Second Quarter 2012
- Core diluted earnings per common share were $0.31, an increase
of $0.07 from the three months ended March 31, 2012, and an
increase of $0.01 from the comparable prior year period.
- GAAP diluted earnings per common share were $0.28, an increase
of $0.05 from the three months ended March 31, 2012, but a decrease
of $0.01 from the comparable prior year period.
- The net interest margin increased seven basis points to 3.68%
from the comparable prior year period and was the same as that
recorded for the three months ended March 31, 2012.
- Net interest income was a record $38.3 million.
- Loan originations increased $85.4 million, or 109.2%, from the
comparable prior year period and $45.1 million, or 38.0% from the
three months ended March 31, 2012.
- Loan applications in process was $277.3 million at June 30,
2012, an increase of $79.9 million from June 30, 2011 and an
increase of $18.9 million from March 31, 2012.
- Net charge-offs for the three months ended June 30, 2012 were
0.59% of average loans.
- Allowance for loan losses as a percentage of gross loans
increased to 0.96% at June 30, 2012.
- The provision for loan losses totaled $5.0 million, a decrease
of $1.0 million from the three months ended March 31, 2012, and the
same as that recorded in the comparable prior year period.
- Recorded OTTI charges totaled $0.8 million on five private
issue CMOs.
Flushing Financial Corporation (the "Company") (Nasdaq:FFIC), the
parent holding company for Flushing Savings Bank, FSB (the "Bank"),
today announced its financial results for the three and six months
ended June 30, 2012.
John R. Buran, President and Chief Executive Officer, stated:
"We are pleased to report that the second quarter of 2012 was a
strong quarter, which saw the continuation of a number of trends in
our Company's financial performance and significant encouraging
improvement in other trends, as we saw an improvement in core
earnings, and reductions in delinquent loans, nonperforming loans,
and classified loans.
"Core diluted earnings per common share were $0.31, an increase
of $0.07 from the first quarter of 2012, as net interest income was
once again at a record level.
"We saw continued improvement in nonperforming assets, as they
decreased by $9.5 million during the second quarter of 2012.
Charge-offs and the provision for loan losses were both less than
the prior 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 delinquent
loan sales, which was 92% of book balance for the quarter.
"Classified assets and criticized assets continued their
improving trend that began over a year ago, which resulted in an 8%
reduction in these categories in the second quarter of 2012, and a
21% reduction since December 31, 2010.
"Our net interest margin for the second quarter of 2012 was
3.68%, an improvement of seven basis points from the second quarter
of 2011, and the same as that for the first quarter of 2012.
Continued growth in the average balance of core deposits helped us
to reduce funding costs for the Company as we lowered total deposit
and borrowing rates by 14 basis points from the first quarter of
2012 and 40 basis points from the second quarter of 2011. This
enabled us to deliver record net interest income for the quarter of
$38.3 million.
"Loan originations for the second quarter of 2012 totaled $163.7
million, the highest level since the second quarter of 2008, more
than double compared to the second quarter of 2011, and an increase
of 38% compared to the first quarter of 2012. Simultaneously, the
pipeline grew to $277.3 million, our largest loan pipeline since
June 2008. The growth in the pipeline includes growth in all of our
lending areas, with the Business Banking area focusing on
adjustable rate loans.
"At June 30, 2012, the Bank continues to be well-capitalized
under regulatory requirements, with Core, Tier 1 risk-based and
Total risk-based capital ratios of 9.45%, 13.66% and 14.67%,
respectively.
"Banking regulators issued proposed revisions to the capital
regulations in June 2012 that have several changes on how we
compute our capital ratios. These proposed capital regulations will
result in the Company, in addition to the Bank, becoming subject to
capital requirements. Based on our preliminary assessment of these
proposed regulations, we believe we will see an increase in our
total risk-weighted assets. However, the Company and the Bank would
each meet the requirements of the proposed capital regulations to
be considered well-capitalized."
Core earnings, which exclude the effects of net gains or losses
from fair value adjustments and other-than-temporary impairment
("OTTI") charges were $9.4 million for the three months ended June
30, 2012, an increase of $0.2 million, or 2.4%, from $9.2 million
in the comparable prior year period. Core diluted earnings per
common share were $0.31 for the three months ended June 30, 2012,
an increase of $0.01, or 3.3%, from the comparable prior year
period.
Core earnings for the six months ended June 30, 2012 were $16.8
million, a decrease of $1.2 million, or 6.9%, from $18.0 million
for the comparable prior year period. Core diluted earnings per
common share were $0.55 for the six months ended June 30, 2012, a
decrease of $0.04 per common share, or 6.8%, from $0.59 per common
share in 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 June 30,
2012
Net income for the three months ended June 30, 2012 was $8.6
million, a decrease of $0.4 million, or 4.8%, compared to $9.1
million for the three months ended June 30, 2011. Diluted earnings
per common share were $0.28 for the three months ended June 30,
2012, a decrease of $0.01, or 3.4%, from $0.29 for the three months
ended June 30, 2011.
Return on average equity was 8.1% for the three months ended
June 30, 2012 compared to 9.1% for the three months ended June 30,
2011. Return on average assets was 0.8% for both of the three month
periods ended June 30, 2012 and 2011.
For the three months ended June 30, 2012, net interest income
was $38.3 million, an increase of $1.5 million, or 4.1%, from $36.8
million for the three months ended June 30, 2011. The increase in
net interest income was attributable to a nine basis point increase
in the net-interest spread to 3.54% for the three months ended June
30, 2012 from 3.45% for the three months ended June 30, 2011,
combined with an increase of $75.5 million in the average balance
of interest-earning assets to $4,156.0 million for the three months
ended June 30, 2012 from $4,080.5 million for the comparable prior
year period. The yield on interest-earning assets decreased 31
basis points to 5.23% for the three months ended June 30, 2012 from
5.54% for the three months ended June 30, 2011. However, this was
more than offset by a decline in the cost of funds of 40 basis
points to 1.69% for the three months ended June 30, 2012 from 2.09%
for the comparable prior year period. The net interest margin
improved seven basis points to 3.68% for the three months ended
June 30, 2012 from 3.61% for the three months ended June 30, 2011.
Excluding prepayment penalty income, the net interest margin would
have increased six basis points to 3.60% for the three months ended
June 30, 2012 from 3.54% for the three months ended June 30,
2011.
The 31 basis point decline in the yield of interest-earning
assets was primarily due to a 22 basis point reduction in the yield
of the loan portfolio to 5.76% for the three months ended June 30,
2012 from 5.98% for the three months ended June 30, 2011, combined
with a 60 basis point decline in the yield on total securities to
3.58% for the three months ended June 30, 2012 from 4.18% for the
comparable prior year period. In addition, the yield of
interest-earning assets was negatively impacted by a $16.8 million
decrease in the average balance of the higher yielding loan
portfolio for the three months ended June 30, 2012 and a $123.3
million increase in the average balances of the lower yielding
securities portfolio for the three months ended June 30, 2012.
These factors that reduced the yield were partially offset by a
$31.0 million decrease in the average balance of lower yielding
interest-earning deposits to $29.8 million for the three months
ended June 30, 2012 from $60.8 million for the comparable prior
year period. The 22 basis point decrease in the yield of 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 June 30, 2012 compared
to the three months ended June 30, 2011. The yield on the mortgage
loan portfolio decreased nine basis points to 5.85% for the three
months ended June 30, 2012 from 5.94% for the three months ended
March 31, 2012. The yield on the mortgage loan portfolio, excluding
prepayment penalty income, decreased 24 basis points to 5.72% for
the three months ended June 30, 2012 from 5.96% for the three
months ended June 30, 2011. The 60 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 40 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 13
basis points, 24 basis points, 43 basis points and 25 basis points,
respectively, for the three months ended June 30, 2012 from the
comparable prior year period. This resulted in a decrease in the
cost of due to depositors of 25 basis points to 1.37% for the three
months ended June 30, 2012 from 1.62% for the three months ended
June 30, 2011. The cost of borrowed funds decreased 140 basis
points from the comparable prior year period to 3.00% for the three
months ended June 30, 2012. This decrease in the cost of borrowed
funds was primarily due to maturing borrowings being replaced at
lower rates and new borrowings being obtained at lower rates.
The net interest margin for the three months ended June 30, 2012
was 3.68%, which was the same as that recorded for the three months
ended March 31, 2012. The yield on interest-earning assets
decreased 13 basis points during the three months ended June 30,
2012 to 5.23%, while the cost of interest-bearing liabilities
decreased 14 basis points to 1.69%. Excluding prepayment penalty
income, the net interest margin increased two basis points to 3.59%
for the three months ended June 30, 2012 from 3.57% for the three
months ended March 31, 2012.
A provision for loan losses of $5.0 million was recorded for the
three months ended June 30, 2012, which was the same as that
recorded for the three months ended June 30, 2011. During the three
months ended June 30, 2012, non-performing loans decreased $7.7
million to $112.2 million from $119.9 million at March 31, 2012.
Net charge-offs for the three months ended June 30, 2012 totaled
$4.7 million, or 59 basis points of average loans. The current
loan-to-value ratio for our non-performing loans collateralized by
real estate was 61.1% at June 30, 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 second quarter of 2012, management, as a result of
the regular quarterly analysis of the allowance for loans losses,
deemed it necessary to record a $5.0 million provision for possible
loan losses in the second quarter of 2012.
Non-interest income for the three months ended June 30, 2012 was
$1.1 million, a decrease of $1.0 million from $2.1 million for the
three months ended June 30, 2011. The decrease in non-interest
income was primarily due to $0.8 million in OTTI charges recorded
on five private issue collateralized mortgage obligations ("CMO")
during the three months ended June 30, 2012 and a $0.4 million
increase in net losses recorded from fair value adjustments.
Non-interest expense was $20.2 million for the three months
ended June 30, 2012, an increase of $1.4 million, or 7.3%, from
$18.9 million for the three months ended June 30, 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.
Salaries and benefits increased $0.8 million for the three months
ended June 30, 2012 compared to the three months ended June 30,
2011 primarily due to the opening of a new branch in 2012, an
increase in stock based compensation expense and increased employee
benefits expense. In addition, other operating expense for the
three months ended June 30, 2012 increased $0.6 million primarily
due to $0.2 million in net losses recorded from the sale of other
real estate owned ("OREO") recorded during the three months ended
June 30, 2012 compared to $0.3 million in net gains from the sale
of OREO recorded during the three months ended June 30, 2011. The
efficiency ratio was 49.0% for the three months ended June 30, 2012
compared to 48.8% for the three months ended June 30, 2011.
Earnings Summary - Six Months Ended June 30,
2012
Net income for the six months ended June 30, 2012 was $15.8
million, a decrease of $1.3 million, or 7.4%, compared to $17.0
million for the six months ended June 30, 2011. Diluted earnings
per common share were $0.52 for the six months ended June 30, 2012,
a decrease of $0.03, or 5.5%, from $0.55 for the six months ended
June 30, 2011.
Return on average equity was 7.5% for the six months ended June
30, 2012 compared to 8.6% for the six months ended June 30, 2011.
Return on average assets was 0.7% for the six months ended June 30,
2012 compared to 0.8% for the six months ended June 30, 2011.
For the six months ended June 30, 2012, net interest income was
$75.6 million, an increase of $1.7 million, or 2.3%, from $74.0
million for the six months ended June 30, 2011. The increase in net
interest income was attributable to an eight basis point increase
in the net-interest spread to 3.54% for the six months ended June
30, 2012 from 3.46% for the six months ended June 30, 2011,
combined with an increase of $16.0 million in the average balance
of interest-earning assets to $4,109.1 million for the six months
ended June 30, 2012 from $4,093.2 million for the comparable prior
year period. The yield on interest-earning assets decreased 25
basis points to 5.30% for the six months ended June 30, 2012 from
5.55% for the six months ended June 30, 2011. However, this was
more than offset by a decline in the cost of funds of 33 basis
points to 1.76% for the six months ended June 30, 2011 from 2.09%
for the comparable prior year period. The net interest margin
improved seven basis points to 3.68% for the six months ended June
30, 2012 from 3.61% for the six months ended June 30, 2011.
The 25 basis point decline in the yield of interest-earning
assets was primarily due to a 20 basis point reduction in the yield
of the loan portfolio to 5.79% for the six months ended June 30,
2012 from 5.99% for the six months ended June 30, 2011, combined
with a 48 basis point decline in the yield on total securities to
3.69% for the six months ended June 30, 2012 from 4.17% for the
comparable prior year period. In addition, the yield of
interest-earning assets was negatively impacted by a $35.7 million
decrease in the average balance of the higher yielding loan
portfolio for the six months ended June 30, 2012 and a $73.6
million increase in the average balances of the lower yielding
securities portfolio for the three months ended June 30, 2012.
These factors that reduced the yield were partially offset by a
$22.0 million decrease in the average balance of lower yielding
interest-earning deposits to $37.4 million for the three months
ended June 30, 2012 from $59.4 million for the comparable prior
year period. The 20 basis point decrease in the loan portfolio was
primarily due to a decline in the rates earned on new loan
originations. The 35 basis point decrease in the securities
portfolio was primarily due to new securities being purchased at
lower yields than the existing portfolio. The yield on the mortgage
loan portfolio decreased 18 basis points to 5.90% for the six
months ended June 30, 2012 from 6.08% for the six months ended June
30, 2011. The yield on the mortgage loan portfolio, excluding
prepayment penalty income, decreased 23 basis points to 5.76% for
the six months ended June 30, 2012 from 5.99% for the six months
ended June 30, 2011.
The 33 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. The cost of certificates of
deposit, money market accounts, savings accounts and NOW accounts
decreased 13 basis points, 21 basis points, 38 basis points and 22
basis points, respectively, for the six months ended June 30, 2012
from the comparable prior year period. This resulted in a decrease
in the cost of due to depositors of 20 basis points to 1.41% for
the six months ended June 30, 2012 from 1.61% for the six months
ended June 30, 2011. The cost of borrowed funds decreased 112 basis
points to 3.28% for the six months ended June 30, 2012 from 4.40%
for the six months ended June 30, 2011 with the average balance
increasing $57.0 million to $733.3 million for the six months ended
June 30, 2012 from $676.3 million for the six months ended June 30,
2011. The decrease in the cost of borrowed funds was primarily due
to maturing borrowings being replaced at lower rates and new
borrowings being obtained at lower rates.
The net interest margin for the six months ended June 30, 2012
increased seven basis points to 3.68% from 3.61% for the six months
ended June 30, 2011. The yield on interest-earning assets decreased
25 basis points while the cost of interest-bearing liabilities
decreased 33 basis points during the six months ended June 30, 2012
from the comparable prior year period. Excluding prepayment penalty
income, the net interest margin would have been 3.58% for the six
months ended June 30, 2012, an increase of three basis points from
3.55% for the six months ended June 30, 2011.
A provision for loan losses of $11.0 million was recorded for
the six months ended June 30, 2012, which was an increase of $1.0
million from $10.0 million recorded in the six months ended June
30, 2011. During the six months ended June 30, 2012, non-performing
loans decreased $5.2 million to $112.2 million from $117.4 million
at December 31, 2011. Net charge-offs for the six months ended June
30, 2012 totaled $10.4 million, or 65 basis points of average
loans. The current loan-to-value ratio for our non-performing loans
collateralized by real estate was 61.1% at June 30, 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 during the six months ended June 30, 2012, management, as
a result of the regular quarterly analysis of the allowance for
loans losses, deemed it necessary to record an $11.0 million
provision for possible loan losses for the six months ended June
30, 2012.
Non-interest income for the six months ended June 30, 2012 was
$3.0 million, which was the same as that recorded for the six
months ended June 30, 2011. An increase of $0.2 million in net
losses from fair value adjustments was offset by a $0.2 million
decrease in OTTI charges recorded during the six months ended June
30, 2012 compared to the six months ended June 30, 2011.
Non-interest expense was $41.8 million for the six months ended
June 30, 2012, an increase of $2.9 million, or 7.5%, from $38.9
million for the six months ended June 30, 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. Salaries and
benefits increased $1.8 million for the six months ended June 30,
2012 compared to the six months ended June 30, 2011primarily due to
the opening of a new branch in January 2012, an increase in stock
based compensation expense and increased employee benefits expense.
Other operating expense for the six months ended June 30, 2012
increased $0.9 million primarily due to $0.3 million in net losses
recorded from the sale of OREO recorded during the six months ended
June 30, 2012 compared to $0.2 million in net gains from the sale
of OREO recorded during the six months ended June 30, 2011. In
addition, other real estate owned/foreclosure expense increased
$0.4 million in the six months ended June 30, 2012 compared to the
six months ended June 30, 2011.The efficiency ratio was 51.2% for
the three months ended June 30, 2012 compared to 49.6% for the
three months ended June 30, 2011.
Balance Sheet Summary – At June 30, 2012
Total assets at June 30, 2012 were $4,435.8 million, an increase
of $147.9 million, or 3.5%, from $4,287.9 million at December 31,
2011. Total loans, net increased $6.1 million, during the six
months ended June 30, 2012 to $3,204.6 million from $3,198.5
million at December 31, 2011. Loan originations and purchases were
$282.3 million for the six months ended June 30, 2012, an increase
of $105.0 million from $177.3 million for the six months ended June
30, 2011. During the six months ended June 30, 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 $277.3 million at June 30, 2012
compared to $194.4 million at December 31, 2011 and $197.4 million
at June 30, 2011.
The following table shows loan originations and purchases for
the periods indicated. The table includes loan purchases of $3.5
million and $14.5 million for the six months ended June 30, 2012
and 2011, respectively, and $1.9 million for the three months ended
June 30, 2011. No loans were purchased during the three months
ended June 30, 2012.
|
For the three months |
For the six months |
|
ended June 30, |
ended June 30, |
(In thousands) |
2012 |
2011 |
2012 |
2011 |
Multi-family residential |
$ 79,850 |
$ 54,461 |
$ 141,753 |
$ 100,480 |
Commercial real estate |
16,389 |
1,593 |
19,813 |
3,012 |
One-to-four family – mixed-use property |
5,366 |
7,826 |
10,481 |
12,645 |
One-to-four family – residential |
4,889 |
3,856 |
10,694 |
7,209 |
Co-operative apartments |
1,626 |
-- |
1,626 |
-- |
Construction |
570 |
197 |
570 |
1,203 |
Small Business Administration |
67 |
509 |
333 |
2,838 |
Taxi Medallion |
-- |
2,410 |
3,464 |
26,234 |
Commercial business and other |
54,965 |
7,426 |
93,601 |
23,717 |
Total |
$ 163,722 |
$ 78,278 |
$ 282,335 |
$ 177,338 |
|
|
|
|
|
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
three months ended June 30, 2012 had an average loan-to-value ratio
of 48.8% and an average debt coverage ratio of 202%.
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:
|
June 30, |
March 31, |
December 31, |
(In thousands) |
2012 |
2012 |
2011 |
Accrual Status: |
|
|
|
Multi-family residential |
$ 2,348 |
$ 2,356 |
$ 9,412 |
Commercial real estate |
1,898 |
2,404 |
2,413 |
One-to-four family - mixed-use property |
1,080 |
1,084 |
795 |
Construction |
3,874 |
5,008 |
5,584 |
Commercial business and other |
2,000 |
2,000 |
2,000 |
|
|
|
|
Total |
11,200 |
12,852 |
20,204 |
|
|
|
|
Non-accrual status: |
|
|
|
Commercial real estate |
5,287 |
1,388 |
-- |
One-to-four family - mixed-use property |
1,275 |
170 |
-- |
Total |
6,562 |
1,558 |
-- |
|
|
|
|
Total performing troubled debt
restructured |
$ 17,762 |
$ 14,410 |
$ 20,204 |
|
|
|
|
During the six months ended June 30, 2012, four TDR totaling
$7.2 million were transferred to non-accrual and seven loans
totaling $6.9 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:
|
June 30, |
March 31, |
December 31, |
(In thousands) |
2012 |
2012 |
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 |
27,972 |
25,986 |
19,946 |
Commercial real estate |
19,585 |
24,876 |
19,895 |
One-to-four family - mixed-use property |
20,437 |
23,475 |
28,429 |
One-to-four family - residential |
12,450 |
12,337 |
12,766 |
Co-operative apartments |
109 |
110 |
152 |
Construction |
9,845 |
11,944 |
14,721 |
Small business administration |
392 |
592 |
493 |
Commercial business and other |
21,403 |
20,478 |
14,660 |
Total |
112,193 |
119,798 |
111,062 |
|
|
|
|
Total non-performing
loans |
112,193 |
119,906 |
117,441 |
|
|
|
|
Other non-performing
assets: |
|
|
|
Real estate acquired through foreclosure |
2,094 |
3,604 |
3,179 |
Investment securities |
2,761 |
3,035 |
2,562 |
Total |
4,855 |
6,639 |
5,741 |
|
|
|
|
Total non-performing
assets |
$ 117,048 |
$ 126,545 |
$ 123,182 |
|
|
|
|
Included in non-accrual loans were nine loans totaling $20.9
million, nine loans totaling $23.2 million and six loans totaling
$17.1 million which were restructured as TDR which were not
performing in accordance with their restructured terms at June 30,
2012, March 31, 2012 and December 31, 2011, respectively.
The Bank's non-performing assets totaled $117.0 million at June
30, 2012, a decrease of $9.5 million from $126.5 million at March
31, 2012 and a decrease of $6.1 million from $123.2 million at
December 31, 2011. Total non-performing assets as a percentage of
total assets were 2.64% at June 30, 2012 compared to 2.90% at March
31, 2012 and 2.87% at December 31, 2011. The ratio of allowance for
loan losses to total non-performing loans was 27.5% at June 30,
2012 compared to 25.5% at March 31, 2012 and 25.8% at December 31,
2011.
During the three months ended June 30, 2012, 38 loans totaling
$12.2 million, (net of $0.2 million in charge-offs), were added to
non-performing loans, 13 loans totaling $7.0 million were returned
to performing status, eight loans totaling $1.4 million were paid
in full, 14 loans totaling $6.2 million were sold, two loans
totaling $0.3 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 second
quarter of 2012.
Non-performing investment securities include two pooled trust
preferred securities for which we are not receiving payments. At
June 30, 2012, these investment securities had a combined amortized
cost and market value of $8.3 million and $2.8 million,
respectively.
Performing loans delinquent 60 to 89 days were $11.3 million at
June 30, 2012, a decrease of $1.2 million from $12.4 million at
March 31, 2012 and a decrease of $2.6 million from $13.9 million at
December 31, 2011. Performing loans delinquent 30 to 59 days were
$57.4 million at June 30, 2012, a decrease of $1.5 million from
$58.8 million at March 31, 2012 and a decrease of $4.8 million from
$62.2 million at December 31, 2011.
The Bank recorded net charge-offs for impaired loans of $4.7
million and $3.1 million during the three months ended June 30,
2012 and 2011, respectively, and net charge-offs for impaired loans
of $10.4 million and $8.3 million during the six months ended June
30, 2012 and 2011, respectively.
The following table shows net loan charge-offs for the periods
indicated:
|
Three Months Ended |
Six Months Ended |
|
June 30, |
June 30, |
June 30, |
June 30, |
(In thousands) |
2012 |
2011 |
2012 |
2011 |
Multi-family residential |
$ 1,078 |
$ 879 |
$ 2,082 |
$ 1,796 |
Commercial real estate |
387 |
572 |
2,097 |
2,522 |
One-to-four family – mixed-use property |
838 |
307 |
2,250 |
480 |
One-to-four family – residential |
44 |
454 |
869 |
1,928 |
Co-operative apartments |
1 |
-- |
43 |
-- |
Construction |
2,207 |
703 |
2,441 |
703 |
Small Business Administration |
138 |
148 |
242 |
471 |
Commercial business and other |
26 |
9 |
421 |
441 |
Total net loan charge-offs |
$ 4,719 |
$ 3,072 |
$ 10,445 |
$ 8,341 |
|
|
|
|
|
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 six months ended June 30, 2012, we sold 31 delinquent
loans and received net proceeds of $17.6 million, resulting in $1.7
million in net charge-offs.
During the six months ended June 30, 2012, mortgage-backed
securities decreased $9.2 million, or 1.2%, to $738.1 million from
$747.3 million at June 30, 2012. The decrease in mortgage-backed
securities during the six months ended June 30, 2012 was primarily
due to principal repayments of $77.5 million partially offset by
purchases of $65.0 million and a $5.7 million improvement in fair
value. Additionally, during the six months ended June 30, 2012 $0.8
million in OTTI charges were recorded on five private issue CMOs.
During the six months ended June 30, 2012, other securities
increased $156.7 million, or 240.2%, to $221.9 million from $65.2
million at March 31, 2012. The increase in other securities during
the six months ended June 30, 2012 was primarily due to purchases
of $160.4 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 $4,004.9 million at June 30, 2012, an
increase of $133.8 million, or 3.5%, from $3,871.0 million at
December 31, 2011. During the six months ended June 30, 2012, due
to depositors decreased $15.7 million, or 0.5%, to $3,100.7
million, as a result of a $28.6 million decrease in certificates of
deposit partially offset by a $12.9 million increase in core
deposits. Borrowed funds increased $141.9 million during the six
months ended June 30, 2012. The increase in borrowed funds was
primarily due to a net increase of $82.5 million in long term
borrowings combined with a $60.0 million increase in short-term
borrowings.
Total stockholders' equity increased $14.1 million, or 3.4%, to
$431.0 million at June 30, 2012 from $416.9 million at December 31,
2011. Stockholders' equity increased primarily due to net income of
$15.8 million for the six months ended June 30, 2012, an increase
in other comprehensive income of $4.0 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 $0.8 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 $7.9 million and the purchase of 130,900
treasury shares at a cost of $1.7 million. Book value per common
share was $13.92 at June 30, 2012 compared to $13.49 at December
31, 2011. Tangible book value per common share was $13.40 at June
30, 2012 compared to $12.96 at December 31, 2011.
During the six months ended June 30, 2012, the Company
repurchased 130,900 shares of the Company's common stock at an
average cost of $13.15 per share. At June 30, 2012, 607,062 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 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 |
Six Months Ended |
|
June 30, |
June 30, |
March 31, |
June 30, |
June 30, |
|
2012 |
2011 |
2012 |
2012 |
2011 |
|
|
|
|
|
|
|
|
|
|
|
|
GAAP income before income taxes |
$ 14,156 |
$ 15,065 |
$ 11,687 |
$ 25,843 |
$ 28,076 |
|
|
|
|
|
|
Net loss from fair value adjustments |
562 |
165 |
448 |
1,010 |
820 |
Other-than-temporary impairment charges |
776 |
-- |
-- |
776 |
926 |
|
|
|
|
|
|
Core income before taxes |
15,494 |
15,230 |
12,135 |
27,629 |
29,822 |
|
|
|
|
|
|
Provision for income taxes for core
income |
6,106 |
6,063 |
4,754 |
10,860 |
11,818 |
|
|
|
|
|
|
Core net income |
$ 9,388 |
$ 9,167 |
$ 7,381 |
$ 16,769 |
$ 18,004 |
|
|
|
|
|
|
GAAP diluted earnings per common share |
$ 0.28 |
$ 0.29 |
$ 0.23 |
$ 0.52 |
$ 0.55 |
|
|
|
|
|
|
Net loss from fair value adjustments |
0.01 |
-- |
0.01 |
0.02 |
0.01 |
Other-than-temporary impairment charges |
0.01 |
-- |
-- |
0.01 |
0.02 |
|
|
|
|
|
|
Core diluted earnings per common share* |
$ 0.31 |
$ 0.30 |
$ 0.24 |
$ 0.55 |
$ 0.59 |
|
|
|
|
|
|
* Core diluted earnings per common share may
not foot due to rounding. |
|
|
|
|
|
Reconciliation of GAAP 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 |
Six Months Ended |
|
June 30, |
June 30, |
March 31, |
June 30, |
June 30, |
|
2012 |
2011 |
2012 |
2012 |
2011 |
|
|
|
|
|
|
|
|
GAAP income before income taxes |
$ 14,156 |
$ 15,065 |
$ 11,687 |
$ 25,843 |
$ 28,076 |
|
|
|
|
|
|
Provision for loan losses |
5,000 |
5,000 |
6,000 |
11,000 |
10,000 |
Net loss from fair value adjustments |
562 |
165 |
448 |
1,010 |
820 |
Other-than-temporary impairment charges |
776 |
-- |
-- |
776 |
926 |
|
|
|
|
|
|
Core net income before the provision for loan
losses and income taxes |
$ 20,494 |
$ 20,230 |
$ 18,135 |
$ 38,629 |
$ 39,822 |
|
|
|
|
|
|
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) |
|
June 30, |
December 31, |
|
2012 |
2011 |
ASSETS |
|
|
Cash and due from banks |
$ 41,216 |
$ 55,721 |
Securities available for sale: |
|
|
Mortgage-backed securities |
738,099 |
747,288 |
Other securities |
221,918 |
65,242 |
Loans available for sale |
740 |
-- |
Loans: |
|
|
Multi-family residential |
1,453,049 |
1,391,221 |
Commercial real estate |
552,513 |
580,783 |
One-to-four family ― mixed-use
property |
669,913 |
693,932 |
One-to-four family ― residential |
208,273 |
220,431 |
Co-operative apartments |
6,834 |
5,505 |
Construction |
39,511 |
47,140 |
Small Business Administration |
11,233 |
14,039 |
Taxi medallion |
37,291 |
54,328 |
Commercial business and other |
242,967 |
206,614 |
Net unamortized premiums and unearned
loan fees |
13,911 |
14,888 |
Allowance for loan losses |
(30,899) |
(30,344) |
Net
loans |
3,204,596 |
3,198,537 |
Interest and dividends receivable |
18,706 |
17,965 |
Bank premises and equipment, net |
23,506 |
24,417 |
Federal Home Loan Bank of New York stock |
36,847 |
30,245 |
Bank owned life insurance |
84,839 |
83,454 |
Goodwill |
16,127 |
16,127 |
Core deposit intangible |
703 |
937 |
Other assets |
48,532 |
48,016 |
Total
assets |
$ 4,435,829 |
$ 4,287,949 |
|
|
|
LIABILITIES |
|
|
Due to depositors: |
|
|
Non-interest bearing |
$ 139,510 |
$ 118,507 |
Interest-bearing: |
|
|
Certificate of deposit
accounts |
1,500,483 |
1,529,110 |
Savings accounts |
322,728 |
349,630 |
Money market accounts |
166,877 |
200,183 |
NOW accounts |
971,128 |
919,029 |
Total
interest-bearing deposits |
2,961,216 |
2,997,952 |
Mortgagors' escrow deposits |
35,880 |
29,786 |
Borrowed funds |
827,008 |
685,139 |
Other liabilities |
41,249 |
39,654 |
Total
liabilities |
4,004,863 |
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 June 30, 2012 and
December 31, 2011; 30,949,332 shares and 30,904,177 shares
outstanding at June 30, 2012 and December 31, 2011,
respectively) |
315 |
315 |
Additional paid-in capital |
197,709 |
195,628 |
Treasury stock (581,263 shares and 626,418
shares at June 30, 2012 and December 31, 2011, respectively) |
(7,086) |
(7,355) |
Retained earnings |
231,224 |
223,510 |
Accumulated other comprehensive income, net
of taxes |
8,804 |
4,813 |
Total
stockholders' equity |
430,966 |
416,911 |
|
|
|
Total
liabilities and stockholders' equity |
$ 4,435,829 |
$ 4,287,949 |
|
|
|
|
|
|
|
|
FLUSHING FINANCIAL
CORPORATION and SUBSIDIARIES |
CONSOLIDATED STATEMENTS
OF INCOME |
(Dollars in thousands, except
per share data) |
(Unaudited) |
|
For the three months |
For the six months |
|
ended June 30, |
ended June 30, |
|
2012 |
2011 |
2012 |
2011 |
|
|
|
Interest and dividend
income |
|
|
|
|
Interest and fees on loans |
$ 46,123 |
$ 48,121 |
$ 92,683 |
$ 96,811 |
Interest and dividends on securities: |
|
|
|
|
Interest |
8,045 |
8,149 |
15,676 |
16,256 |
Dividends |
205 |
202 |
412 |
404 |
Other interest income |
11 |
27 |
28 |
54 |
Total interest and dividend
income |
54,384 |
56,499 |
108,799 |
113,525 |
|
|
|
|
|
Interest expense |
|
|
|
|
Deposits |
10,225 |
12,354 |
21,135 |
24,688 |
Other interest expense |
5,872 |
7,350 |
12,032 |
14,887 |
Total interest expense |
16,097 |
19,704 |
33,167 |
39,575 |
|
|
|
|
|
Net interest income |
38,287 |
36,795 |
75,632 |
73,950 |
Provision for loan losses |
5,000 |
5,000 |
11,000 |
10,000 |
Net interest income after provision
for loan losses |
33,287 |
31,795 |
64,632 |
63,950 |
|
|
|
|
|
Non-interest income
(loss) |
|
|
|
|
Other-than-temporary impairment ("OTTI")
charge |
(6,218) |
-- |
(6,218) |
(3,939) |
Less: Non-credit portion of OTTI charge
recorded in Other |
|
|
|
|
Comprehensive Income,
before taxes |
5,442 |
-- |
5,442 |
3,013 |
Net OTTI charge recognized in earnings |
(776) |
-- |
(776) |
(926) |
Loan fee income |
634 |
515 |
1,100 |
949 |
Banking services fee income |
409 |
388 |
864 |
849 |
Net gain on sale of loans |
39 |
-- |
39 |
-- |
Net loss from fair value adjustments |
(562) |
(165) |
(1,010) |
(820) |
Federal Home Loan Bank of New York stock
dividends |
338 |
342 |
723 |
842 |
Bank owned life insurance |
689 |
695 |
1,385 |
1,362 |
Other income |
337 |
360 |
661 |
750 |
Total non-interest
income |
1,108 |
2,135 |
2,986 |
3,006 |
|
|
|
|
|
Non-interest expense |
|
|
|
|
Salaries and employee benefits |
10,457 |
9,682 |
21,498 |
19,709 |
Occupancy and equipment |
1,918 |
1,874 |
3,848 |
3,741 |
Professional services |
1,553 |
1,637 |
3,275 |
3,236 |
FDIC deposit insurance |
1,087 |
951 |
2,104 |
2,379 |
Data processing |
1,051 |
1,181 |
2,027 |
2,186 |
Depreciation and amortization |
785 |
779 |
1,619 |
1,545 |
Other real estate owned/foreclosure
expense |
595 |
531 |
1,307 |
868 |
Other operating expenses |
2,793 |
2,230 |
6,097 |
5,216 |
Total non-interest
expense |
20,239 |
18,865 |
41,775 |
38,880 |
|
|
|
|
|
Income before income
taxes |
14,156 |
15,065 |
25,843 |
28,076 |
|
|
|
|
|
Provision for income
taxes |
|
|
|
|
Federal |
4,236 |
4,564 |
7,860 |
8,476 |
State and local |
1,283 |
1,427 |
2,217 |
2,573 |
Total taxes |
5,519 |
5,991 |
10,077 |
11,049 |
|
|
|
|
|
Net income |
$ 8,637 |
$ 9,074 |
$ 15,766 |
$ 17,027 |
|
|
|
|
|
Basic earnings per common share |
$ 0.28 |
$ 0.29 |
$ 0.52 |
$ 0.55 |
Diluted earnings per common share |
$ 0.28 |
$ 0.29 |
$ 0.52 |
$ 0.55 |
Dividends per common share |
$ 0.13 |
$ 0.13 |
$ 0.26 |
$ 0.26 |
|
|
|
|
|
|
|
|
|
|
FLUSHING FINANCIAL
CORPORATION and SUBSIDIARIES |
SELECTED CONSOLIDATED
FINANCIAL DATA |
(Dollars in thousands, except
share data) |
(Unaudited) |
|
|
|
|
|
|
At or for the three months |
At or for the six months |
|
ended June 30, |
ended June 30, |
|
2012 |
2011 |
2012 |
2011 |
Per Share Data |
|
|
|
|
Basic earnings per share |
$ 0.28 |
$ 0.29 |
$ 0.52 |
$ 0.55 |
Diluted earnings per share |
$ 0.28 |
$ 0.29 |
$ 0.52 |
$ 0.55 |
Average number of shares outstanding
for: |
|
|
|
|
Basic earnings per common share
computation |
30,472,378 |
30,822,618 |
30,433,980 |
30,722,108 |
Diluted earnings per common share
computation |
30,492,164 |
30,864,259 |
30,456,003 |
30,775,854 |
Book value per common share (1) |
$13.92 |
$12.85 |
$13.92 |
$12.85 |
Tangible book value per common share (2) |
$13.40 |
$12.34 |
$13.40 |
$12.34 |
|
|
|
|
|
Average Balances |
|
|
|
|
Total loans, net |
$ 3,204,055 |
$ 3,220,882 |
$ 3,199,011 |
$ 3,234,696 |
Total interest-earning assets |
4,156,003 |
4,080,464 |
4,109,136 |
4,093,182 |
Total assets |
4,398,521 |
4,295,870 |
4,347,923 |
4,308,352 |
Total due to depositors |
2,973,896 |
3,049,365 |
2,991,493 |
3,067,515 |
Total interest-bearing liabilities |
3,806,270 |
3,765,583 |
3,768,758 |
3,785,612 |
Stockholders' equity |
424,880 |
398,369 |
422,181 |
393,936 |
Common stockholders' equity |
424,880 |
398,369 |
422,181 |
393,936 |
|
|
|
|
|
Performance Ratios (3) |
|
|
|
|
Return on average assets |
0.79% |
0.84% |
0.73% |
0.79% |
Return on average equity |
8.13 |
9.11 |
7.47 |
8.64 |
Yield on average interest-earning assets |
5.23 |
5.54 |
5.30 |
5.55 |
Cost of average interest-bearing
liabilities |
1.69 |
2.09 |
1.76 |
2.09 |
Interest rate spread during period |
3.54 |
3.45 |
3.54 |
3.46 |
Net interest margin |
3.68 |
3.61 |
3.68 |
3.61 |
Non-interest expense to average assets |
1.84 |
1.76 |
1.92 |
1.80 |
Efficiency ratio (4) |
49.04 |
48.76 |
51.19 |
49.61 |
Average interest-earning assets to average
interest-bearing liabilities |
1.09 X |
1.08 X |
1.09 X |
1.08 X |
|
(1) Calculated by dividing
common stockholders' equity of $431.0 million and $405.2 million at
June 30, 2012 and 2011, respectively, by 30,949,332 and 31,519,942
shares outstanding at June 30, 2012 and 2011,
respectively. |
(2) Calculated by dividing
tangible common stockholders' equity of $414.9 million and $388.8
million at June 30, 2012 and 2011, respectively, by 30,949,332 and
31,519,942 shares outstanding at June 30, 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 and six
months ended June 30, 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 six |
At or for the year |
|
months ended |
ended |
|
June 30, 2012 |
December 31, 2011 |
|
|
|
Selected Financial Ratios and Other
Data |
|
|
|
|
|
Regulatory capital ratios (for Flushing
Savings Bank only): |
|
|
Core capital (well capitalized = 5%) |
9.45% |
9.63% |
Tier 1 risk-based capital (well
capitalized = 6%) |
13.66 |
14.26 |
Total risk-based capital (well
capitalized = 10%) |
14.67 |
15.32 |
|
|
|
Capital ratios: |
|
|
Average equity to average assets |
9.71% |
9.36% |
Equity to total assets |
9.72 |
9.72 |
Tangible common equity to tangible
assets |
9.39 |
9.38 |
|
|
|
Asset quality: |
|
|
Non-accrual loans |
$ 112,193 |
$ 111,062 |
Non-performing loans |
112,193 |
117,441 |
Non-performing assets |
117,048 |
123,182 |
Net charge-offs |
10,445 |
18,855 |
|
|
|
Asset quality ratios: |
|
|
Non-performing loans to gross loans |
3.48% |
3.65% |
Non-performing assets to total
assets |
2.64 |
2.87 |
Allowance for loan losses to gross
loans |
0.96 |
0.94 |
Allowance for loan losses to
non-performing assets |
26.40 |
24.63 |
Allowance for loan losses to
non-performing loans |
27.54 |
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 June 30, |
|
2012 |
2011 |
|
Average |
|
Yield/ |
Average |
|
Yield/ |
|
Balance |
Interest |
Cost |
Balance |
Interest |
Cost |
Assets |
|
|
|
|
|
|
Interest-earning assets: |
|
|
|
|
|
|
Mortgage loans, net (1) |
$ 2,910,023 |
42,541 |
5.85% |
$ 2,926,738 |
44,310 |
6.06% |
Other loans, net (1) |
294,032 |
3,582 |
4.87 |
294,144 |
3,811 |
5.18 |
Total
loans, net |
3,204,055 |
46,123 |
5.76 |
3,220,882 |
48,121 |
5.98 |
Mortgage-backed securities |
713,589 |
6,874 |
3.85 |
735,895 |
7,850 |
4.27 |
Other securities |
208,544 |
1,376 |
2.64 |
62,854 |
501 |
3.19 |
Total
securities |
922,133 |
8,250 |
3.58 |
798,749 |
8,351 |
4.18 |
Interest-earning deposits and federal
funds sold |
29,815 |
11 |
0.15 |
60,833 |
27 |
0.18 |
Total interest-earning assets |
4,156,003 |
54,384 |
5.23 |
4,080,464 |
56,499 |
5.54 |
Other assets |
242,518 |
|
|
215,406 |
|
|
Total
assets |
$ 4,398,521 |
|
|
$ 4,295,870 |
|
|
|
|
|
|
|
|
|
Liabilities and Equity |
|
|
|
|
|
|
Interest-bearing liabilities: |
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
Savings accounts |
$ 330,573 |
168 |
0.20 |
$ 376,351 |
597 |
0.63 |
NOW accounts |
1,035,245 |
1,589 |
0.61 |
804,764 |
1,726 |
0.86 |
Money market accounts |
181,940 |
101 |
0.22 |
301,350 |
350 |
0.46 |
Certificate of deposit
accounts |
1,426,138 |
8,360 |
2.34 |
1,566,900 |
9,669 |
2.47 |
Total due to
depositors |
2,973,896 |
10,218 |
1.37 |
3,049,365 |
12,342 |
1.62 |
Mortgagors' escrow
accounts |
49,630 |
7 |
0.06 |
47,579 |
12 |
0.10 |
Total
deposits |
3,023,526 |
10,225 |
1.35 |
3,096,944 |
12,354 |
1.60 |
Borrowed funds |
782,744 |
5,872 |
3.00 |
668,639 |
7,350 |
4.40 |
Total
interest-bearing liabilities |
3,806,270 |
16,097 |
1.69 |
3,765,583 |
19,704 |
2.09 |
Non interest-bearing deposits |
132,569 |
|
|
106,175 |
|
|
Other liabilities |
34,802 |
|
|
25,743 |
|
|
Total
liabilities |
3,973,641 |
|
|
3,897,501 |
|
|
Equity |
424,880 |
|
|
398,369 |
|
|
Total
liabilities and equity |
$ 4,398,521 |
|
|
$ 4,295,870 |
|
|
|
|
|
|
|
|
|
Net interest income / net
interest rate spread |
$ 38,287 |
3.54% |
|
$ 36,795 |
3.45% |
|
|
|
|
|
|
|
Net interest-earning assets / net interest
margin |
$ 349,733 |
|
3.68% |
$ 314,881 |
|
3.61% |
|
|
|
|
|
|
|
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 $0.4 million for the three months
ended June 30, 2012 and 2011, respectively. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FLUSHING FINANCIAL
CORPORATION and SUBSIDIARIES |
NET INTEREST
MARGIN |
(Dollars in thousands) |
(Unaudited) |
|
|
|
|
|
|
|
|
For the six months ended
June 30, |
|
2012 |
2011 |
|
Average |
|
Yield/ |
Average |
|
Yield/ |
|
Balance |
Interest |
Cost |
Balance |
Interest |
Cost |
Assets |
|
|
|
|
|
|
Interest-earning assets: |
|
|
|
|
|
|
Mortgage loans, net (1) |
$ 2,908,422 |
85,738 |
5.90% |
$ 2,936,827 |
89,244 |
6.08% |
Other loans, net (1) |
290,589 |
6,945 |
4.78 |
297,869 |
7,567 |
5.08 |
Total loans,
net |
3,199,011 |
92,683 |
5.79 |
3,234,696 |
96,811 |
5.99 |
Mortgage-backed securities |
710,082 |
13,887 |
3.91 |
739,744 |
15,704 |
4.25 |
Other securities |
162,651 |
2,201 |
2.71 |
59,350 |
956 |
3.22 |
Total
securities |
872,733 |
16,088 |
3.69 |
799,094 |
16,660 |
4.17 |
Interest-earning deposits and federal
funds sold |
37,392 |
28 |
0.15 |
59,392 |
54 |
0.18 |
Total interest-earning assets |
4,109,136 |
108,799 |
5.30 |
4,093,182 |
113,525 |
5.55 |
Other assets |
238,787 |
|
|
215,170 |
|
|
Total
assets |
$ 4,347,923 |
|
|
$ 4,308,352 |
|
|
|
|
|
|
|
|
|
Liabilities and Equity |
|
|
|
|
|
|
Interest-bearing liabilities: |
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
Savings accounts |
$ 334,816 |
396 |
0.24 |
376,547 |
1,172 |
0.62 |
NOW accounts |
1,008,010 |
3,239 |
0.64 |
817,823 |
3,500 |
0.86 |
Money market accounts |
188,521 |
265 |
0.28 |
332,310 |
809 |
0.49 |
Certificate of deposit
accounts |
1,460,146 |
17,217 |
2.36 |
1,540,835 |
19,183 |
2.49 |
Total due to
depositors |
2,991,493 |
21,117 |
1.41 |
3,067,515 |
24,664 |
1.61 |
Mortgagors' escrow
accounts |
43,934 |
18 |
0.08 |
41,804 |
24 |
0.11 |
Total
deposits |
3,035,427 |
21,135 |
1.39 |
3,109,319 |
24,688 |
1.59 |
Borrowed funds |
733,331 |
12,032 |
3.28 |
676,293 |
14,887 |
4.40 |
Total
interest-bearing liabilities |
3,768,758 |
33,167 |
1.76 |
3,785,612 |
39,575 |
2.09 |
Non interest-bearing deposits |
122,529 |
|
|
102,663 |
|
|
Other liabilities |
34,455 |
|
|
26,141 |
|
|
Total
liabilities |
3,925,742 |
|
|
3,914,416 |
|
|
Equity |
422,181 |
|
|
393,936 |
|
|
Total
liabilities and equity |
$ 4,347,923 |
|
|
$ 4,308,352 |
|
|
|
|
|
|
|
|
|
Net interest income / net interest rate
spread |
|
$ 75,632 |
3.54% |
|
$ 73,950 |
3.46% |
|
|
|
|
|
|
|
Net interest-earning assets / net interest
margin |
$ 340,378 |
|
3.68% |
$ 307,570 |
|
3.61% |
|
|
|
|
|
|
|
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 $1.3 million and $0.7
million for the six months ended June 30, 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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