UNIONDALE, N.Y., April 27, 2021 (GLOBE NEWSWIRE) -- Flushing Financial Corporation (the “Company”) (NASDAQ-GS: FFIC)
John R. Buran, President and CEO Commentary
“We are optimistic that as more people receive vaccines, local economic activity will improve. Our first quarter 2021 actions largely focused on helping our customers navigate an improving, but still challenging environment. Despite these challenges, we achieved our fourth consecutive quarter of record net interest income. We reduced loans in forbearance by 81% from their peak nearly a year ago, and while our forbearance programs will continue into 2022, borrowers’ fundamentals are improving. The recent steepening of the yield curve is a positive for us and we expect to capitalize on our robust loan pipeline. We continue to make investments in our technology platform and fintech partnerships, both of which are driving digital engagement.”
| “First quarter of 2021 marked a continuation of the economic improvement in our local economies and the outlook is brighter than three months ago with continued vaccine rollouts and a steeper yield curve. We continue to assist customers during the pandemic by originating $123 million of PPP loans in the quarter and processing nearly $50 million in forgiveness over the life of the program.” - John R. Buran, President and CEO |
Record Net Interest Income; NIM Expansion. “Core NIM improved by 3 bps during the quarter as funding costs declined faster than asset yields. The steeper yield curve should mitigate pressure on asset yields while keeping funding costs low. However, we are preparing for an eventual rise in short term rates by extending the duration of our liabilities and utilizing forward swaps, the bulk of which begin in 2022. We focused our efforts on PPP this quarter and that impacted overall loan growth, which rose 2.4% (annualized) from fourth quarter 2020. We reported first quarter GAAP EPS of $0.60, which included improving fair value adjustments, partially offset by merger and other charges totaling $0.06 per share, net of tax. Adjusting for noncore items1, first quarter core EPS was $0.54, up 184% year over year. The Empire integration is complete with 100% of the cost savings in our run rate. We are on track to achieve our 20% earnings accretion target for 2021.”
Strong Credit Quality. “We remain confident with our credit quality given the loan to value of 38% on our real estate dependent loans, improving delinquencies, lower criticized and classified assets, and our conservative underwriting standards.”
| 1Q21 Key Financial Metrics1 | |||||||||||||||||
| 1Q21 | 4Q20 | 3Q20 | 2Q20 | 1Q20 | |||||||||||||
| GAAP: | |||||||||||||||||
| EPS | $ | 0.60 | $ | 0.11 | $ | 0.50 | $ | 0.63 | $ | (0.05 | ) | ||||||
| ROAA (%) | 0.93 | 0.18 | 0.81 | 1.01 | (0.08 | ) | |||||||||||
| ROAE (%) | 12.29 | 2.27 | 9.94 | 13.11 | (0.96 | ) | |||||||||||
| NIM FTE (%) | 3.18 | 3.08 | 3.00 | 2.87 | 2.44 | ||||||||||||
| Core: | |||||||||||||||||
| EPS | $ | 0.54 | $ | 0.58 | $ | 0.56 | $ | 0.36 | $ | 0.19 | |||||||
| ROAA (%) | 0.83 | 0.92 | 0.91 | 0.57 | 0.31 | ||||||||||||
| ROAE (%) | 10.96 | 11.67 | 11.22 | 7.39 | 3.82 | ||||||||||||
| Core NIM FTE (%) | 3.06 | 3.03 | 2.98 | 2.89 | 2.56 | ||||||||||||
| Efficiency Ratio (%) | 58.6 | 57.6 | 55.4 | 54.9 | 68.2 | ||||||||||||
| Credit Quality: | |||||||||||||||||
| NPAs/Loans&REO (%) | 0.31 | 0.31 | 0.42 | 0.34 | 0.29 | ||||||||||||
| LLRs/Loans (%) | 0.67 | 0.67 | 0.65 | 0.61 | 0.47 | ||||||||||||
| LLRs/NPLs (%) | 212.87 | 214.27 | 154.66 | 181.84 | 167.73 | ||||||||||||
| NCOs/Avg Loans (%) | 0.17 | 0.04 | 0.06 | 0.07 | 0.08 | ||||||||||||
| Balance Sheet: | |||||||||||||||||
| Avg Loans ($B) | $ | 6.7 | $ | 6.4 | $ | 5.9 | $ | 5.9 | $ | 5.8 | |||||||
| Avg Dep ($B) | $ | 6.3 | $ | 5.5 | $ | 5.0 | $ | 5.0 | $ | 5.1 | |||||||
| Book Value/Share | $ | 20.65 | $ | 20.11 | $ | 20.78 | $ | 20.27 | $ | 19.48 | |||||||
| Tangible BV/Share | $ | 19.99 | $ | 19.45 | $ | 20.22 | $ | 19.71 | $ | 18.92 | |||||||
| TCE/TA (%) | 7.60 | 7.52 | 8.10 | 7.78 | 7.38 | ||||||||||||
| 1 See “Reconciliation of GAAP Earnings and Core Earnings” and “Reconciliation of GAAP Net Interest Margin to Core and Base Net Interest Income and Net Interest Margin.” | |||||||||||||||||
1Q21 Highlights
- Record net interest income up 9.3% QoQ and 49.2% YoY to $60.9 million, while core net interest income was up 7.0% QoQ and 36.5% YoY to $58.5 million due to Empire transaction and lower funding costs
- Net interest margin rose 10 bps QoQ and 74 bps YoY to 3.18%, and core net interest margin up 3 bps QoQ and 50 bps YoY to 3.06% primarily due to lower funding costs
- Average loans up 5.1% QoQ and 15.6% YoY to $6.7 billion, including $123.2 million of PPP originations
- Average deposits rose 14.0% QoQ and 23.4% YoY to $6.3 billion, with core deposits 83% of total average deposits (including escrow deposits)
- Loan pipeline rose 15.9% YoY to $375.8 million
- Provision for credit losses of $2.8 million and net charge-offs of $2.9 million in 1Q21 largely the result of the $2.8 million charge-off for the remaining taxi medallion loans
- NPAs were flat QoQ at $21.2 million; criticized and classified assets fell 11.9% to $63.1 million
- Loans in forbearance were 4.4% of total loans and only 1.7% of loans excluding loans making interest only payments
| Income Statement Highlights | |||||||||||||||||||||||||
| Y/Y | Q/Q | ||||||||||||||||||||||||
| ($000s, except EPS) | 1Q21 | 4Q20 | 3Q20 | 2Q20 | 1Q20 | Change | Change | ||||||||||||||||||
| Net Interest Income | $ | 60,892 | $ | 55,732 | $ | 49,924 | $ | 48,717 | $ | 40,826 | 49.2 | % | 9.3 | % | |||||||||||
| Provision for Credit Losses | 2,820 | 3,862 | 2,470 | 9,619 | 7,178 | (60.7 | ) | (27.0 | ) | ||||||||||||||||
| Non-interest Income (Loss) | 6,311 | (1,181 | ) | 1,351 | 13,737 | (2,864 | ) | NM | NM | ||||||||||||||||
| Non-interest Expense | 38,159 | 46,811 | 29,985 | 28,755 | 32,380 | 17.8 | (18.5 | ) | |||||||||||||||||
| Income (Loss) Before Income Taxes | 26,224 | 3,878 | 18,820 | 24,080 | (1,596 | ) | NM | NM | |||||||||||||||||
| Provision (Benefit) for Income Taxes | 7,185 | 417 | 4,489 | 5,808 | (206 | ) | NM | NM | |||||||||||||||||
| Net Income (Loss) | $ | 19,039 | $ | 3,461 | $ | 14,331 | $ | 18,272 | $ | (1,390 | ) | NM | NM | ||||||||||||
| Diluted EPS | $ | 0.60 | $ | 0.11 | $ | 0.50 | $ | 0.63 | $ | (0.05 | ) | NM | NM | ||||||||||||
| Avg. Diluted Shares (000s) | 31,604 | 30,603 | 28,874 | 28,867 | 28,853 | 9.5 | 3.3 | ||||||||||||||||||
| Core Net Income1 | $ | 16,973 | $ | 17,784 | $ | 16,168 | $ | 10,297 | $ | 5,500 | 208.6 | (4.6 | ) | ||||||||||||
| Core EPS1 | $ | 0.54 | $ | 0.58 | $ | 0.56 | $ | 0.36 | $ | 0.19 | 184.2 | (6.9 | ) | ||||||||||||
1 See Reconciliation of GAAP Earnings and Core Earnings
Net interest income for 1Q21 was $60.9 million, an increase of 49.2% YoY and 9.3% QoQ (Empire contributed $6.1 million in 1Q21 and $4.2 million in 4Q20).
- Net interest margin of 3.18%, increased 74 bps YoY and 10 bps QoQ; net purchase accounting accretion was $0.9 million in 1Q21 and not meaningful in 4Q20
- Prepayment penalty income from loans and securities, net reversals and recoveries of interest from non-accrual loans, net gains (losses) from fair value adjustments on qualifying hedges, and purchase accounting accretion totaled $3.3 million (17 bps) in 1Q21, $2.1 million (11 bps) in 4Q20, $1.7 million (11 bps) in 3Q20, $0.4 million (2 bps) in 2Q20, and $(0.9) million ((5) bps) in 1Q20
- Excluding these items, net interest margin was 3.01% in 1Q21, 2.97% in 4Q20, 2.89% in 3Q20, 2.85% in 2Q20, and 2.49% in 1Q20, or an increase of 52 bps YoY and 4 bps QoQ
The Company recorded a provision for credit losses of $2.8 million in 1Q21, compared to $3.9 million in 4Q20, $2.5 million in 3Q20, $9.6 million in 2Q20, and $7.2 million in 1Q20.
- 1Q21 provision for credit losses was driven by the charge-off of the total remaining taxi medallion portfolio of $2.8 million; excluding the taxi medallion portfolio, net charge-offs were only $0.1 million
- Net charge-offs were $2.9 million in 1Q21, $0.6 million in 4Q20, $0.8 million in 3Q20, $1.0 million in 2Q20, and $1.1 million in 1Q20
Non-interest income (loss) for 1Q21 was $6.3 million versus $(1.2) million in 4Q20, $1.4 million in 3Q20, $13.7 million in 2Q20, and $(2.9) million in 1Q20.
- Non-interest income (loss) included net gains (losses) from fair value adjustments of $1.0 million ($0.02 per share, net of tax) in 1Q21, $(4.1) million ($(0.11) per share, net of tax) in 4Q20, $(2.2) million ($(0.06) per share, net of tax) in 3Q20, $10.2 million ($0.27 per share, net of tax) in 2Q20, and $(6.0) million ($(0.15) per share, net of tax) in 1Q20
- The net gain on the disposition of assets was $0.6 million in 1Q21 ($0.01 per share, net of tax); losses on the sale of investment securities were $0.6 million ($0.02 per share, net of tax) in 4Q20 and less than $0.1 million (less than $0.01 per share, net of tax) in both 2Q20 and 1Q20;
- Absent all above items, non-interest income was $4.7 million in 1Q21, up 48.7% YoY and 32.3% QoQ and was primarily driven by strong customer swap activity
Non-interest expense was $38.2 million in 1Q21 compared to $46.8 million in 4Q20, $30.0 million in 3Q20, $28.8 million in 2Q20, and $32.4 million in 1Q20.
- 1Q21 non-interest expense includes $1.0 million of pre-tax merger charges ($0.02 per share, net of tax) and $0.1 million of core deposit intangible amortization and other purchase accounting adjustments (less than $0.01 per share net of tax)
- 4Q20 non-interest expense includes $5.3 million pre-tax merger charges ($0.14 per share, net of tax) and $7.8 million pre-tax debt prepayment penalties ($0.20 per share, net of tax)
- 3Q20, 2Q20, and 1Q20 non-interest expense includes $0.4 million of merger charges ($0.01 per share, net of tax), $0.2 million ($0.01 per share, net of tax), and $0.9 million ($0.02 per share, net of tax), respectively
- Excluding the above items, core operating expenses were $37.1 million in 1Q21, up 17.8% YoY and 10.5% QoQ; Empire contributed $1.9 million in 1Q21 and $1.7 million in 4Q20
- There were $3.3 million of seasonal compensation expenses in 1Q21 (compared to $3.0 million a year ago) that are not expected to repeat in 2Q21
- The ratio of core operating expense to average assets was 1.82% in 1Q21, 1.74% in 4Q20, 1.67% in 3Q20, 1.59% in 2Q20, and 1.77% in 1Q20
- The efficiency ratio was 58.6% in 1Q21, 57.6% in 4Q20, 55.4% in 3Q20, 54.9% in 2Q20, and 68.2% in 1Q20
The provision (benefit) for income taxes was $7.2 million in 1Q21 versus $0.4 million in 4Q20, $4.5 million in 3Q20, $5.8 million in 2Q20, and $(0.2) million in 1Q20.
- Pre-tax income (loss) was $26.2 million in 1Q21, compared to $3.9 million in 4Q20, $18.8 million in 3Q20, $24.1 million in 2Q20, and $(1.6) million in 1Q20
- The effective tax rate was 27.4% in 1Q21, 10.8% in 4Q20, 23.9% in 3Q20, 24.1% in 2Q20, and 12.9% in 1Q20
- New York State passed a law increasing the state tax rate to 7.25% from 6.5% on April 19, 2021; with this change, we now expect the effective tax rate to approximate 27% in 2021
| Balance Sheet, Credit Quality, and Capital Highlights | ||||||||||||||||||||||
| Y/Y | Q/Q | |||||||||||||||||||||
| ($000s, except per share data) | 1Q21 | 4Q20 | 3Q20 | 2Q20 | 1Q20 | Change | Change | |||||||||||||||
| Loans And Deposits | ||||||||||||||||||||||
| Period End Loans, net | $ | 6,700 | $ | 6,660 | $ | 5,903 | $ | 5,947 | $ | 5,904 | 13.5 | % | 0.6 | % | ||||||||
| Average Deposits | 6,285 | 5,515 | 4,999 | 5,043 | 5,094 | 23.4 | 14.0 | |||||||||||||||
| Credit Quality | ||||||||||||||||||||||
| Nonperforming Loans | $ | 21,186 | $ | 21,073 | $ | 24,792 | $ | 20,188 | $ | 16,752 | 26.5 | % | 0.5 | % | ||||||||
| Nonperforming Assets | 21,221 | 21,108 | 24,827 | 20,431 | 16,995 | 24.9 | 0.5 | |||||||||||||||
| Criticized and Classified Assets | 63,130 | 71,691 | 42,181 | 48,712 | 34,199 | 84.6 | (11.9 | ) | ||||||||||||||
| Allowance for Credit Losses/Loans (%) | 0.67 | 0.67 | 0.65 | 0.61 | 0.47 | 20 | bps | - | bps | |||||||||||||
| Capital | ||||||||||||||||||||||
| Book Value/Share | $ | 20.65 | $ | 20.11 | $ | 20.78 | $ | 20.27 | $ | 19.48 | 6.0 | % | 2.7 | % | ||||||||
| Tangible Book Value/Share | 19.99 | 19.45 | 20.22 | 19.71 | 18.92 | 5.7 | 2.8 | |||||||||||||||
| Tang. Common Equity/Tang. Assets (%) | 7.60 | 7.52 | 8.10 | 7.78 | 7.38 | 22 | bps | 8 | bps | |||||||||||||
| Leverage Ratio (%) | 8.44 | 8.38 | 9.03 | 8.64 | 8.59 | (15 | ) | 6 | ||||||||||||||
Net loans held for investment were $6.7 billion, an increase of 13.5% YoY and 0.6% QoQ.
- SBA Paycheck Protection Program (“PPP”) loans were $251.0 million at 1Q21, compared to $151.9 million at 4Q20, $111.6 million at 3Q20, and $93.2 million at 2Q20, as we supported our customers with the second round of PPP originations and forgiveness, with originations totaling $123.2 million in 1Q21
- Total loan closings were $322.9 million (including $123.2 million from PPP) in 1Q21 versus $316.0 million in 4Q20, $155.6 million in 3Q20, $233.8 million in 2Q20, and $298.7 million in 1Q20
- The loan pipeline was $375.8 million at March 31, 2021, compared to $324.4 million a year ago
Average Deposits totaled $6.3 billion, rising 23.4% YoY and 14.0% QoQ, partially due to customer growth, the Empire transaction, and unused PPP funds.
- Core deposits (non-CD deposits) were 82.5% of total average deposits (including escrow deposits) in 1Q21, compared to 75.1% a year ago
- With the steepening of the yield curve, we have extended the duration of our funding liabilities to prepare for rising short term rates
Credit Quality; Non-performing loans totaled $21.2 million compared to $21.1 million in 4Q20 and $16.8 million in 1Q20.
- Non-performing assets totaled $21.2 million, flat QoQ, but up 24.9% YoY
- Criticized and classified assets totaled $63.1 million in 1Q21, compared to $71.7 million in 4Q20, and $34.2 million in 1Q20; the QoQ decline was primarily due to improved borrowers’ fundamentals, while the YoY rise related to the impacts of the pandemic
- Loans classified as troubled debt restructured (TDR) totaled $15.2 million, versus $15.7 million in 4Q20, and $6.3 million a year ago
- Active COVID-19 forbearances totaled 116 loans with a principal balance of $295.5 million at March 31 2021, with 61% making interest payments; approximately 25% of these loans are scheduled to exit forbearance in 2Q21, 15% in 3Q21, and 43% in 4Q21
- Over 85% of gross loans are collateralized by real estate and these loans have a loan-to-value ratio of 38% as of March 31, 2021
- Allowance for credit losses were 0.67% of loans in 1Q21 compared to 0.67% in 4Q20 and 0.47% a year ago
Capital; Book value per common share increased to $20.65 in 1Q21, compared to $20.11 in 4Q20 and $19.48 in 1Q20; tangible book value per common share, a non-GAAP measure, improved to $19.99 in 1Q21, versus $19.45 in 4Q20, and $18.92 in 1Q20.
- The Company paid a dividend of $0.21 per share in 1Q21 and did not repurchase any shares in the quarter; up to 284,806 shares remained subject to repurchase under the authorized stock repurchase program, which has no expiration or maximum dollar limit
- Tangible common equity to tangible assets was 7.60% in 1Q21 compared to 7.38% a year ago
- The Company and the Bank remain well capitalized under all applicable regulatory requirements
- The leverage ratio was 8.44% in 1Q21 versus 8.59% in 1Q20
| Conference Call Information And Future Earnings Release Dates |
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 tomorrow, Wednesday, April 28, 2021 at 9:30 AM (ET) to discuss the Company’s first quarter 2021 results and strategy.
- Dial-in for Live Call: 1-877-509-5836
- Webcast: https://services.choruscall.com/links/ffic210428.html
- Dial-in for Replay: 1-877-344-7529
- Replay Access Code: 10151631
- The conference call will be simultaneously webcast and archived through April 28, 2022.
Future Earnings Release Dates:
The Company plans to release quarterly financial results on the following dates:
Second Quarter 2021 after the market close on July 27, 2021; conference call at 9:30 AM (ET) on July 28, 2021.
Third Quarter 2021 after the market close on October 26, 2021; conference call at 9:30 AM (ET) on October 27, 2021.
A detailed announcement will be issued prior to each quarter’s close confirming the date and time of the earnings release and conference call for that quarter.
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, equipment finance, and cash management services through its banking offices located in Queens, Brooklyn, Manhattan, and on Long Island. 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. Flushing Bank is an Equal Housing Lender. The Bank also operates an online banking division consisting of iGObanking.com®, which offers competitively priced deposit products to consumers nationwide, and BankPurely®, an eco-friendly, healthier lifestyle community brand.
Additional information on Flushing Bank and Flushing Financial Corporation may be obtained by visiting the Company’s website at http://www.flushingbank.com. Flushing Financial Corporation’s earnings release and presentation slides will be available prior to the conference call at www.flushingbank.com under investor relations.
“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: Statements in this Press Release relating to plans, strategies, economic performance and trends, projections of results of specific activities or investments and other statements that are not descriptions of historical facts may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking information is inherently subject to risks and uncertainties, and actual results could differ materially from those currently anticipated due to a number of factors, which include, but are not limited to, risk factors discussed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020 and in other documents filed by the Company with the Securities and Exchange Commission from time to time. Forward-looking statements may be identified by terms such as “may”, “will”, “should”, “could”, “expects”, “plans”, “intends”, “anticipates”, “believes”, “estimates”, “predicts”, “forecasts”, “goals”, “potential” or “continue” or similar terms or the negative of these terms. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. The Company has no obligation to update these forward-looking statements.
Investor Contact: Susan K. Cullen, SEVP, Treasurer and CFO, 718-961-5400
- Statistical Tables Follow -
FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
FINANCIAL HIGHLIGHTS
(Unaudited)
| At or for the three months ended | ||||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||
| (Dollars in thousands, except per share data) | 2021 | 2020 | 2020 | 2020 | 2020 | |||||||||||||||
| Performance Ratios (1) | ||||||||||||||||||||
| Return on average assets | 0.93 | % | 0.18 | % | 0.81 | % | 1.01 | % | (0.08 | )% | ||||||||||
| Return on average equity | 12.29 | 2.27 | 9.94 | 13.11 | (0.96 | ) | ||||||||||||||
| Yield on average interest-earning assets (2) | 3.77 | 3.82 | 3.84 | 3.81 | 3.98 | |||||||||||||||
| Cost of average interest-bearing liabilities | 0.69 | 0.86 | 0.98 | 1.09 | 1.74 | |||||||||||||||
| Cost of funds | 0.61 | 0.77 | 0.89 | 0.99 | 1.61 | |||||||||||||||
| Net interest rate spread during period (2) | 3.08 | 2.96 | 2.86 | 2.72 | 2.24 | |||||||||||||||
| Net interest margin (2) | 3.18 | 3.08 | 3.00 | 2.87 | 2.44 | |||||||||||||||
| Non-interest expense to average assets | 1.87 | 2.43 | 1.69 | 1.60 | 1.82 | |||||||||||||||
| Efficiency ratio (3) | 58.58 | 57.56 | 55.37 | 54.92 | 68.21 | |||||||||||||||
| Average interest-earning assets to average interest-bearing liabilities | 1.18 | X | 1.17 | X | 1.16 | X | 1.15 | X | 1.13 | X | ||||||||||
| Average Balances | ||||||||||||||||||||
| Total loans, net | $ | 6,700,476 | $ | 6,375,516 | $ | 5,904,051 | $ | 5,946,412 | $ | 5,794,866 | ||||||||||
| Total interest-earning assets | 7,667,217 | 7,243,472 | 6,675,896 | 6,809,835 | 6,719,857 | |||||||||||||||
| Total assets | 8,147,714 | 7,705,407 | 7,083,028 | 7,206,059 | 7,106,998 | |||||||||||||||
| Total due to depositors | 5,361,619 | 4,708,760 | 4,353,560 | 4,395,228 | 4,578,793 | |||||||||||||||
| Total interest-bearing liabilities | 6,475,843 | 6,169,574 | 5,731,899 | 5,912,774 | 5,951,925 | |||||||||||||||
| Stockholders' equity | 619,647 | 609,463 | 576,512 | 557,414 | 576,597 | |||||||||||||||
| Per Share Data | ||||||||||||||||||||
| Book value per common share (4) | $ | 20.65 | $ | 20.11 | $ | 20.78 | $ | 20.27 | $ | 19.48 | ||||||||||
| Tangible book value per common share (5) | $ | 19.99 | $ | 19.45 | $ | 20.22 | $ | 19.71 | $ | 18.92 | ||||||||||
| Stockholders' Equity | ||||||||||||||||||||
| Stockholders' equity | $ | 639,201 | $ | 618,997 | $ | 586,406 | $ | 571,921 | $ | 549,683 | ||||||||||
| Tangible stockholders' equity | 618,839 | 598,476 | 570,571 | 556,086 | 533,848 | |||||||||||||||
| Consolidated Regulatory Capital Ratios | ||||||||||||||||||||
| Tier 1 capital | $ | 679,343 | $ | 662,987 | $ | 630,380 | $ | 617,620 | $ | 610,898 | ||||||||||
| Common equity Tier 1 capital | 636,071 | 621,247 | 593,344 | 583,238 | 567,306 | |||||||||||||||
| Total risk-based capital | 806,922 | 794,034 | 740,499 | 726,291 | 712,761 | |||||||||||||||
| Risk Weighted Assets | 6,281,136 | 6,287,598 | 5,381,938 | 5,406,104 | 5,418,219 | |||||||||||||||
| Tier 1 leverage capital (well capitalized = 5%) | 8.44 | % | 8.38 | % | 9.03 | % | 8.64 | % | 8.59 | % | ||||||||||
| Common equity Tier 1 risk-based capital (well capitalized = 6.5%) | 10.13 | 9.88 | 11.02 | 10.79 | 10.47 | |||||||||||||||
| Tier 1 risk-based capital (well capitalized = 8.0%) | 10.82 | 10.54 | 11.71 | 11.42 | 11.28 | |||||||||||||||
| Total risk-based capital (well capitalized = 10.0%) | 12.85 | 12.63 | 13.76 | 13.43 | 13.16 | |||||||||||||||
| Capital Ratios | ||||||||||||||||||||
| Average equity to average assets | 7.61 | % | 7.91 | % | 8.14 | % | 7.74 | % | 8.11 | % | ||||||||||
| Equity to total assets | 7.83 | 7.76 | 8.30 | 7.98 | 7.59 | |||||||||||||||
| Tangible common equity to tangible assets (6) | 7.60 | 7.52 | 8.10 | 7.78 | 7.38 | |||||||||||||||
| Asset Quality | ||||||||||||||||||||
| Non-accrual loans (7) | $ | 18,604 | $ | 18,325 | $ | 24,792 | $ | 20,038 | $ | 16,752 | ||||||||||
| Non-performing loans | 21,186 | 21,073 | 24,792 | 20,188 | 16,752 | |||||||||||||||
| Non-performing assets | 21,221 | 21,108 | 24,827 | 20,431 | 16,995 | |||||||||||||||
| Net charge-offs | 2,865 | 646 | 837 | 1,007 | 1,149 | |||||||||||||||
| Asset Quality Ratios | ||||||||||||||||||||
| Non-performing loans to gross loans | 0.31 | % | 0.31 | % | 0.42 | % | 0.34 | % | 0.28 | % | ||||||||||
| Non-performing assets to total assets | 0.26 | 0.26 | 0.35 | 0.29 | 0.23 | |||||||||||||||
| Allowance for loan losses to gross loans | 0.67 | 0.67 | 0.65 | 0.61 | 0.47 | |||||||||||||||
| Allowance for loan losses to non-performing assets | 212.52 | 213.91 | 154.44 | 179.68 | 165.32 | |||||||||||||||
| Allowance for loan losses to non-performing loans | 212.87 | 214.27 | 154.66 | 181.85 | 167.73 | |||||||||||||||
| Net charge-offs to average loans | 0.17 | 0.04 | 0.06 | 0.07 | 0.08 | |||||||||||||||
| Full-service customer facilities | 25 | 25 | 20 | 20 | 20 | |||||||||||||||
(see footnotes on next page)
(1) Ratios are presented on an annualized basis, where appropriate.
(2) Yields are calculated on the tax equivalent basis using the statutory federal income tax rate of 21% for the periods presented.
(3) Efficiency ratio, a non-GAAP measure, was calculated by dividing non-interest expense (excluding merger expense, OREO expense, prepayment penalty on borrowings, the net gain/loss from the sale of OREO and net amortization of purchase accounting adjustments) by the total of net interest income (excluding net gains and losses from fair value adjustments on qualifying hedges and net amortization of purchase accounting adjustments) and non-interest income (excluding life insurance proceeds, net gains and losses from the sale or disposition of securities, assets and fair value adjustments).
(4) Calculated by dividing stockholders’ equity by shares outstanding.
(5) Calculated by dividing tangible stockholders’ common equity, a non-GAAP measure, by shares outstanding. Tangible stockholders’ common equity is stockholders’ equity less intangible assets (goodwill, net of deferred taxes). See “Calculation of Tangible Stockholders’ Common Equity to Tangible Assets”.
(6) See “Calculation of Tangible Stockholders’ Common Equity to Tangible Assets”.
(7) Excludes performing non-accrual TDR loans.
FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
| For the three months ended | |||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||||||
| (In thousands, except per share data) | 2021 | 2020 | 2020 | 2020 | 2020 | ||||||||||||||
| Interest and Dividend Income | |||||||||||||||||||
| Interest and fees on loans | $ | 69,021 | $ | 66,120 | $ | 60,367 | $ | 60,557 | $ | 61,109 | |||||||||
| Interest and dividends on securities: | |||||||||||||||||||
| Interest | 3,072 | 2,813 | 3,525 | 4,182 | 5,256 | ||||||||||||||
| Dividends | 8 | 8 | 9 | 11 | 15 | ||||||||||||||
| Other interest income | 36 | 30 | 13 | 22 | 290 | ||||||||||||||
| Total interest and dividend income | 72,137 | 68,971 | 63,914 | 64,772 | 66,670 | ||||||||||||||
| Interest Expense | |||||||||||||||||||
| Deposits | 6,105 | 6,470 | 7,093 | 9,971 | 18,778 | ||||||||||||||
| Other interest expense | 5,140 | 6,769 | 6,897 | 6,084 | 7,066 | ||||||||||||||
| Total interest expense | 11,245 | 13,239 | 13,990 | 16,055 | 25,844 | ||||||||||||||
| Net Interest Income | 60,892 | 55,732 | 49,924 | 48,717 | 40,826 | ||||||||||||||
| Provision for credit losses | 2,820 | 3,862 | 2,470 | 9,619 | 7,178 | ||||||||||||||
| Net Interest Income After Provision for Credit Losses | 58,072 | 51,870 | 47,454 | 39,098 | 33,648 | ||||||||||||||
| Non-interest Income | |||||||||||||||||||
| Banking services fee income | 2,725 | 1,442 | 1,316 | 944 | 798 | ||||||||||||||
| Net loss on sale of securities | — | (610 | ) | — | (54 | ) | (37 | ) | |||||||||||
| Net gain on sale of loans | 31 | 6 | — | — | 42 | ||||||||||||||
| Net gain on disposition of assets | 621 | — | — | — | — | ||||||||||||||
| Net gain (loss) from fair value adjustments | 982 | (4,129 | ) | (2,225 | ) | 10,205 | (5,993 | ) | |||||||||||
| Federal Home Loan Bank of New York stock dividends | 689 | 734 | 874 | 881 | 964 | ||||||||||||||
| Life insurance proceeds | — | — | — | 659 | — | ||||||||||||||
| Bank owned life insurance | 997 | 1,016 | 923 | 932 | 943 | ||||||||||||||
| Other income | 266 | 360 | 463 | 170 | 419 | ||||||||||||||
| Total non-interest income (loss) | 6,311 | (1,181 | ) | 1,351 | 13,737 | (2,864 | ) | ||||||||||||
| Non-interest Expense | |||||||||||||||||||
| Salaries and employee benefits | 22,664 | 22,089 | 17,335 | 16,184 | 18,620 | ||||||||||||||
| Occupancy and equipment | 3,367 | 3,446 | 3,021 | 2,827 | 2,840 | ||||||||||||||
| Professional services | 2,400 | 2,463 | 2,064 | 1,985 | 2,862 | ||||||||||||||
| FDIC deposit insurance | 1,213 | 562 | 727 | 737 | 650 | ||||||||||||||
| Data processing | 2,109 | 3,411 | 1,668 | 1,813 | 1,694 | ||||||||||||||
| Depreciation and amortization | 1,639 | 1,579 | 1,542 | 1,555 | 1,536 | ||||||||||||||
| Other real estate owned/foreclosure (recoveries) expense | (10 | ) | 95 | 240 | 45 | (164 | ) | ||||||||||||
| Net loss from sales of real estate owned | — | — | 5 | — | 31 | ||||||||||||||
| Prepayment penalty on borrowings | — | 7,834 | — | — | — | ||||||||||||||
| Other operating expenses | 4,777 | 5,332 | 3,383 | 3,609 | 4,311 | ||||||||||||||
| Total non-interest expense | 38,159 | 46,811 | 29,985 | 28,755 | 32,380 | ||||||||||||||
| Income (loss) Before Income Taxes | 26,224 | 3,878 | 18,820 | 24,080 | (1,596 | ) | |||||||||||||
| Provision (benefit) for Income Taxes | |||||||||||||||||||
| Federal | 5,071 | 533 | 3,359 | 4,307 | 989 | ||||||||||||||
| State and local | 2,114 | (116 | ) | 1,130 | 1,501 | (1,195 | ) | ||||||||||||
| Total taxes | 7,185 | 417 | 4,489 | 5,808 | (206 | ) | |||||||||||||
| Net Income (loss) | $ | 19,039 | $ | 3,461 | $ | 14,331 | $ | 18,272 | $ | (1,390 | ) | ||||||||
| Basic earnings (loss) per common share | $ | 0.60 | $ | 0.11 | $ | 0.50 | $ | 0.63 | $ | (0.05 | ) | ||||||||
| Diluted earnings (loss) per common share | $ | 0.60 | $ | 0.11 | $ | 0.50 | $ | 0.63 | $ | (0.05 | ) | ||||||||
| Dividends per common share | $ | 0.21 | $ | 0.21 | $ | 0.21 | $ | 0.21 | $ | 0.21 | |||||||||
| Basic average shares | 31,604 | 30,603 | 28,874 | 28,867 | 28,853 | ||||||||||||||
| Diluted average shares | 31,604 | 30,603 | 28,874 | 28,867 | 28,853 | ||||||||||||||
FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Unaudited)
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||
| (Dollars in thousands) | 2021 | 2020 | 2020 | 2020 | 2020 | |||||||||||||||
| ASSETS | ||||||||||||||||||||
| Cash and due from banks | $ | 174,420 | $ | 157,388 | $ | 75,560 | $ | 84,754 | $ | 157,184 | ||||||||||
| Securities held-to-maturity: | ||||||||||||||||||||
| Mortgage-backed securities | 7,909 | 7,914 | 7,919 | 7,924 | 7,929 | |||||||||||||||
| Other securities | 49,912 | 49,918 | 50,252 | 50,078 | 50,225 | |||||||||||||||
| Securities available for sale: | ||||||||||||||||||||
| Mortgage-backed securities | 518,781 | 404,460 | 386,235 | 442,507 | 489,556 | |||||||||||||||
| Other securities | 242,440 | 243,514 | 234,721 | 232,803 | 225,856 | |||||||||||||||
| Loans | 6,745,316 | 6,704,674 | 5,941,398 | 5,983,275 | 5,932,088 | |||||||||||||||
| Allowance for loan losses | (45,099 | ) | (45,153 | ) | (38,343 | ) | (36,710 | ) | (28,098 | ) | ||||||||||
| Net loans | 6,700,217 | 6,659,521 | 5,903,055 | 5,946,565 | 5,903,990 | |||||||||||||||
| Interest and dividends receivable | 44,941 | 44,041 | 36,068 | 30,219 | 25,526 | |||||||||||||||
| Bank premises and equipment, net | 27,498 | 28,179 | 25,766 | 27,018 | 27,899 | |||||||||||||||
| Federal Home Loan Bank of New York stock | 41,498 | 43,439 | 57,119 | 56,400 | 74,000 | |||||||||||||||
| Bank owned life insurance | 182,707 | 181,710 | 158,701 | 157,779 | 158,655 | |||||||||||||||
| Goodwill | 17,636 | 17,636 | 16,127 | 16,127 | 16,127 | |||||||||||||||
| Other real estate owned, net | — | — | — | 208 | 208 | |||||||||||||||
| Core deposit intangibles | 3,013 | 3,172 | — | — | — | |||||||||||||||
| Right of use asset | 53,802 | 50,743 | 42,326 | 38,303 | 39,729 | |||||||||||||||
| Other assets | 94,410 | 84,759 | 69,207 | 71,974 | 68,526 | |||||||||||||||
| Total assets | $ | 8,159,184 | $ | 7,976,394 | $ | 7,063,056 | $ | 7,162,659 | $ | 7,245,410 | ||||||||||
| LIABILITIES | ||||||||||||||||||||
| Deposits | $ | 6,326,577 | $ | 6,090,733 | $ | 4,906,359 | $ | 5,049,874 | $ | 4,828,435 | ||||||||||
| Mortgagors' escrow deposits | 74,348 | 45,622 | 57,136 | 48,525 | 73,051 | |||||||||||||||
| Borrowed funds | 948,920 | 1,020,895 | 1,323,975 | 1,305,187 | 1,617,582 | |||||||||||||||
| Operating lease liability | 58,080 | 59,100 | 49,737 | 45,897 | 47,726 | |||||||||||||||
| Other liabilities | 112,058 | 141,047 | 139,443 | 141,255 | 128,933 | |||||||||||||||
| Total liabilities | 7,519,983 | 7,357,397 | 6,476,650 | 6,590,738 | 6,695,727 | |||||||||||||||
| STOCKHOLDERS' EQUITY | ||||||||||||||||||||
| Preferred stock (5,000,000 shares authorized; none issued) | — | — | — | — | — | |||||||||||||||
| Common stock ($0.01 par value; 100,000,000 shares authorized) | 341 | 341 | 315 | 315 | 315 | |||||||||||||||
| Additional paid-in capital | 260,019 | 261,533 | 227,877 | 226,901 | 225,893 | |||||||||||||||
| Treasury stock | (65,479 | ) | (69,400 | ) | (69,409 | ) | (69,436 | ) | (69,540 | ) | ||||||||||
| Retained earnings | 455,023 | 442,789 | 445,931 | 437,663 | 425,455 | |||||||||||||||
| Accumulated other comprehensive loss, net of taxes | (10,703 | ) | (16,266 | ) | (18,308 | ) | (23,522 | ) | (32,440 | ) | ||||||||||
| Total stockholders' equity | 639,201 | 618,997 | 586,406 | 571,921 | 549,683 | |||||||||||||||
| Total liabilities and stockholders' equity | $ | 8,159,184 | $ | 7,976,394 | $ | 7,063,056 | $ | 7,162,659 | $ | 7,245,410 | ||||||||||
| (In thousands) | ||||||||||||||||||||
| Issued shares | 34,088 | 34,088 | 31,531 | 31,531 | 31,531 | |||||||||||||||
| Outstanding shares | 30,954 | 30,776 | 28,218 | 28,217 | 28,214 | |||||||||||||||
| Treasury shares | 3,133 | 3,312 | 3,312 | 3,313 | 3,317 | |||||||||||||||
FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
AVERAGE BALANCE SHEETS
(Unaudited)
| For the three months ended | |||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||
| (In thousands) | 2021 | 2020 | 2020 | 2020 | 2020 | ||||||||||
| Interest-earning Assets: | |||||||||||||||
| Mortgage loans, net | $ | 5,155,975 | $ | 5,010,097 | $ | 4,721,742 | $ | 4,762,068 | $ | 4,697,531 | |||||
| Other loans, net | 1,544,501 | 1,365,419 | 1,182,309 | 1,184,344 | 1,097,335 | ||||||||||
| Total loans, net | 6,700,476 | 6,375,516 | 5,904,051 | 5,946,412 | 5,794,866 | ||||||||||
| Taxable securities: | |||||||||||||||
| Mortgage-backed securities | 433,917 | 413,875 | 413,902 | 465,365 | 507,912 | ||||||||||
| Other securities | 300,828 | 266,663 | 243,754 | 243,867 | 243,726 | ||||||||||
| Total taxable securities | 734,745 | 680,538 | 657,656 | 709,232 | 751,638 | ||||||||||
| Tax-exempt securities: | |||||||||||||||
| Other securities | 50,828 | 50,768 | 51,652 | 60,280 | 63,535 | ||||||||||
| Total tax-exempt securities | 50,828 | 50,768 | 51,652 | 60,280 | 63,535 | ||||||||||
| Interest-earning deposits and federal funds sold | 181,168 | 136,650 | 62,537 | 93,911 | 109,818 | ||||||||||
| Total interest-earning assets | 7,667,217 | 7,243,472 | 6,675,896 | 6,809,835 | 6,719,857 | ||||||||||
| Other assets | 480,497 | 461,935 | 407,132 | 396,224 | 387,141 | ||||||||||
| Total assets | $ | 8,147,714 | $ | 7,705,407 | $ | 7,083,028 | $ | 7,206,059 | $ | 7,106,998 | |||||
| Interest-bearing Liabilities: | |||||||||||||||
| Deposits: | |||||||||||||||
| Savings accounts | $ | 170,079 | $ | 163,382 | $ | 160,100 | $ | 188,587 | $ | 194,026 | |||||
| NOW accounts | 2,183,356 | 1,924,840 | 1,625,109 | 1,440,147 | 1,419,739 | ||||||||||
| Money market accounts | 1,905,543 | 1,507,245 | 1,461,996 | 1,580,652 | 1,697,783 | ||||||||||
| Certificate of deposit accounts | 1,102,641 | 1,113,293 | 1,106,355 | 1,185,842 | 1,267,245 | ||||||||||
| Total due to depositors | 5,361,619 | 4,708,760 | 4,353,560 | 4,395,228 | 4,578,793 | ||||||||||
| Mortgagors' escrow accounts | 65,372 | 75,005 | 55,868 | 87,058 | 65,503 | ||||||||||
| Total interest-bearing deposits | 5,426,991 | 4,783,765 | 4,409,428 | 4,482,286 | 4,644,296 | ||||||||||
| Borrowings | 1,048,852 | 1,385,809 | 1,322,471 | 1,430,488 | 1,307,629 | ||||||||||
| Total interest-bearing liabilities | 6,475,843 | 6,169,574 | 5,731,899 | 5,912,774 | 5,951,925 | ||||||||||
| Non interest-bearing demand deposits | 858,080 | 731,170 | 589,674 | 560,637 | 449,761 | ||||||||||
| Other liabilities | 194,144 | 195,200 | 184,943 | 175,234 | 128,715 | ||||||||||
| Total liabilities | 7,528,067 | 7,095,944 | 6,506,516 | 6,648,645 | 6,530,401 | ||||||||||
| Equity | 619,647 | 609,463 | 576,512 | 557,414 | 576,597 | ||||||||||
| Total liabilities and equity | $ | 8,147,714 | $ | 7,705,407 | $ | 7,083,028 | $ | 7,206,059 | $ | 7,106,998 | |||||
| Net interest-earning assets | $ | 1,191,374 | $ | 1,073,898 | $ | 943,997 | $ | 897,061 | $ | 767,932 | |||||
FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
NET INTEREST INCOME AND NET INTEREST MARGIN
(Unaudited)
| For the three months ended | ||||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||
| (Dollars in thousands) | 2021 | 2020 | 2020 | 2020 | 2020 | |||||||||||||||
| Interest Income: | ||||||||||||||||||||
| Mortgage loans, net | $ | 55,219 | $ | 53,777 | $ | 49,814 | $ | 49,719 | $ | 49,412 | ||||||||||
| Other loans, net | 13,802 | 12,343 | 10,553 | 10,838 | 11,697 | |||||||||||||||
| Total loans, net | 69,021 | 66,120 | 60,367 | 60,557 | 61,109 | |||||||||||||||
| Taxable securities: | ||||||||||||||||||||
| Mortgage-backed securities | 1,698 | 1,435 | 1,928 | 2,327 | 3,040 | |||||||||||||||
| Other securities | 963 | 957 | 1,166 | 1,358 | 1,697 | |||||||||||||||
| Total taxable securities | 2,661 | 2,392 | 3,094 | 3,685 | 4,737 | |||||||||||||||
| Tax-exempt securities: | ||||||||||||||||||||
| Other securities | 530 | 543 | 557 | 643 | 676 | |||||||||||||||
| Total tax-exempt securities | 530 | 543 | 557 | 643 | 676 | |||||||||||||||
| Interest-earning deposits and federal funds sold | 36 | 30 | 13 | 22 | 290 | |||||||||||||||
| Total interest-earning assets | 72,248 | 69,085 | 64,031 | 64,907 | 66,812 | |||||||||||||||
| Interest Expense: | ||||||||||||||||||||
| Deposits: | ||||||||||||||||||||
| Savings accounts | $ | 75 | $ | 75 | $ | 65 | $ | 74 | $ | 281 | ||||||||||
| NOW accounts | 1,706 | 1,320 | 1,242 | 2,099 | 4,648 | |||||||||||||||
| Money market accounts | 2,100 | 2,010 | 2,108 | 3,208 | 7,042 | |||||||||||||||
| Certificate of deposit accounts | 2,222 | 3,065 | 3,700 | 4,564 | 6,767 | |||||||||||||||
| Total due to depositors | 6,103 | 6,470 | 7,115 | 9,945 | 18,738 | |||||||||||||||
| Mortgagors' escrow accounts | 2 | — | (22 | ) | 26 | 40 | ||||||||||||||
| Total interest-bearing deposits | 6,105 | 6,470 | 7,093 | 9,971 | 18,778 | |||||||||||||||
| Borrowings | 5,140 | 6,769 | 6,897 | 6,084 | 7,066 | |||||||||||||||
| Total interest-bearing liabilities | 11,245 | 13,239 | 13,990 | 16,055 | 25,844 | |||||||||||||||
| Net interest income- tax equivalent | $ | 61,003 | $ | 55,846 | $ | 50,041 | $ | 48,852 | $ | 40,968 | ||||||||||
| Included in net interest income above: | ||||||||||||||||||||
| Prepayment penalties received on loans and securities and net of reversals and recovered interest from non-accrual loans | $ | 947 | $ | 1,093 | $ | 1,518 | $ | 776 | $ | 1,189 | ||||||||||
| Net gains/(losses) from fair value adjustments on qualifying hedges included in loan interest income | 1,427 | 1,023 | 230 | (365 | ) | (2,073 | ) | |||||||||||||
| Purchase accounting adjustments | 922 | 11 | — | — | — | |||||||||||||||
| Interest-earning Assets Yields: | ||||||||||||||||||||
| Mortgage loans, net | 4.28 | % | 4.29 | % | 4.22 | % | 4.18 | % | 4.21 | % | ||||||||||
| Other loans, net | 3.57 | 3.62 | 3.57 | 3.66 | 4.26 | |||||||||||||||
| Total loans, net | 4.12 | 4.15 | 4.09 | 4.07 | 4.22 | |||||||||||||||
| Taxable securities: | ||||||||||||||||||||
| Mortgage-backed securities | 1.57 | 1.39 | 1.86 | 2.00 | 2.39 | |||||||||||||||
| Other securities | 1.28 | 1.44 | 1.91 | 2.23 | 2.79 | |||||||||||||||
| Total taxable securities | 1.45 | 1.41 | 1.88 | 2.08 | 2.52 | |||||||||||||||
| Tax-exempt securities: (1) | ||||||||||||||||||||
| Other securities | 4.17 | 4.28 | 4.31 | 4.27 | 4.26 | |||||||||||||||
| Total tax-exempt securities | 4.17 | 4.28 | 4.31 | 4.27 | 4.26 | |||||||||||||||
| Interest-earning deposits and federal funds sold | 0.08 | 0.09 | 0.08 | 0.09 | 1.06 | |||||||||||||||
| Total interest-earning assets | 3.77 | % | 3.82 | % | 3.84 | % | 3.81 | % | 3.98 | % | ||||||||||
| Interest-bearing Liabilities Yields: | ||||||||||||||||||||
| Deposits: | ||||||||||||||||||||
| Savings accounts | 0.18 | % | 0.18 | % | 0.16 | % | 0.16 | % | 0.58 | % | ||||||||||
| NOW accounts | 0.31 | 0.27 | 0.31 | 0.58 | 1.31 | |||||||||||||||
| Money market accounts | 0.44 | 0.53 | 0.58 | 0.81 | 1.66 | |||||||||||||||
| Certificate of deposit accounts | 0.81 | 1.10 | 1.34 | 1.54 | 2.14 | |||||||||||||||
| Total due to depositors | 0.46 | 0.55 | 0.65 | 0.91 | 1.64 | |||||||||||||||
| Mortgagors' escrow accounts | 0.01 | — | (0.16 | ) | 0.12 | 0.24 | ||||||||||||||
| Total interest-bearing deposits | 0.45 | 0.54 | 0.64 | 0.89 | 1.62 | |||||||||||||||
| Borrowings | 1.96 | 1.95 | 2.09 | 1.70 | 2.16 | |||||||||||||||
| Total interest-bearing liabilities | 0.69 | % | 0.86 | % | 0.98 | % | 1.09 | % | 1.74 | % | ||||||||||
| Net interest rate spread (tax equivalent) | 3.08 | % | 2.96 | % | 2.86 | % | 2.72 | % | 2.24 | % | ||||||||||
| Net interest margin (tax equivalent) | 3.18 | % | 3.08 | % | 3.00 | % | 2.87 | % | 2.44 | % | ||||||||||
| Ratio of interest-earning assets to interest-bearing liabilities | 1.18 | X | 1.17 | X | 1.16 | X | 1.15 | X | 1.13 | X | ||||||||||
(1) Yields are calculated on the tax equivalent basis using the statutory federal income tax rate of 21% for the periods presented.
FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
DEPOSIT and LOAN COMPOSITION
(Unaudited)
Deposit Composition
| March 2021 vs. | March 2021 vs. | ||||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | December 2020 | March 2020 | |||||||||||||||
| (Dollars in thousands) | 2021 | 2020 | 2020 | 2020 | 2020 | % Change | % Change | ||||||||||||||
| Deposits | |||||||||||||||||||||
| Non-interest bearing | $ | 917,189 | $ | 778,672 | $ | 607,954 | $ | 581,881 | $ | 489,198 | 17.8 | % | 87.5 | % | |||||||
| Interest bearing: | |||||||||||||||||||||
| Certificate of deposit accounts | 1,070,595 | 1,138,361 | 1,051,644 | 1,135,977 | 1,172,381 | (6.0 | ) | (8.7 | ) | ||||||||||||
| Savings accounts | 170,272 | 168,183 | 160,294 | 184,895 | 192,192 | 1.2 | (11.4 | ) | |||||||||||||
| Money market accounts | 1,990,656 | 1,682,345 | 1,381,552 | 1,474,880 | 1,597,109 | 18.3 | 24.6 | ||||||||||||||
| NOW accounts | 2,177,865 | 2,323,172 | 1,704,915 | 1,672,241 | 1,377,555 | (6.3 | ) | 58.1 | |||||||||||||
| Total interest-bearing deposits | 5,409,388 | 5,312,061 | 4,298,405 | 4,467,993 | 4,339,237 | 1.8 | 24.7 | ||||||||||||||
| Total deposits | $ | 6,326,577 | $ | 6,090,733 | $ | 4,906,359 | $ | 5,049,874 | $ | 4,828,435 | 3.9 | % | 31.0 | % | |||||||
Loan Composition
| March 2021 vs. | March 2021 vs. | |||||||||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | December 2020 | March 2020 | ||||||||||||||||||||
| (Dollars in thousands) | 2021 | 2020 | 2020 | 2020 | 2020 | % Change | % Change | |||||||||||||||||||
| Loans held for investment: | ||||||||||||||||||||||||||
| Multi-family residential | $ | 2,525,967 | $ | 2,533,952 | $ | 2,252,757 | $ | 2,285,555 | $ | 2,272,343 | (0.3 | )% | 11.2 | % | ||||||||||||
| Commercial real estate | 1,721,702 | 1,754,754 | 1,636,659 | 1,646,085 | 1,664,934 | (1.9 | ) | 3.4 | ||||||||||||||||||
| One-to-four family ― mixed-use property | 595,431 | 602,981 | 585,159 | 591,347 | 592,109 | (1.3 | ) | 0.6 | ||||||||||||||||||
| One-to-four family ― residential | 239,391 | 245,211 | 191,011 | 184,741 | 189,774 | (2.4 | ) | 26.1 | ||||||||||||||||||
| Co-operative apartments | 7,965 | 8,051 | 8,132 | 8,423 | 8,493 | (1.1 | ) | (6.2 | ) | |||||||||||||||||
| Construction | 61,528 | 83,322 | 63,567 | 69,433 | 66,727 | (26.2 | ) | (7.8 | ) | |||||||||||||||||
| Mortgage Loans | 5,151,984 | 5,228,271 | 4,737,285 | 4,785,584 | 4,794,380 | (1.5 | ) | 7.5 | ||||||||||||||||||
| Small Business Administration (1) | 267,120 | 167,376 | 124,649 | 106,813 | 14,076 | 59.6 | 1,797.7 | |||||||||||||||||||
| Taxi medallion | — | 2,757 | 2,317 | 3,269 | 3,281 | (100.0 | ) | (100.0 | ) | |||||||||||||||||
| Commercial business and other | 1,326,657 | 1,303,225 | 1,063,429 | 1,073,623 | 1,104,967 | 1.8 | 20.1 | |||||||||||||||||||
| Non-mortgage loans | 1,593,777 | 1,473,358 | 1,190,395 | 1,183,705 | 1,122,324 | 8.2 | 42.0 | |||||||||||||||||||
| Net unamortized premiums and unearned loan fees (2) | (445 | ) | 3,045 | 13,718 | 13,986 | 15,384 | (114.6 | ) | (102.9 | ) | ||||||||||||||||
| Allowance for loan losses | (45,099 | ) | (45,153 | ) | (38,343 | ) | (36,710 | ) | (28,098 | ) | (0.1 | ) | 60.5 | |||||||||||||
| Net loans | $ | 6,700,217 | $ | 6,659,521 | $ | 5,903,055 | $ | 5,946,565 | $ | 5,903,990 | 0.6 | % | 13.5 | % | ||||||||||||
(1) Includes $251.0 million, $151.9 million, $111.6 million and $93.2 million of PPP loans at March, 31, 2021, December 31, 2020, September 30, 2020 and June 30, 2020, respectively.
(2) Includes $10.5 million and $11.3 million of purchase accounting unamortized discount resulting from the acquisition of Empire Bancorp at March 31, 2021 and December 31, 2020, respectively.
FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
LOAN CLOSINGS, RATES, and FORBEARANCE DETAIL
(Unaudited)
Loan Closings
| For the three months ended | |||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||
| (In thousands) | 2021 | 2020 | 2020 | 2020 | 2020 | ||||||||||
| Multi-family residential | $ | 58,553 | $ | 52,024 | $ | 33,733 | $ | 59,654 | $ | 67,318 | |||||
| Commercial real estate | 17,156 | 57,634 | 26,644 | 8,003 | 99,571 | ||||||||||
| One-to-four family – mixed-use property | 8,712 | 9,692 | 3,867 | 8,117 | 13,455 | ||||||||||
| One-to-four family – residential | 3,131 | 8,422 | 2,296 | 2,674 | 8,413 | ||||||||||
| Co-operative apartments | — | — | — | — | 704 | ||||||||||
| Construction | 7,123 | 6,869 | 5,420 | 2,821 | 6,749 | ||||||||||
| Mortgage Loans | 94,675 | 134,641 | 71,960 | 81,269 | 196,210 | ||||||||||
| Small Business Administration (1) | 125,093 | 598 | 18,456 | 93,241 | 57 | ||||||||||
| Commercial business and other | 103,118 | 180,787 | 65,160 | 59,287 | 102,448 | ||||||||||
| Non-mortgage Loans | 228,211 | 181,385 | 83,616 | 152,528 | 102,505 | ||||||||||
| Total | $ | 322,886 | $ | 316,026 | $ | 155,576 | $ | 233,797 | $ | 298,715 | |||||
(1) Includes $123.2 million, $18.4 million and $93.2 million of PPP closings for the three months ended March 31, 2021, September 30, 2020 and June 30, 2020, respectively.
Weighted Average Rate on Loan Closings
| For the three months ended | |||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||
| Loan type | 2021 | 2020 | 2020 | 2020 | 2020 | ||||||||||
| Mortgage loans | 3.47 | % | 3.47 | % | 3.56 | % | 3.79 | % | 3.93 | % | |||||
| Non-mortgage loans | 2.26 | 3.37 | 2.81 | 1.99 | 4.23 | ||||||||||
| Total loans | 2.62 | % | 3.41 | % | 3.16 | % | 2.62 | % | 4.03 | % | |||||
| Excluding PPP loans | 3.62 | % | 3.41 | % | 3.45 | % | 3.71 | % | 4.03 | % | |||||
Forbearance Detail
• Loans paying interest only comprise 61% of forbearance loans; excluding this forbearance loans were only 1.7% of loans
| (Dollars in thousands) | Forbearances (1) | Backed by Mortgages (1) | |||||||||||||
| Balance | % of Sector | Balance | % of Forbearances | LTV | |||||||||||
| Higher Risk Segments | |||||||||||||||
| Restaurants and Catering Halls | $ | 15,578 | 17.0 | % | $ | 15,578 | 100.0 | % | 31.6 | % | |||||
| Hotels | 107,867 | 56.6 | 107,867 | 100.0 | 50.3 | ||||||||||
| Travel and Leisure | 37,670 | 21.0 | 37,670 | 100.0 | 36.9 | ||||||||||
| Retail Services (2) | 12,046 | 6.5 | 3,169 | 26.3 | 36.9 | ||||||||||
| CRE - Single Tenant | 275 | 0.2 | 275 | 100.0 | 51.9 | ||||||||||
| CRE - Strip Mall | 9,785 | 3.4 | 9,785 | 100.0 | 47.3 | ||||||||||
| Transportation (2) | 7,463 | 4.9 | — | — | — | ||||||||||
| Contractors (2) | 2,131 | 0.6 | 723 | 33.9 | 58.3 | ||||||||||
| Schools and Child Care | 10,260 | 14.4 | 10,260 | 100.0 | 55.5 | ||||||||||
| Subtotal | $ | 203,075 | 10.5 | % | $ | 185,327 | 91.3 | % | 44.6 | % | |||||
| Lower Risk Segments | $ | 92,452 | 1.9 | % | $ | 90,404 | 97.8 | % | 33.8 | % | |||||
| Total | $ | 295,527 | 4.4 | % | $ | 275,731 | 93.3 | % | 40.4 | % | |||||
(1) Represents dollar amount granted at modification
(2) Loans not backed by mortgages are collateralized by equipment
FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
ASSET QUALITY
(Unaudited)
Allowance for Loan Losses
| For the Three Months Ended | ||||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||
| (Dollars in thousands) | 2021 | 2020 | 2020 | 2020 | 2020 | |||||||||||||||
| Allowance for loan losses | ||||||||||||||||||||
| Beginning balances | $ | 45,153 | $ | 38,343 | $ | 36,710 | $ | 28,098 | $ | 21,751 | ||||||||||
| Adoption of Current Expected Credit Losses | — | — | — | — | 379 | |||||||||||||||
| Multi-family residential | 33 | (11 | ) | (14 | ) | (7 | ) | (6 | ) | |||||||||||
| Commercial real estate | 64 | — | — | — | — | |||||||||||||||
| One-to-four family – mixed-use property | 19 | — | (60 | ) | 3 | (78 | ) | |||||||||||||
| One-to-four family – residential | (5 | ) | (2 | ) | (2 | ) | (3 | ) | (5 | ) | ||||||||||
| Small Business Administration | (10 | ) | (3 | ) | (47 | ) | 165 | (7 | ) | |||||||||||
| Taxi medallion | 2,758 | 124 | 951 | — | — | |||||||||||||||
| Commercial business and other | 6 | 538 | 9 | 849 | 1,245 | |||||||||||||||
| Total net loan charge-offs | 2,865 | 646 | 837 | 1,007 | 1,149 | |||||||||||||||
| Provision for loan losses | 2,811 | 3,357 | 2,470 | 9,619 | 7,117 | |||||||||||||||
| Allowance recorded at the time of Acquisition | — | 4,099 | — | — | — | |||||||||||||||
| Ending balance | $ | 45,099 | $ | 45,153 | $ | 38,343 | $ | 36,710 | $ | 28,098 | ||||||||||
| Gross charge-offs | $ | 2,922 | $ | 752 | $ | 964 | $ | 1,030 | $ | 1,259 | ||||||||||
| Gross recoveries | 57 | 106 | 127 | 23 | 110 | |||||||||||||||
| Allowance for loan losses to gross loans | 0.67 | % | 0.67 | % | 0.65 | % | 0.61 | % | 0.47 | % | ||||||||||
| Net loan charge-offs to average loans | 0.17 | 0.04 | 0.06 | 0.07 | 0.08 | |||||||||||||||
Non-Performing Assets
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||
| (Dollars in thousands) | 2021 | 2020 | 2020 | 2020 | 2020 | |||||||||||||||
| Loans 90 Days Or More Past Due and Still Accruing: | ||||||||||||||||||||
| Multi-family residential | $ | 201 | $ | 201 | $ | — | $ | — | $ | — | ||||||||||
| Commercial real estate | — | 2,547 | — | — | — | |||||||||||||||
| Construction | 2,381 | — | — | — | — | |||||||||||||||
| Commercial business and other | — | — | — | 150 | — | |||||||||||||||
| Total | 2,582 | 2,748 | — | 150 | — | |||||||||||||||
| Non-accrual Loans: | ||||||||||||||||||||
| Multi-family residential | 4,338 | 2,524 | 2,661 | 3,688 | 2,741 | |||||||||||||||
| Commercial real estate | 8 | 1,683 | 2,657 | 2,671 | 8 | |||||||||||||||
| One-to-four family - mixed-use property (1) | 2,355 | 1,366 | 1,366 | 2,511 | 607 | |||||||||||||||
| One-to-four family - residential | 7,335 | 5,854 | 6,454 | 6,412 | 5,158 | |||||||||||||||
| Small Business Administration | 1,151 | 1,151 | 1,151 | 1,321 | 1,518 | |||||||||||||||
| Taxi medallion(1) | — | 2,317 | 2,218 | 1,757 | 1,761 | |||||||||||||||
| Commercial business and other(1) | 3,417 | 3,430 | 8,285 | 1,678 | 4,959 | |||||||||||||||
| Total | 18,604 | 18,325 | 24,792 | 20,038 | 16,752 | |||||||||||||||
| Total Non-performing Loans | 21,186 | 21,073 | 24,792 | 20,188 | 16,752 | |||||||||||||||
| Other Non-performing Assets: | ||||||||||||||||||||
| Real estate acquired through foreclosure | — | — | — | 208 | 208 | |||||||||||||||
| Other asset acquired through foreclosure | 35 | 35 | 35 | 35 | 35 | |||||||||||||||
| Total | 35 | 35 | 35 | 243 | 243 | |||||||||||||||
| Total Non-performing Assets | $ | 21,221 | $ | 21,108 | $ | 24,827 | $ | 20,431 | $ | 16,995 | ||||||||||
| Non-performing Assets to Total Assets | 0.26 | % | 0.26 | % | 0.35 | % | 0.29 | % | 0.23 | % | ||||||||||
| Allowance For Loan Losses to Non-performing Loans | 212.9 | % | 214.3 | % | 154.7 | % | 181.8 | % | 167.7 | % | ||||||||||
(1) Not included in the above analysis are non-accrual performing TDR one-to-four family mixed use property loans totaling $0.3 million each in 1Q21, 4Q20 and 3Q20; non-accrual performing TDR taxi medallion loans totaling $0.4 million in 4Q20, $0.1 million in 3Q20, $1.5 million in 2Q20, and $1.5 million in 1Q20, and non-accrual performing TDR commercial business loans totaling $2.2 million each in 1Q21 and 4Q20, respectively; $1.0 million each in 3Q20, 2Q20, 1Q20, respectively.
FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
RECONCILIATION OF GAAP EARNINGS and CORE EARNINGS
Non-cash Fair Value Adjustments to GAAP Earnings
The variance in GAAP and core earnings is partly driven by the impact of non-cash net gains and losses from fair value adjustments. These fair value adjustments relate primarily to swaps designated to protect against rising rates and borrowing carried at fair value under the fair value option. As the swaps get closer to maturity, the volatility in fair value adjustments will dissipate. In a declining interest rate environment, the movement in the curve exaggerates our mark-to-market loss position. In a rising interest rate environment or a steepening of the yield curve, the loss position would experience an improvement.
Core Net Income, Core Diluted EPS, Core ROAE, Core ROAA, Pre-provision Pre-tax Net Revenue, Core Net Interest Income FTE, Core Net Interest Margin FTE, Base Net Interest Income FTE, Base Net Interest Margin FTE, Core Interest Income and Yield on Total Loans, Base Interest Income and Yield on Total Loans, Core Non-interest Income, Core Non-interest Expense and tangible book value per common share are each non-GAAP measures used in this release. A reconciliation to the most directly comparable GAAP financial measures appears below in tabular form. The Company believes that these measures are useful for both investors and management to understand the effects of certain interest and 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
(Unaudited)
| Three Months Ended | ||||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||
| (Dollars In thousands, except per share data) | 2021 | 2020 | 2020 | 2020 | 2020 | |||||||||||||||
| GAAP income (loss) before income taxes | $ | 26,224 | $ | 3,878 | $ | 18,820 | $ | 24,080 | $ | (1,596 | ) | |||||||||
| Day 1, Provision for Credit Losses - Empire transaction (Provision for credit losses) | — | 1,818 | — | — | — | |||||||||||||||
| Net (gain) loss from fair value adjustments (Non-interest income (loss)) | (982 | ) | 4,129 | 2,225 | (10,205 | ) | 5,993 | |||||||||||||
| Net loss on sale of securities (Non-interest income (loss)) | — | 610 | — | 54 | 37 | |||||||||||||||
| Life insurance proceeds (Non-interest income (loss)) | — | — | — | (659 | ) | — | ||||||||||||||
| Net gain on disposition of assets (Non-interest income (loss)) | (621 | ) | — | — | — | — | ||||||||||||||
| Net (gain) loss from fair value adjustments on qualifying hedges (Interest and fees on loans) | (1,427 | ) | (1,023 | ) | (230 | ) | 365 | 2,073 | ||||||||||||
| Prepayment penalty on borrowings (Non-interest expense) | — | 7,834 | — | — | — | |||||||||||||||
| Net amortization of purchase accounting adjustments (Various) | (789 | ) | 80 | — | — | — | ||||||||||||||
| Merger expense (Various) | 973 | 5,349 | 422 | 194 | 929 | |||||||||||||||
| Core income before taxes | 23,378 | 22,675 | 21,237 | 13,829 | 7,436 | |||||||||||||||
| Provision for income taxes for core income | 6,405 | 4,891 | 5,069 | 3,532 | 1,936 | |||||||||||||||
| Core net income | $ | 16,973 | $ | 17,784 | $ | 16,168 | $ | 10,297 | $ | 5,500 | ||||||||||
| GAAP diluted earnings (loss) per common share | $ | 0.60 | $ | 0.11 | $ | 0.50 | $ | 0.63 | $ | (0.05 | ) | |||||||||
| Day 1, Provision for Credit Losses - Empire transaction, net of tax | — | 0.05 | — | — | — | |||||||||||||||
| Net (gain) loss from fair value adjustments, net of tax | (0.02 | ) | 0.11 | 0.06 | (0.27 | ) | 0.15 | |||||||||||||
| Net loss on sale of securities, net of tax | — | 0.02 | — | — | — | |||||||||||||||
| Life insurance proceeds | — | — | — | (0.02 | ) | — | ||||||||||||||
| Net gain on disposition of assets, net of tax | (0.01 | ) | — | — | — | — | ||||||||||||||
| Net (gain) loss from fair value adjustments on qualifying hedges, net of tax | (0.03 | ) | (0.03 | ) | (0.01 | ) | 0.01 | 0.05 | ||||||||||||
| Prepayment penalty on borrowings, net of tax | — | 0.20 | — | — | — | |||||||||||||||
| Net amortization of purchase accounting adjustments, net of tax | (0.02 | ) | — | — | — | — | ||||||||||||||
| Merger expense, net of tax | 0.02 | 0.14 | 0.01 | 0.01 | 0.02 | |||||||||||||||
| Core diluted earnings per common share(1) | $ | 0.54 | $ | 0.58 | $ | 0.56 | $ | 0.36 | $ | 0.19 | ||||||||||
| Core net income, as calculated above | $ | 16,973 | $ | 17,784 | $ | 16,168 | $ | 10,297 | $ | 5,500 | ||||||||||
| Average assets | 8,147,714 | 7,705,407 | 7,083,028 | 7,206,059 | 7,106,998 | |||||||||||||||
| Average equity | 619,647 | 609,463 | 576,512 | 557,414 | 576,597 | |||||||||||||||
| Core return on average assets(2) | 0.83 | % | 0.92 | % | 0.91 | % | 0.57 | % | 0.31 | % | ||||||||||
| Core return on average equity(2) | 10.96 | % | 11.67 | % | 11.22 | % | 7.39 | % | 3.82 | % | ||||||||||
(1) Core diluted earnings per common share may not foot due to rounding.
(2) Ratios are calculated on an annualized basis.
FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
RECONCILIATION OF GAAP REVENUE and PRE-PROVISION
PRE-TAX NET REVENUE
(Unaudited)
| Three Months Ended | ||||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||
| (Dollars In thousands) | 2021 | 2020 | 2020 | 2020 | 2020 | |||||||||||||||
| GAAP Net interest income | $ | 60,892 | $ | 55,732 | $ | 49,924 | $ | 48,717 | $ | 40,826 | ||||||||||
| Net (gain) loss from fair value adjustments on qualifying hedges | (1,427 | ) | (1,023 | ) | (230 | ) | 365 | 2,073 | ||||||||||||
| Net amortization of purchase accounting adjustments | (922 | ) | (11 | ) | — | — | — | |||||||||||||
| Core Net interest income | $ | 58,543 | $ | 54,698 | $ | 49,694 | $ | 49,082 | $ | 42,899 | ||||||||||
| GAAP Non-interest income (loss) | $ | 6,311 | $ | (1,181 | ) | $ | 1,351 | $ | 13,737 | $ | (2,864 | ) | ||||||||
| Net (gain) loss from fair value adjustments | (982 | ) | 4,129 | 2,225 | (10,205 | ) | 5,993 | |||||||||||||
| Net loss on sale of securities | — | 610 | — | 54 | 37 | |||||||||||||||
| Life insurance proceeds | — | — | — | (659 | ) | — | ||||||||||||||
| Net gain on sale of assets | (621 | ) | — | — | — | — | ||||||||||||||
| Core Non-interest income | $ | 4,708 | $ | 3,558 | $ | 3,576 | $ | 2,927 | $ | 3,166 | ||||||||||
| GAAP Non-interest expense | $ | 38,159 | $ | 46,811 | $ | 29,985 | $ | 28,755 | $ | 32,380 | ||||||||||
| Prepayment penalty on borrowings | — | (7,834 | ) | — | — | — | ||||||||||||||
| Net amortization of purchase accounting adjustments | (133 | ) | (91 | ) | — | — | — | |||||||||||||
| Merger expense | (973 | ) | (5,349 | ) | (422 | ) | (194 | ) | (929 | ) | ||||||||||
| Core Non-interest expense | $ | 37,053 | $ | 33,537 | $ | 29,563 | $ | 28,561 | $ | 31,451 | ||||||||||
| GAAP: | ||||||||||||||||||||
| Net interest income | $ | 60,892 | $ | 55,732 | $ | 49,924 | $ | 48,717 | $ | 40,826 | ||||||||||
| Non-interest income (loss) | 6,311 | (1,181 | ) | 1,351 | 13,737 | (2,864 | ) | |||||||||||||
| Non-interest expense | (38,159 | ) | (46,811 | ) | (29,985 | ) | (28,755 | ) | (32,380 | ) | ||||||||||
| Pre-provision pre-tax net revenue | $ | 29,044 | $ | 7,740 | $ | 21,290 | $ | 33,699 | $ | 5,582 | ||||||||||
| Core: | ||||||||||||||||||||
| Net interest income | $ | 58,543 | $ | 54,698 | $ | 49,694 | $ | 49,082 | $ | 42,899 | ||||||||||
| Non-interest income | 4,708 | 3,558 | 3,576 | 2,927 | 3,166 | |||||||||||||||
| Non-interest expense | (37,053 | ) | (33,537 | ) | (29,563 | ) | (28,561 | ) | (31,451 | ) | ||||||||||
| Pre-provision pre-tax net revenue | $ | 26,198 | $ | 24,719 | $ | 23,707 | $ | 23,448 | $ | 14,614 | ||||||||||
| Efficiency Ratio | 58.6 | % | 57.6 | % | 55.4 | % | 54.9 | % | 68.2 | % | ||||||||||
FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
RECONCILIATION OF GAAP NET INTEREST INCOME and NET INTEREST MARGIN
to CORE and BASE NET INTEREST INCOME and NET INTEREST MARGIN
(Unaudited)
| Three Months Ended | ||||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||
| (Dollars In thousands) | 2021 | 2020 | 2020 | 2020 | 2020 | |||||||||||||||
| GAAP net interest income | $ | 60,892 | $ | 55,732 | $ | 49,924 | $ | 48,717 | $ | 40,826 | ||||||||||
| Net (gain) loss from fair value adjustments on qualifying hedges | (1,427 | ) | (1,023 | ) | (230 | ) | 365 | 2,073 | ||||||||||||
| Net amortization of purchase accounting adjustments | (922 | ) | (11 | ) | — | — | — | |||||||||||||
| Tax equivalent adjustment | 111 | 114 | 117 | 135 | 142 | |||||||||||||||
| Core net interest income FTE | $ | 58,654 | $ | 54,812 | $ | 49,811 | $ | 49,217 | $ | 43,041 | ||||||||||
| Prepayment penalties received on loans, net of reversals and recoveries of interest from non-accrual loans | (947 | ) | (1,093 | ) | (1,518 | ) | (776 | ) | (1,189 | ) | ||||||||||
| Base net interest income FTE | $ | 57,707 | $ | 53,719 | $ | 48,293 | $ | 48,441 | $ | 41,852 | ||||||||||
| Total average interest-earning assets (1) | $ | 7,676,833 | $ | 7,245,147 | $ | 6,675,896 | $ | 6,809,835 | $ | 6,719,857 | ||||||||||
| Core net interest margin FTE | 3.06 | % | 3.03 | % | 2.98 | % | 2.89 | % | 2.56 | % | ||||||||||
| Base net interest margin FTE | 3.01 | % | 2.97 | % | 2.89 | % | 2.85 | % | 2.49 | % | ||||||||||
| GAAP interest income on total loans, net | $ | 69,021 | $ | 66,120 | $ | 60,367 | $ | 60,557 | $ | 61,109 | ||||||||||
| Net (gain) loss from fair value adjustments on qualifying hedges | (1,427 | ) | (1,023 | ) | (230 | ) | 365 | 2,073 | ||||||||||||
| Net amortization of purchase accounting adjustments | (728 | ) | (356 | ) | — | — | — | |||||||||||||
| Core interest income on total loans, net | $ | 66,866 | $ | 64,741 | $ | 60,137 | $ | 60,922 | $ | 63,182 | ||||||||||
| Prepayment penalties received on loans, net of reversals and recoveries of interest from non-accrual loans | (947 | ) | (1,093 | ) | (1,443 | ) | (776 | ) | (1,189 | ) | ||||||||||
| Base interest income on total loans, net | $ | 65,919 | $ | 63,648 | $ | 58,694 | $ | 60,146 | $ | 61,993 | ||||||||||
| Average total loans, net (1) | $ | 6,711,446 | $ | 6,379,429 | $ | 5,904,051 | $ | 5,946,412 | $ | 5,794,866 | ||||||||||
| Core yield on total loans | 3.99 | % | 4.06 | % | 4.07 | % | 4.10 | % | 4.36 | % | ||||||||||
| Base yield on total loans | 3.93 | % | 3.99 | % | 3.98 | % | 4.05 | % | 4.28 | % | ||||||||||
(1) Excludes purchase accounting average balances for three months ended March 31, 2021, and December 31, 2020.
FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
CALCULATION OF TANGIBLE STOCKHOLDERS’
COMMON EQUITY to TANGIBLE ASSETS
(Unaudited)
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||
| (Dollars in thousands) | 2021 | 2020 | 2020 | 2020 | 2020 | |||||||||||||||
| Total Equity | $ | 639,201 | $ | 618,997 | $ | 586,406 | $ | 571,921 | $ | 549,683 | ||||||||||
| Less: | ||||||||||||||||||||
| Goodwill | (17,636 | ) | (17,636 | ) | (16,127 | ) | (16,127 | ) | (16,127 | ) | ||||||||||
| Core deposit Intangibles | (3,013 | ) | (3,172 | ) | — | — | — | |||||||||||||
| Intangible deferred tax liabilities | 287 | 287 | 292 | 292 | 292 | |||||||||||||||
| Tangible Stockholders' Common Equity | $ | 618,839 | $ | 598,476 | $ | 570,571 | $ | 556,086 | $ | 533,848 | ||||||||||
| Total Assets | $ | 8,159,184 | $ | 7,976,394 | $ | 7,063,056 | $ | 7,162,659 | $ | 7,245,410 | ||||||||||
| Less: | ||||||||||||||||||||
| Goodwill | (17,636 | ) | (17,636 | ) | (16,127 | ) | (16,127 | ) | (16,127 | ) | ||||||||||
| Core deposit Intangibles | (3,013 | ) | (3,172 | ) | — | — | — | |||||||||||||
| Intangible deferred tax liabilities | 287 | 287 | 292 | 292 | 292 | |||||||||||||||
| Tangible Assets | $ | 8,138,822 | $ | 7,955,873 | $ | 7,047,221 | $ | 7,146,824 | $ | 7,229,575 | ||||||||||
| Tangible Stockholders' Common Equity to Tangible Assets | 7.60 | % | 7.52 | % | 8.10 | % | 7.78 | % | 7.38 | % | ||||||||||