516
Construction 14,276 16,723 25,376 31,327
Commercial business
and other loans 22,811 25,184 48,293 37,178
-------- -------- -------- --------
Total $213,533 $140,479 $397,246 $280,325
======== ======== ======== ========
Loan purchases included in the table above totaled $9.1 million and $2.0 million for the six months ended June 30, 2007 and 2006, respectively. There were no loan purchases for the three month periods ended June 30, 2007 and 2006. Loans acquired on June 30, 2006 in the purchase of Atlantic Liberty are excluded from the table above.
As the Bank continues to increase its loan portfolio, management continues to adhere to the Bank's strict underwriting standards. As a result, the Bank has been able to minimize charge-offs of losses from impaired loans and maintain asset quality. Non-performing assets were $6.5 million at June 30, 2007 compared to $3.1 million at December 31, 2006 and $2.4 million at June 30, 2006. Included in non-performing assets at June 30, 2007 is a multi-family residential mortgage loan for $2.9 million, which has a loan-to-value ratio of approximately 60%. Management expects to be paid-in-full during the third quarter as the borrower has a commitment to refinance the loan. Total non-performing assets as a percentage of total assets was 0.21% at June 30, 2007 compared to 0.11% at December 31, 2006 and 0.09% as of June 30, 2006. The ratio of allowance for loan losses to total non-performing loans was 105% at June 30, 2007, compared to 226% at December 31, 2006 and 301% at June 30, 2006.
During the six months ended June 30, 2007, mortgage-backed securities decreased $21.4 million to $267.5 million, while other securities decreased $4.1 million to $37.6 million. Principal repayments on the securities portfolio during the first half of 2007 have been reinvested in higher yielding loans. Other securities primarily consists of securities issued by government agencies and mutual or bond funds that invest in government and government agency securities.
Total liabilities were $2,818.0 million at June 30, 2007, an increase of $199.9 million, or 7.6%, from December 31, 2006. During the six months ended June 30, 2007, due to depositors increased $179.9 million to $1,924.3 million, primarily as a result of an increase of $78.0 million in certificates of deposit, of which $39.2 million were new brokered deposits, while core deposits increased $101.9 million. Borrowed funds increased $15.8 million. During June 2007, the Company issued junior subordinated debt with a face amount of $41.2 million. Following the end of the quarter, the Company issued an additional $20.6 million of junior subordinated debt, and called junior subordinated debt with a face amount of $20.6 million that was issued in 2002. The $61.8 million of junior subordinated debt was issued with a weighted average fixed rate of interest for the first five years of 6.96%, and then adjusts quarterly at a weighted average rate equal to three month LIBOR plus 142 basis points. The junior subordinated debt that was called in July adjusted quarterly at a rate equal to three month LIBOR plus 365 basis points. In July 2007, the Company used $30.0 million of the funds obtained from issuing this debt to increase its investment in the Bank, thereby increasing the Bank's regulatory capital to support further asset growth. In addition, mortgagors' escrow deposits increased $6.3 million during the six months ended June 30, 2007.
Total stockholders' equity increased $4.3 million, or 2.0%, to $222.7 million at June 30, 2007 from $218.4 million at December 31, 2006. Net income of $10.2 million for the six months ended June 30, 2007 was partially offset by a net after tax decrease of $0.9 million on the market value of securities available for sale, $0.6 million in treasury shares purchased through the Company's stock repurchase program, a $2.2 million charge related to the adoption of SFAS No. 159, and $4.7 million of cash dividends declared and paid during the six months ended June 30, 2007. The exercise of stock options increased stockholders' equity by $1.1 million, including the income tax benefit realized by the Company upon the exercise of the options. Book value per share was $10.48 at June 30, 2007, compared to $10.34 per share at December 31, 2006 and $9.86 per share at June 30, 2006.
Under its current stock repurchase program, the Company repurchased 38,000 shares during the six months ended June 30, 2007, at a total cost of $0.6 million, or an average of $16.52 per share. At June 30, 2007, 362,050 shares remain to be repurchased under the current stock repurchase program. Through June 30, 2007, the Company had repurchased approximately 48% of the common shares issued in connection with the Company's initial public offering at a cost of $118.6 million.
Reconciliation of GAAP and Core Earnings
Although core earnings are not a measure of performance calculated in accordance with GAAP, the Company believes that its core earnings are an important indication of performance through ongoing operations. The Company believes that core earnings are useful to management and investors in evaluating its ongoing operating performance, and in comparing its performance with other companies in the banking industry, particularly those that have not adopted SFAS No. 159. Core earnings should not be considered in isolation or as a substitute for GAAP earnings. For the three months ended March 31, 2007 and June 30, 2007, and the six months ended June 30, 2007, the Company calculated core earnings by adding back or subtracting the fair value gain or loss recorded under SFAS No.159. The Company adopted SFAS No. 159 effective January 1, 2007.
Three Months Ended
------------------- Six Months Ended
March 31, June 30, June 30,
2007 2007 2007
------------------- -----------------
(in thousands, except per share data)
GAAP net income $5,386 $4,781 $10,167
Net (gain) loss
under SFAS No. 159 (805) 634 (171)
Income tax effect 356 (280) 76
------- ------- -------
Core net income $4,937 $5,135 $10,072
------- ------- -------
GAAP diluted earnings
per share $0.27 $0.24 $0.51
Net after tax effect
of SFAS No. 159 (0.02) 0.02 0.00
------- ------- -------
Core diluted earnings
per share $0.25 $0.26 $0.51
------- ------- -------
"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, 2006 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.
Flushing Financial Corporation is the holding company for Flushing Savings Bank, FSB, a federally chartered stock savings bank insured by the Federal Deposit Insurance Corporation (FDIC). The Bank conducts its business through fourteen banking offices located in Queens, Brooklyn, Manhattan and Nassau County, and its internet banking division, "iGObanking.com(tm)".
Additional information on Flushing Financial Corporation may be obtained by visiting the Company's website at http://www.flushingsavings.com.
FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollars in Thousands Except Per Share Data)
(Unaudited)
June 30, December 31,
2007 2006
---------- ----------
ASSETS
Cash and due from banks $ 34,157 $ 29,251
Securities available for sale:
Mortgage-backed securities 267,460 288,851
Other securities 37,594 41,736
Loans:
Multi-family residential 930,168 870,912
Commercial real estate 580,010 519,552
One-to-four family -
mixed-use property 648,935 588,092
One-to-four family - residential 161,156 161,889
Co-operative apartments 7,994 8,059
Construction 118,760 104,488
Small Business Administration 17,291 17,521
Commercial business and other 77,009 50,899
Net unamortized premiums and
unearned loan fees 12,611 10,393
Allowance for loan losses (6,799) (7,057)
---------- ----------
Net loans 2,547,135 2,324,748
Interest and dividends receivable 14,111 13,332
Bank premises and equipment, net 24,804 23,042
Federal Home Loan Bank of New York
stock 35,244 36,160
Bank owned life insurance 41,369 40,516
Goodwill 14,819 14,818
Core deposit intangible 3,045 3,279
Other assets 20,950 20,788
---------- ----------
Total assets $3,040,688 $2,836,521
========== ==========
LIABILITIES
Due to depositors:
Non-interest bearing $ 82,584 $ 80,061
Interest-bearing:
Certificate of deposit
accounts 1,180,960 1,102,976
Savings accounts 306,432 262,980
Money market accounts 292,137 251,197
NOW accounts 62,167 47,181
---------- ----------
Total interest-bearing deposits 1,841,696 1,664,334
Mortgagors' escrow deposits 26,022 19,755
Borrowed funds 848,177 832,413
Other liabilities 19,523 21,543
---------- ----------
Total liabilities 2,818,002 2,618,106
---------- ----------
STOCKHOLDERS' EQUITY
Preferred stock ($0.01 par value;
5,000,000 shares authorized;
none issued) -- --
Common stock ($0.01 par value;
40,000,000 shares authorized;
21,256,849 shares and 21,165,052
shares issued at June 30, 2007
and December 31, 2006,
respectively; 21,253,363 shares
and 21,131,274 shares
outstanding at June 30, 2007 and
December 31, 2006, respectively) 213 212
Additional paid-in capital 72,026 71,079
Treasury stock (3,486 shares and
33,778 shares at June 30, 2007
and December 31, 2006,
respectively) (57) (592)
Unearned compensation (2,503) (2,897)
Retained earnings 156,425 156,879
Accumulated other comprehensive
loss, net of taxes (3,418) (6,266)
---------- ----------
Total stockholders' equity 222,686 218,415
---------- ----------
Total liabilities and
stockholders' equity $3,040,688 $2,836,521
========== ==========
FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in Thousands Except Per Share Data)
(Unaudited)
For the three months For the six months
ended June 30, ended June 30,
------------------- -------------------
2007 2006 2007 2006
---------------------------------------------------------------------
Interest and dividend
income
Interest and fees on
loans $ 43,367 $ 33,584 $ 84,031 $ 65,849
Interest and
dividends on
securities:
Interest 3,820 3,628 7,746 7,328
Dividends 104 76 206 153
Other interest income 80 258 179 428
-------- -------- -------- --------
Total interest and
dividend income 47,371 37,546 92,162 73,758
-------- -------- -------- --------
Interest expense
Deposits 18,889 13,224 36,308 24,734
Other interest
expense 10,412 7,661 20,479 15,448
-------- -------- -------- --------
Total interest
expense 29,301 20,885 56,787 40,182
-------- -------- -------- --------
Net interest income 18,070 16,661 35,375 33,576
Provision for loan
losses -- -- -- --
-------- -------- -------- --------
Net interest income
after provision for
loan losses 18,070 16,661 35,375 33,576
-------- -------- -------- --------
Non-interest income
Loan fee income 1,080 879 1,792 1,509
Banking services fee
income 381 339 768 710
Net gain on sale of
loans held for sale 118 237 239 360
Net gain on sale of
loans 90 73 137 100
Net gain on sale of
securities -- -- -- 81
Net gain (loss) from
fair value
adjustments (634) -- 171 --
Federal Home Loan
Bank of New York
stock dividends 663 380 1,238 759
Bank owned life
insurance 424 401 853 671
Other income 621 277 1,196 603
-------- -------- -------- --------
Total non-interest
income 2,743 2,586 6,394 4,793
-------- -------- -------- --------
Non-interest expense
Salaries and employee
benefits 6,234 4,813 12,381 9,567
Occupancy and
equipment 1,608 1,261 3,233 2,370
Professional services 1,195 967 2,391 1,934
Data processing 867 656 1,711 1,294
Depreciation and
amortization 604 364 1,197 731
Other operating
expenses 2,771 2,324 4,889 3,921
-------- -------- -------- --------
Total non-interest
expense 13,279 10,385 25,802 19,817
-------- -------- -------- --------
Income before income
taxes 7,534 8,862 15,967 18,552
-------- -------- -------- --------
Provision for income
taxes
Federal 2,315 2,863 4,962 5,804
State and local 438 593 838 1,431
-------- -------- -------- --------
Total taxes 2,753 3,456 5,800 7,235
-------- -------- -------- --------
Net income $ 4,781 $ 5,406 $ 10,167 $ 11,317
======== ======== ======== ========
Basic earnings
per share $ 0.24 $ 0.30 $ 0.52 $ 0.64
Diluted earnings
per share $ 0.24 $ 0.30 $ 0.51 $ 0.63
Dividends per
share $ 0.12 $ 0.11 $ 0.24 $ 0.22
FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
SELECTED CONSOLIDATED FINANCIAL DATA
(Dollars in Thousands Except Share Data)
(Unaudited)
At or for the At or for the
three months six months
ended June 30, ended June 30,
------------------------ ------------------------
2007 2006 2007 2006
----------- ----------- ----------- -----------
Per Share Data
Basic earnings
per share $0.24 $0.30 $0.52 $0.64
Diluted
earnings per
share $0.24 $0.30 $0.51 $0.63
Average number
of shares
outstanding
for:
Basic
earnings
per share
computation 19,552,896 17,811,046 19,550,845 17,788,822
Diluted
earnings
per share
computation 19,790,087 18,079,904 19,798,242 18,078,845
Book value
per share
(based on
21,253,363
and
21,102,652
shares
outstanding
at June 30,
2007 and 2006,
respectively) $10.48 $9.86 $10.48 $9.86
Average Balances
Total loans,
net $ 2,485,258 $ 1,974,209 $ 2,429,242 $ 1,943,425
Total
interest-
earning
assets 2,810,404 2,326,946 2,759,917 2,297,538
Total assets 2,971,938 2,437,221 2,921,588 2,403,397
Total due to
depositors 1,792,172 1,486,338 1,753,897 1,447,301
Total
interest-
bearing
liabilities 2,668,720 2,183,079 2,620,884 2,153,691
Stockholders'
equity 217,757 177,466 216,255 177,034
Performance
Ratios (1)
-------------
Return on
average
assets 0.64% 0.89% 0.70% 0.94%
Return on
average
equity 8.78 12.18 9.40 12.79
Yield on
average
interest-
earning
assets 6.74 6.45 6.68 6.42
Cost of
average
interest-
bearing
liabilities 4.39 3.83 4.33 3.73
Interest rate
spread during
period 2.35 2.62 2.35 2.69
Net interest
margin 2.57 2.86 2.56 2.92
Non-interest
expense to
average
assets 1.79 1.70 1.77 1.65
Efficiency
ratio 61.92 53.96 62.07 51.76
Average
interest-
earning
assets to
average
interest-
bearing
liabilities 1.05X 1.07X 1.05X 1.07X
(1) Ratios for the quarters and six months ended June 30, 2007 and
2006 are presented on an annualized basis.
FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
SELECTED CONSOLIDATED FINANCIAL DATA
(Dollars in Thousands)
(Unaudited)
At or for the six At or for the year
Selected Financial Ratios months ended ended
and Other Data June 30, 2007 December 31, 2006
------------------------- ----------------- ------------------
Regulatory capital ratios (for
Flushing Savings Bank only):
Tangible capital (minimum
requirement = 1.5%) 6.66% 6.91%
Leverage and core capital
(minimum requirement = 3%) 6.66 6.91
Total risk-based capital
(minimum requirement = 8%) 10.36 10.99
Capital ratios:
Average equity to average assets 7.40% 7.58%
Equity to total assets 7.32 7.70
Asset quality:
Non-performing loans $6,458 $ 3,126
Non-performing assets 6,458 3,126
Net charge-offs 258 81
Asset quality ratios:
Non-performing loans to gross
loans 0.25% 0.13%
Non-performing assets to
total assets 0.21 0.11
Allowance for loan losses to
gross loans 0.27 0.30
Allowance for loan losses to
non-performing assets 105.27 225.72
Allowance for loan losses to
non-performing loans 105.27 225.72
Full-service customer facilities 14 12
FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
NET INTEREST MARGIN
(Dollars in Thousands)
(Unaudited)
For the three months ended June 30,
-----------------------------------------------------
2007 2006
------------------------- -------------------------
Average Yield/ Average Yield/
Balance Interest Cost Balance Interest Cost
------------------------- -------------------------
Assets
Interest-earning
assets:
Mortgage loans,
net (1) $2,397,978 $41,667 6.95% $1,927,902 $32,745 6.79%
Other loans,
net (1) 87,280 1,700 7.79 46,307 839 7.25
------------------------- -------------------------
Total loans,
net 2,485,258 43,367 6.98 1,974,209 33,584 6.80
------------------------- -------------------------
Mortgage-backed
securities 275,818 3,361 4.87 290,519 3,255 4.48
Other
securities 42,631 563 5.28 39,758 449 4.52
------------------------- -------------------------
Total
securities 318,449 3,924 4.93 330,277 3,704 4.49
------------------------- -------------------------
Interest-earning
deposits and
federal funds
sold 6,697 80 4.78 22,460 258 4.59
------------------------- -------------------------
Total interest-
earning assets 2,810,404 47,371 6.74 2,326,946 37,546 6.45
------------------------- -------------------------
Other assets 161,534 110,275
---------- ----------
Total assets $2,971,938 $2,437,221
========== ==========
Liabilities and
Equity
Interest-bearing
liabilities:
Deposits:
Savings
accounts $ 299,607 1,721 2.30 $ 258,537 965 1.49
NOW accounts 57,077 195 1.37 39,442 48 0.49
Money market
accounts 272,067 2,848 4.19 225,655 2,054 3.64
Certificate of
deposit
accounts 1,163,421 14,109 4.85 962,704 10,143 4.21
------------------------- -------------------------
Total due to
depositors 1,792,172 18,873 4.21 1,486,338 13,210 3.56
Mortgagors'
escrow
accounts 38,442 16 0.17 34,004 14 0.16
------------------------- -------------------------
Total
deposits 1,830,614 18,889 4.13 1,520,342 13,224 3.48
Borrowed funds 838,106 10,412 4.97 662,737 7,661 4.62
------------------------- -------------------------
Total interest-
bearing
liabilities 2,668,720 29,301 4.39 2,183,079 20,885 3.83
------------------------- -------------------------
Non interest-
bearing deposits 65,958 59,555
Other liabilities 19,503 17,121
---------- ----------
Total
liabilities 2,754,181 2,259,755
Equity 217,757 177,466
---------- ----------
Total
liabilities
and equity $2,971,938 $2,437,221
========== ==========
Net interest
income/net
interest rate
spread $18,070 2.35% $16,661 2.62%
============= =============
Net interest-
earning assets/
net interest
margin $ 141,684 2.57% $ 143,867 2.86%
========== ===== ======== =====
Ratio of interest-
earning assets to
interest-bearing
liabilities 1.05 X 1.07 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 $1.3 million and $1.0
million for the three-month periods ended June 30, 2007 and 2006,
respectively.
FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
NET INTEREST MARGIN
(Dollars in Thousands)
(Unaudited)
For the six months ended June 30,
-----------------------------------------------------
2007 2006
------------------------- -------------------------
Average Yield/ Average Yield/
Balance Interest Cost Balance Interest Cost
------------------------- -------------------------
Assets
Interest-earning
assets:
Mortgage loans,
net (1) $2,349,576 $80,931 6.89% $1,905,284 $64,465 6.77%
Other loans,
net (1) 79,666 3,100 7.78 38,141 1,384 7.26
------------------------- -------------------------
Total loans,
net 2,429,242 84,031 6.92 1,943,425 65,849 6.78
------------------------- -------------------------
Mortgage-backed
securities 280,547 6,834 4.87 296,426 6,647 4.48
Other securities 42,608 1,118 5.25 38,589 834 4.32
------------------------- -------------------------
Total
securities 323,155 7,952 4.92 335,015 7,481 4.47
------------------------- -------------------------
Interest-earning
deposits and
federal funds
sold 7,520 179 4.76 19,098 428 4.48
------------------------- -------------------------
Total interest-
earning assets 2,759,917 92,162 6.68 2,297,538 73,758 6.42
------------------------- -------------------------
Other assets 161,671 105,859
---------- ----------
Total assets $2,921,588 $2,403,397
========== ==========
Liabilities and
Equity
Interest-bearing
liabilities:
Deposits:
Savings
accounts $ 287,006 3,012 2.10 $ 263,008 1,928 1.47
NOW accounts 52,600 289 1.10 39,931 98 0.49
Money market
accounts 262,617 5,332 4.06 201,024 3,292 3.28
Certificate
of deposit
accounts 1,151,674 27,637 4.80 943,338 19,387 4.11
------------------------- -------------------------
Total due to
depositors 1,753,897 36,270 4.14 1,447,301 24,705 3.41
Mortgagors'
escrow
accounts 33,084 38 0.23 29,840 29 0.19
------------------------- -------------------------
Total
deposits 1,786,981 36,308 4.06 1,477,141 24,734 3.35
Borrowed funds 833,903 20,479 4.91 676,550 15,448 4.57
------------------------- -------------------------
Total interest-
bearing
liabilities 2,620,884 56,787 4.33 2,153,691 40,182 3.73
------------------------- -------------------------
Non interest-
bearing
deposits 65,632 56,836
Other liabilities 18,817 15,836
---------- ----------
Total
liabilities 2,705,333 2,226,363
Equity 216,255 177,034
---------- ----------
Total
liabilities
and equity $2,921,588 $2,403,397
========== ==========
Net interest
income/net
interest rate
spread $35,375 2.35% $33,576 2.69%
============= =============
Net interest-
earning assets/
net interest
margin $ 139,033 2.56% $ 143,847 2.92%
========== ===== ========== =====
Ratio of interest-
earning assets
to interest-
bearing
liabilities 1.05 X 1.07 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 $2.0 million and $1.9
million for the six-month periods ended June 30, 2007 and 2006,
respectively.