Full Year
2012
- Non-performing loans totaled $89.8 million at December 31,
2012, an improvement of $27.6 million from December 31, 2011.
- Non-performing loans improved to 2.79% of gross loans at
December 31, 2012 from 3.65% at December 31, 2011.
- Core diluted earnings per common share, a non-GAAP measure,
were $1.14, a decrease of $0.01 from the year ended December 31,
2011.
- GAAP diluted earnings per common share were $1.13, a decrease
of $0.02 from the year ended December 31, 2011.
- The net interest margin was 3.65%, a four basis point increase
from the year ended December 31, 2011.
- Record net interest income of $150.4 million for the year ended
December 31, 2012.
- Net charge-offs for the year ended December 31, 2012 were 0.64%
of average loans.
- The provision for loan losses totaled $21.0 million for the
year ended December 31, 2012.
- Allowance for loan losses as a percentage of gross loans
increased to 0.97% at December 31, 2012.
- Other-than-temporary impairment ("OTTI") charges totaled $0.8
million on five private issue collateralized mortgage obligations
("CMOs").
- Received all regulatory approvals to convert to a New York
State-chartered full service commercial bank.
Fourth Quarter
2012
- Non-performing loans totaled $89.8 million at December 31,
2012, an improvement of $11.0 million from September 30, 2012.
- Core diluted earnings per common share, a non-GAAP measure,
were $0.30, an increase of $0.04 from the three months ended
December 31, 2011, and an increase of $0.01 from the trailing
quarter.
- GAAP diluted earnings per common share were $0.30, an increase
of $0.03 from the three months ended December 31, 2011, but a
decrease of $0.01 from the three months ended September 30,
2012.
- The net interest margin was 3.60%, a decrease of two basis
points from both the comparable prior year period and the three
months ended September 30, 2012.
- Loan originations increased $71.3 million, or 55.8%, from the
comparable prior year period.
- Net charge-offs for the three months ended December 31, 2012
were 0.58% of average loans.
- The provision for loan losses totaled $5.0 million, the same as
that recorded for the three months ended September 30, 2012, but a
decrease of $1.5 million from the comparable prior year
period.
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 twelve
months ended December 31, 2012.
John R. Buran, President and Chief Executive Officer, stated:
"We are pleased to report that the fourth quarter of 2012 continued
to show improvement in credit quality. We continue to see
reductions in delinquent loans, non-performing loans, and
classified loans, in spite of an increase in early stage
delinquencies caused by damage done to borrowers by Hurricane
Sandy. Non-performing loans decreased by $11.0 million, or 11%, to
$89.8 million, and are at their lowest level since the fourth
quarter of 2009. Loans delinquent over 30 days decreased $5.5
million, or 3%, during the fourth quarter, and are at their lowest
level since the second quarter of 2009. Loans delinquent over 90
days decreased $8.9 million, or 9%, and are at their lowest level
since the first quarter of 2010. Classified assets and criticized
assets continued their improving trend that began over a year ago,
which resulted in a 10% reduction in these categories in the fourth
quarter of 2012, a 28% reduction in the twelve months ended
December 31, 2012, and a 35% reduction since December 31, 2011.
"During the fourth quarter, we sold $11.9 million of
non-performing loans, realizing $11.2 million upon sale, or 94% of
book value. We have agreed to sell an additional $5.7 million of
loans with projected closing of these sales in the first quarter of
2013. Estimated proceeds are $5.3 million, which is 92% of our
exposure. These loans are reported as Loans held for sale in our
financial statements. Also included in non-performing loans at
December 31, 2012 is a $3.3 million loan for which we received
payment in full in January 2013.
"The fourth quarter of 2012 includes a charge-off of $2.1
million on our largest non-performing loan, which is a construction
loan, and reduces our exposure to $7.4 million. Currently, an
independent third party is negotiating to become a partner in this
project and complete the process to ultimately resolve this loan.
The remaining charge-offs for the fourth quarter of 2012 are
primarily due to our continued program of obtaining updated
appraisals, and recording charge-offs based on these up-to-date
values as opposed to adding to the allowance for loan losses. As a
result, we do not carry any 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. The
loan-to-value ratio for our non-performing loans, based upon
current appraisals, was 58.6% at the end of the quarter.
"Net loans increased $47.1 million during the fourth quarter of
2012, as loan originations for the fourth quarter of 2012 totaled
$199.3 million, a 56% increase from the fourth quarter of 2011, and
a 32% increase from the third quarter of 2012. As we transition to
a commercial bank, our lending departments continue to emphasize
full relationship banking with our borrowers. This is seen in our
Commercial Business and Other loan portfolio which grew $34.1
million and $88.5 million in the fourth quarter and twelve months
ended December 31, 2012, respectively. Our pipeline stood at $211.4
million at December 31, 2012.
"Our net interest margin for the fourth quarter of 2012 was
3.60%, a decrease of only two basis points from 3.62% in the fourth
quarter of 2011, and a decrease of two basis points from 3.62% in
the third quarter of 2012. Excluding prepayment penalty income
received on loans and mortgage-backed securities, our net interest
margin for the fourth quarter of 2012 was 3.47%, a decrease of one
basis point from 3.48% for the third quarter of 2012. While we saw
a decrease in our funding costs of 11 basis points for the quarter,
excluding prepayment penalty income the yield on interest-earning
assets decreased 11 basis points. In the current interest rate
environment, new loans and securities are added at rates well below
our portfolio average yield, and higher yielding loans and
securities are prepaid. We also experienced significantly higher
than average activity in loans refinancing during the fourth
quarter of 2012, which further reduced the yield on our loan
portfolio.
"The fourth quarter of 2012 presented an opportunity to reduce
our funding costs as certificates of deposit totaling $339.6
million matured at an average cost of 1.79%. These maturing
certificates of deposit were replaced with funding at a
significantly lower cost. The maturing certificates of deposit
which rolled over were generally renewed at a cost of 10 to 15
basis points. Additionally, during the three months ended December
31, 2012, NOW accounts and borrowed funds balances increased $149.6
million and $163.5 million, respectively, with the new funding
being obtained for NOW accounts and borrowed funds at an average
cost of 0.58% and 0.45%, respectively.
"At December 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 9.62%, 14.38% and 15.43%,
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 becoming subject to capital requirements. The
proposed changes would be phased in over a number of years, with
the most significant changes being fully phased in by 2015. The
regulators announced the regulations would not be effective January
1, 2013 as originally proposed, but have not yet announced a new
effective date. Based on our preliminary assessment of these
proposed regulations, we will see an increase in our total
risk-weighted assets. However, the Company and the Bank each
presently meet the fully phased in requirements of the proposed
capital regulations to be considered well-capitalized.
"We previously announced our filing of an application to combine
our two banks under a New York State commercial bank charter. We
believe this will allow us to provide improved service to all our
customers and produce cost savings of at least $0.8 million
annually. Regulators have approved our application. The merger of
the two banks will be completed on February 28, 2013."
Core earnings, a non-GAAP measure, which exclude the effects of
net gains or losses from fair value adjustments, OTTI charges and
net gains from the sale of securities were $9.1 million for the
three months ended December 31, 2012, an increase of $1.3 million,
or 16.8%, from $7.8 million in the comparable prior year period.
Core diluted earnings per common share were $0.30 for the three
months ended December 31, 2012, an increase of $0.04, or 15.4%,
from the comparable prior year period.
Core earnings, a non-GAAP measure, for the twelve months ended
December 31, 2012 were $34.7 million, a decrease of $0.4 million,
or 1.2%, from $35.1 million for the comparable prior year period.
Core diluted earnings per common share were $1.14 for the twelve
months ended December 31, 2012, a decrease of $0.01 per common
share, or 0.9%, from $1.15 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 December 31,
2012
Net income for the three months ended December 31, 2012 was $9.2
million, an increase of $1.0 million, or 12.6%, compared to $8.2
million for the three months ended December 31, 2011. Diluted
earnings per common share were $0.30 for the three months ended
December 31, 2012, an increase of $0.03, or 11.1%, from $0.27 for
the three months ended December 31, 2011.
Return on average equity was 8.4% for the three months ended
December 31, 2012 compared to 7.9% for the three months ended
December 31, 2011. Return on average assets was 0.8% for the three
month periods ended December 31, 2012 and 2011.
For the three months ended December 31, 2012, net interest
income was $37.2 million, an increase of $0.5 million, or 1.4%,
from $36.7 million for the three months ended December 31, 2011.
The increase in net interest income was attributable to a $73.4
million increase in the average balance of interest-earning assets
as the net interest spread was 3.47% for the three months ended
December 31, 2012 and 2011. The yield on interest-earning assets
decreased 38 basis points to 5.01% for the three months ended
December 31, 2012 from 5.39% for the three months ended December
31, 2011. The cost of funds decreased 38 basis points to 1.54% for
the three months ended December 31, 2012 from 1.92% for the
comparable prior year period. The net interest margin decreased two
basis points to 3.60% for the three months ended December 31, 2012
from 3.62% for the three months ended December 31, 2011. Excluding
prepayment penalty income from loans and mortgage-backed
securities, the net interest margin would have decreased nine basis
points to 3.47% for the three months ended December 31, 2012 from
3.56% for the three months ended December 31, 2011.
The 38 basis point decline in the yield of interest-earning
assets was primarily due to a 31 basis point reduction in the yield
of the loan portfolio to 5.54% for the three months ended December
31, 2012 from 5.85% for the three months ended December 31, 2011,
combined with a 53 basis point decline in the yield on total
securities to 3.36% for the three months ended December 31, 2012
from 3.89% for the comparable prior year period. In addition, the
yield of interest-earning assets was negatively impacted by a $32.9
million decrease in the average balance of the higher yielding loan
portfolio for the three months ended December 31, 2012 and a $127.6
million increase in the average balances of the lower yielding
securities portfolio for the three months ended December 31, 2012,
each as compared to the comparable prior year period. These factors
that reduced the yield were partially offset by a $21.3 million
decrease in the average balance of lower yielding interest-earning
deposits to $33.6 million for the three months ended December 31,
2012 from $54.9 million for the comparable prior year period. The
31 basis point decrease in the yield of the loan portfolio was
primarily due to the current interest rate environment, as new
loans are added at rates well below the portfolio average yield,
and higher yielding loans are prepaid. In addition, we experienced
a significantly higher than average activity in loans refinancing
during 2012. The yield on the mortgage loan portfolio decreased 26
basis points to 5.69% for the three months ended December 31, 2012
from 5.95% for the three months ended December 31, 2011. The yield
on the mortgage loan portfolio, excluding prepayment penalty
income, decreased 35 basis points to 5.52% for the three months
ended December 31, 2012 from 5.87% for the three months ended
December 31 2011. The 53 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 38 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 27
basis points, 21 basis points, 20 basis points and 10 basis points,
respectively, for the three months ended December 31, 2012 from the
comparable prior year period. This resulted in a decrease in
the cost of due to depositors of 26 basis points to 1.27% for the
three months ended December 31, 2012 from 1.53% for the three
months ended December 31, 2011. The cost of borrowed funds
decreased 110 basis points from the comparable prior year period to
2.61% for the three months ended December 31, 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, and adjustable rate borrowings resetting
to a lower rate during 2012.
The net interest margin for the three months ended December 31,
2012 was 3.60%, which was a decrease of two basis points from that
recorded for the three months ended September 30, 2012. The yield
on interest-earning assets decreased 11 basis points during the
three months ended December 31, 2012 to 5.01% while the cost of
interest-bearing liabilities decreased 11 basis points to 1.54%.
Excluding prepayment penalty income from loans and mortgage-backed
securities, the net interest margin decreased one basis point to
3.47% for the three months ended December 31, 2012 from 3.48% for
the three months ended September 30, 2012.
A provision for loan losses of $5.0 million was recorded for the
three months ended December 31, 2012, which was a decrease of $1.5
million for the three months ended December 31, 2011. During
the three months ended December 31, 2012, non-performing loans
decreased $11.0 million to $89.8 million from $100.8 million at
September 30, 2012. Net charge-offs for the three months ended
December 31, 2012 totaled $4.6 million, or 58 basis points of
average loans. During the three months ended December 31, 2012, the
Bank sold 17 non-performing loans, with a book value of $11.9
million. The current loan-to-value ratio for our non-performing
loans collateralized by real estate was 58.6% at December 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 fourth 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 fourth quarter of
2012.
Non-interest income for the three months ended December 31, 2012
was $2.6 million, a decrease of $0.4 million from $3.0 million for
the three months ended December 31, 2011. The decrease in
non-interest income was primarily due to a $0.5 million decrease in
net gains recorded from fair value adjustments recorded during the
three months ended December 31, 2012 from the comparable prior year
period.
Non-interest expense was $19.8 million for the three months
ended December 31, 2012, an increase of $0.4 million, or 2.3%, from
$19.4 million for the three months ended December 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.
Salaries and benefits increased $1.4 million for the three months
ended December 31, 2012 compared to the three months ended December
31, 2011 primarily due to the opening of a new branch in 2012, an
increase in stock based compensation expense and increased employee
benefits expense. This increase was partially offset by decreases
in professional services, other operating expense and other real
estate owned/foreclosure expense of $0.5 million, $0.2 million and
$0.1 million, respectively. The efficiency ratio was 49.2% for the
three months ended December 31, 2012, the same as that for the
three months ended December 31, 2011.
Earnings Summary - Twelve Months Ended December 31,
2012
Net income for the twelve months ended December 31, 2012 was
$34.3 million, a decrease of $1.0 million, or 2.9%, compared to
$35.3 million for the twelve months ended December 31, 2011.
Diluted earnings per common share were $1.13 for the twelve months
ended December 31, 2012, a decrease of $0.02, or 1.7%, from $1.15
for the twelve months ended December 31, 2011.
Return on average equity was 8.0% for the twelve months ended
December 31, 2012 compared to 8.8% for the twelve months ended
December 31, 2011. Return on average assets was 0.8% for the twelve
months ended December 31, 2012 and 2011.
For the twelve months ended December 31, 2012, net interest
income was $150.4 million, an increase of $2.7 million, or 1.8%,
from $147.8 million for the twelve months ended December 31, 2011.
The increase in net interest income was attributable to a four
basis point increase in the net interest spread to 3.50% for the
twelve months ended December 31, 2012 from 3.46% for the twelve
months ended December 31, 2011, combined with an increase of $36.6
million in the average balance of interest-earning assets to
$4,127.0 million for the twelve months ended December 31, 2012 from
$4,090.4 million for the comparable prior year period. The
yield on interest-earning assets decreased 31 basis points to 5.18%
for the twelve months ended December 31, 2012 from 5.49% for the
twelve months ended December 31, 2011. However, this was more than
offset by a decline in the cost of funds of 35 basis points to
1.68% for the twelve months ended December 31, 2012 from 2.03% for
the comparable prior year period. The net interest margin improved
four basis points to 3.65% for the twelve months ended December 31,
2012 from 3.61% for the twelve months ended December 31, 2011.
The 31 basis point decline in the yield of interest-earning
assets was primarily due to a 25 basis point reduction in the yield
of the loan portfolio to 5.69% for the twelve months ended December
31, 2012 from 5.94% for the twelve months ended December 31, 2011,
combined with a 50 basis point decline in the yield on total
securities to 3.58% for the twelve months ended December 31, 2012
from 4.08% for the comparable prior year period. In addition, the
yield of interest-earning assets was negatively impacted by a $33.6
million decrease in the average balance of the higher yielding loan
portfolio for the twelve months ended December 31, 2012 and a $90.9
million increase in the average balances of the lower yielding
securities portfolio for the twelve months ended December 31, 2012.
These factors that reduced the yield were partially offset by a
$20.7 million decrease in the average balance of lower yielding
interest-earning deposits to $41.3 million for the twelve months
ended December 31, 2012 from $62.0 million for the comparable prior
year period. The 25 basis point decrease in the loan portfolio was
primarily due to the current interest rate environment, as new
loans are added at rates well below the portfolio average yield,
and higher yielding loans are prepaid. In addition, we
experienced a significantly higher than average activity in loans
refinancing during 2012. The 50 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 23 basis points to 5.80% for
the twelve months ended December 31, 2012 from 6.03% for the twelve
months ended December 31, 2011. The yield on the mortgage loan
portfolio, excluding prepayment penalty income, decreased 29 basis
points to 5.66% for the twelve months ended December 31, 2012 from
5.95% for the twelve months ended December 31, 2011.
The 35 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 18 basis points, 24 basis points, 35 basis points and 18
basis points, respectively, for the twelve months ended December
31, 2012 from the comparable prior year period. This resulted
in a decrease in the cost of due to depositors of 23 basis points
to 1.36% for the twelve months ended December 31, 2012 from 1.59%
for the twelve months ended December 31, 2011. The cost of borrowed
funds decreased 110 basis points to 2.98% for the twelve months
ended December 31, 2012 from 4.08% for the twelve months ended
December 31, 2011 with the average balance increasing $74.2 million
to $767.6 million for the twelve months ended December 31, 2012
from $693.4 million for the twelve months ended December 31, 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, and to a lesser extent
adjustable rate borrowings resetting to a lower rate during
2012.
The net interest margin for the twelve months ended December 31,
2012 increased four basis points to 3.65% from 3.61% for the twelve
months ended December 31, 2011. The yield on interest-earning
assets decreased 31 basis points while the cost of interest-bearing
liabilities decreased 35 basis points during the twelve months
ended December 31, 2012 from the comparable prior year period.
Excluding prepayment penalty income on loans and mortgage-backed
securities, the net interest margin would have been 3.53% for the
twelve months ended December 31, 2012, a two basis point decline
from the twelve months ended December 31, 2011.
A provision for loan losses of $21.0 million was recorded for
the twelve months ended December 31, 2012, which was a decrease of
$0.5 million from $21.5 million recorded in the twelve months ended
December 31, 2011. During the twelve months ended December 31,
2012, non-performing loans decreased $27.6 million to $89.8 million
from $117.4 million at December 31, 2011. Net charge-offs for the
twelve months ended December 31, 2012 totaled $20.2 million, or 64
basis points of average loans. During the twelve months ended
December 31, 2012, the Bank sold 77 non-performing loans, with a
book value of $46.6 million. The current loan-to-value ratio for
our non-performing loans collateralized by real estate was 58.6% at
December 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 during the twelve
months ended December 31, 2012, management, as a result of the
regular quarterly analysis of the allowance for loans losses,
deemed it necessary to record a $21.0 million provision for
possible loan losses for the twelve months ended December 31,
2012.
Non-interest income for the twelve months ended December 31,
2012 was $9.1 million, a decrease of $1.2 million, or 11.8% from
$10.3 million for the twelve months ended December 31, 2011. The
decrease was primarily due to a $1.9 million decrease in net gains
recorded form fair value adjustments, partially offset by a $0.8
million decrease in OTTI charges recorded for the twelve months
ended December 31, 2012 from the comparable prior year
period.
Non-interest expense was $82.3 million for the twelve months
ended December 31, 2012, an increase of $4.6 million, or 5.9%, from
$77.7 million for the twelve months ended December 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. Salaries and benefits increased $4.2 million for the twelve
months ended December 31, 2012 compared to the twelve months ended
December 31, 2011 primarily 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 twelve months ended December 31, 2012 increased $1.0 million
primarily due to $0.7 million in net losses recorded from the sale
of other real estate owned ("OREO") during the twelve months ended
December 31, 2012 compared to $0.2 million in net gains from the
sale of OREO recorded during the twelve months ended December 31,
2011. The efficiency ratio was 50.7% for the twelve months ended
December 31, 2012 compared to 49.2% for the twelve months ended
December 31, 2011.
Balance Sheet Summary – At December 31,
2012
Total assets at December 31, 2012 were $4,451.4 million, an
increase of $163.5 million, or 3.8%, from $4,287.9 million at
December 31, 2011. Total loans, net increased $4.5 million, during
the twelve months ended December 31, 2012 to $3,203.0 million from
$3,198.5 million at December 31, 2011. Loan originations and
purchases were $632.5 million for the twelve months ended December
31, 2012, an increase of $221.3 million from $411.2 million for the
twelve months ended December 31, 2011. During the twelve months
ended December 31, 2012, we continued to focus on the origination
of multi-family properties and business loans with a full
relationship and deemphasize non-owner occupied commercial real
estate and construction lending. The Bank has cautiously resumed
the origination of non-owner occupied commercial real estate. Loan
applications in process have remained strong, totaling $211.4
million at December 31, 2012 compared to $194.4 million at December
31, 2011 and $198.0 million at September 30, 2012.
The following table shows loan originations and purchases for
the periods indicated. The table includes loan purchases of $3.5
million and $19.1 million for the twelve months ended December 31,
2012 and 2011, respectively. There were loan purchases of $4.6
million for the three months ended December 31, 2011. There were no
loans purchased during the three months ended December 31,
2012.
|
For the three months
ended December 31, |
For the twelve months
ended December 31, |
(In thousands) |
2012 |
2011 |
2012 |
2011 |
Multi-family residential |
$ 106,611 |
$ 87,492 |
$ 317,663 |
$ 249,010 |
Commercial real estate |
10,033 |
8 |
31,789 |
7,070 |
One-to-four family – mixed-use property |
2,006 |
5,202 |
15,961 |
23,754 |
One-to-four family – residential |
6,409 |
8,504 |
24,485 |
24,075 |
Co-operative apartments |
84 |
-- |
1,810 |
-- |
Construction |
153 |
440 |
806 |
1,723 |
Small Business Administration |
16 |
358 |
529 |
3,528 |
Taxi Medallion |
-- |
4,597 |
3,464 |
30,832 |
Commercial business and other |
73,962 |
21,336 |
236,015 |
71,211 |
Total |
$ 199,274 |
$ 127,937 |
$ 632,522 |
$ 411,203 |
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 December 31, 2012 had an average loan-to-value
ratio of 51.6% and an average debt coverage ratio of 199%.
Non-accrual loans and charge-offs for impaired loans remain at
elevated levels primarily due to the current economic environment.
However, non-accrual loans decreased $21.9 million during the
twelve months ended December 31, 2012 to $89.2 million from $111.1
million at December 31, 2011. Included in non-accrual loans at
December 31, 2012 are $5.3 million of loans the Bank has agreed to
sell and $3.3 million of loans which were paid in full subsequent
to year end. 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) |
December 31, 2012 |
September 30, 2012 |
December 31, 2011 |
Accrual Status: |
|
|
|
|
Multi-family residential |
$ 2,348 |
$ 2,339 |
$ 9,412 |
Commercial real estate |
3,263 |
3,268 |
2,413 |
One-to-four family - mixed-use
property |
2,338 |
1,245 |
795 |
One-to-four family -
residential |
374 |
376 |
-- |
Construction |
|
3,500 |
3,500 |
5,584 |
Commercial business and
other |
3,849 |
3,870 |
2,000 |
|
|
|
|
|
|
Total |
15,672 |
14,598 |
20,204 |
|
|
|
|
|
Non-accrual
status: |
|
|
|
Commercial real estate |
3,872 |
3,887 |
-- |
One-to-four family - mixed-use
property |
-- |
1,098 |
-- |
|
Total |
3,872 |
4,985 |
-- |
|
|
|
|
|
|
Total performing
TDR |
$ 19,544 |
$ 19,583 |
$ 20,204 |
During the twelve months ended December 31, 2012, four TDR
totaling $7.2 million were transferred to non-performing status and
nine loans totaling $8.8 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, including Loans
held for sale, at the periods indicated:
(In
thousands) |
December 31, 2012 |
September 30, 2012 |
December 31, 2011 |
Loans 90 days or more
past due |
|
|
|
|
and still accruing: |
|
|
|
Multi-family residential |
|
$ -- |
$ -- |
$ 6,287 |
Commercial real estate |
|
-- |
540 |
92 |
Commercial business and
other |
644 |
748 |
-- |
|
Total |
644 |
1,288 |
6,379 |
|
|
|
|
|
Non-accrual loans: |
|
|
|
|
Multi-family residential |
|
16,486 |
18,242 |
19,946 |
Commercial real estate |
|
15,640 |
18,051 |
19,895 |
One-to-four family - mixed-use
property |
18,280 |
20,250 |
28,429 |
One-to-four family -
residential |
13,726 |
13,068 |
12,766 |
Co-operative apartments |
|
234 |
234 |
152 |
Construction |
|
7,695 |
9,787 |
14,721 |
Small business
administration |
283 |
294 |
493 |
Commercial business and
other |
16,860 |
19,589 |
14,660 |
|
Total |
89,204 |
99,515 |
111,062 |
|
|
|
|
|
|
Total non-performing
loans |
89,848 |
100,803 |
117,441 |
|
|
|
|
|
Other non-performing
assets: |
|
|
|
Real estate acquired through
foreclosure |
5,278 |
3,660 |
3,179 |
Investment securities |
|
3,332 |
2,984 |
2,562 |
|
Total |
8,610 |
6,644 |
5,741 |
|
|
|
|
|
|
Total non-performing
assets |
$ 98,458 |
$ 107,447 |
$ 123,182 |
|
|
|
|
|
Included in non-accrual loans were seven loans totaling $11.1
million, seven loans totaling $13.3 million and six loans totaling
$17.1 million which were restructured as TDR and were not
performing in accordance with their restructured terms at December
31, 2012, September 30, 2012 and December 31, 2011,
respectively.
Hurricane Sandy swept through the New York City Metropolitan
area in late October. This hurricane caused significant damage to
numerous homes and businesses throughout the area. In working with
its borrowers and depositors affected by this hurricane, the Bank
has entered into payment agreements on 27 mortgages totaling $17.8
million. These agreements provide for partial payment deferrals,
generally for 90 days. These agreements are intended to provide the
borrowers the opportunity to fully assess any damage to the
properties, apply for and receive insurance proceeds, and repair
damages to the properties. Each borrower is required, commencing at
the end of the deferral period, to begin making their regularly
scheduled loan payments plus a portion of the deferred amounts. The
Bank does not expect to incur significant losses on these
mortgages.
The Bank's non-performing assets totaled $98.5 million at
December 31, 2012, a decrease of $9.0 million from $107.4 million
at September 30, 2012 and a decrease of $24.7 million from $123.2
million at December 31, 2011. Total non-performing assets as a
percentage of total assets were 2.21% at December 31, 2012 compared
to 2.45% at September 30, 2012 and 2.87% at December 31, 2011. The
ratio of allowance for loan losses to total non-performing loans
was 34.6% at December 31, 2012 compared to 30.4% at September 30,
2012 and 25.8% at December 31, 2011.
During the three months ended December 31, 2012, 35 loans
totaling $12.3 million (net of $0.2 million in charge-offs) were
added to non-accrual loans, 10 loans totaling $2.6 million were
returned to performing status, eight loans totaling $2.1 million
(net of $0.1 million in charge-offs) were satisfied, 17 loans
totaling $10.9 million (net of $0.6 million in charge-offs) were
sold, four loans totaling $2.4 million (net of $0.1 million in
charge-offs) were transferred to other real estate owned, and
charge-offs of $3.5 million were recorded on non-accrual loans that
were non-accrual at the beginning of the fourth quarter of
2012.
Non-performing investment securities include two pooled trust
preferred securities for which we are not accruing interest income.
One of these securities is not currently paying interest, while the
second has resumed partial interest payments. At December 31, 2012,
these investment securities had a combined amortized cost and
market value of $8.3 million and $3.3 million, respectively.
Performing loans delinquent 60 to 89 days were $13.7 million at
December 31, 2012, a decrease of $2.1 million from $15.8 million at
September 30, 2012 and a decrease of $0.2 million from $13.9
million at December 31, 2011. Performing loans delinquent 30
to 59 days were $61.1 million at December 31, 2012, an increase of
$7.5 million from $53.6 million at September 30, 2012, but a
decrease of $1.1 million from $62.2 million at December 31,
2011.
The Bank recorded net charge-offs for impaired loans of $4.6
million and $5.8 million during the three months ended December 31,
2012 and 2011, respectively, and net charge-offs for impaired loans
of $20.2 million and $18.9 million during the twelve months ended
December 31, 2012 and 2011, respectively.
The following table shows net loan charge-offs for the periods
indicated:
|
Three Months Ended |
Twelve Months Ended |
(In thousands) |
December 31, 2012 |
December 31, 2011 |
December 31, 2012 |
December 31, 2011 |
Multi-family residential |
$ 709 |
$ 2,670 |
$ 5,872 |
$ 6,654 |
Commercial real estate |
287 |
917 |
2,439 |
4,988 |
One-to-four family – mixed-use property |
864 |
1,233 |
3,928 |
2,521 |
One-to-four family – residential |
487 |
235 |
1,554 |
2,163 |
Co-operative apartments |
-- |
-- |
62 |
-- |
Construction |
2,091 |
385 |
4,591 |
1,088 |
Small Business Administration |
(28) |
203 |
237 |
811 |
Commercial business and other |
173 |
116 |
1,557 |
630 |
Total net loan charge-offs |
$ 4,583 |
$ 5,759 |
$ 20,240 |
$ 18,855 |
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 twelve months ended December 31, 2012, we sold 77
delinquent loans and received net proceeds of $44.2 million,
resulting in $6.7 million in net charge-offs.
During the twelve months ended December 31, 2012,
mortgage-backed securities decreased $27.2 million, or 3.6%, to
$720.1 million from $747.3 million at December 31, 2011. The
decrease in mortgage-backed securities during the twelve months
ended December 31, 2012 was primarily due to principal repayments
of $158.2 million partially offset by purchases of $141.5 million
and a $6.6 million improvement in fair value. Additionally, during
the twelve months ended December 31, 2012, $0.8 million in OTTI
charges were recorded on five private issue CMOs. During the twelve
months ended December 31, 2012, other securities increased $164.2
million, or 251.7%, to $229.5 million from $65.2 million at
December 31, 2011. The increase in other securities during the
twelve months ended December 31, 2012 was primarily due to
purchases of $170.1 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 $4,009.1 million at December 31, 2012, an
increase of $138.0 million, or 3.6%, from $3,871.0 million at
December 31, 2011. During the twelve months ended December 31,
2012, due to depositors decreased $133.8 million, or 4.3%, to
$2,982.6 million, as a result of a $275.9 million decrease in
certificates of deposit partially offset by a $142.1 million
increase in core deposits. Borrowed funds increased $263.3 million
during the twelve months ended December 31, 2012. The increase
in borrowed funds was primarily due to a net increase of $132.5
million in long term borrowings combined with a $132.0 million
increase in short-term borrowings.
Total stockholders' equity increased $25.5 million, or 6.1%, to
$442.4 million at December 31, 2012 from $416.9 million at December
31, 2011. Stockholders' equity increased primarily due to net
income of $34.3 million for the twelve months ended December 31,
2012, an increase in other comprehensive income of $7.3 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 $1.0 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 $16.1 million
and the purchase of 352,000 treasury shares at a cost of $5.0
million. Book value per common share was $14.39 at December 31,
2012 compared to $13.49 at December 31, 2011. Tangible book value
per common share was $13.87 at December 31, 2012 compared to $12.96
at December 31, 2011.
During the twelve months ended December 31, 2012, the Company
repurchased 352,000 shares of the Company's common stock at an
average cost of $14.26 per share. At December 31, 2012, 385,962
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, the
net gain recorded from fair value adjustments, net gain or loss on
the sale of securities and OTTI charges.
|
Three Months Ended |
Twelve Months Ended |
|
December 31, 2012 |
December 31, 2011 |
September 30, 2012 |
December 31, 2012 |
December 31, 2011 |
|
|
|
|
|
|
|
|
|
|
|
|
GAAP income before income taxes |
$ 14,982 |
$ 13,835 |
$ 15,353 |
$ 56,178 |
$ 58,817 |
|
|
|
|
|
|
Net gain from fair value adjustments |
(240) |
(695) |
(825) |
(55) |
(1,960) |
Other-than-temporary impairment charges |
-- |
-- |
-- |
776 |
1,578 |
Net loss (gain) on sale of securities |
49 |
-- |
(96) |
(47) |
-- |
|
|
|
|
|
|
Core income before taxes |
14,791 |
13,140 |
14,432 |
56,852 |
58,435 |
|
|
|
|
|
|
Provision for income taxes for core
income |
5,699 |
5,358 |
5,584 |
22,142 |
23,303 |
|
|
|
|
|
|
Core net income |
$ 9,092 |
$ 7,782 |
$ 8,848 |
$ 34,710 |
$ 35,132 |
|
|
|
|
|
|
GAAP diluted earnings per common share |
$ 0.30 |
$ 0.27 |
$ 0.31 |
$ 1.13 |
$ 1.15 |
|
|
|
|
|
|
Net gain from fair value adjustments, net of
tax |
-- |
(0.01) |
(0.02) |
-- |
(0.04) |
Other-than-temporary impairment charges, net
of tax |
-- |
-- |
-- |
0.01 |
0.03 |
Net loss (gain) on sale of securities, net of
tax |
-- |
-- |
-- |
-- |
-- |
|
|
|
|
|
|
Core diluted earnings per common share* |
$ 0.30 |
$ 0.26 |
$ 0.29 |
$ 1.14 |
$ 1.15 |
|
|
|
|
|
|
* 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, the net loss from the sale of
securities and OTTI charges and subtracting the net gain recorded
from fair value adjustments and the net gain on the sale of
securities.
|
Three Months Ended |
Twelve Months Ended |
|
December 31, 2012 |
December 31, 2011 |
September 30, 2012 |
December 31, 2012 |
December 31, 2011 |
|
|
|
|
|
|
|
|
|
|
|
|
GAAP income before income taxes |
$ 14,982 |
$ 13,835 |
$ 15,353 |
$ 56,178 |
$ 58,817 |
|
|
|
|
|
|
Provision for loan losses |
5,000 |
6,500 |
5,000 |
21,000 |
21,500 |
Net gain from fair value adjustments |
(240) |
(695) |
(825) |
(55) |
(1,960) |
Other-than-temporary impairment charges |
-- |
-- |
-- |
776 |
1,578 |
Net loss (gain) from sale of securities |
49 |
-- |
(96) |
(47) |
-- |
|
|
|
|
|
|
Core net income before the provision for loan
losses and income taxes |
$ 19,791 |
$ 19,640 |
$ 19,432 |
$ 77,852 |
$ 79,935 |
|
|
|
|
|
|
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.
Approval has been received from the Federal Reserve to convert
Flushing Financial Corporation from a savings and loan holding
company to a bank holding company in connection with the merger of
the Bank with and into Flushing Commercial Bank. The combined bank
will be named Flushing Bank and will be a New York State-chartered,
full-service commercial bank. The transaction is expected to be
completed on February 28, 2013.
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) |
|
|
|
|
December 31, 2012 |
December 31, 2011 |
ASSETS |
|
|
Cash and due from banks |
$ 40,425 |
$ 55,721 |
Securities available for sale: |
|
|
Mortgage-backed securities |
720,113 |
747,288 |
Other securities |
229,453 |
65,242 |
Loans held for sale |
5,313 |
-- |
Loans: |
|
|
Multi-family residential |
1,534,438 |
1,391,221 |
Commercial real estate |
515,438 |
580,783 |
One-to-four family ― mixed-use
property |
637,353 |
693,932 |
One-to-four family ― residential |
198,968 |
220,431 |
Co-operative apartments |
6,303 |
5,505 |
Construction |
14,381 |
47,140 |
Small Business Administration |
9,496 |
14,039 |
Taxi medallion |
9,922 |
54,328 |
Commercial business and other |
295,076 |
206,614 |
Net unamortized premiums and unearned
loan fees |
12,746 |
14,888 |
Allowance for loan losses |
(31,104) |
(30,344) |
Net loans |
3,203,017 |
3,198,537 |
Interest and dividends receivable |
17,917 |
17,965 |
Bank premises and equipment, net |
22,500 |
24,417 |
Federal Home Loan Bank of New York stock |
42,337 |
30,245 |
Bank owned life insurance |
106,244 |
83,454 |
Goodwill |
16,127 |
16,127 |
Core deposit intangible |
468 |
937 |
Other assets |
47,502 |
48,016 |
Total assets |
$ 4,451,416 |
$ 4,287,949 |
|
|
|
LIABILITIES |
|
|
Due to depositors: |
|
|
Non-interest bearing |
$ 155,789 |
$ 118,507 |
Interest-bearing: |
|
|
Certificate of deposit accounts |
1,253,229 |
1,529,110 |
Savings accounts |
288,398 |
349,630 |
Money market accounts |
148,618 |
200,183 |
NOW accounts |
1,136,599 |
919,029 |
Total interest-bearing deposits |
2,826,844 |
2,997,952 |
Mortgagors' escrow deposits |
32,560 |
29,786 |
Borrowed funds |
948,405 |
685,139 |
Other liabilities |
45,453 |
39,654 |
Total liabilities |
4,009,051 |
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 December 31, 2012
and December 31, 2011; 30,743,329 shares and 30,904,177 shares
outstanding at December 31, 2012 and December 31, 2011,
respectively) |
315 |
315 |
Additional paid-in capital |
198,314 |
195,628 |
Treasury stock (787,266 shares and 626,418
shares at December 31, 2012 and December 31, 2011,
respectively) |
(10,257) |
(7,355) |
Retained earnings |
241,856 |
223,510 |
Accumulated other comprehensive income, net
of taxes |
12,137 |
4,813 |
Total stockholders' equity |
442,365 |
416,911 |
|
|
|
Total liabilities and stockholders'
equity |
$ 4,451,416 |
$ 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 December 31, |
For the twelve months
ended December 31, |
|
2012 |
2011 |
2012 |
2011 |
|
|
|
|
|
Interest and
dividend income |
|
|
|
Interest and fees on loans |
$ 43,946 |
$ 46,876 |
$ 181,486 |
$ 191,454 |
Interest and dividends on
securities: |
|
|
|
Interest |
7,510 |
7,540 |
31,306 |
32,121 |
Dividends |
252 |
205 |
855 |
811 |
Other interest income |
14 |
23 |
67 |
112 |
Total interest and dividend
income |
51,722 |
54,644 |
213,714 |
224,498 |
|
|
|
|
|
Interest expense |
|
|
|
|
Deposits |
9,150 |
11,477 |
40,382 |
48,431 |
Other interest expense |
5,348 |
6,443 |
22,893 |
28,292 |
Total interest expense |
14,498 |
17,920 |
63,275 |
76,723 |
|
|
|
|
|
Net interest income |
37,224 |
36,724 |
150,439 |
147,775 |
Provision for loan losses |
5,000 |
6,500 |
21,000 |
21,500 |
Net interest income after provision
for loan losses |
32,224 |
30,224 |
129,439 |
126,275 |
|
|
|
|
|
Non-interest
income |
|
|
|
Other-than-temporary impairment ("OTTI")
charge |
-- |
-- |
(3,138) |
(9,365) |
Less: Non-credit portion of OTTI
charge recorded in Other |
|
|
Comprehensive Income, before
taxes |
-- |
-- |
2,362 |
7,787 |
Net OTTI charge recognized in earnings |
-- |
-- |
(776) |
(1,578) |
Loan fee income |
473 |
454 |
2,304 |
1,941 |
Banking services fee income |
428 |
420 |
1,703 |
1,699 |
Net gain (loss) on sale of loans |
(69) |
18 |
22 |
511 |
Net gain (loss) on sale of securities |
(49) |
-- |
47 |
-- |
Net gain from fair value adjustments |
240 |
695 |
55 |
1,960 |
Federal Home Loan Bank of New York stock
dividends |
394 |
322 |
1,507 |
1,502 |
Bank owned life insurance |
702 |
702 |
2,790 |
2,769 |
Other income |
447 |
369 |
1,413 |
1,477 |
Total non-interest income |
2,566 |
2,980 |
9,065 |
10,281 |
|
|
|
|
|
Non-interest
expense |
|
|
|
Salaries and employee benefits |
10,280 |
8,838 |
42,503 |
38,262 |
Occupancy and equipment |
1,940 |
2,091 |
7,807 |
7,803 |
Professional services |
1,287 |
1,764 |
6,108 |
6,697 |
FDIC deposit insurance |
1,018 |
969 |
4,186 |
4,378 |
Data processing |
1,058 |
1,133 |
4,101 |
4,458 |
Depreciation and amortization |
778 |
848 |
3,207 |
3,185 |
Other real estate owned/foreclosure
expense |
770 |
833 |
2,964 |
2,471 |
Other operating expenses |
2,677 |
2,893 |
11,450 |
10,485 |
Total non-interest expense |
19,808 |
19,369 |
82,326 |
77,739 |
|
|
|
|
|
Income before income
taxes |
14,982 |
13,835 |
56,178 |
58,817 |
|
|
|
|
|
Provision for
income taxes |
|
|
|
Federal |
4,337 |
4,174 |
16,740 |
17,749 |
State and local |
1,445 |
1,490 |
5,107 |
5,720 |
Total taxes |
5,782 |
5,664 |
21,847 |
23,469 |
|
|
|
|
|
Net income |
$ 9,200 |
$ 8,171 |
$ 34,331 |
$ 35,348 |
|
|
|
|
|
|
|
|
|
|
Basic earnings per common share |
$ 0.30 |
$ 0.27 |
$ 1.13 |
$ 1.15 |
Diluted earnings per common share |
$ 0.30 |
$ 0.27 |
$ 1.13 |
$ 1.15 |
Dividends per common share |
$ 0.13 |
$ 0.13 |
$ 0.52 |
$ 0.52 |
|
|
|
|
|
|
FLUSHING FINANCIAL
CORPORATION and SUBSIDIARIES |
SELECTED CONSOLIDATED
FINANCIAL DATA |
(Dollars in thousands, except
per share data) |
(Unaudited) |
|
|
|
|
|
|
At or for the three months |
At or for the twelve
months |
|
ended December 31, |
ended December 31, |
|
2012 |
2011 |
2012 |
2011 |
Per Share Data |
|
|
|
|
Basic earnings per share |
$ 0.30 |
$ 0.27 |
$ 1.13 |
$ 1.15 |
Diluted earnings per share |
$ 0.30 |
$ 0.27 |
$ 1.13 |
$ 1.15 |
Average number of shares outstanding
for: |
|
|
|
|
Basic earnings per common share
computation |
30,309,640 |
30,371,014 |
30,402,403 |
30,622,637 |
Diluted earnings per common share
computation |
30,339,549 |
30,387,260 |
30,432,949 |
30,654,321 |
Book value per common share (1) |
$14.39 |
$13.49 |
$14.39 |
$13.49 |
Tangible book value per common share (2) |
$13.87 |
$12.96 |
$13.87 |
$12.96 |
|
|
|
|
|
Average Balances |
|
|
|
|
Total loans, net |
$ 3,175,002 |
$ 3,207,903 |
$ 3,187,004 |
$ 3,220,617 |
Total interest-earning assets |
4,131,771 |
4,058,395 |
4,127,046 |
4,090,437 |
Total assets |
4,384,474 |
4,288,322 |
4,370,781 |
4,311,368 |
Total due to depositors |
2,889,600 |
2,990,047 |
2,961,223 |
3,038,566 |
Total interest-bearing liabilities |
3,754,470 |
3,724,629 |
3,770,834 |
3,771,404 |
Stockholders' equity |
440,211 |
416,483 |
429,472 |
403,330 |
|
|
|
|
|
Performance Ratios (3) |
|
|
|
|
Return on average assets |
0.84% |
0.76% |
0.79% |
0.82% |
Return on average equity |
8.36 |
7.85 |
7.99 |
8.76 |
Yield on average interest-earning assets |
5.01 |
5.39 |
5.18 |
5.49 |
Cost of average interest-bearing
liabilities |
1.54 |
1.92 |
1.68 |
2.03 |
Interest rate spread during period |
3.47 |
3.47 |
3.50 |
3.46 |
Net interest margin |
3.60 |
3.62 |
3.65 |
3.61 |
Non-interest expense to average assets |
1.81 |
1.81 |
1.88 |
1.80 |
Efficiency ratio (4) |
49.22 |
49.22 |
50.73 |
49.18 |
Average interest-earning assets to
average interest-bearing liabilities |
1.10 X |
1.09 X |
1.09 X |
1.08 X |
|
|
(1) Calculated by dividing
common stockholders' equity of $442.4 million and $416.9 million at
December 31, 2012 and 2011, respectively, by 30,743,329 and
30,904,177 shares outstanding at December 31, 2012 and 2011,
respectively. |
(2) Calculated by dividing
tangible common stockholders' equity of $426.4 million and $400.7
million at December 31, 2012 and 2011, respectively, by 30,743,329
and 30,904,177 shares outstanding at December 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 and
twelve months ended December 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 year ended December 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%) |
9.62% |
9.63% |
Tier 1 risk-based capital
(well capitalized = 6%) |
14.38 |
14.26 |
Total risk-based capital
(well capitalized = 10%) |
15.43 |
15.32 |
|
|
|
Capital ratios: |
|
|
Average equity to average
assets |
9.83% |
9.36% |
Equity to total
assets |
9.94 |
9.72 |
Tangible common equity to
tangible assets |
9.61 |
9.38 |
|
|
|
Asset quality: |
|
|
Non-accrual loans
(excludes performing non-accrual TDR) |
$ 89,204 |
$ 111,062 |
Non-performing loans |
89,848 |
117,441 |
Non-performing
assets |
98,458 |
123,182 |
Net charge-offs |
20,240 |
18,855 |
|
|
|
Asset quality ratios: |
|
|
Non-performing loans to
gross loans |
2.79% |
3.65% |
Non-performing assets to
total assets |
2.21 |
2.87 |
Allowance for loan losses
to gross loans |
0.97 |
0.94 |
Allowance for loan losses
to non-performing assets |
31.59 |
24.63 |
Allowance for loan losses
to non-performing loans |
34.62 |
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 December 31, |
|
2012 |
2011 |
|
Average Balance |
Interest |
Yield/Cost |
Average Balance |
Interest |
Yield/Cost |
Assets |
|
|
|
|
|
|
Interest-earning assets: |
|
|
|
|
|
|
Mortgage loans, net (1) |
$ 2,866,678 |
40,809 |
5.69 % |
$ 2,921,480 |
43,451 |
5.95 % |
Other loans, net (1) |
308,324 |
3,137 |
4.07 |
286,423 |
3,425 |
4.78 |
Total loans, net |
3,175,002 |
43,946 |
5.54 |
3,207,903 |
46,876 |
5.85 |
Mortgage-backed securities |
690,812 |
6,114 |
3.54 |
740,398 |
7,259 |
3.92 |
Other securities |
232,351 |
1,648 |
2.84 |
55,186 |
486 |
3.52 |
Total securities |
923,163 |
7,762 |
3.36 |
795,584 |
7,745 |
3.89 |
Interest-earning
deposits and |
|
|
|
|
|
federal funds sold |
33,606 |
14 |
0.17 |
54,908 |
23 |
0.17 |
Total interest-earning assets |
4,131,771 |
51,722 |
5.01 |
4,058,395 |
54,644 |
5.39 |
Other assets |
252,703 |
|
|
229,927 |
|
|
Total assets |
$ 4,384,474 |
|
|
$ 4,288,322 |
|
|
|
|
|
|
|
|
|
Liabilities and Equity |
|
|
|
|
|
|
Interest-bearing
liabilities: |
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
Savings accounts |
$ 292,560 |
143 |
0.20 |
$ 355,944 |
359 |
0.40 |
NOW accounts |
1,094,430 |
1,590 |
0.58 |
884,861 |
1,510 |
0.68 |
Money market accounts |
154,489 |
59 |
0.15 |
212,628 |
191 |
0.36 |
Certificate of deposit
accounts |
1,348,121 |
7,349 |
2.18 |
1,536,614 |
9,406 |
2.45 |
Total due to depositors |
2,889,600 |
9,141 |
1.27 |
2,990,047 |
11,466 |
1.53 |
Mortgagors' escrow accounts |
44,337 |
9 |
0.08 |
40,829 |
11 |
0.11 |
Total deposits |
2,933,937 |
9,150 |
1.25 |
3,030,876 |
11,477 |
1.51 |
Borrowed funds |
820,533 |
5,348 |
2.61 |
693,753 |
6,443 |
3.71 |
Total interest-bearing
liabilities |
3,754,470 |
14,498 |
1.54 |
3,724,629 |
17,920 |
1.92 |
Non interest-bearing deposits |
149,814 |
|
|
112,837 |
|
|
Other liabilities |
39,979 |
|
|
34,373 |
|
|
Total liabilities |
3,944,263 |
|
|
3,871,839 |
|
|
Equity |
440,211 |
|
|
416,483 |
|
|
Total liabilities and equity |
$ 4,384,474 |
|
|
$ 4,288,322 |
|
|
|
|
|
|
|
|
|
Net interest income / |
|
|
|
|
|
|
net interest rate spread |
|
$ 37,224 |
3.47 % |
|
$ 36,724 |
3.47 % |
|
|
|
|
|
|
|
Net interest-earning assets
/ |
|
|
|
|
|
net interest margin |
$ 377,301 |
|
3.60 % |
$ 333,766 |
|
3.62 % |
|
|
|
|
|
|
|
Ratio of interest-earning assets
to |
|
|
|
|
|
interest-bearing
liabilities |
|
1.10 X |
|
|
1.09 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
$1.0 million and $0.3 million for the three months ended December
31, 2012 and 2011, respectively. |
|
FLUSHING FINANCIAL
CORPORATION and SUBSIDIARIES |
NET INTEREST
MARGIN |
(Dollars in thousands) |
(Unaudited) |
|
|
|
|
|
|
|
|
For the twelve months
ended December 31, |
|
2012 |
2011 |
|
Average Balance |
Interest |
Yield/Cost |
Average Balance |
Interest |
Yield/Cost |
Assets |
|
|
|
|
|
|
Interest-earning assets: |
|
|
|
|
|
|
Mortgage loans, net (1) |
$ 2,893,271 |
167,920 |
5.80 % |
$ 2,929,647 |
176,777 |
6.03% |
Other loans, net (1) |
293,733 |
13,566 |
4.62 |
290,970 |
14,677 |
5.04 |
Total loans, net |
3,187,004 |
181,486 |
5.69 |
3,220,617 |
191,454 |
5.94 |
Mortgage-backed securities |
700,945 |
26,766 |
3.82 |
749,347 |
30,999 |
4.14 |
Other securities |
197,775 |
5,395 |
2.73 |
58,431 |
1,933 |
3.31 |
Total securities |
898,720 |
32,161 |
3.58 |
807,778 |
32,932 |
4.08 |
Interest-earning
deposits and |
|
|
|
|
|
federal funds sold |
41,322 |
67 |
0.16 |
62,042 |
112 |
0.18 |
Total interest-earning assets |
4,127,046 |
213,714 |
5.18 |
4,090,437 |
224,498 |
5.49 |
Other assets |
243,735 |
|
|
220,931 |
|
|
Total assets |
$ 4,370,781 |
|
|
$ 4,311,368 |
|
|
|
|
|
|
|
|
|
Liabilities and Equity |
|
|
|
|
|
|
Interest-bearing liabilities: |
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
Savings accounts |
$ 317,095 |
689 |
0.22 |
$ 369,206 |
2,091 |
0.57 |
NOW accounts |
1,025,116 |
6,275 |
0.61 |
838,648 |
6,610 |
0.79 |
Money market accounts |
175,817 |
399 |
0.23 |
278,692 |
1,309 |
0.47 |
Certificate of deposit
accounts |
1,443,195 |
32,983 |
2.29 |
1,552,020 |
38,372 |
2.47 |
Total due to depositors |
2,961,223 |
40,346 |
1.36 |
3,038,566 |
48,382 |
1.59 |
Mortgagors' escrow accounts |
41,973 |
36 |
0.09 |
39,430 |
49 |
0.12 |
Total deposits |
3,003,196 |
40,382 |
1.34 |
3,077,996 |
48,431 |
1.57 |
Borrowed funds |
767,638 |
22,893 |
2.98 |
693,408 |
28,292 |
4.08 |
Total interest-bearing
liabilities |
3,770,834 |
63,275 |
1.68 |
3,771,404 |
76,723 |
2.03 |
Non interest-bearing deposits |
134,166 |
|
|
107,278 |
|
|
Other liabilities |
36,309 |
|
|
29,356 |
|
|
Total liabilities |
3,941,309 |
|
|
3,908,038 |
|
|
Equity |
429,472 |
|
|
403,330 |
|
|
Total liabilities and equity |
$ 4,370,781 |
|
|
$ 4,311,368 |
|
|
|
|
|
|
|
|
|
Net interest income / |
|
|
|
|
|
|
net interest rate spread |
|
$ 150,439 |
3.50% |
|
$ 147,775 |
3.46% |
|
|
|
|
|
|
|
Net interest-earning assets
/ |
|
|
|
|
|
net interest margin |
$ 356,212 |
|
3.65% |
$ 319,033 |
|
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 $3.2 million and $1.3 million for the twelve months
ended December 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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