FIRST QUARTER 2012
- GAAP diluted earnings per common share were $0.23, a decrease
of $0.03 from the comparable prior year period, and a decrease of
$0.04 from the three months ended December 31, 2011.
- Core diluted earnings per common share were $0.24, a decrease
of $0.05 from the comparable prior year period, and a decrease of
$0.02 from the three months ended December 31, 2011.
- The net interest margin increased six basis points to 3.68%
from both the comparable prior year period and the three months
ended December 31, 2011.
- Net interest income was a record $37.3 million.
- Loan originations increased $19.6 million, or 19.7%, from the
three months ended March 31, 2011.
- Loan applications in process increased $64.0 million during the
first quarter to $258.4 million at March 31, 2012.
- Net charge-offs for the quarter were 0.72% of average
loans.
- Allowance for loan losses as a percentage of gross loans
increased to 0.95% at March 31, 2012.
- The provision for loan losses totaled $6.0 million.
- The Office of the Comptroller of the Currency ("OCC") completed
their first examination of Flushing Savings Bank, FSB.
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 months ended
March 31, 2012.
John R. Buran, President and Chief Executive Officer, stated:
"The first quarter of 2012 saw the continuation of a number of
trends in our Company's financial performance and significant
encouraging improvement in other trends.
"Nonperforming assets increased by $3.4 million during the first
quarter of 2012. Charge-offs and the provision for loan losses were
both similar to last quarter's performance. As in most of the prior
quarters, the majority of charge-offs came from revisions to our
carrying values based upon our program of continually obtaining
updated appraisals. As in prior quarters, we have recorded
charge-offs based upon these up-to-date values as opposed to adding
to the allowance. As a result, we do not carry non-performing
assets at more than 85% of their current appraised value. This
process has insured that we have kept pace with changing values in
the real estate market and helped maintain strong returns on our
OREO and delinquent loan sales, the latter of which was 91% of book
balance for the quarter.
"Classified assets and criticized assets continued their
improving trend that began a little over a year ago, which has
resulted in a 14% reduction in these categories since December
2010.
"Our margins continued to expand for the quarter, increasing six
basis points from the trailing quarter. Continued growth in core
deposits helped us to reduce funding costs for the Company as we
lowered total deposit and borrowing rates by 26 basis points from
the first quarter of 2011. This enabled us to deliver record net
interest income for the quarter of $37.3 million.
"Loan originations increased almost 20% for the quarter compared
to the first quarter of 2011. Simultaneously the pipeline grew to
$258.4 million, our largest loan pipeline since June 2008.
"At March 31, 2012, the Bank continues to be well-capitalized
under regulatory requirements, with Core, Tier 1 risk-based and
Total risk-based capital ratios of 9.54%, 13.98% and 15.02%,
respectively."
Core earnings, which exclude the effects of net gains or losses
from fair value adjustments and other-than-temporary impairment
("OTTI") charges, were $7.4 million for the three months ended
March 31, 2012, a decrease of $1.5 million, or 16.5%, from $8.8
million in the comparable prior year period. Core diluted earnings
per common share were $0.24 for the three months ended March 31,
2012, a decrease of $0.05, or 17.2%, from the comparable prior year
period.
For a reconciliation of core earnings and core diluted earnings
per common share to accounting principles generally accepted in the
United States ("GAAP") net income and GAAP diluted earnings per
common share, please refer to the tables in the section titled
"Reconciliation of GAAP and Core Earnings."
Earnings Summary - Three Months Ended March 31,
2012
Net income for the three months ended March 31, 2012 was $7.1
million, a decrease of $0.8 million, or 10.4%, compared to $8.0
million for the three months ended March 31, 2011. Diluted earnings
per common share were $0.23 for the three months ended March 31,
2012, a decrease of $0.03, or 11.5%, from $0.26 for the three
months ended March 31, 2011.
Return on average equity was 6.8% for the three months ended
March 31, 2012 compared to 8.2% for the three months ended March
31, 2011. Return on average assets was 0.7% for the three months
ended March 31, 2012 and 2011.
For the three months ended March 31, 2012, net interest income
was $37.3 million, an increase of $0.2 million, or 0.5%, from $37.2
million for the three months ended March 31, 2011. The increase in
net interest income was attributable to a six basis point increase
in the net-interest spread to 3.53% for the three months ended
March 31, 2012 from 3.47% for the three months ended March 31,
2011, partially offset by a decrease of $43.8 million in the
average balance of interest-earning assets to $4,062.3 million for
the three months ended March 31, 2012 from $4,106.0 million for the
comparable prior year period. The yield on interest-earning assets
decreased 20 basis points to 5.36% for the three months ended March
31, 2012 from 5.56% for the three months ended March 31, 2011.
However, this was more than offset by a decline in the cost of
funds of 26 basis points to 1.83% for the three months ended March
31, 2012 from 2.09% for the comparable prior year period. The net
interest margin improved six basis points to 3.68% for the three
months ended March 31, 2012 from 3.62% for the three months ended
March 31, 2011. Excluding prepayment penalty income, the net
interest margin would have been 3.57% for the three months ended
March 31, 2012 and 2011.
The 20 basis point decline in the yield of interest-earning
assets was primarily due to a 17 basis point reduction in the yield
of the loan portfolio to 5.83% for the three months ended March 31,
2012 from 6.00% for the three months ended March 31, 2011, combined
with a 35 basis point decline in the yield on total securities to
3.81% for the three months ended March 31, 2012 from 4.16% for the
comparable prior year period. In addition, the yield of
interest-earning assets was negatively impacted by a $54.7 million
decrease in the average balance of the higher yielding loan
portfolio for the three months ended March 31, 2012 and a $23.9
million increase in the average balances of the lower yielding
securities portfolio for the three months ended March 31, 2012,
which has a lower yield than the yield of total interest-earning
assets. These factors that reduced the yield were partially offset
by a $13.0 million decrease in the average balance of lower
yielding interest-earning deposits to $45.0 million for the three
months ended March 31, 2012 from $57.9 million for the comparable
prior year period. The 17 basis point decrease in the loan
portfolio was primarily due to the decline in the rates earned on
new loan originations partially offset by an increase in prepayment
penalty income during the three months ended March 31, 2012
compared to the three months ended March 31, 2011. The yield on the
mortgage loan portfolio decreased 16 basis points to 5.94% for the
three months ended March 31, 2012 from 6.10% for the three months
ended December 31, 2011. The yield on the mortgage loan portfolio,
excluding prepayment penalty income, decreased 23 basis points to
5.80% for the three months ended March 31, 2012 from 6.03% for the
three months ended March 31, 2011. The 35 basis point decrease in
the securities portfolio yield was primarily due to the purchase of
new securities at lower yields than the existing portfolio.
The 26 basis point decrease in the cost of interest-bearing
liabilities was primarily attributable to the Bank reducing the
rates it pays on its deposit products and a reduction in the cost
of borrowed funds. The cost of certificates of deposit, money
market accounts, savings accounts and NOW accounts decreased 14
basis points, 16 basis points, 34 basis points and 18 basis points,
respectively, for the three months ended March 31, 2012 from the
comparable prior year period. This resulted in a decrease in the
cost of due to depositors of 15 basis points to 1.45% for the three
months ended March 31, 2012 from 1.60% for the three months ended
March 31, 2011. The cost of borrowed funds decreased 81 basis
points from the comparable prior year period to 3.60% for the three
months ended March 31, 2012. This decrease in the cost of borrowed
funds was primarily due to maturing borrowing being replaced at
lower rates.
The net interest margin for the three months ended March 31,
2012 increased six basis points to 3.68% from 3.62% for the three
months ended December 31, 2011. The yield on interest-earning
assets decreased three basis points during the first quarter of
2012 to 5.36%, while the cost of interest-bearing liabilities
decreased nine basis points to 1.83%. Excluding prepayment penalty
income, the net interest margin increased one basis point to 3.57%
for the three months ended March 31, 2012 from 3.56% for the three
months ended December 31, 2011.
A provision for loan losses of $6.0 million was recorded for the
three months ended March 31, 2012; an increase of $1.0 million from
$5.0 million that was recorded for the three months ended March 31,
2011. During the three months ended March 31, 2012, non-performing
loans increased $2.5 million to $119.9 million from $117.4 million
at December 31, 2011. Net charge-offs for the three months ended
March 31, 2012 totaled $5.7 million. The current loan-to-value
ratio for our non-performing loans collateralized by real estate
was 62.6% at March 31, 2012. When we have obtained properties
through foreclosure, we have been able to quickly sell the
properties at amounts that approximate book value. We anticipate
that we will continue to see low loss content in our loan
portfolio. The Bank continues to maintain conservative underwriting
standards. However, given the level of non-performing loans, the
current economic uncertainties, and the charge-offs recorded in the
first quarter of 2012, management, as a result of the regular
quarterly analysis of the allowance for loans losses, deemed it
necessary to record a $6.0 million provision for possible loan
losses in the first quarter of 2012.
Non-interest income for the three months ended March 31, 2012
was $1.9 million, an increase of $1.0 million from $0.9 million for
the three months ended March 31, 2011. The increase in non-interest
income was primarily due to a $0.9 million decrease in OTTI charges
recorded during the three months ended March 31, 2012 compared to
the three months ended March 31, 2011.
Non-interest expense was $21.5 million for the three months
ended March 31, 2012, an increase of $1.5 million, or 7.6%, from
$20.0 million for the three months ended March 31, 2011. The
increase was primarily due to the growth of the Bank over the past
year, which included the opening of a new branch in January 2012,
an increase in stock based compensation expense, employee benefits
expense and other real estate owned/foreclosure expense. Salaries
and benefits increased $1.0 million for the three months ended
March 31, 2012 compared to the three months ended March 31, 2011.
In addition, other real estate owned/foreclosure expense and other
operating expense for the three months ended March 31, 2012
increased $0.4 million and $0.3 million, respectively, compared to
the three months ended March 31, 2011. These increases were
partially offset by a $0.4 million decrease in FDIC assessments
during the three months ended March 31, 2012 from the comparable
prior year period. The efficiency ratio was 53.4% for the three
months ended March 31, 2012 compared to 50.4% for the three months
ended March 31, 2011.
Balance Sheet Summary – At March 31, 2012
Total assets at March 31, 2012 were $4,358.0 million, an
increase of $70.0 million, or 1.6%, from $4,287.9 million at
December 31, 2011. Total loans, net decreased $0.5 million, during
the three months ended March 31, 2012 to $3,198.1 million from
$3,198.5 million at December 31, 2011. Loan originations and
purchases were $118.6 million for the three months ended March 31,
2012, an increase of $19.6 million from $99.1 million for the three
months ended March 31, 2011. During the three months ended March
31, 2012, we continued to focus on the origination of multi-family
properties and deemphasize non-owner occupied commercial real
estate and construction lending. Loan applications in process have
continued to show improvement, totaling $258.4 million at March 31,
2012 compared to $194.4 million at December 31, 2011 and $164.7
million at March 31, 2011.
The following table shows loan originations and purchases for
the periods indicated. The table includes loan purchases of $3.5
million and $12.6 million for the three months ended March 31, 2012
and 2011, respectively.
|
For the three months
ended March 31, |
(In thousands) |
2012 |
2011 |
Multi-family residential |
$ 61,903 |
$ 46,019 |
Commercial real estate |
3,424 |
1,419 |
One-to-four family – mixed-use property |
5,115 |
4,819 |
One-to-four family – residential |
5,805 |
3,353 |
Co-operative apartments |
-- |
-- |
Construction |
-- |
1,006 |
Small Business Administration |
266 |
2,329 |
Taxi Medallion |
3,464 |
23,824 |
Commercial business and other |
38,636 |
16,291 |
Total |
$ 118,613 |
$ 99,060 |
The Bank continues to maintain conservative underwriting
standards that include, among other things, a loan-to-value ratio
of 75% or less and a debt coverage ratio of at least 125%.
Multi-family residential, commercial real estate and one-to-four
family mixed-use property mortgage loans originated during the
first quarter of 2012 had an average loan-to-value ratio of 43.3%
and an average debt coverage ratio of 226%.
Non-accrual loans and charge-offs for impaired loans remain at
elevated levels, primarily due to the current economic environment.
The Bank reviews its delinquencies on a loan by loan basis working
with borrowers to help them meet their obligations and return them
back to current status. The Bank takes a proactive approach to
managing delinquent loans, including conducting site examinations
and encouraging borrowers to meet with a Bank representative. The
Bank has been developing short-term payment plans that enable
certain borrowers to bring their loans current and has employees
experienced in loan workouts to manage the delinquent loans. The
Bank has also restructured certain problem loans by either:
reducing the interest rate until the next reset date, extending the
amortization period thereby lowering the monthly payments,
deferring a portion of the interest payment, or changing the loan
to interest only payments for a limited time period. At times,
certain problem loans have been restructured by combining more than
one of these options. These restructurings have not included a
reduction of principal balance. The Bank believes that
restructuring these loans in this manner will allow certain
borrowers to become and remain current on their loans. These
restructured loans are classified as troubled debt restructured
("TDR"). Loans which have been current for six consecutive months
at the time they are restructured as TDR remain on accrual status.
Loans which were delinquent at the time they are restructured as a
TDR are placed on non-accrual status until they have made timely
payments for six consecutive months. Loans that are restructured as
TDR but are not performing in accordance with the restructured
terms are excluded from the TDR table below, as they are placed on
non-accrual status and reported as non-performing loans.
The following table shows loans classified as TDR that are
performing according to their restructured terms at the periods
indicated:
(In thousands) |
March 31, 2012 |
December 31, 2011 |
Accrual Status: |
|
|
Multi-family residential |
$ 2,356 |
$ 9,412 |
Commercial real estate |
2,404 |
2,413 |
One-to-four family - mixed-use property |
1,084 |
795 |
Construction |
5,008 |
5,584 |
Commercial business and other |
2,000 |
2,000 |
|
|
|
Total |
12,852 |
20,204 |
|
|
|
Non-accrual status: |
|
|
Commercial real estate |
1,388 |
-- |
One-to-four family - mixed-use property |
170 |
-- |
Total |
1,558 |
-- |
|
|
|
Total performing
troubled debt restructured |
$ 14,410 |
$ 20,204 |
During the three months ended March 31, 2012, three TDR totaling
$6.9 million were transferred to non-accrual and three loans
totaling $1.8 million were restructured as TDR.
Interest income on loans is recognized on the accrual basis. The
accrual of income on loans is discontinued when certain factors,
such as contractual delinquency of 90 days or more, indicate
reasonable doubt as to the timely collectability of such income.
Additionally, uncollected interest previously recognized on
non-accrual loans is reversed from interest income at the time the
loan is placed on non-accrual status. Loans in default 90 days or
more, as to their maturity date but not their payments, continue to
accrue interest as long as the borrower continues to remit monthly
payments.
The following table shows non-performing assets at the periods
indicated:
(In thousands) |
March 31, 2012 |
December 31, 2011 |
Loans 90 days or more past due and
still accruing: |
|
|
Multi-family residential |
$ -- |
$ 6,287 |
Commercial real estate |
-- |
92 |
Construction |
108 |
-- |
Total |
108 |
6,379 |
|
|
|
Non-accrual loans: |
|
|
Multi-family residential |
25,986 |
19,946 |
Commercial real estate |
24,876 |
19,895 |
One-to-four family - mixed-use property |
23,475 |
28,429 |
One-to-four family - residential |
12,337 |
12,766 |
Co-operative apartments |
110 |
152 |
Construction |
11,944 |
14,721 |
Small business administration |
592 |
493 |
Commercial business and other |
20,478 |
14,660 |
Total |
119,798 |
111,062 |
|
|
|
Total non-performing
loans |
119,906 |
117,441 |
|
|
|
Other non-performing
assets: |
|
|
Real estate acquired through foreclosure |
3,604 |
3,179 |
Investment securities |
3,035 |
2,562 |
Total |
6,639 |
5,741 |
|
|
|
Total non-performing
assets |
$ 126,545 |
$ 123,182 |
Included in non-accrual loans were nine loans totaling $23.2
million and seven loans totaling $17.5 million which were
restructured as TDR which were not performing in accordance with
their restructured terms at March 31, 2012 and December 31, 2011,
respectively.
The Bank's non-performing assets totaled $126.5 million at March
31, 2012, an increase of $3.4 million from $123.2 million at
December 31, 2011. Total non-performing assets as a percentage of
total assets were 2.90% at March 31, 2012 compared to 2.87% at
December 31, 2011. The ratio of allowance for loan losses to total
non-performing loans was 26% at March 31, 2012 and December 31,
2011.
During the three months ended March 31, 2012, 37 loans totaling
$29.2 million, (net of $0.7 million in charge-offs), were added to
non-performing loans, 19 loans totaling $12.0 million were returned
to performing status, six loans totaling $1.6 million were paid in
full, 16 loans totaling $7.0 million were sold, three loans
totaling $1.4 million were transferred to other real estate owned,
and charge-offs of $4.7 million were recorded on non-performing
loans that were non-performing at the beginning of the first
quarter of 2012.
Non-performing investment securities include two pooled trust
preferred securities for which we are not receiving payments. At
March 31, 2012, these investment securities had a combined
amortized cost and market value of $8.3 million and $3.0 million,
respectively.
Performing loans delinquent 60 to 89 days were $12.4 million at
March 31, 2012, a decrease of $1.5 million from $13.9 million at
December 31, 2011. Performing loans delinquent 30 to 59 days were
$58.8 million at March 31, 2012, a decrease of $3.4 million from
$62.2 million at December 31, 2011.
The Bank recorded net charge-offs for impaired loans of $5.7
million, $5.3 million and $5.8 million during the three months
ended March 31, 2012 and 2011 and December 31, 2011,
respectively.
The following table shows net loan charge-offs for the periods
indicated:
|
Three Months Ended |
(In thousands) |
March 31, 2012 |
March 31, 2011 |
December 31, 2011 |
Multi-family residential |
$ 1,004 |
$ 917 |
$ 2,670 |
Commercial real estate |
1,710 |
1,950 |
917 |
One-to-four family – mixed-use property |
1,412 |
173 |
1,233 |
One-to-four family – residential |
825 |
1,474 |
235 |
Co-operative apartments |
42 |
-- |
-- |
Construction |
234 |
-- |
385 |
Small Business Administration |
104 |
323 |
203 |
Commercial business and other |
395 |
432 |
116 |
Total net loan
charge-offs |
$ 5,726 |
$ 5,269 |
$ 5,759 |
The Bank considers a loan impaired when, based upon current
information, we believe it is probable that we will be unable to
collect all amounts due, both principal and interest, according to
the original contractual terms of the loan. All non-accrual loans
are considered impaired. Impaired loans are measured based on the
present value of the expected future cash flows discounted at the
loan's effective interest rate or at the loan's observable market
price or the fair value of the collateral if the loan is collateral
dependent. The property value of impaired mortgage loans are
internally reviewed on a quarterly basis using multiple valuation
approaches in evaluating the underlying collateral. These include
obtaining a third party appraisal, an income approach or a sales
approach. When obtained, third party appraisals are used. The
income approach is used for income producing properties, and uses
current revenues less operating expenses to determine the net cash
flow of the property. Once the net cash flow is determined, the
value of the property is calculated using an appropriate
capitalization rate for the property. The sales approach uses
comparable sales prices in the market. In the absence of a third
party appraisal, greater reliance is placed on the income approach
to value the collateral. The loan balance of impaired mortgage
loans is then compared to the property's updated fair value. We
consider fair value to be 85% of the market value of the real
estate securing the loan. The balance which exceeds fair value is
generally charged-off against the allowance for loan losses.
During the three months ended March 31, 2012, we sold delinquent
loans and received net proceeds of $9.7 million, resulting in $1.0
million in net charge-offs.
During the three months ended March 31, 2012, mortgage-backed
securities decreased $13.4 million, or 1.8%, to $733.9 million from
$747.3 million at December 31, 2011. The decrease in
mortgage-backed securities during the three months ended March 31,
2012 was primarily due to principal repayments of $37.9 million
partially offset by purchases of $24.6 million and a $0.7 million
improvement in fair value. During the three months ended March 31,
2012, other securities increased $98.5 million, or 151.0%, to
$163.8 million from $65.2 million at December 31, 2011. The
increase in other securities during the three months ended March
31, 2012 was primarily due to purchases of $97.9 million. Other
securities primarily consist of securities issued by government
agencies, mutual or bond funds that invest in government and
government agency securities and corporate bonds.
Total liabilities were $3,935.0 million at March 31, 2012, an
increase of $64.0 million, or 1.7%, from $3,871.0 million at
December 31, 2011. During the three months ended March 31, 2012,
due to depositors increased $12.4 million, or 0.4%, to $3,128.9
million, as a result of a $79.9 million increase in core deposits
partially offset by a $67.5 million decrease in certificates of
deposit. Borrowed funds increased $44.0 million during the three
months ended March 31, 2012.
Total stockholders' equity increased $6.0 million, or 1.5%, to
$423.0 million at March 31, 2012 from $416.9 million at December
31, 2011. Stockholders' equity increased primarily due to net
income of $7.1 million for the three months ended March 31, 2012,
an increase in other comprehensive income of $1.4 million primarily
due to an increase in the fair value of the securities portfolio
and $1.4 million due to the issuance of shares from the annual
funding of certain employee retirement plans through the release of
common shares from the Employee Benefit Trust. In addition, the
exercise of stock options increase stockholders' equity by $0.3
million, including the income tax benefit realized. These increases
were partially offset by the declaration and payment of dividends
on the Company's common stock of $4.1 million and the purchase of
97,200 treasury shares at a cost of $1.3 million. Book value per
common share was $13.68 at March 31, 2012 compared to $13.49 at
December 31, 2011. Tangible book value per common share was $13.16
at March 31, 2012 compared to $12.96 at December 31, 2011.
During the three months ended March 31, 2012, the Company
repurchased 97,200 shares of the Company's common stock at an
average cost of $13.19 per share. At March 31, 2012, 640,762 shares
remain to be repurchased under the current stock repurchase
program. Stock will be purchased under the current stock repurchase
program from time to time, in the open market or through private
transactions, subject to market conditions. There is no expiration
or maximum dollar amount under this authorization.
Reconciliation of GAAP Earnings 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 do not
carry financial assets and financial liabilities at fair value.
Core earnings should not be considered in isolation or as a
substitute for GAAP earnings. During the periods presented, the
Company calculated core earnings by adding back or subtracting, net
of tax, the net gain or loss recorded on financial assets and
financial liabilities carried at fair value and OTTI charges.
|
Three Months Ended |
|
March 31, 2012 |
March 31, 2011 |
December 31, 2011 |
|
(In thousands, except per share
data) |
|
|
|
|
GAAP income before income taxes |
$ 11,687 |
$ 13,011 |
$ 13,835 |
|
|
|
|
Net (gain) loss from fair value
adjustments |
448 |
655 |
(695) |
Other-than-temporary impairment charges |
-- |
926 |
-- |
|
|
|
|
Core income before taxes |
12,135 |
14,592 |
13,140 |
Provision for income taxes for core
income |
4,754 |
5,755 |
5,358 |
|
|
|
|
Core net income |
$ 7,381 |
$ 8,837 |
$ 7,782 |
|
|
|
|
GAAP diluted earnings per common share |
$ 0.23 |
$ 0.26 |
$ 0.27 |
|
|
|
|
Net (gain) loss from fair value
adjustments |
0.01 |
0.01 |
(0.01) |
Other-than-temporary impairment charges |
-- |
0.02 |
-- |
|
|
|
|
Core diluted earnings per common share* |
$ 0.24 |
$ 0.29 |
$ 0.26 |
|
* Core diluted earnings per
common share may not foot due to rounding. |
Reconciliation of GAAP Earnings and Core Earnings before
Provision for Loan Losses and Income Taxes
Although core earnings before the provision for loan losses and
income taxes are not a measure of performance calculated in
accordance with GAAP, the Company believes this measure of earnings
is an important indication of earnings through ongoing operations
that are available to cover possible loan losses and OTTI charges.
The Company believes this earnings measure is useful to management
and investors in evaluating its ongoing operating performance.
During the periods presented, the Company calculated this earnings
measure by adjusting GAAP income before income taxes by adding back
the provision for loan losses and adding back or subtracting the
net gain or loss recorded on financial assets and financial
liabilities carried at fair value and OTTI charges.
|
Three Months Ended |
|
March 31, 2012 |
March 31, 2011 |
December 31, 2011 |
|
(In thousands) |
|
|
|
|
GAAP income before income taxes |
$ 11,687 |
$ 13,011 |
$ 13,835 |
|
|
|
|
Provision for loan losses |
6,000 |
5,000 |
6,500 |
Net (gain) loss from fair value
adjustments |
448 |
655 |
(695) |
Other-than-temporary impairment charges |
-- |
926 |
-- |
|
|
|
|
Core net income before the provision for loan
losses and income taxes |
$ 18,135 |
$ 19,592 |
$ 19,640 |
About Flushing Financial Corporation
Flushing Financial Corporation is the parent holding company for
Flushing Savings Bank, FSB (the "Bank"), a federally chartered
stock savings bank insured by the FDIC. Flushing Bank is a trade
name of Flushing Savings Bank, FSB. The Bank serves consumers and
businesses by offering a full complement of deposit, loan and cash
management services through its seventeen banking offices located
in Queens, Brooklyn, Manhattan and Nassau County. The Bank also
operates an online banking division, iGObanking.com®, which offers
competitively priced deposit products to consumers nationwide.
Flushing Commercial Bank, a wholly-owned subsidiary, provides
banking services to public entities including counties, cities,
towns, villages, school districts, libraries, fire districts and
the various courts throughout the metropolitan area.
Additional information on Flushing Financial Corporation may be
obtained by visiting the Company's website at
http://www.flushingbank.com.
"Safe Harbor" Statement under the Private Securities
Litigation Reform Act of 1995: Statements in this Press
Release relating to plans, strategies, economic performance and
trends, projections of results of specific activities or
investments and other statements that are not descriptions of
historical facts may be forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995,
Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. Forward-looking information is
inherently subject to risks and uncertainties, and actual results
could differ materially from those currently anticipated due to a
number of factors, which include, but are not limited to, risk
factors discussed in the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 2011 and in other documents
filed by the Company with the Securities and Exchange Commission
from time to time. Forward-looking statements may be identified by
terms such as "may," "will," "should," "could," "expects," "plans,"
"intends," "anticipates," "believes," "estimates," "predicts,"
"forecasts," "potential" or "continue" or similar terms or the
negative of these terms. Although we believe that the expectations
reflected in the forward-looking statements are reasonable, we
cannot guarantee future results, levels of activity, performance or
achievements. The Company has no obligation to update these
forward-looking statements.
- Statistical Tables Follow
-
|
FLUSHING FINANCIAL
CORPORATION and SUBSIDIARIES |
CONSOLIDATED STATEMENTS
OF FINANCIAL CONDITION |
(Dollars in thousands, except
per share data) |
(Unaudited) |
|
|
|
|
|
|
|
March 31, 2012 |
December 31, 2011 |
ASSETS |
|
|
Cash and due from banks |
$ 35,390 |
$ 55,721 |
Securities available for sale: |
|
|
Mortgage-backed securities |
733,873 |
747,288 |
Other securities |
163,760 |
65,242 |
Loans: |
|
|
Multi-family residential |
1,418,254 |
1,391,221 |
Commercial real estate |
557,688 |
580,783 |
One-to-four family ― mixed-use
property |
681,389 |
693,932 |
One-to-four family ―
residential |
214,163 |
220,431 |
Co-operative apartments |
5,409 |
5,505 |
Construction |
42,655 |
47,140 |
Small Business
Administration |
13,665 |
14,039 |
Taxi medallion |
49,391 |
54,328 |
Commercial business and
other |
231,674 |
206,614 |
Net unamortized premiums and
unearned loan fees |
14,410 |
14,888 |
Allowance for loan losses |
(30,618) |
(30,344) |
Net loans |
3,198,080 |
3,198,537 |
Interest and dividends receivable |
18,434 |
17,965 |
Bank premises and equipment, net |
24,053 |
24,417 |
Federal Home Loan Bank of New York stock |
32,221 |
30,245 |
Bank owned life insurance |
84,150 |
83,454 |
Goodwill |
16,127 |
16,127 |
Core deposit intangible |
820 |
937 |
Other assets |
51,049 |
48,016 |
Total assets |
$ 4,357,957 |
$ 4,287,949 |
|
|
|
LIABILITIES |
|
|
Due to depositors: |
|
|
Non-interest bearing |
$ 131,428 |
$ 118,507 |
Interest-bearing: |
|
|
Certificate of deposit
accounts |
1,461,651 |
1,529,110 |
Savings accounts |
331,242 |
349,630 |
Money market accounts |
193,569 |
200,183 |
NOW accounts |
1,011,001 |
919,029 |
Total interest-bearing
deposits |
2,997,463 |
2,997,952 |
Mortgagors' escrow deposits |
41,243 |
29,786 |
Borrowed funds |
729,161 |
685,139 |
Other liabilities |
35,706 |
39,654 |
Total liabilities |
3,935,001 |
3,871,038 |
|
|
|
STOCKHOLDERS'
EQUITY |
|
|
Preferred stock (5,000,000 shares authorized;
none issued) |
-- |
-- |
Common stock ($0.01 par value; 100,000,000
shares authorized; 31,530,595 shares issued at March 31, 2012 and
December 31, 2011; 30,919,551 shares and 30,904,177 shares
outstanding at March 31, 2012 and December 31, 2011,
respectively) |
315 |
315 |
Additional paid-in capital |
197,325 |
195,628 |
Treasury stock (611,044 shares and 626,418
shares at March 31, 2012 and December 31, 2011, respectively) |
(7,410) |
(7,355) |
Retained earnings |
226,553 |
223,510 |
Accumulated other comprehensive income, net
of taxes |
6,173 |
4,813 |
Total stockholders' equity |
422,956 |
416,911 |
|
|
|
Total liabilities and
stockholders' equity |
$ 4,357,957 |
$ 4,287,949 |
|
|
|
|
|
|
FLUSHING FINANCIAL
CORPORATION and SUBSIDIARIES |
CONSOLIDATED STATEMENTS
OF INCOME |
(Dollars in thousands, except
per share data) |
(Unaudited) |
|
|
|
|
|
|
|
For the three months
ended March 31, |
|
2012 |
2011 |
|
|
|
Interest and dividend
income |
|
|
Interest and fees on loans |
$46,560 |
$48,690 |
Interest and dividends on securities: |
|
|
Interest |
7,631 |
8,107 |
Dividends |
207 |
202 |
Other interest income |
17 |
27 |
Total interest and
dividend income |
54,415 |
57,026 |
|
|
|
Interest
expense |
|
|
Deposits |
10,910 |
12,334 |
Other interest expense |
6,160 |
7,537 |
Total interest
expense |
17,070 |
19,871 |
|
|
|
Net interest income |
37,345 |
37,155 |
Provision for loan losses |
6,000 |
5,000 |
Net interest income after provision
for loan losses |
31,345 |
32,155 |
|
|
|
Non-interest
income |
|
|
Other-than-temporary impairment ("OTTI")
charge |
-- |
(3,616) |
Less: Non-credit portion of OTTI charge
recorded in Other Comprehensive Income, before taxes |
-- |
2,690 |
Net OTTI charge recognized in earnings |
-- |
(926) |
Loan fee income |
466 |
434 |
Banking services fee income |
455 |
461 |
Net loss from fair value adjustments |
(448) |
(655) |
Federal Home Loan Bank of New York stock
dividends |
385 |
500 |
Bank owned life insurance |
696 |
667 |
Other income |
324 |
390 |
Total non-interest
income |
1,878 |
871 |
|
|
|
Non-interest
expense |
|
|
Salaries and employee benefits |
11,041 |
10,027 |
Occupancy and equipment |
1,930 |
1,867 |
Professional services |
1,722 |
1,599 |
FDIC deposit insurance |
1,017 |
1,428 |
Data processing |
976 |
1,005 |
Depreciation and amortization |
834 |
766 |
Other real estate owned / foreclosure
expense |
712 |
337 |
Other operating expenses |
3,304 |
2,986 |
Total non-interest
expense |
21,536 |
20,015 |
|
|
|
Income before income
taxes |
11,687 |
13,011 |
|
|
|
Provision for income
taxes |
|
|
Federal |
3,624 |
3,912 |
State and local |
934 |
1,146 |
Total taxes |
4,558 |
5,058 |
|
|
|
Net income |
$7,129 |
$7,953 |
|
|
|
Basic earnings per common share |
$0.23 |
$0.26 |
Diluted earnings per common share |
$0.23 |
$0.26 |
Dividends per common share |
$0.13 |
$0.13 |
|
|
|
|
|
|
FLUSHING FINANCIAL
CORPORATION and SUBSIDIARIES |
SELECTED CONSOLIDATED
FINANCIAL DATA |
(Dollars in thousands, except
per share data) |
(Unaudited) |
|
|
|
|
|
At or for the three
months ended March 31, |
|
2012 |
2011 |
Per Share
Data |
|
|
Basic earnings per share |
$ 0.23 |
$ 0.26 |
Diluted earnings per share |
$ 0.23 |
$ 0.26 |
Average number of shares outstanding
for: |
|
|
Basic earnings per common
share computation |
30,395,582 |
30,620,483 |
Diluted earnings per
common share computation |
30,419,862 |
30,686,066 |
Book value per common share (1) |
$13.68 |
$12.57 |
Tangible book value per common share (2) |
$13.16 |
$12.05 |
|
|
|
Average
Balances |
|
|
Total loans, net |
$ 3,193,967 |
$ 3,248,664 |
Total interest-earning assets |
4,062,269 |
4,106,043 |
Total assets |
4,297,325 |
4,320,974 |
Total due to depositors |
3,009,090 |
3,085,868 |
Total interest-bearing liabilities |
3,731,245 |
3,805,864 |
Stockholders' equity |
419,482 |
389,453 |
Common stockholders' equity |
419,482 |
389,453 |
Performance
Ratios (3) |
|
|
Return on average assets |
0.66% |
0.74% |
Return on average equity |
6.80 |
8.17 |
Yield on average interest-earning assets |
5.36 |
5.56 |
Cost of average interest-bearing
liabilities |
1.83 |
2.09 |
Interest rate spread during period |
3.53 |
3.47 |
Net interest margin |
3.68 |
3.62 |
Non-interest expense to average assets |
2.00 |
1.85 |
Efficiency ratio (4) |
53.41 |
50.45 |
Average interest-earning assets to average
interest-bearing liabilities |
1.09 X |
1.08 X |
|
|
|
|
(1) Calculated by dividing common
stockholders' equity of $423.0 million and $394.1 million at March
31, 2012 and 2011, respectively, by 30,919,551 and 31,350,727
shares outstanding at March 31, 2012 and 2011, respectively. |
(2) Calculated by dividing
tangible common stockholders' equity of $406.8 million and $377.6
million at March 31, 2012 and 2011, respectively, by 30,919,551 and
31,350,727 shares outstanding at March 31, 2012 and 2011,
respectively. Tangible common stockholders' equity is total
stockholders' equity less intangible assets (goodwill and core
deposit intangible, net of deferred taxes). |
(3) Ratios for the three months
ended March 31, 2012 and 2011 are presented on an annualized
basis. |
(4) Calculated by dividing
non-interest expense (excluding OREO expense) by the total of net
interest income and non-interest income (excluding net gain/loss
from fair value adjustments, OTTI charges, net gains on the sale of
securities and certain non-recurring items). |
|
|
|
|
|
|
FLUSHING FINANCIAL
CORPORATION and SUBSIDIARIES |
SELECTED CONSOLIDATED
FINANCIAL DATA |
(Dollars in thousands) |
(Unaudited) |
|
|
|
|
|
At or for the three months ended
March 31, 2012 |
At or for the year ended December 31,
2011 |
Selected Financial Ratios and
Other Data |
|
|
|
|
|
Regulatory capital ratios (for Flushing
Savings Bank only): |
|
|
Core capital (well
capitalized = 5%) |
9.54% |
9.63% |
Tier 1 risk-based capital
(well capitalized = 6%) |
13.98 |
14.26 |
Total risk-based capital
(well capitalized = 10%) |
15.02 |
15.32 |
|
|
|
Capital ratios: |
|
|
Average equity to average
assets |
9.76% |
9.36% |
Equity to total
assets |
9.71 |
9.72 |
Tangible common equity to
tangible assets |
9.37 |
9.38 |
|
|
|
Asset quality: |
|
|
Non-accrual loans |
$ 119,798 |
$ 111,062 |
Non-performing loans |
119,906 |
117,441 |
Non-performing
assets |
126,545 |
123,182 |
Net charge-offs |
5,726 |
18,855 |
|
|
|
Asset quality ratios: |
|
|
Non-performing loans to
gross loans |
3.73% |
3.65% |
Non-performing assets to
total assets |
2.90 |
2.87 |
Allowance for loan losses
to gross loans |
0.95 |
0.94 |
Allowance for loan losses
to non-performing assets |
24.20 |
24.63 |
Allowance for loan losses
to non-performing loans |
25.53 |
25.84 |
|
|
|
Full-service customer facilities |
17 |
16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FLUSHING FINANCIAL
CORPORATION and SUBSIDIARIES |
NET INTEREST
MARGIN |
(Dollars in thousands) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months
ended March 31, |
|
2012 |
2011 |
|
Average Balance |
Interest |
Yield/ Cost |
Average Balance |
Interest |
Yield/ Cost |
Assets |
|
|
|
|
|
|
Interest-earning assets: |
|
|
|
|
|
|
Mortgage loans, net
(1) |
$ 2,906,820 |
43,197 |
5.94% |
$ 2,947,028 |
44,934 |
6.10% |
Other loans, net (1) |
287,147 |
3,363 |
4.68 |
301,636 |
3,756 |
4.98 |
Total
loans, net |
3,193,967 |
46,560 |
5.83 |
3,248,664 |
48,690 |
6.00 |
Mortgage-backed
securities |
706,576 |
7,013 |
3.97 |
743,637 |
7,854 |
4.22 |
Other securities |
116,757 |
825 |
2.83 |
55,807 |
455 |
3.26 |
Total
securities |
823,333 |
7,838 |
3.81 |
799,444 |
8,309 |
4.16 |
Interest-earning deposits and
federal funds sold |
44,969 |
17 |
0.15 |
57,935 |
27 |
0.19 |
Total interest-earning assets |
4,062,269 |
54,415 |
5.36 |
4,106,043 |
57,026 |
5.56 |
Other assets |
235,056 |
|
|
214,931 |
|
|
Total
assets |
$ 4,297,325 |
|
|
$ 4,320,974 |
|
|
|
|
|
|
|
|
|
Liabilities and Equity |
|
|
|
|
|
|
Interest-bearing liabilities: |
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
Savings accounts |
$ 339,059 |
228 |
0.27 |
$ 376,746 |
575 |
0.61 |
NOW accounts |
980,775 |
1,650 |
0.67 |
831,028 |
1,774 |
0.85 |
Money market
accounts |
195,102 |
164 |
0.34 |
363,614 |
459 |
0.50 |
Certificate of deposit
accounts |
1,494,154 |
8,857 |
2.37 |
1,514,480 |
9,514 |
2.51 |
Total due to
depositors |
3,009,090 |
10,899 |
1.45 |
3,085,868 |
12,322 |
1.60 |
Mortgagors' escrow
accounts |
38,238 |
11 |
0.12 |
35,964 |
12 |
0.13 |
Total deposits |
3,047,328 |
10,910 |
1.43 |
3,121,832 |
12,334 |
1.58 |
Borrowed funds |
683,917 |
6,160 |
3.60 |
684,032 |
7,537 |
4.41 |
Total interest-bearing
liabilities |
3,731,245 |
17,070 |
1.83 |
3,805,864 |
19,871 |
2.09 |
Non interest-bearing deposits |
114,489 |
|
|
99,112 |
|
|
Other liabilities |
32,109 |
|
|
26,545 |
|
|
Total liabilities |
3,877,843 |
|
|
3,931,521 |
|
|
Equity |
419,482 |
|
|
389,453 |
|
|
Total liabilities and
equity |
$ 4,297,325 |
|
|
$ 4,320,974 |
|
|
|
|
|
|
|
|
|
Net interest income / |
|
|
|
|
|
|
net interest rate
spread |
|
$ 37,345 |
3.53% |
|
$ 37,155 |
3.47% |
|
|
|
|
|
|
|
Net interest-earning assets / |
|
|
|
|
|
|
net interest margin |
$ 331,024 |
|
3.68% |
$ 300,179 |
|
3.62% |
|
|
|
|
|
|
|
Ratio of interest-earning assets to |
|
|
|
|
|
|
interest-bearing
liabilities |
|
|
1.09 X |
|
|
1.08 X |
|
|
|
|
|
|
|
(1) Loan interest income
includes loan fee income (which includes net amortization of
deferred fees and costs, late charges, and prepayment penalties) of
approximately $0.7 million and $0.3 million for the three months
ended March 31, 2012 and 2011, respectively. |
CONTACT: David W. Fry
Executive Vice President, Treasurer and
Chief Financial Officer
Flushing Financial Corporation
(718) 961-5400
Flushing Financial (NASDAQ:FFIC)
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