Second Quarter 2014
- Core diluted earnings per common share, a non-GAAP measure,
were $0.40, an increase of $0.07 from the three months ended June
30, 2013, and an increase of $0.04 from the trailing quarter.
- GAAP diluted earnings per common share were $0.39, an increase
of $0.07 from the three months ended June 30, 2013, and an increase
of $0.05 from the trailing quarter.
- Loan portfolio grew at an annualized rate of 3.9% in the three
months ended June 30, 2014.
- Improvement in credit quality:
- Non-accrual loans totaled $42.8 million at June 30, 2014, an
improvement of $0.4 million, or 0.9%, from March 31, 2014, and at
its lowest level since December 31, 2008.
- Delinquent loans totaled $82.0 million at June 30, 2014, an
increase of $0.4 million, or 0.4%, from March 31, 2014.
- Classified assets totaled $77.1 million, a decrease of $9.8
million, or 11.3% from March 31, 2014, and at its lowest level
since March 31, 2009.
- The net interest margin was 3.22%, a decrease of three basis
points from the trailing quarter.
- Net charge-offs for the three months ended June 30, 2014 were
net- recoveries of $0.1 million.
- The provision for loan losses improved to a benefit of $1.1
million for the three months ended June 30, 2014, from a provision
of $3.5 million recorded for the comparable prior year period and
matched the benefit of $1.1 million recorded for the three months
ended March 31, 2014.
SIX MONTHS ENDED JUNE 30, 2014
- Core diluted earnings per common share, a non-GAAP measure,
were $0.75, an increase of $0.20 from the six months ended June 30,
2013.
- GAAP diluted earnings per common share were $0.73, an increase
of $0.19 from the six months ended June 30, 2013.
- Loan portfolio grew at an annualized rate of 5.9% in the six
months ended June 30, 2014.
- Improvement in credit quality:
- Non-accrual loans totaled $42.8 million at June 30, 2014, an
improvement of $5.6 million, or 11.5%, from December 31, 2013, and
at its lowest level since December 31, 2008.
- Delinquent loans totaled $82.0 million at June 30, 2014, a
decrease of $7.1 million, or 8.0%, from December 31, 2013.
- Classified assets totaled $77.1 million, a decrease of $10.4
million, or 11.9% from December 31, 2013, and at its lowest level
since March 31, 2009.
- The net interest margin was 3.24%, a decrease of 15 basis
points from the comparable prior year period.
- Net charge-offs for the six months ended June 30, 2014 were
$0.3 million, or 0.02% of average loans.
- The provision for loan losses improved to a benefit of $2.2
million for the six months ended June 30, 2014, from a provision of
$9.5 million recorded for the comparable prior year period.
Flushing Financial Corporation (the "Company") (Nasdaq:FFIC), the
parent holding company for Flushing Bank (the "Bank"), today
announced its financial results for the three and six months ended
June 30, 2014.
John R. Buran, President and Chief Executive Officer, stated:
"We are pleased to report continued improvement as programs that we
put in place in 2013 paid off handsomely in the first half of 2014.
Core diluted earnings per common share, a non-GAAP measure, were
$0.75 for the first six months of 2014, an increase of $0.20 from
the first half of 2013.
"Both our solutions to credit issues associated with the
financial crisis and our tight control of expenses contributed to
our improved operating results. In addition, both growth in our
loan portfolio and reduction in our funding costs have achieved
some success to date and contributed to our improved operating
results, while still providing significant upside going
forward.
"Loan growth for the first half of the year at an annualized
rate of 6% is at the lower end of our expected range of growth for
the year. However, loan applications in process were very strong at
a record level of $364.3 million at June 30, 2014. New loan
officers that came on in the later part of the first quarter and
the beginning of the second quarter are beginning to contribute.
The mix of our loans has improved as our business banking operation
contributed 37% of year to date originations. This business banking
portion of our loan portfolio has continued to grow, providing us
with additional variable rate loans to lock in spreads in a
potentially rising interest rate environment while allowing us to
be more discriminating in our acceptance of more liberal pricing
and terms that we see in the multi-family market.
"In controlling our funding costs, we have an opportunity in the
second half of this year to further reduce this cost as $321
million of certificates of deposit mature at a cost of 1.91%.
"We have seen continued improvement in our credit risk profile,
which has allowed us to reduce our provision for loan losses from
the comparable prior year period. Non-performing loans, delinquent
loans, classified loans and loan charge-offs have decreased to
levels last seen in 2008. The changes we made to our underwriting
standards in 2009 have resulted in loans originated since then
showing de minimis delinquency and charge-offs. Loans originated
prior to 2010, which have the highest delinquency rates and
charge-offs, decreased 9.6% during the first half of 2014. The real
estate market in the New York Metropolitan area has rebounded from
the lows seen in 2012. These factors have reduced the risk in our
loan portfolio and allowed us to reduce our allowance for loan
losses during the first half of this year.
"Net charge-offs for the first half of 2014 were $0.3 million.
We continued our practice of obtaining updated appraisals and
recording charge-offs based on these current values as opposed to
adding to the allowance for loan losses. This process has ensured
that we have kept pace with changing values in the real estate
market. The average loan-to-value ratio for our non-performing
loans collateralized by real estate was 46.1% at June 30, 2014.
"Net loans increased $33.9 million, or 1.0%, during the second
quarter of 2014, as loan originations and purchases for the quarter
totaled $191.2 million. Our loan pipeline at June 30, 2014 remained
strong at $364.3 million. Our lending departments continue to
emphasize full relationship banking with our borrowers.
Originations continue to be focused on multi-family and commercial
business loans, which represented 56% and 25%, respectively, of
loan originations during the second quarter of 2014. Additionally,
as part of the loan closing process, we generally obtain full
banking relationships with these borrowers.
"Deposits from public entities saw a seasonal decrease during
the second quarter of 2014. We expect these deposits to return in
the third and fourth quarters. Short term borrowings were obtained
at similar rates to replace the government deposits.
"Our net interest margin for the second quarter of 2014 was
3.22%, a decrease of three basis points from the first quarter of
2014. The decrease for the three months ended June 30, 2014 from
the trailing quarter was primarily due to a six basis point
decrease in the yield earned from interest-earning assets to 4.33%,
while our cost of funding decreased two basis points to 1.23%. The
decline in the yield of interest-earning assets was primarily due
to the current interest rate environment, where new loans and
securities are added at rates below our portfolio average yield,
and higher yielding loans and securities continue to prepay. The
decrease in the cost of interest-bearing liabilities was primarily
due to a seven basis point decline in the cost of certificates of
deposit to 2.02% for the second quarter of 2014 from 2.09% for the
first quarter of 2014. The net interest margin includes the benefit
of interest collected from non-accrual loans. Excluding this
benefit, the net interest margin for the second quarter of 2014
declined five basis points from the first quarter of 2014."
At June 30, 2014, the Bank continues to be well-capitalized
under regulatory requirements, with Core, Tier 1 risk-based and
Total risk-based capital ratios of 9.54%, 14.13% and 15.02%,
respectively. The Company is also subject to the same regulatory
requirements. At June 30, 2014, the Company's capital ratios for
Core, Tier 1 risk-based and Total risk-based capital ratios were
9.82%, 14.54% and 15.44%, respectively.
Banking regulators issued new proposed revisions to the capital
regulations in July 2013, replacing the proposed capital
regulations that were issued in June 2012. The regulators announced
these capital regulations would be effective January 1, 2015 for
bank holding companies and banks with less than $15 billion in
total assets, such as our Company and Bank. Based on our
preliminary assessment of these proposed regulations, the Company
and the Bank each presently meet the fully phased in requirements
of the proposed capital regulations to be considered
well-capitalized.
Core earnings, a non-GAAP measure, which exclude the effects of
net losses from fair value adjustments, net gains from the sale of
securities and penalties from the prepayment of long-term
borrowings, were $11.9 million for the three months ended June 30,
2014, an increase of $1.8 million, or 18.3%, from $10.1 million in
the comparable prior year period. Core diluted earnings per common
share were $0.40 for the three months ended June 30, 2014, an
increase of $0.07, or 21.2%, from the comparable prior year
period.
Core earnings were $22.6 million for the six months ended June
30, 2014, an increase of $5.8 million, or 34.9%, from $16.7 million
in the comparable prior year period. Core diluted earnings per
common share were $0.75 for the six months ended June 30, 2014, an
increase of $0.20, or 36.4%, from the comparable prior year
period.
For a reconciliation of core earnings and core diluted earnings
per common share to accounting principles generally accepted in the
United States ("GAAP") net income and GAAP diluted earnings per
common share, please refer to the tables in the section titled
"Reconciliation of GAAP and Core Earnings."
Earnings Summary - Three Months Ended June 30,
2014
Net income for the three months ended June 30, 2014 was $11.7
million, an increase of $2.1 million, or 21.4%, compared to $9.6
million for the three months ended June 30, 2013. Diluted earnings
per common share were $0.39 for the three months ended June 30,
2014, an increase of $0.07, or 21.9%, from $0.32 for the three
months ended June 30, 2013.
Return on average equity increased to 10.3% for the three months
ended June 30, 2014 from 8.8% for the three months ended June 30,
2013. Return on average assets increased to 1.0% for the three
months ended June 30, 2014 from 0.8% for the three months ended
June 30, 2013.
For the three months ended June 30, 2014, net interest income
was $36.8 million, a decrease of $0.5 million, or 1.3%, from $37.3
million for the three months ended June 30, 2013. The decrease in
net interest income was primarily attributable to a 26 basis point
decrease in the net-interest spread to 3.10% for the three months
ended June 30, 2014 from 3.36% for the three months ended June 30,
2013, partially offset by the effect of an increase of $301.9
million in the average balance of interest-earning assets to
$4,578.8 million for the three months ended June 30, 2014 from
$4,276.8 million for the comparable prior year period. The yield on
interest-earning assets decreased 37 basis points to 4.33% for the
three months ended June 30, 2014 from 4.70% for the three months
ended June 30, 2013, while the cost of interest-bearing liabilities
decreased 11 basis points to 1.23% for the three months ended June
30, 2014 from 1.34% for the comparable prior year period. The net
interest margin declined 27 basis points to 3.22% for the three
months ended June 30, 2014 from 3.49% for the three months ended
June 30, 2013. Excluding prepayment penalty income on loans, the
net interest margin decreased 25 basis points to 3.10% for the
three months ended June 30, 2014 from 3.35% for the three months
ended June 30, 2013.
The 37 basis point decline in the yield of interest-earning
assets was primarily due to a 50 basis point reduction in the yield
of the loan portfolio to 4.88% for the three months ended June 30,
2014 from 5.38% for the three months ended June 30, 2013, combined
with a 17 basis point decline in the yield on total securities to
2.68% for the three months ended June 30, 2014 from 2.85% for the
comparable prior year period. The yield was positively impacted by
an increase of $296.5 million in the average balance of total loans
to $3,485.9 million for the three months ended June 30, 2014 from
$3,189.4 million for the comparable prior year period. The 50 basis
point decrease in the loan portfolio was primarily due to the
decline in the rates earned on new loan originations, existing
loans modifying to lower rates, and higher yielding loans
prepaying. The yield on the loan portfolio, excluding prepayment
penalty income, decreased 48 basis points to 4.72% for the three
months ended June 30, 2014 from 5.20% for the three months ended
June 30, 2013. The 17 basis point decrease in the yield of the
securities portfolio was primarily due to the purchase of new
securities at lower yields than the existing portfolio.
The 11 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, savings
accounts and NOW accounts decreased 11 basis points, one basis
point and 11 basis points, respectively, partially offset by a
seven basis point increase in the cost of money market accounts for
the three months ended June 30, 2014 from the comparable prior year
period. The cost was also positively affected by an increase in the
average balance of lower costing core deposits totaling $135.2
million during the three months ended June 30, 2014 to $1,933.7
million from $1,798.5 million for the comparable prior year period.
These improvements resulted in a decrease in the cost of due to
depositors of 11 basis points to 0.99% for the three months ended
June 30, 2014 from 1.10% for the three months ended June 30, 2013.
The cost of borrowed funds decreased 16 basis points from the
comparable prior year period to 2.03% for the three months ended
June 30, 2014.
The net interest margin for the three months ended June 30, 2014
decreased three basis points to 3.22% from 3.25% for the three
months ended March 31, 2014. The yield on interest-earning assets
decreased six basis points during the second quarter of 2014 to
4.33%, while the cost of interest-bearing liabilities decreased two
basis points to 1.23%. The yield on the mortgage loan portfolio
decreased 12 basis points to 5.04% for the three months ended June
30, 2014 from 5.16% for the three months ended March 31, 2014. The
three months ended June 30, 2014 included $0.4 million in
additional interest collected from non-accrual loans compared to
$0.3 million recorded during the three months ended March 31, 2014.
Excluding this additional interest collected from non-accrual
loans, the net interest margin decreased five basis points to 3.18%
for the three months ended June 30, 2014 from 3.23% for the three
months ended March 31, 2014. Further excluding prepayment penalty
income, the net interest margin was 3.07% for the three months
ended June 30, 2014, a four basis point decrease from the three
months ended March 31, 2014.
The provision for loan losses decreased $4.6 million during the
three months ended June 30, 2014 to a benefit of $1.1 million from
a provision of $3.5 million during the comparable prior year
period. The decrease in the provision was primarily due to the
continued improvement in credit conditions. During the three months
ended June 30, 2014, net-recoveries of $0.1 million were recorded
and non-accrual loans decreased $0.4 million to $42.8 million from
$43.2 million at March 31, 2014. The current average loan-to-value
ratio for our non-performing loans collateralized by real estate
was 46.1% at June 30, 2014. When we have obtained properties
through foreclosure, we have been able to quickly sell the
properties at amounts that approximate book value. The Bank
continues to maintain conservative underwriting standards. We
anticipate that we will continue to see low loss content in our
loan portfolio. As a result of the quarterly analysis of the
allowance for loans losses, a reduction in the allowance was
warranted, and as such, the Company recorded a benefit of $1.1
million for the three months ended June 30, 2014.
Non-interest income for the three months ended June 30, 2014 was
$2.0 million, a decrease of $0.2 million, or 9.7% from $2.2 million
for the three months ended June 30, 2013. Non-interest income
declined over the recent quarter due to a $0.1 million increase in
net losses from fair value adjustments, a $0.4 million decrease in
banking service fee income primarily due to reduced ancillary loan
fees, and a $0.2 million decrease in net gain on sale of loans. The
decline over quarters also was impacted by an other-than-temporary
impairment ("OTTI") charge of $0.5 million on private issued
collateralized mortgage obligations ("CMOs") during the prior year
quarter.
Non-interest expense was $20.6 million for the three months
ended June 30, 2014, an increase of $0.4 million, or 2.0%, from
$20.2 million for the three months ended June 30, 2013. The
increase was primarily due to an increase of $1.0 million in
salaries and employee benefits, partially offset by decreases of
$0.2 million in real estate owned/ foreclosure expense primarily
due to a reduction in non-performing loans, $0.3 million in other
operating expenses, and $0.1 million in FDIC insurance expense
primarily due to a reduction in the assessment rate. The efficiency
ratio was 52.9% for the three months ended June 30, 2014 compared
to 49.7% for the three months ended June 30, 2013.
The provision for income taxes for the three months ended June
30, 2014 was $7.6 million, an increase of $1.4 million, or 23.4%,
from $6.2 million for the comparable prior year period. The
increase was primarily due to a $3.5 million increase in income
before income taxes to $19.3 million for the three months ended
June 30, 2014 from $15.8 million for the comparable prior year
period. The effective tax rate was 39.4% and 39.0% for the three
months ended June 30, 2014 and 2013, respectively.
Earnings Summary - Six Months Ended June 30,
2014
Net income for the six months ended June 30, 2014 was $22.0
million, an increase of $5.6 million, or 34.2%, compared to $16.4
million for the six months ended June 30, 2013. Diluted earnings
per common share were $0.73 for the six months ended June 30, 2014,
an increase of $0.19, or 35.2%, from $0.54 for the six months ended
June 30, 2013.
Return on average equity increased to 9.9% for the six months
ended June 30, 2014, from 7.5% for the comparable prior year
period. Return on average assets increased to 0.9% for the six
months ended June 30, 2014, from 0.7% for the comparable prior year
period.
For the six months ended June 30, 2014, net interest income was
$73.3 million, an increase of $1.9 million, or 2.6%, from $71.4
million for the six months ended June 30, 2013. The increase in net
interest income was primarily attributable to the prior year period
including a $2.6 million prepayment penalty recorded on
borrowings.
Excluding the $2.6 million prepayment penalty recorded on
borrowings during the prior year period, net interest income for
the six months ended June 30, 2014 decreased $0.7 million, or 1.0%,
to $73.3 million from $74.0 million for the six months ended June
30, 2013. The decrease in net interest income was primarily
attributable to a 27 basis point decrease in the net-interest
spread to 3.12% for the six months ended June 30, 2014 from 3.39%
for the six months ended June 30, 2013, partially offset by the
effect of an increase of $316.4 million in the average balance of
interest-earning assets to $4,532.6 million for the six months
ended June 30, 2014 from $4,216.2 million for the comparable prior
year period. The yield on interest-earning assets decreased 40
basis points to 4.36% for the six months ended June 30, 2014 from
4.76% for the six months ended June 30, 2013, while the cost of
interest-bearing liabilities decreased 13 basis points to 1.24% for
the six months ended June 30, 2014 from 1.37% for the comparable
prior year period. The net interest margin decreased 27 basis
points to 3.24% for the six months ended June 30, 2014 from 3.51%
for the six months ended June 30, 2013. Excluding prepayment
penalty income, the net interest margin decreased 27 basis points
to 3.12% for the six months ended June 30, 2014 from 3.39% for the
six months ended June 30, 2013.
The 40 basis point decline in the yield of interest-earning
assets was primarily due to a 46 basis point reduction in the yield
of the loan portfolio to 4.92% for the six months ended June 30,
2014 from 5.38% for the six months ended June 30, 2013, combined
with a 26 basis point decline in the yield on total securities to
2.70% for the six months ended June 30, 2014 from 2.96% for the
comparable prior year period. The yield of interest-earning assets
was positively impacted by a $250.8 million increase in the average
balance of the higher yielding loan portfolio for the six months
ended June 30, 2014, partially offset by a $62.4 million increase
in the average balance of the lower yielding securities portfolio
for the six months ended June 30, 2014. The 46 basis point decrease
in the yield of the loan portfolio was primarily due to the decline
in the rates earned on new loan originations, existing loans
modifying to lower rates, and higher yielding loans prepaying. The
26 basis point decrease in the yield of the securities portfolio
was primarily due to the purchase of new securities at lower yields
than the existing portfolio. The yield on the mortgage loan
portfolio decreased 42 basis points to 5.10% for the six months
ended June 30, 2014 from 5.52% for the six months ended June 30,
2013. The yield on the mortgage loan portfolio, excluding
prepayment penalty income, decreased 41 basis points to 4.94% for
the six months ended June 30, 2014 from 5.35% for the six months
ended June 30, 2013.
The 13 basis point decrease in the cost of interest-bearing
liabilities, excluding the prepayment penalty on borrowings
recorded in 2013, was primarily attributable to the Bank reducing
the rates it pays on its deposit products and a shifting of deposit
concentrations, as higher costing certificates of deposits average
balance decreased $53.8 million to $1,131.5 million, while lower
costing core deposits average balance increased $227.1 million to
$1,933.4 million for the six months ended June 30, 2014.
Additionally, the cost of borrowed funds decreased 18 basis points
to 2.03% for the six months ended June 30, 2014 from 2.21% for the
comparable prior year period. The decrease in the cost of borrowed
funds was primarily due to maturing and new borrowings being
replaced and obtained at lower rates. The cost of certificates of
deposit, savings accounts and NOW accounts decreased eight basis
points, one basis point and eight basis points, respectively, for
the six months ended June 30, 2014 from the comparable prior year
period, while the cost of money market accounts increased eight
basis points for the six months ended June 30, 2014 from the
comparable prior year period. This resulted in a decrease in the
cost of due to depositors of 13 basis points to 1.00% for the six
months ended June 30, 2014 from 1.13% for the six months ended June
30, 2013.
The provision for loan losses decreased $11.7 million during the
six months ended June 30, 2014 to a benefit of $2.2 million from a
provision of $9.5 million during the comparable prior year period.
During the six months ended June 30, 2014, non-performing loans
decreased $3.2 million to $45.8 million from $49.0 million at
December 31, 2013. Net charge-offs for the six months ended June
30, 2014 totaled $0.3 million, or two basis points of average
loans. The current loan-to-value ratio for our non-performing loans
collateralized by real estate was 46.1% at June 30, 2014. 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. As a result of the quarterly analysis of
the allowance for loans losses, a reduction in the allowance was
warranted, and as such, the Company recorded a benefit of $2.2
million for the six months ended June 30, 2014.
Non-interest income for the six months ended June 30, 2014 was
$3.7 million, a decrease of 3.9 million from $7.5 million for the
six months ended June 30, 2013. The decrease in non-interest income
was primarily due to the $2.9 million gain from the sale of
mortgage-backed securities during the six months ended June 30,
2013. Non-interest income also declined due to a $0.6 million
increase in net losses from fair value adjustments and a decrease
of $0.7 million in banking service fees. These decreases were
partially offset by the comparable prior year period including an
OTTI charge on private issued CMOs of $0.5 million.
Non-interest expense was $42.7 million for the six months ended
June 30, 2014, an increase of $0.1 million, or 0.2%, from $42.6
million for the six months ended June 30, 2013. The increase was
primarily due to an increase of $1.3 million in salaries and
benefits expense primarily due to annual salary increases and an
increase in the cost of grants of annual restricted stock unit
awards. This increase was partially offset by decreases of $0.4
million and $0.6 million in FDIC insurance expense and real estate
owned/foreclosure expense, respectively. The efficiency ratio was
54.7% for the six months ended June 30, 2014 compared to 53.2% for
the six months ended June 30, 2013.
The provision for income taxes for the six months ended June 30,
2014 was $14.5 million, an increase of $4.1 million, or 38.7%, from
$10.5 million for the comparable prior year period. The increase
was primarily due to a $9.6 million increase in income before
income taxes to $36.5 million for the six months ended June 30,
2014 from $26.9 million for the comparable prior year period. The
effective tax rate was 39.8% and 39.0% for the six months ended
June 30, 2014 and 2013, respectively. The increase in the effective
tax rate was primarily due to the impact of changes to the New York
State tax code passed on March 31, 2014, resulting in a reduction
in the Company's deferred tax assets. We expect to see a small
reduction in our effective tax rate beginning in 2015 as a result
of the changes in the New York State tax code.
Balance Sheet Summary – At June 30, 2014
Total assets at June 30, 2014 were $4,853.8 million, an increase
of $132.3 million, or 2.8%, from $4,721.5 million at December 31,
2013. Total loans, net increased $100.9 million during the six
months ended June 30, 2014 to $3,503.3 million from $3,402.4
million at December 31, 2013. Loan originations and purchases were
$389.2 million for the six months ended June 30, 2014, an increase
of $16.1 million from $373.1 million for the six months ended June
30, 2013. During the six months ended June 30, 2014, we continued
to focus on the origination of multi-family properties and business
loans with a full relationship. Loan applications in process have
continued to remain strong, totaling $364.3 million at June 30,
2014 compared to $297.5 million at December 31, 2013 and $342.3
million at June 30, 2013.
The following table shows loan originations and purchases for
the periods indicated. Loan purchases were $1.2 million and zero
for the three months ended June 30, 2014 and 2013, respectively.
Loan purchases were $12.9 million and $0.5 million for the six
months ended June 30, 2014 and 2013, respectively.
|
For the three months |
For the six months |
|
ended June 30, |
ended June 30, |
(In thousands) |
2014 |
2013 |
2014 |
2013 |
Multi-family residential |
$ 107,197 |
$ 132,292 |
$ 165,009 |
$ 175,217 |
Commercial real estate |
18,205 |
31,612 |
31,621 |
38,598 |
One-to-four family – mixed-use property |
8,429 |
7,344 |
18,428 |
11,734 |
One-to-four family – residential |
6,404 |
6,380 |
15,504 |
12,890 |
Co-operative apartments |
-- |
1,695 |
-- |
3,762 |
Construction |
300 |
1,788 |
997 |
1,788 |
Small Business Administration |
225 |
210 |
578 |
378 |
Taxi Medallion |
1,889 |
-- |
13,538 |
-- |
Commercial business and other |
48,542 |
70,361 |
143,498 |
128,701 |
Total |
$ 191,191 |
$ 251,682 |
$ 389,173 |
$ 373,068 |
The average rate on mortgage loan originations and purchases was
3.25% and 3.47% for the three months ended June 30, 2014 and 2013,
respectively. The average rate on other loan originations and
purchases was 3.25% and 3.20% for the three months ended June 30,
2014 and 2013, respectively. The average rate on total loan
originations and purchases was 3.25% and 3.39% for the three months
ended June 30, 2014 and 2013, respectively.
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
second quarter of 2014 had an average loan-to-value ratio of 46.7%
and an average debt coverage ratio of 401%.
The Bank experienced improvements in its non-accrual loans
during the six months ended June 30, 2014, and charge-offs remained
low during the same period. 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 at times will develop 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) |
2014 |
2014 |
2013 |
Accrual Status: |
|
|
|
Multi-family residential |
$ 3,061 |
$ 3,074 |
$ 3,087 |
Commercial real estate |
2,389 |
2,398 |
2,407 |
One-to-four family - mixed-use property |
2,022 |
2,288 |
2,297 |
One-to-four family - residential |
359 |
362 |
364 |
Construction |
-- |
-- |
442 |
Commercial business and other |
2,329 |
2,367 |
4,406 |
|
|
|
|
Total |
10,160 |
10,489 |
13,003 |
|
|
|
|
Non-accrual status: |
|
|
|
One-to-four family - mixed-use property |
380 |
382 |
383 |
Total |
380 |
382 |
383 |
|
|
|
|
Total performing
troubled debt restructured |
$ 10,540 |
$ 10,871 |
$ 13,386 |
During the six months ended June 30, 2014, two TDR totaling $2.4
million were transferred to non-performing status when they became
over 90 days past maturity, which resulted in these loans being
included in non-performing loans. These loans paid in full during
the quarter ended June 30, 2014. During the six months ended June
30, 2014, one additional TDR for $0.2 million was transferred to
non-performing status when it became 90 days past due as to
payments.
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:
|
June 30, |
March 31, |
December 31, |
(In thousands) |
2014 |
2014 |
2013 |
Loans 90 days or more past
due |
|
|
|
and still accruing: |
|
|
|
Multi-family residential |
$ 987 |
$ 188 |
$ 52 |
Commercial real estate |
266 |
793 |
-- |
One-to-four family - mixed-use property |
1,303 |
874 |
-- |
One-to-four family - residential |
14 |
15 |
15 |
Construction |
-- |
1,012 |
-- |
Commercial business and other |
410 |
2,490 |
539 |
Total |
2,980 |
5,372 |
606 |
|
|
|
|
Non-accrual loans: |
|
|
|
Multi-family residential |
10,861 |
12,062 |
13,682 |
Commercial real estate |
9,761 |
8,769 |
9,962 |
One-to-four family - mixed-use property |
8,713 |
7,977 |
9,063 |
One-to-four family - residential |
11,346 |
12,208 |
13,250 |
Co-operative apartments |
-- |
-- |
57 |
Commercial business and other |
2,130 |
2,165 |
2,348 |
Total |
42,811 |
43,181 |
48,362 |
|
|
|
|
Total non-performing
loans |
45,791 |
48,553 |
48,968 |
|
|
|
|
Other non-performing
assets: |
|
|
|
Real estate acquired through foreclosure |
1,346 |
1,700 |
2,985 |
Investment securities |
-- |
-- |
1,871 |
Total |
1,346 |
1,700 |
4,856 |
|
|
|
|
Total non-performing
assets |
$ 47,137 |
$ 50,253 |
$ 53,824 |
Included in loans over 90 days past due and still accruing were
11 loans totaling $3.0 million, 13 loans totaling $5.4 million, and
six loans totaling $0.6 million at June 30, 2014, March 31, 2014
and December 31, 2013, respectively. These loans are all past their
respective maturity dates and are still remitting
payments. The Bank is actively working with these borrowers to
extend the maturity of or repay these loans.
Included in non-performing loans were two loans totaling $2.4
million, three loans totaling $4.7 million, and one loan totaling
$2.3 million which were restructured as TDR and not performing in
accordance with their restructured terms at June 30, 2014, March
31, 2014 and December 31, 2013, respectively.
Hurricane Sandy caused significant damage to numerous homes and
businesses throughout the New York Metropolitan area. In working
with its borrowers and depositors affected by this hurricane, the
Bank had entered into payment agreements on 30 loans totaling $18.9
million. These agreements originally provided for partial payment
deferrals, generally for 90 days, but some agreements provide for
longer deferral periods. These agreements were 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. At June 30, 2014, eight loans totaling
$4.9 million remain under these agreements, of which seven loans
totaling $4.6 million are considered non-performing as we have
placed them on non-accrual status until they reestablish a payment
history and bring the loans current. Eight loans are current under
their repayment plans and have had their agreements extended into
2014 to give the borrowers additional time to recover. Each
borrower was required, commencing at the end of the deferral
period, to make their regularly scheduled loan payments plus a
portion of the deferred amounts. As of June 30, 2014, the Bank has
not incurred, and does not expect to incur, any losses related to
these agreements.
The Bank's non-performing assets totaled $47.1 million at June
30, 2014, a decrease of $3.1 million from $50.3 million at March
31, 2014, and a decrease of $6.7 million from $53.8 million at
December 31, 2013. Total non-performing assets as a percentage of
total assets were 0.97% at June 30, 2014 compared to 1.04% at March
31, 2014 and 1.14% at December 31, 2013. The ratio of allowance for
loan losses to total non-performing loans was 63.8% at June 30,
2014 compared to 62.3% at March 31, 2014, and 64.9% at December 31,
2013.
During the three months ended June 30, 2014, 18 loans totaling
$5.3 million were added to non-accrual loans, 12 loans totaling
$2.5 million were returned to performing status, seven loans
totaling $1.3 million were paid in full, three loans totaling $0.9
million were sold, two loans totaling $0.4 million was transferred
to other real estate owned, and charge-offs of $0.3 million were
recorded on non-accrual loans that were non-accrual at the
beginning of the second quarter of 2014.
At December 31, 2013, non-accrual investment securities included
one pooled trust preferred security with a carrying amount of $1.9
million for which we were not receiving payments. During the six
months ended June 30, 2014, the Company sold the one non-accrual
trust preferred security for total proceeds of $2.1 million.
Performing loans delinquent 60 to 89 days were $2.5 million at
June 30, 2014, a decrease of $2.7 million from $5.2 million at
March 31, 2014 and a decrease of $2.2 million from $4.7 million at
December 31, 2013. Performing loans delinquent 30 to 59 days were
$36.4 million at June 30, 2014, an increase of $2.8 million from
$33.6 million at March 31, 2014 but a decrease of $1.0 million from
$37.4 million at December 31, 2013.
The following table shows net loan charge-offs (recoveries) for
the periods indicated:
|
Three Months Ended |
Six Months Ended |
|
June 30, |
June 30, |
June 30, |
June 30, |
(In thousands) |
2014 |
2013 |
2014 |
2013 |
Multi-family residential |
$ (65) |
$ 1,207 |
$ 533 |
$ 2,684 |
Commercial real estate |
39 |
(160) |
(296) |
441 |
One-to-four family – mixed-use property |
80 |
471 |
123 |
3,024 |
One-to-four family – residential |
(60) |
(75) |
(86) |
585 |
Co-operative apartments |
-- |
(4) |
(7) |
70 |
Construction |
-- |
70 |
-- |
304 |
Small Business Administration |
(2) |
103 |
(12) |
277 |
Commercial business and other |
(49) |
560 |
75 |
864 |
Total net loan charge-offs |
$ (57) |
$ 2,172 |
$ 330 |
$ 8,249 |
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 is
internally reviewed on a quarterly basis using multiple valuation
approaches in evaluating the underlying collateral. These include
obtaining a third party appraisal, or for internally reviewed loans
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 loan
balance which exceeds fair value is generally charged-off against
the allowance for loan losses.
During the six months ended June 30, 2014, the Bank sold nine
non-performing loans for proceeds totaling $4.5 million, realizing
net recoveries at the time of sale totaling $0.2 million.
Additionally, during the six months ended June 30, 2014, the Bank
sold three performing loans for total proceeds of $1.0 million.
During the six months ended June 30, 2014, mortgage-backed
securities increased $14.4 million, or 1.9%, to $770.5 million from
$756.2 million at December 31, 2013. The increase in
mortgage-backed securities during the six months ended June 30,
2014 was primarily due to purchases of $47.5 million and an
improvement of $14.4 million in the fair value of mortgage-backed
securities, partially offset by principal repayments totaling $46.2
million.
During the six months ended June 30, 2014, other securities
increased $26.5 million, or 10.1%, to $288.1 million from $261.6
million at December 31, 2013. The increase in other securities
during the six months ended June 30, 2014 was primarily due to
purchases of $23.3 million and an improvement in the fair value of
other securities totaling $7.0 million, partially offset by $1.9
million in sales and $1.0 million in maturities. Other securities
primarily consist of securities issued by mutual or bond funds that
invest in government and government agency securities, municipal
bonds and corporate bonds.
Banking regulators issued the Volcker Rule in December 2013. The
Volcker Rule, among other things, prohibits banks from owning
certain investment securities. We have reviewed our investment
portfolio for compliance with the Volcker Rule. In the opinion of
management, we do not own any securities which are prohibited under
the Volcker Rule.
Total liabilities were $4,393.3 million at June 30, 2014, an
increase of $104.3 million, or 2.4%, from $4,289.0 million at
December 31, 2013. During the six months ended June 30, 2014, due
to depositors decreased $2.0 million, or 0.1%, to $3,198.0 million,
as a result of a $40.9 million decrease in core deposits partially
offset by a $38.9 million increase in certificates of deposit.
Borrowed funds increased $100.1 million during the six months ended
June 30, 2014. The decrease in core deposits was a result of a
seasonal decrease in deposits from public entities. We expect these
deposits to return in the third and fourth quarters. Short term
borrowings were obtained at similar rates to replace the government
deposits.
Total stockholders' equity increased $28.0 million, or 6.5%, to
$460.5 million at June 30, 2014 from $432.5 million at December 31,
2013. Stockholders' equity increased primarily due to net income of
$22.0 million for the six months ended June 30, 2014, an increase
in comprehensive income of $12.0 million primarily due to an
increase in the fair value of the securities portfolio and $1.9
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. Additionally, the exercise
of stock options increased stockholders' equity by $0.5 million,
including the income tax benefit realized by the Company upon the
exercise of the options. These increases were partially offset by
the declaration and payment of dividends on the Company's common
stock of $9.0 million and the purchase of 108,120 treasury shares
at a cost of $2.1 million. Book value per common share was $15.26
at June 30, 2014 compared to $14.36 at December 31, 2013. Tangible
book value per common share, a non-GAAP measure, was $14.74 at June
30, 2014 compared to $13.84 at December 31, 2013.
During the quarter ended June 30, 2014, the Company repurchased
80,000 shares of the Company's common stock at an average cost of
$19.85 per share. At June 30, 2014, 441,750 shares remain to be
repurchased under the current stock repurchase program. Stock will
be purchased under the current stock repurchase program from time
to time, in the open market or through private transactions,
subject to market conditions. There is no expiration or maximum
dollar amount under this authorization.
Reconciliation of GAAP Earnings and Core
Earnings
Although core earnings are not a measure of performance
calculated in accordance with GAAP, the Company believes that its
core earnings are an important indication of performance through
ongoing operations. The Company believes that core earnings are
useful to management and investors in evaluating its ongoing
operating performance, and in comparing its performance with other
companies in the banking industry, particularly those that do not
carry financial assets and financial liabilities at fair value.
Core earnings should not be considered in isolation or as a
substitute for GAAP earnings. During the periods presented, the
Company calculated core earnings by adding back or subtracting, net
of tax, net gain or loss recorded on financial assets and financial
liabilities carried at fair value and the sale of securities, and
by adding back, net of tax, the penalty incurred from the
prepayment of borrowings.
|
Three Months Ended |
Six Months Ended |
|
June 30, |
June 30, |
March 31, |
June 30, |
June 30, |
|
2014 |
2013 |
2014 |
2014 |
2013 |
|
|
|
|
|
|
GAAP income before income taxes |
$ 19,283 |
$ 15,782 |
$ 17,223 |
$ 36,506 |
$ 26,857 |
|
|
|
|
|
|
Net loss from fair value adjustments |
402 |
308 |
644 |
1,046 |
431 |
Other-than-temporary impairment charges |
-- |
503 |
-- |
-- |
503 |
Net gain on sale of securities |
-- |
(18) |
-- |
-- |
(2,876) |
Penalty from prepayment of borrowings |
-- |
-- |
-- |
-- |
2,579 |
|
|
|
|
|
|
Core income before taxes |
19,685 |
16,575 |
17,867 |
37,552 |
27,494 |
|
|
|
|
|
|
Provision for income taxes for core
income |
7,771 |
6,501 |
7,203 |
14,974 |
10,752 |
|
|
|
|
|
|
Core net income |
$ 11,914 |
$ 10,074 |
$ 10,664 |
$ 22,578 |
$ 16,742 |
|
|
|
|
|
|
GAAP diluted earnings per common share |
$ 0.39 |
$ 0.32 |
$ 0.34 |
$ 0.73 |
$ 0.54 |
|
|
|
|
|
|
Net loss from fair value adjustments, net of
tax |
0.01 |
-- |
0.02 |
0.02 |
0.01 |
Other-than-temporary impairment charges, net
of tax |
-- |
0.01 |
-- |
-- |
0.01 |
Net gain on sale of securities, net of
tax |
-- |
-- |
-- |
-- |
(0.05) |
Penalty from prepayment of borrowings, net of
tax |
-- |
-- |
-- |
-- |
0.05 |
|
|
|
|
|
|
Core diluted earnings per common share* |
$ 0.40 |
$ 0.33 |
$ 0.36 |
$ 0.75 |
$ 0.55 |
|
|
|
|
|
|
* Core diluted earnings per
common share may not foot due to rounding. |
Reconciliation of GAAP Earnings and Core Earnings before
Provision for Loan Losses and Income Taxes
Although core earnings before the provision for loan losses and
income taxes are not a measure of performance calculated in
accordance with GAAP, the Company believes this measure of earnings
is an important indication of earnings through ongoing operations
that are available to cover possible loan losses and OTTI charges.
The Company believes this earnings measure is useful to management
and investors in evaluating its ongoing operating performance.
During the periods presented, the Company calculated this earnings
measure by adjusting GAAP income before income taxes by adding back
the penalty incurred from the prepayment of borrowings; and by
adding back or subtracting the benefit or provision for loan losses
the net gain or loss recorded on financial assets and financial
liabilities carried at fair value and the sale of securities.
|
Three Months Ended |
Six Months Ended |
|
June 30, |
June 30, |
March 31, |
June 30, |
June 30, |
|
2014 |
2013 |
2014 |
2014 |
2013 |
|
|
|
|
|
|
|
|
GAAP income before income taxes |
$ 19,283 |
$ 15,782 |
$ 17,223 |
$ 36,506 |
$ 26,857 |
|
|
|
|
|
|
(Benefit) provision for loan losses |
(1,092) |
3,500 |
(1,119) |
(2,211) |
9,500 |
Net loss from fair value adjustments |
402 |
308 |
644 |
1,046 |
431 |
Other-than-temporary impairment charges |
-- |
503 |
-- |
-- |
503 |
Net gain on sale of securities |
-- |
(18) |
-- |
-- |
(2,876) |
Penalty from prepayment of borrowings |
-- |
-- |
-- |
-- |
2,579 |
|
|
|
|
|
|
Core net income before the provision for loan
losses and income taxes |
$ 18,593 |
$ 20,075 |
$ 16,748 |
$ 35,341 |
$ 36,994 |
About Flushing Financial Corporation
Flushing Financial Corporation is the holding company for
Flushing Bank, a New York State-chartered commercial bank insured
by the Federal Deposit Insurance Corporation. The Bank serves
consumers, businesses, and public entities by offering a full
complement of deposit, loan, and cash management services through
its 17 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.
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, 2013 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, |
|
2014 |
2013 |
ASSETS |
|
|
Cash and due from banks |
$ 36,982 |
$ 33,485 |
Securities available for sale: |
|
|
Mortgage-backed securities |
770,545 |
756,156 |
Other securities |
288,137 |
261,634 |
Loans held for sale |
-- |
425 |
Loans: |
|
|
Multi-family residential |
1,784,111 |
1,712,039 |
Commercial real estate |
510,224 |
512,552 |
One-to-four family ― mixed-use
property |
581,207 |
595,751 |
One-to-four family ―
residential |
192,895 |
193,726 |
Co-operative apartments |
9,885 |
10,137 |
Construction |
4,717 |
4,247 |
Small Business
Administration |
7,543 |
7,792 |
Taxi medallion |
25,291 |
13,123 |
Commercial business and
other |
405,853 |
373,641 |
Net unamortized premiums and
unearned loan fees |
10,811 |
11,170 |
Allowance for loan losses |
(29,235) |
(31,776) |
Net loans |
3,503,302 |
3,402,402 |
Interest and dividends receivable |
17,524 |
17,370 |
Bank premises and equipment, net |
19,779 |
20,356 |
Federal Home Loan Bank of New York stock |
51,407 |
46,025 |
Bank owned life insurance |
111,137 |
109,606 |
Goodwill |
16,127 |
16,127 |
Other assets |
38,872 |
57,915 |
Total assets |
$ 4,853,812 |
$ 4,721,501 |
|
|
|
LIABILITIES |
|
|
Due to depositors: |
|
|
Non-interest bearing |
$ 213,263 |
$ 197,343 |
Interest-bearing: |
|
|
Certificate of deposit
accounts |
1,159,897 |
1,120,955 |
Savings accounts |
254,665 |
265,003 |
Money market accounts |
272,679 |
199,907 |
NOW accounts |
1,297,480 |
1,416,774 |
Total interest-bearing
deposits |
2,984,721 |
3,002,639 |
Mortgagors' escrow deposits |
40,987 |
32,798 |
Borrowed funds |
1,112,202 |
1,012,122 |
Other liabilities |
42,132 |
44,067 |
Total liabilities |
4,393,305 |
4,288,969 |
|
|
|
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, 2014 and
December 31, 2013; 30,185,040 shares and 30,123,252 shares
outstanding at June 30, 2014 and December 31, 2013,
respectively) |
315 |
315 |
Additional paid-in capital |
205,322 |
201,902 |
Treasury stock (1,345,555 shares and
1,407,343 shares at June 30, 2014 and December 31, 2013,
respectively) |
(22,048) |
(22,053) |
Retained earnings |
276,269 |
263,743 |
Accumulated other comprehensive income
(loss), net of taxes |
649 |
(11,375) |
Total stockholders' equity |
460,507 |
432,532 |
|
|
|
Total liabilities and
stockholders' equity |
$ 4,853,812 |
$ 4,721,501 |
|
|
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, |
|
2014 |
2013 |
2014 |
2013 |
|
|
|
Interest and dividend
income |
|
|
|
|
Interest and fees on loans |
$ 42,489 |
$ 42,861 |
$ 84,609 |
$ 85,801 |
Interest and dividends on securities: |
|
|
|
|
Interest |
6,867 |
7,174 |
13,742 |
14,128 |
Dividends |
195 |
236 |
384 |
411 |
Other interest income |
18 |
24 |
45 |
41 |
Total interest and dividend
income |
49,569 |
50,295 |
98,780 |
100,381 |
|
|
|
|
|
Interest expense |
|
|
|
|
Deposits |
7,670 |
8,093 |
15,388 |
16,384 |
Other interest expense |
5,070 |
4,906 |
10,076 |
12,555 |
Total interest
expense |
12,740 |
12,999 |
25,464 |
28,939 |
|
|
|
|
|
Net interest income |
36,829 |
37,296 |
73,316 |
71,442 |
Provision for loan losses |
(1,092) |
3,500 |
(2,211) |
9,500 |
Net interest income after provision
for loan losses |
37,921 |
33,796 |
75,527 |
61,942 |
|
|
|
|
|
Non-interest income
(loss) |
|
|
|
|
Other-than-temporary impairment ("OTTI")
charge |
-- |
(1,221) |
-- |
(1,221) |
Less: Non-credit portion of OTTI charge
recorded in Other |
|
|
|
|
Comprehensive Income, before
taxes |
-- |
718 |
-- |
718 |
Net OTTI charge recognized in earnings |
-- |
(503) |
-- |
(503) |
Banking services fee income |
867 |
1,228 |
1,576 |
2,268 |
Net gain on sale of securities |
-- |
18 |
-- |
2,876 |
Net gain on sale of loans |
-- |
152 |
-- |
143 |
Net loss from fair value adjustments |
(402) |
(308) |
(1,046) |
(431) |
Federal Home Loan Bank of New York stock
dividends |
430 |
401 |
981 |
815 |
Bank owned life insurance |
755 |
841 |
1,531 |
1,666 |
Other income |
336 |
370 |
654 |
713 |
Total non-interest income |
1,986 |
2,199 |
3,696 |
7,547 |
|
|
|
|
|
Non-interest expense |
|
|
|
|
Salaries and employee benefits |
11,944 |
10,961 |
24,522 |
23,194 |
Occupancy and equipment |
1,919 |
1,856 |
3,954 |
3,716 |
Professional services |
1,527 |
1,515 |
2,737 |
3,133 |
FDIC deposit insurance |
673 |
786 |
1,370 |
1,777 |
Data processing |
1,042 |
1,099 |
2,110 |
2,142 |
Depreciation and amortization |
717 |
734 |
1,432 |
1,501 |
Other real estate owned/foreclosure
expense |
279 |
444 |
535 |
1,112 |
Other operating expenses |
2,523 |
2,818 |
6,057 |
6,057 |
Total non-interest expense |
20,624 |
20,213 |
42,717 |
42,632 |
|
|
|
|
|
Income before income
taxes |
19,283 |
15,782 |
36,506 |
26,857 |
|
|
|
|
|
Provision for income
taxes |
|
|
|
|
Federal |
5,513 |
4,663 |
10,271 |
8,124 |
State and local |
2,085 |
1,492 |
4,254 |
2,350 |
Total taxes |
7,598 |
6,155 |
14,525 |
10,474 |
|
|
|
|
|
Net income |
$ 11,685 |
$ 9,627 |
$ 21,981 |
$ 16,383 |
|
|
|
|
|
|
|
|
|
|
Basic earnings per common share |
$ 0.39 |
$ 0.32 |
$ 0.73 |
$ 0.54 |
Diluted earnings per common share |
$ 0.39 |
$ 0.32 |
$ 0.73 |
$ 0.54 |
Dividends per common share |
$ 0.15 |
$ 0.13 |
$ 0.30 |
$ 0.26 |
|
|
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 six months |
|
ended June 30, |
ended June 30, |
|
2014 |
2013 |
2014 |
2013 |
Per Share Data |
|
|
|
|
Basic earnings per share |
$ 0.39 |
$ 0.32 |
$ 0.73 |
$ 0.54 |
Diluted earnings per share |
$ 0.39 |
$ 0.32 |
$ 0.73 |
$ 0.54 |
Average number of shares outstanding
for: |
|
|
|
|
Basic earnings per common share
computation |
30,059,373 |
30,213,053 |
30,021,998 |
30,329,721 |
Diluted earnings per common share
computation |
30,089,662 |
30,235,403 |
30,055,916 |
30,357,030 |
Book value per common share (1) |
$ 15.26 |
$ 14.04 |
$ 15.26 |
$ 14.04 |
Tangible book value per common share (2) |
$ 14.74 |
$ 13.52 |
$ 14.74 |
$ 13.52 |
|
|
|
|
|
Average Balances |
|
|
|
|
Total loans, net |
$ 3,485,934 |
$ 3,189,403 |
$ 3,438,886 |
$ 3,188,072 |
Total interest-earning assets |
4,578,764 |
4,276,834 |
4,532,558 |
4,216,184 |
Total assets |
4,833,038 |
4,537,245 |
4,785,602 |
4,482,262 |
Total due to depositors |
3,086,675 |
2,942,463 |
3,064,907 |
2,891,605 |
Total interest-bearing liabilities |
4,141,062 |
3,894,283 |
4,105,757 |
3,845,224 |
Stockholders' equity |
452,129 |
438,108 |
446,310 |
439,770 |
Common stockholders' equity |
452,129 |
438,108 |
446,310 |
439,770 |
|
|
|
|
|
Performance Ratios (3) |
|
|
|
|
Return on average assets |
0.97% |
0.85% |
0.92% |
0.73% |
Return on average equity |
10.34 |
8.79 |
9.85 |
7.45 |
Yield on average interest-earning assets |
4.33 |
4.70 |
4.36 |
4.76 |
Cost of average interest-bearing
liabilities |
1.23 |
1.34 |
1.24 |
1.51 |
Interest rate spread during period |
3.10 |
3.36 |
3.12 |
3.25 |
Net interest margin |
3.22 |
3.49 |
3.24 |
3.39 |
Non-interest expense to average assets |
1.71 |
1.78 |
1.79 |
1.90 |
Efficiency ratio (4) |
52.86 |
49.65 |
54.74 |
53.21 |
Average interest-earning assets to average
interest-bearing liabilities |
1.11x |
1.10x |
1.10x |
1.10x |
|
|
|
|
|
|
(1) Calculated by dividing
common stockholders' equity of $460.5 million and $422.7 million at
June 30, 2014 and 2013, respectively, by 30,185,040 and 30,103,613
shares outstanding at June 30, 2014 and 2013, respectively. |
(2) Calculated by dividing
tangible common stockholders' equity, a non-GAAP measure, of $444.8
million and $406.9 million at June 30, 2014 and 2013, respectively,
by 30,185,040 and 30,103,613 shares outstanding at June 30, 2014
and 2013, 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, 2014 and 2013 are presented on an annualized
basis. |
(4) Efficiency ratio, a
non-GAAP measure, was calculated by dividing non-interest expense
(excluding OREO expense and the net gain/loss from the sale of
OREO) by the total of net interest income (excluding prepayment
penalties paid on borrowings) and non-interest income (excluding
net gain/loss from fair value adjustments, OTTI charges and net
gains on the sale of securities). |
|
|
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, 2014 |
December 31, 2013 |
|
|
|
Selected Financial Ratios and Other
Data |
|
|
|
|
|
Regulatory capital ratios (for Flushing
Financial Corporation): |
|
|
Core capital |
9.82% |
9.70% |
Tier 1 risk-based capital |
14.54 |
14.93 |
Total risk-based capital |
15.44 |
15.97 |
|
|
|
Regulatory capital ratios (for Flushing Bank
only): |
|
|
Core capital (well capitalized
= 5%) |
9.54% |
9.48% |
Tier 1 risk-based capital (well
capitalized = 6%) |
14.13 |
14.59 |
Total risk-based capital (well
capitalized = 10%) |
15.02 |
15.63 |
|
|
|
Capital ratios: |
|
|
Average equity to average
assets |
9.33% |
9.45% |
Equity to total assets |
9.49 |
9.16 |
Tangible common equity to
tangible assets |
9.19 |
8.86 |
|
|
|
Asset quality: |
|
|
Non-accrual loans (excludes
performing non-accrual TDR) |
$ 42,811 |
$ 48,362 |
Non-performing loans |
45,791 |
48,968 |
Non-performing assets |
47,137 |
53,824 |
Net charge-offs |
330 |
13,263 |
|
|
|
Asset quality ratios: |
|
|
Non-performing loans to gross
loans |
1.30% |
1.43% |
Non-performing assets to total
assets |
0.97 |
1.14 |
Allowance for loan losses to
gross loans |
0.83 |
0.93 |
Allowance for loan losses to
non-performing assets |
62.02 |
59.04 |
Allowance for loan losses to
non-performing loans |
63.84 |
64.89 |
|
|
|
Full-service customer facilities |
17 |
17 |
|
|
FLUSHING FINANCIAL
CORPORATION and SUBSIDIARIES |
NET INTEREST
MARGIN |
(Dollars in thousands) |
(Unaudited) |
|
|
|
|
|
|
|
|
For the three months
ended June 30, |
|
2014 |
2013 |
|
Average |
|
Yield/ |
Average |
|
Yield/ |
|
Balance |
Interest |
Cost |
Balance |
Interest |
Cost |
Assets |
|
|
|
|
|
|
Interest-earning assets: |
|
|
|
|
|
|
Mortgage loans, net
(1) |
$ 3,039,477 |
38,330 |
5.04% |
$ 2,883,200 |
39,816 |
5.52% |
Other loans, net (1) |
446,457 |
4,159 |
3.73 |
306,203 |
3,045 |
3.98 |
Total loans, net |
3,485,934 |
42,489 |
4.88 |
3,189,403 |
42,861 |
5.38 |
Mortgage-backed securities |
769,474 |
5,320 |
2.77 |
794,233 |
5,868 |
2.96 |
Other securities |
283,200 |
1,742 |
2.46 |
243,983 |
1,542 |
2.53 |
Total securities |
1,052,674 |
7,062 |
2.68 |
1,038,216 |
7,410 |
2.85 |
Interest-earning deposits and
federal funds sold |
40,156 |
18 |
0.18 |
49,215 |
24 |
0.20 |
Total interest-earning assets |
4,578,764 |
49,569 |
4.33 |
4,276,834 |
50,295 |
4.70 |
Other assets |
254,274 |
|
|
260,411 |
|
|
Total assets |
$ 4,833,038 |
|
|
$ 4,537,245 |
|
|
|
|
|
|
|
|
|
Liabilities and Equity |
|
|
|
|
|
|
Interest-bearing liabilities: |
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
Savings accounts |
$ 258,659 |
116 |
0.18 |
$ 276,570 |
128 |
0.19 |
NOW accounts |
1,458,612 |
1,586 |
0.43 |
1,337,479 |
1,789 |
0.54 |
Money market accounts |
216,394 |
126 |
0.23 |
184,422 |
73 |
0.16 |
Certificate of deposit
accounts |
1,153,010 |
5,810 |
2.02 |
1,143,992 |
6,095 |
2.13 |
Total due to depositors |
3,086,675 |
7,638 |
0.99 |
2,942,463 |
8,085 |
1.10 |
Mortgagors' escrow
accounts |
57,213 |
32 |
0.22 |
55,795 |
8 |
0.06 |
Total deposits |
3,143,888 |
7,670 |
0.98 |
2,998,258 |
8,093 |
1.08 |
Borrowed funds |
997,174 |
5,070 |
2.03 |
896,025 |
4,906 |
2.19 |
Total interest-bearing
liabilities |
4,141,062 |
12,740 |
1.23 |
3,894,283 |
12,999 |
1.34 |
Non interest-bearing
deposits |
202,809 |
|
|
164,327 |
|
|
Other liabilities |
37,038 |
|
|
40,527 |
|
|
Total liabilities |
4,380,909 |
|
|
4,099,137 |
|
|
Equity |
452,129 |
|
|
438,108 |
|
|
Total liabilities and
equity |
$ 4,833,038 |
|
|
$ 4,537,245 |
|
|
|
|
|
|
|
|
|
Net interest income / net interest rate
spread |
|
$ 36,829 |
3.10% |
|
$ 37,296 |
3.36% |
|
|
|
|
|
|
|
Net interest-earning assets / net interest
margin |
$ 437,702 |
|
3.22% |
$ 382,551 |
|
3.49% |
|
|
|
|
|
|
|
Ratio of interest-earning assets to
interest-bearing liabilities |
|
|
1.11x |
|
|
1.10x |
|
|
|
|
|
|
|
(1) Loan interest income
includes loan fee income (which includes net amortization of
deferred fees and costs, late charges, and prepayment penalties) of
approximately $1.1 million for each of the three month periods
ended June 30, 2014 and 2013, respectively. |
|
|
FLUSHING FINANCIAL
CORPORATION and SUBSIDIARIES |
NET INTEREST
MARGIN |
(Dollars in thousands) |
(Unaudited) |
|
|
|
|
|
|
|
|
For the six months ended
June 30, |
|
2014 |
2013 |
|
Average |
|
Yield/ |
Average |
|
Yield/ |
|
Balance |
Interest |
Cost |
Balance |
Interest |
Cost |
Assets |
|
|
|
|
|
|
Interest-earning assets: |
|
|
|
|
|
|
Mortgage loans, net (1) |
$ 3,015,208 |
76,912 |
5.10% |
$ 2,882,614 |
79,563 |
5.52% |
Other loans, net (1) |
423,678 |
7,697 |
3.63 |
305,458 |
6,238 |
4.08 |
Total loans, net |
3,438,886 |
84,609 |
4.92 |
3,188,072 |
85,801 |
5.38 |
Mortgage-backed securities |
769,693 |
10,710 |
2.78 |
751,841 |
11,589 |
3.08 |
Other securities |
276,663 |
3,416 |
2.47 |
232,148 |
2,950 |
2.54 |
Total securities |
1,046,356 |
14,126 |
2.70 |
983,989 |
14,539 |
2.96 |
Interest-earning deposits and federal
funds sold |
47,316 |
45 |
0.19 |
44,123 |
41 |
0.19 |
Total interest-earning assets |
4,532,558 |
98,780 |
4.36 |
4,216,184 |
100,381 |
4.76 |
Other assets |
253,044 |
|
|
266,078 |
|
|
Total assets |
$ 4,785,602 |
|
|
$ 4,482,262 |
|
|
|
|
|
|
|
|
|
Liabilities and Equity |
|
|
|
|
|
|
Interest-bearing liabilities: |
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
Savings accounts |
$ 261,161 |
235 |
0.18 |
$ 280,753 |
263 |
0.19 |
NOW accounts |
1,465,276 |
3,279 |
0.45 |
1,261,541 |
3,371 |
0.53 |
Money market accounts |
206,976 |
233 |
0.23 |
164,027 |
127 |
0.15 |
Certificate of deposit
accounts |
1,131,494 |
11,596 |
2.05 |
1,185,284 |
12,606 |
2.13 |
Total due to depositors |
3,064,907 |
15,343 |
1.00 |
2,891,605 |
16,367 |
1.13 |
Mortgagors' escrow
accounts |
50,293 |
45 |
0.18 |
49,005 |
17 |
0.07 |
Total deposits |
3,115,200 |
15,388 |
0.99 |
2,940,610 |
16,384 |
1.11 |
Borrowed funds |
990,557 |
10,076 |
2.03 |
904,614 |
12,555 |
2.78 |
Total interest-bearing
liabilities |
4,105,757 |
25,464 |
1.24 |
3,845,224 |
28,939 |
1.51 |
Non interest-bearing deposits |
196,285 |
|
|
156,386 |
|
|
Other liabilities |
37,250 |
|
|
40,882 |
|
|
Total liabilities |
4,339,292 |
|
|
4,042,492 |
|
|
Equity |
446,310 |
|
|
439,770 |
|
|
Total liabilities and
equity |
$ 4,785,602 |
|
|
$ 4,482,262 |
|
|
|
|
|
|
|
|
|
Net interest income / net interest rate
spread |
|
$ 73,316 |
3.12% |
|
$ 71,442 |
3.25% |
|
|
|
|
|
|
|
Net interest-earning assets / net interest
margin |
$ 426,801 |
|
3.24% |
$ 370,960 |
|
3.39% |
|
|
|
|
|
|
|
Ratio of interest-earning assets
to interest-bearing liabilities |
1.10x |
|
|
1.10x |
|
|
|
|
|
|
|
(1) Loan interest income
includes loan fee income (which includes net amortization of
deferred fees and costs, late charges, and prepayment penalties) of
approximately $2.2 million and $1.8 million for the six months
ended June 30, 2014 and 2013, respectively. |
CONTACT: David Fry
Senior Executive Vice President, Treasurer
and Chief Financial Officer
Flushing Financial Corporation
(718) 961-5400
Flushing Financial (NASDAQ:FFIC)
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から 6 2024 まで 7 2024
Flushing Financial (NASDAQ:FFIC)
過去 株価チャート
から 7 2023 まで 7 2024