Third Quarter 2015
- Core diluted earnings per common share, a non-GAAP measure,
were $0.40, an increase of $0.04, or 11.1%, from the trailing
quarter.
- Core return on average assets and core return on average
equity, both non-GAAP measures, increased to 0.9% and 10.0%,
respectively, from 0.8% and 9.1% in the trailing quarter,
respectively.
- GAAP diluted earnings per common share were $0.38, a decrease
of $0.13, or 25.5%, from the trailing quarter.
- GAAP return on average assets and GAAP return on average equity
decreased to 0.8% and 9.5%, respectively, from 1.1% and 12.7%,
respectively, for the trailing quarter.
- Record loan originations and purchases totaling $334.5 million
for the three months ended September 30, 2015.
- Loan portfolio grew $169.9 million, an annualized rate of
17.0%, in the three months ended September 30, 2015.
- Loan pipeline remained strong at $381.9 million at September
30, 2015.
- The net interest margin was 3.05% for the three months ended
September 30, 2015, an increase of two basis points from the
trailing quarter.
- Record net interest income of $39.3 million for the three
months ended September 30, 2015.
- Net recoveries for the three months ended September 30, 2015
were $0.3 million.
- The provision for loan losses was a benefit of $0.4 million for
the three months ended September 30, 2015, compared to a benefit of
$0.5 million and $0.6 million recorded for the three months ended
June 30, 2015 and September 30, 2014, respectively.
- Opened our 19th full-service branch at 99 Park Ave in
Manhattan, NY, which uses the Universal Banking Model.
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 nine months ended
September 30, 2015.
John R. Buran, President and Chief Executive Officer, stated:
"We are pleased to report another quarter of strong earnings due to
record loan originations and purchases, and continued improvements
in credit quality and deposit growth. During the quarter, we opened
our second branch in Manhattan, NY, utilizing the Universal Banking
Model, which we expect to reduce future branch operating costs. The
record loan originations and purchases this quarter allowed us to
grow net interest income.
"Core diluted earnings per common share were $0.40 for the third
quarter of 2015, which was an increase of $0.04 from the trailing
quarter. The net interest margin increased by two basis points
while the loan portfolio grew by $169.9 million and resulted in
record net interest income of $39.3 million for the quarter ended
September 30, 2015.
"During the current quarter, loan originations and purchases
totaled $334.5 million, 88.4% of which were multi-family
residential, commercial real estate and commercial business loans.
We continued our focus on the origination of commercial real estate
loans due to the higher yields and commercial business loans due to
the adjustable rates. We are positioning the balance sheet to hold
a larger percentage of assets which will re-price when the Federal
Reserve increases rates. This quarter we purchased $65.1 million
and $20.0 million in commercial real estate mortgages and
multi-family real estate mortgages, respectively. The weighted
average yield on loan originations and purchases were 3.56%, 3.79%
and 3.36% for the quarters ended September 30, 2015, June 30, 2015
and September 30, 2014, respectively. The loan pipeline remains
strong totaling $381.9 million at September 30, 2015, and has
increased during the current month.
"Credit quality continued to improve as non-accrual loans
decreased $1.2 million, or 4.2%, to $26.3 million at September 30,
2015 from $27.5 million at June 30, 2015. This represents the
lowest level of non-accrual loans since September 2008. Classified
assets decreased by $0.5 million, or 1.0%, to $45.2 million at
September 30, 2015 from $45.7 million at June 30, 2015. Classified
loans are now at their lowest level since December 2008. We
recorded our seventh consecutive quarterly benefit for loan losses,
which totaled $0.4 million for the quarter ended September 30,
2015, due to the decreases in non-accrual and classified loans
along with the net recoveries realized in the quarter of $0.3
million. We continued our practice of obtaining updated appraisals
and recorded charge-offs based on these current values. The process
has ensured that we have kept pace with changing values in the real
estate market. The current average loan-to-value for non-performing
loans collateralized by real estate was 44.6% at September 30,
2015.
"Our net interest margin for the third quarter of 2015 was
3.05%, an increase of two basis points from the second quarter of
2015. Net interest income increased $1.2 million during the three
months ended September 30, 2015 to $39.3 million, compared to the
second quarter of 2015 due to the increase in interest-earning
assets. The increase in net interest income was affected in the
third quarter of 2015 by elevated levels of prepayment penalty
income and interest recovered from non-accrual loans. Absent these
two items, the net interest margin would have decreased by five
basis points to 2.85% for the third quarter of 2015 from 2.90% for
the second quarter of 2015.
"During the third quarter of 2015, non-interest expense
decreased $0.5 million to $23.7 million compared to $24.2 million
in the trailing quarter. The trailing quarter included a write-down
of $0.8 million on one other real estate owned ("OREO") property to
reduce the carrying value to its net realizable value and the
expenses related to the move to our new headquarters totaling $0.4
million. Adjusting the trailing quarter for these two items,
non-interest expense increased by $0.7 million for the quarter
ended September 30, 2015, as compared to the trailing quarter. The
adjusted increase in non-interest expense was primarily due to
increased professional services totaling $0.6 million for enhancing
our compliance program."
September 30, 2015, the Bank was considered to be
well-capitalized under all regulatory requirements, with Tier 1
leverage, Common Equity Tier 1, Tier 1 Risk-based, and Total
Risk-based capital ratios of 9.02%, 12.86%, 12.86% and 13.47%,
respectively. The Company also is subject to the same regulatory
requirements. At September 30, 2015, the Company's capital ratios
for Tier 1 leverage, Common Equity Tier 1, Tier 1 Risk-based, and
Total Risk-based capital ratios were 8.93%, 12.01%, 12.74% and
13.34%, respectively.
Core earnings, is a non-GAAP measure, that excludes the effects
of net gains from sale of buildings, net gains and losses from fair
value adjustments, net gains from the sale of securities and
penalties from the prepayment of long-term borrowings. Core
earnings were $11.6 million for the three months ended September
30, 2015, an increase of $0.1 million, or 1.0%, from $11.5 million
in the comparable prior year period. Core diluted earnings per
common share were $0.40 for the three months ended September 30,
2015, an increase of $0.02, or 5.3%, from the comparable prior year
period.
Core earnings were $31.3 million for the nine months ended
September 30, 2015, a decrease of $2.8 million, or 8.1%, from $34.0
million in the comparable prior year period. Core diluted earnings
per common share were $1.07 for the nine months ended September 30,
2015, a decrease of $0.07, or 6.1%, 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 Earnings and Core Earnings."
Earnings Summary - Three Months Ended September 30,
2015
Net income for the three months ended September 30, 2015 was
$11.0 million, a decrease of $0.2 million, or 1.7%, compared to
$11.2 million for the three months ended September 30, 2014.
Diluted earnings per common share were $0.38 for the three months
ended September 30, 2015 and 2014.
Return on average equity decreased to 9.5% for the three months
ended September 30, 2015 from 9.9% for the three months ended
September 30, 2014. Return on average assets decreased to 0.8% for
the three months ended September 30, 2015 from 0.9% for the three
months ended September 30, 2014.
For the three months ended September 30, 2015, net interest
income was $39.3 million, an increase of $7.4 million, or 23.0%,
from $32.0 million for the three months ended September 30, 2014.
The increase in net interest income was due to the growth of net
interest-earning assets, an increase in prepayment penalty income
and the absence of a $5.2 million prepayment penalty recorded on
borrowings in the comparable 2014 period as a result of a balance
sheet deleveraging.
Excluding the $5.2 million prepayment penalty on borrowings
during the three months ended September 30, 2014, net interest
income would have increased by $2.2 million, or 5.8%, for the
quarter ended September 30, 2015. Average interest-earning assets
increased $544.0 million to $5,151.0 million for the three months
ended September 30, 2015 from $4,607.0 million for the comparable
prior year period while the yield decreased 24 basis points to
4.03% for the quarter ended September 30, 2015 from 4.27% for the
comparable prior year period. Absent the prepayment penalty on
borrowings, the cost of interest-bearing liabilities would have
decreased seven basis points to 1.09% for the three months ended
September 30, 2015 as compared to 1.16% for the quarter ended
September 30, 2014. The effects of the above on both the net
interest spread and net interest margin was a decrease of 17 basis
points to 2.94% and 3.05%, respectively, for the quarter ended
September 30, 2015, compared to the quarter ended September 30,
2014. Included in net interest income for the three months ended
September 30, 2015 and 2014 was prepayment penalty income from
loans and securities totaling $2.2 million and $1.4 million,
respectively, along with recovered interest from non-accrual loans
totaling $0.4 million and $0.3 million, respectively. Without the
prepayment penalty income, recovered interest and prepayment
penalty on borrowings, the net interest margin for the three months
ended September 30, 2015 would have been 2.85%, a decrease of 22
basis points, as compared to 3.07% for the three months ended
September 30, 2014.
The decline in the yield on interest-earning assets of 24 basis
points was primarily due to a 34 basis point reduction in the yield
of the loan portfolio to 4.45% for the three months ended September
30, 2015 from 4.79% for the three months ended September 30, 2014,
combined with an increase of $50.5 million in the average balance
of lower yielding interest-earning deposits and federal funds sold
to $76.5 million for the three months ended September 30, 2015 from
$26.0 million in the comparable prior year period. The yield on
interest-earning assets was positively impacted by an increase of
$503.3 million in the average balance of the higher yielding total
loans, net to $4,069.7 million for the three months ended September
30, 2015 from $3,566.4 million for the comparable prior year
period. Additionally, the yield of the securities portfolio
increased eight basis points to 2.64% for three months ended
September 30, 2015, from 2.56% for the comparable prior year
period. The 34 basis point decrease in the yield of the loan
portfolio was primarily due to the decline in the rates earned on
new loan originations, as compared to the existing portfolio,
existing loans modifying to lower rates, and higher yielding loans
prepaying. The eight basis point increase in the yield of the
security portfolio was primarily due to prepayment penalty income
of $0.2 million for the three months ended September 30, 2015,
whereas no prepayment penalty income was received on securities in
the comparable prior year period. Excluding prepayment penalty
income from loans and securities, the yield on total loans, net,
would have decreased 37 basis points to 4.25% for the three months
ended September 30, 2015 from 4.62% for the three months ended
September 30, 2014, while the yield on total securities was 2.56%
for the three months ended September 30, 2015 and 2014.
Excluding the $5.2 million prepayment penalty on borrowings
during the three months ended September 30, 2014, the seven basis
point decrease in the cost of interest-bearing liabilities was
primarily attributable to decreases of 23 basis points and 16 basis
points in the cost of certificates of deposit and borrowed funds,
respectively. The decrease in the cost of certificates of deposit
and borrowed funds was primarily due to maturing issuances being
replaced at lower rates. These decreases were partially offset by
increases of 26 basis points, 13 basis points, and three basis
points in the cost of savings, money market and NOW accounts
respectively, for the three months ended September 30, 2015 from
the comparable prior year period. The cost of savings accounts
increased as we increased the rate we pay on some of our savings
products to attract additional deposits. The cost of money market
accounts increased primarily due to our shifting Government NOW
deposits to a money market product which does not require us to
provide collateral, which allows us to invest these funds in higher
yielding assets. The cost of NOW accounts increased primarily due
to an increase in the rate we pay on our premium checking product.
Additionally, the cost of interest-bearing liabilities was
negatively affected by increases of $137.9 million and $132.8
million in the average balance of higher costing borrowed funds and
certificates of deposit, respectively, during the three months
ended September 30, 2015, which was partially offset by an increase
of $219.3 million in the average balance of lower costing core
deposits during the three months ended September 30, 2015 to
$2,081.8 million from $1,862.5 million for the comparable prior
year period.
The net interest margin for the three months ended September 30,
2015 was 3.05%, an increase of two basis points from 3.03% for the
three months ended June 30, 2015. The yield on interest-earning
assets increased four basis points during the three months ended
September 30, 2015 to 4.03%, which was partially offset by an
increase of three basis points in the cost of interest-bearing
liabilities to 1.09% from the three months ended June 30, 2015. The
yield on total loans increased two basis points to 4.45% for the
three months ended September 30, 2015 from 4.43% for the three
months ended June 30, 2015, while the yield on total securities
increased 18 basis points to 2.64% for the three months ended
September 30, 2015 from 2.46% for the three months ended June 30,
2015. The three months ended September 30, 2015 included $0.4
million in recovered interest collected from non-accrual loans
compared to $0.1 million recorded during the three months ended
June 30, 2015. Excluding the recovered interest collected from
non-accrual loans, the net interest margin was 3.02% for the three
months ended September 30, 2015 and June 30, 2015. Further
excluding prepayment penalty income from loans and securities
totaling $2.2 million and $1.5 million recorded during the three
months ended September 30, 2015 and June 30, 2015, respectively,
the net interest margin decreased five basis points to 2.85% for
the three months ended September 30, 2015 from 2.90% for the three
months ended June 30, 2015.
The benefit for loan losses for the three months ended September
30, 2015 was $0.4 million, a decrease of $0.2 million from a
benefit of $0.6 million recorded during the comparable prior year
period. The benefit recorded during the three months ended
September 30, 2015 was primarily due to the continued improvement
in credit conditions and an improvement in the impact of the
qualitative factors used in the calculation of the allowance for
loan losses. During the three months ended September 30, 2015,
non-accrual loans decreased $1.2 million to $26.3 million from
$27.5 million at June 30, 2015 and net recoveries totaled $0.3
million. The current average loan-to-value ratio for our
non-performing loans collateralized by real estate was 44.6% at
September 30, 2015. 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 $0.4 million for the three months ended
September 30, 2015.
Non-interest income for the three months ended September 30,
2015 was $1.7 million, a decrease of $5.4 million, or 76.2%, from
$7.1 million for the three months ended September 30, 2014. The
decrease in non-interest income was primarily due to the $5.2
million net gain from the sale of mortgage-backed securities during
the three months ended September 30, 2014, as part of our balance
sheet deleveraging. Additionally, non-interest income decreased due
to an increase of $0.6 million in net losses from fair value
adjustments, partially offset by $0.3 million in net gains on sale
of loans recorded during the three months ended September 30,
2015.
Non-interest expense was $23.7 million for the three months
ended September 30, 2015, an increase of $2.3 million, or 10.6%,
from $21.4 million for the three months ended September 30, 2014.
The increase in non-interest expense was primarily due to increases
of $0.8 million in other operating expense, $0.5 million in
salaries and benefits, $0.4 million in occupancy and equipment,
$0.3 million in professional services, $0.3 million in depreciation
and amortization and $0.2 million in data processing expense. The
increase in salaries and benefits was primarily due to increased
staffing for technology, risk/compliance and retail departments.
The increases in occupancy and equipment and depreciation and
amortization were primarily due to the opening of two new branches
along with the move to and consolidation of staff at our new larger
corporate headquarters in 2015. The increase in professional
services was primarily due to increased costs to enhance our
compliance programs and advertising expense. These increases were
partially offset by a decrease of $0.3 million in foreclosure
expenses. The efficiency ratio increased to 56.2% for the three
months ended September 30, 2015 from 54.1% for the three months
ended September 30, 2014, primarily due to the increased expenses
discussed above.
The provision for income taxes for the three months ended
September 30, 2015 was $6.7 million, a decrease of $0.4 million, or
5.7%, from $7.1 million for the comparable prior year period. The
decrease was primarily due to a decrease of $0.6 million in income
before income taxes and a reduction in the effective tax rate to
37.7% for the three months ended September 30, 2015 from 38.7% in
the comparable prior year period. The decrease in the effective tax
rate reflects the greater impact that preferential tax items had on
the Company's tax liability during the three months ended September
30, 2015 compared to the three months ended September 30, 2014.
Earnings Summary - Nine Months Ended September 30,
2015
Net income for the nine months ended September 30, 2015 was
$34.6 million, an increase of $1.4 million, or 4.2%, compared to
$33.2 million for the nine months ended September 30, 2014. Diluted
earnings per common share were $1.18 for the nine months ended
September 30, 2015, an increase of $0.07, or 6.3%, from $1.11 for
the nine months ended September 30, 2014.
Return on average equity increased to 10.0% for the nine months
ended September 30, 2015, from 9.9% for the nine months ended
September 30, 2014. Return on average assets was 0.9% for the nine
months ended September 30, 2015 and 2014.
For the nine months ended September 30, 2015, net interest
income was $115.0 million, an increase of $9.7 million, or 9.2%,
from $105.3 million for the nine months ended September 30, 2014.
The increase in net interest income was due to the growth of net
interest-earning assets, an increase in prepayment penalty income
and the absence of a $5.2 million prepayment penalty recorded on
borrowings in the comparable 2014 period as a result of a balance
sheet deleveraging.
Excluding the $5.2 million prepayment penalty on borrowings
during the nine months ended September 30, 2014, net interest
income would have increased $4.5 million, or 4.1% to $115.0 million
from $110.5 million for the nine months ended September 30, 2014.
Average interest-earning assets increased $458.9 million to
$5,016.5 million for the nine months ended September 30, 2015 from
$4,557.7 million for the comparable prior year period while the
yield decreased 30 basis points to 4.03% for the nine months ended
September 30, 2015 from 4.33% for the comparable prior year period.
Absent the prepayment penalty on borrowings, the cost of
interest-bearing liabilities would have decreased 13 basis points
to 1.08% for the nine months ended September 30, 2015 as compared
to 1.21% for the nine months ended September 30, 2014. The effects
of the above on both the net interest spread and net interest
margin was a decrease of 17 basis points to 2.95% and 3.06%,
respectively, for the nine months ended September 30, 2015.
Included in net interest income for the nine months ended September
30, 2015 and 2014 was prepayment penalty income from loans and
securities totaling $4.9 million and $4.1 million, respectively,
along with recovered interest from non-accrual loans totaling $1.2
million and $1.0 million, respectively. Without the prepayment
penalty income, recovered interest and prepayment penalty on
borrowings, the net interest margin for the nine months ended
September 30, 2015 would have been 2.89%, a decrease of 19 basis
points, as compared to 3.08% for the nine months ended September
30, 2015.
The decline in the yield on interest-earning assets of 30 basis
points was primarily due to a 40 basis point reduction in the yield
of the loan portfolio to 4.47% for the nine months ended September
30, 2015 from 4.87% for the nine months ended September 30, 2014,
combined with a 14 basis point decline in the yield on total
securities to 2.52% for the nine months ended September 30, 2015
from 2.66% for the comparable prior year period. The yield on
interest-earning assets was positively impacted by an increase of
$485.4 million in the average balance of the higher yielding total
loans, net to $3,967.2 million for the nine months ended September
30, 2015 from $3,481.8 million for the comparable prior year period
and a decrease of $46.5 million in the average balance of the lower
yielding total securities portfolio to $989.2 million for the nine
months ended September 30, 2015 from $1,035.7 million for the
comparable prior year period. The 40 basis point decrease in the
yield of the loan portfolio was primarily due to the decline in the
rates earned on new loan originations, as compared to the existing
portfolio, existing loans modifying to lower rates, and higher
yielding loans prepaying. The 14 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.
Excluding prepayment penalty income from loans, the yield on total
loans, net, would have decreased 41 basis points to 4.31% for the
nine months ended September 30, 2015 from 4.72% for the nine months
ended September 30, 2014, while the yield on total securities
decreased 16 basis points to 2.50% for the nine months ended
September 30, 2015 from 2.66% for the nine months ended September
30, 2014.
Excluding the $5.2 million prepayment penalty on borrowings
during the nine months ended September 30, 2014, the 13 basis point
decrease in the cost of interest-bearing liabilities was primarily
attributable to decreases of 37 basis points and 24 basis points in
the cost of certificates of deposit and borrowed funds,
respectively. The decrease in the cost of certificates of deposit
and borrowed funds was primarily due to maturing issuances being
replaced at lower rates. These decreases were partially offset by
increases of 25 basis points and 13 basis points in the cost of
savings and money market accounts, respectively, for the nine
months ended September 30, 2015 from the comparable prior year
period. The cost of savings accounts increased as we increased the
rate we pay on some of our savings products to attract additional
deposits. The cost of money market accounts increased primarily due
to our shifting Government NOW deposits to a money market product
which does not require us to provide collateral, which will allow
us to invest these funds in higher yielding assets. Additionally,
the cost of interest-bearing liabilities was negatively affected by
increases of $169.2 million and $81.3 million in the average
balance of higher costing certificates of deposit and borrowed
funds, respectively, during the nine months ended September 30,
2015, which was partially offset by an increase of $150.6 million
in the average balance of lower costing core deposits during the
nine months ended September 30, 2015 to $2,060.1 million from
$1,909.5 million for the comparable prior year period.
The benefit for loan losses for the nine months ended September
30, 2015 was $1.6 million, a decrease of $1.2 million, or 42.7%,
from a benefit of $2.8 million during the comparable prior year
period. The benefit recorded during the nine months ended September
30, 2015 was primarily due to the continued improvement in credit
conditions and an improvement in the impact of the qualitative
factors used in the calculation of the allowance for loan losses.
During the nine months ended September 30, 2015, non-accrual loans
decreased $5.6 million to $26.3 million from $31.9 million at
December 31, 2014 and net charge-offs continued to be minimal at
$0.5 million, or two basis points of average loans, for the nine
months ended September 30, 2015. The current average loan-to-value
ratio for our non-performing loans collateralized by real estate
was 44.6% at September 30, 2015. 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 $1.6
million for the nine months ended September 30, 2015.
Non-interest income for the nine months ended September 30, 2015
was $13.6 million, an increase of $2.8 million, or 25.5%, from
$10.8 million for the nine months ended September 30, 2014. The
increase in non-interest income was primarily due to increases of
$6.5 million in net gains on sale of buildings, as we sold and
leased back our Brooklyn branch buildings, $0.4 million in net
gains on sale of loans and $0.4 million in investment products.
Additionally, non-interest income increased due to a decrease of
$0.6 million in net losses from fair value adjustments. These
increases to non-interest income were partially offset by a
decrease of $5.0 million in net gains on sale of securities,
primarily due to the prior year comparable period including a gain
on sale of securities totaling $5.2 million, as part of a balance
sheet deleveraging.
Non-interest expense was $73.9 million for the nine months ended
September 30, 2015, an increase of $9.7 million, or 15.2%, from
$64.2 million for the nine months ended September 30, 2014. The
increase in non-interest expense was primarily due to increases of
$3.8 million in salaries and benefits, $2.7 million in other
operating expense and $1.8 million in occupancy and equipment
expense. The increase in salaries and benefits was primarily due to
annual salary increases, increases in staffing in the technology,
risk/compliance and retail departments, as well as an increase in
restricted stock expense. The increase in other operating expense
was primarily due to $0.3 million in ATM fraud losses recorded in
the first quarter of 2015, $0.7 million in expenses related to the
move of our corporate headquarters $1.0 million in expenses related
to the growth of the Bank and an increase of $0.7 million in net
losses from the sale of OREO. The growth in occupancy and equipment
expense was primarily due to $0.2 million recorded in the first
quarter of 2015 for temporary staff for additional security to
guard against further ATM fraud losses, increases in rent expense
of $1.1 million for our new corporate headquarters and new branch
at the same location and $0.4 million from additional space in
Manhattan for Business Bankers and a new branch location, which
opened in September 2015. Additionally, during the current period
the Bank also experienced increases of $0.7 million in professional
services, primarily due to costs related to enhancing our
compliance program and $0.4 million, $0.3 million and $0.2 million
in depreciation and amortization expense, data processing expense
and FDIC insurance expense, respectively, due to the growth of the
Bank, partially offset by a decrease of $0.2 million in OREO
foreclosure expense. The efficiency ratio increased to 59.5% for
the nine months ended September 30, 2015 from 54.5% for the nine
months ended September 30, 2014, primarily due to the increased
expenses discussed above.
The provision for income taxes for the nine months ended
September 30, 2015 was $21.7 million, an increase of $0.1 million,
or 0.7%, from $21.6 million for the comparable prior year period.
The increase was primarily due to an increase of $1.5 million in
income before income taxes, partially offset by a decrease in the
effective tax rate to 38.6% for the nine months ended September 30,
2015 from 39.4% for the nine months ended September 30, 2014. The
decrease in the effective tax rate was primarily due to the prior
year being affected by changes in New York State tax code passed on
March 31, 2014, which resulted in a reduction in the Company's
deferred tax assets and a corresponding increase in tax expense
during the nine months ended September 30, 2014.
Balance Sheet Summary – At September 30,
2015
Total assets at September 30, 2015 were $5,502.1 million, an
increase of $425.1 million, or 8.4%, from $5,077.0 million at
December 31, 2014. Total loans, net increased $392.7 million, or
10.4%, during the nine months ended September 30, 2015 to $4,178.0
million from $3,785.3 million at December 31, 2014. Loan
originations and purchases were $837.9 million for the nine months
ended September 30, 2015, an increase of $200.5 million from $637.3
million for the nine months ended September 30, 2014. During the
nine months ended September 30, 2015, we continued to focus on the
origination of multi-family residential, commercial real estate and
commercial business loans with a full relationship. The loan
pipeline remained strong, totaling $381.9 million at September 30,
2015 compared to $295.9 million at December 31, 2014.
The following table shows loan originations and purchases for
the periods indicated. The table includes loan purchases of $90.3
million and $10.9 million for the three months ended September 30,
2015 and 2014, respectively. Loan purchases were $216.3 million and
$55.1 million for the nine months ended September 30, 2015 and
2014, respectively.
|
For the three months |
For the nine months |
|
ended September 30, |
ended September 30, |
(In thousands) |
2015 |
2014 |
2015 |
2014 |
Multi-family residential |
$ 91,306 |
$ 79,753 |
$ 268,481 |
$ 244,762 |
Commercial real estate |
151,358 |
68,875 |
295,084 |
100,496 |
One-to-four family – mixed-use property |
20,008 |
13,938 |
44,905 |
32,366 |
One-to-four family – residential |
12,618 |
5,426 |
34,696 |
20,930 |
Co-operative apartments |
1,915 |
-- |
2,365 |
-- |
Construction |
1,999 |
404 |
3,386 |
1,401 |
Small Business Administration |
2,232 |
499 |
8,713 |
1,077 |
Taxi Medallion |
-- |
893 |
-- |
14,431 |
Commercial business and other |
53,028 |
78,382 |
180,239 |
221,880 |
Total |
$ 334,464 |
$ 248,170 |
$ 837,869 |
$ 637,343 |
The average rate on mortgage loan originations and purchases was
3.58% for the three months ended September 30, 2015 and 2014. The
average rate on non-mortgage loan originations and purchases was
3.43% and 2.89% for the three months ended September 30, 2015 and
2014, respectively. The average rate on total loan originations and
purchases was 3.56% and 3.36% for the three months ended September
30, 2015 and 2014, 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
third quarter of 2015 had an average loan-to-value ratio of 56.3%
and an average debt coverage ratio of 177%.
The Bank experienced improvement in its non-accrual loans during
the three months ended September 30, 2015, and had net recoveries
totaling $0.3 million 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 restructures 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:
|
September 30, |
June 30, |
December 31, |
(In thousands) |
2015 |
2015 |
2014 |
Accrual Status: |
|
|
|
Multi-family residential |
$ 2,644 |
$ 2,657 |
$ 3,034 |
Commercial real estate |
2,349 |
2,356 |
2,373 |
One-to-four family - mixed-use property |
2,347 |
2,358 |
2,381 |
One-to-four family - residential |
346 |
349 |
354 |
Small business administration |
37 |
39 |
-- |
Commercial business and other |
2,125 |
2,167 |
2,249 |
|
|
|
|
Total performing troubled debt
restructured |
$ 9,848 |
$ 9,926 |
$ 10,391 |
During the nine months ended September 30, 2015, one
multi-family TDR loan of $0.4 million was transferred to
non-performing status, which resulted in this loan being included
in non-performing loans.
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:
|
September 30, |
June 30, |
December 31, |
(In thousands) |
2015 |
2015 |
2014 |
Loans 90 days or more past due and
still accruing: |
|
|
|
Multi-family residential |
$ 516 |
$ -- |
$ 676 |
Commercial real estate |
253 |
416 |
820 |
One-to-four family - mixed-use property |
1,293 |
353 |
405 |
One-to-four family - residential |
13 |
13 |
14 |
Commercial business and other |
222 |
315 |
386 |
Total |
2,297 |
1,097 |
2,301 |
|
|
|
|
Non-accrual loans: |
|
|
|
Multi-family residential |
4,686 |
6,352 |
6,878 |
Commercial real estate |
2,407 |
2,694 |
5,689 |
One-to-four family - mixed-use property |
5,446 |
6,238 |
6,936 |
One-to-four family - residential |
10,441 |
11,329 |
11,244 |
Small business administration |
234 |
170 |
-- |
Commercial business and other |
3,089 |
679 |
1,143 |
Total |
26,303 |
27,462 |
31,890 |
|
|
|
|
Total non-performing
loans |
28,600 |
28,559 |
34,191 |
|
|
|
|
Other non-performing
assets: |
|
|
|
Real estate acquired through foreclosure |
4,855 |
4,255 |
6,326 |
Total |
4,855 |
4,255 |
6,326 |
|
|
|
|
Total non-performing
assets |
$ 33,455 |
$ 32,814 |
$ 40,517 |
Included in loans over 90 days past due and still accruing were
nine loans totaling $2.3 million, eight loans totaling $1.1 million
and 10 loans totaling $2.3 million at September 30, 2015, June 30,
2015 and December 31, 2014, 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
loans maturity or repay these loans.
Included in non-performing loans was one loan totaling $0.4
million at September 30, 2015 which was restructured as TDR and not
performing in accordance with its restructured terms, compared to
two loans totaling $0.5 million at June 30, 2015 and two loans
totaling $2.4 million at December 31, 2014.
The Bank's non-performing assets totaled $33.5 million at
September 30, 2015, an increase of $0.6 million from $32.8 million
at June 30, 2015, but a decrease of $7.1 million from $40.5 million
at December 31, 2014.
Total non-performing assets as a percentage of total assets were
0.61% at September 30, 2015 and June 30, 2015, compared to 0.80% at
December 31, 2014. The ratio of allowance for loan losses to total
non-performing loans was 80.3% at September 30, 2015, compared to
80.8% at June 30, 2015 and 73.4% at December 31, 2014.
During the three months ended September 30, 2015, 12 loans
totaling $4.4 million were added to non-accrual loans, six loans
totaling $1.0 million were returned to performing status, 10 loans
totaling $2.5 million were paid in full, four loans totaling $1.0
million were sold, and one loan totaling $0.8 million was
transferred to other real estate owned.
Performing loans delinquent 60 to 89 days were $3.2 million at
September 30, 2015, an increase of $1.5 million from $1.6 million
at June 30, 2015, but a decrease of $4.7 million from $7.9 million
at December 31, 2014. Performing loans delinquent 30 to 59 days
were $23.1 million at September 30, 2015, an increase of $6.3
million from $16.8 million at June 30, 2015 but a decrease of $2.1
million from $25.1 million at December 31, 2014.
The following table shows net loan charge-offs (recoveries) for
the periods indicated:
|
Three Months Ended |
Nine Months Ended |
|
September 30, |
September 30, |
September 30, |
September 30, |
(In thousands) |
2015 |
2014 |
2015 |
2014 |
Multi-family residential |
$ 54 |
$ 409 |
$ 240 |
$ 942 |
Commercial real estate |
(100) |
122 |
(136) |
(174) |
One-to-four family – mixed-use property |
73 |
(149) |
498 |
(26) |
One-to-four family – residential |
(300) |
(86) |
(130) |
(172) |
Co-operative apartments |
-- |
-- |
-- |
(7) |
Small Business Administration |
4 |
(15) |
(23) |
(27) |
Commercial business and other |
10 |
(8) |
54 |
67 |
Total net loan charge-offs
(recoveries) |
$ (259) |
$ 273 |
$ 503 |
$ 603 |
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 nine months ended September 30, 2015, the Bank sold
11 non-performing loans for proceeds totaling $3.8 million,
realizing a gain on sale of $63,000 and net recoveries at the time
of sale totaling $0.1 million. Additionally, during the nine months
ended September 30, 2015, the Bank sold eight performing loans at
carrying value for total proceeds of $6.6 million.
During the nine months ended September 30, 2015, mortgage-backed
securities decreased $14.9 million, or 2.1%, to $690.0 million from
$704.9 million at December 31, 2014. The decrease in
mortgage-backed securities during the nine months ended September
30, 2015 was primarily due to sales of $103.1 million and principal
repayments of $75.7 million, which was partially offset by
purchases of $159.8 million at an average yield of 2.63% and an
increase of $6.3 million in the fair value of mortgage-backed
securities.
During the nine months ended September 30, 2015, other
securities, including securities held-to-maturity, increased $56.3
million, or 21.0%, to $324.7 million from $268.4 million at
December 31, 2014. The increase in other securities during the nine
months ended September 30, 2015 was primarily due to purchases of
$134.7 million at an average yield of 3.33%, which was partially
offset by sales, maturities, principal repayments and a decrease in
the fair value of other securities totaling $59.9 million, $9.0
million, $8.0 million, and $1.3 million, respectively. Other
securities primarily consist of securities issued by mutual or bond
funds that invest in government and government agency securities,
municipal bonds, collateralized loan obligations and corporate
bonds.
Total liabilities were $5,030.9 million at September 30, 2015,
an increase of $410.1 million, or 8.9%, from $4,620.8 million at
December 31, 2014. During the nine months ended September 30, 2015,
due to depositors increased $209.8 million, or 6.0%, to $3,682.7
million, due to increases of $128.7 million in core deposits and
$81.1 million in certificates of deposit. The increase in core
deposits was due to increases of $148.2 million and $1.4 million in
money market and demand accounts, respectively, partially offset by
decreases of $20.3 million and $0.5 million in NOW and savings
accounts, respectively. Borrowed funds increased $180.1 million
during the nine months ended September 30, 2015. The increase in
borrowed funds was primarily due to the addition of $225.0 million
in long-term borrowing at an average cost of 1.29% and a net
increase in short-term borrowings totaling $45.0 million at an
average cost of 0.34%, partially offset by the maturity of $90.0
million in long-term borrowings at an average cost of 0.94%.
Total stockholders' equity increased $14.9 million, or 3.3%, to
$471.2 million at September 30, 2015 from $456.2 million at
December 31, 2014. Stockholders' equity increased primarily due to
net income of $34.6 million, an increase in additional paid in
capital of $3.5 million from the vesting and exercising of shares
of employee and director stock plans, and an increase of $3.2
million in accumulated other comprehensive income primarily due to
an increase in the fair value of the securities portfolio for the
nine months ended September 30, 2015. These increases were
partially offset by the purchase of 735,599 treasury shares, at an
average price of $19.51 per share, for a total cost of $14.4
million and the declaration and payment of dividends on the
Company's common stock of $0.48 per common share totaling $14.0
million. Book value per common share was $16.34 at September 30,
2015 compared to $15.52 at December 31, 2014. Tangible book value
per common share, a non-GAAP measure, was $15.80 at September 30,
2015 compared to $14.98 at December 31, 2014.
During the quarter ended September 30, 2015, the Company
repurchased 100,400 shares of the Company's common stock at an
average cost of $19.64 per share. At September 30, 2015, 899,600
shares may still be repurchased under the currently authorized
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 subtracting, net of tax, the
net gain on the sale of buildings and the net gain on the sale of
securities, and by adding back or subtracting, net of tax, the net
gain or loss recorded from fair value adjustments and prepayment
penalties incurred on borrowings.
|
Three Months Ended |
Nine Months Ended |
|
September 30, |
September 30, |
June 30, |
September 30, |
September 30, |
|
2015 |
2014 |
2015 |
2015 |
2014 |
|
(dollars in thousands, except
per share data) |
|
|
|
|
|
|
GAAP income before income taxes |
$ 17,669 |
$ 18,261 |
$ 24,355 |
$ 56,303 |
$ 54,767 |
|
|
|
|
|
|
Net (gain) loss from fair value
adjustments |
1,094 |
474 |
(768) |
921 |
1,520 |
Net gain on sale of securities |
(103) |
(5,216) |
(64) |
(167) |
(5,216) |
Penalty from prepayment of borrowings |
-- |
5,187 |
-- |
-- |
5,187 |
Net gain on sale of buildings |
-- |
-- |
(6,537) |
(6,537) |
-- |
|
|
|
|
|
|
Core income before taxes |
18,660 |
18,706 |
16,986 |
50,520 |
56,258 |
|
|
|
|
|
|
Provision for income taxes for core
income |
7,087 |
7,251 |
6,359 |
19,247 |
22,225 |
|
|
|
|
|
|
Core net income |
$ 11,573 |
$ 11,455 |
$ 10,627 |
$ 31,273 |
$ 34,033 |
|
|
|
|
|
|
GAAP diluted earnings per common share |
$ 0.38 |
$ 0.38 |
$ 0.51 |
$ 1.18 |
$ 1.11 |
|
|
|
|
|
|
Net (gain) loss from fair value adjustments,
net of tax |
0.02 |
0.01 |
(0.01) |
0.02 |
0.03 |
Net gain on sale of securities, net of
tax |
-- |
(0.10) |
-- |
-- |
(0.10) |
Penalty from prepayment of borrowings, net of
tax |
-- |
0.10 |
-- |
-- |
0.10 |
Net gain on sale of buildings, net of
tax |
-- |
-- |
(0.13) |
(0.13) |
-- |
|
|
|
|
|
|
Core diluted earnings per common share* |
$ 0.40 |
$ 0.38 |
$ 0.36 |
$ 1.07 |
$ 1.14 |
|
|
|
|
|
|
|
|
|
|
|
|
Core net income, as calculated above |
$ 11,573 |
$ 11,455 |
$ 10,627 |
$ 31,273 |
$ 34,033 |
Average assets |
5,427,619 |
4,859,717 |
5,309,463 |
5,291,093 |
4,810,578 |
Average equity |
464,180 |
454,580 |
465,618 |
463,316 |
449,097 |
Core return on average assets** |
0.85% |
0.94% |
0.80% |
0.79% |
0.94% |
Core return on average equity** |
9.97% |
10.08% |
9.13% |
9.00% |
10.10% |
|
|
|
|
|
|
* Core diluted earnings per
common share may not foot due to rounding. |
** Ratios for the three and nine
months ended September 30, 2015 and 2014 and for the three months
ended June 30, 2015 are calculated on an annualized basis. |
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 19 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, 2014 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) |
|
|
|
|
September 30, |
December 31, |
|
2015 |
2014 |
ASSETS |
|
|
Cash and due from banks |
$ 34,474 |
$ 34,265 |
Securities held-to-maturity: |
|
|
Other securities |
6,220 |
-- |
Securities available for sale: |
|
|
Mortgage-backed securities |
690,044 |
704,933 |
Other securities |
318,501 |
268,377 |
Loans: |
|
|
Multi-family residential |
2,043,740 |
1,923,460 |
Commercial real estate |
857,806 |
621,569 |
One-to-four family ― mixed-use
property |
568,401 |
573,779 |
One-to-four family ― residential |
191,430 |
187,572 |
Co-operative apartments |
9,122 |
9,835 |
Construction |
5,671 |
5,286 |
Small Business Administration |
10,540 |
7,134 |
Taxi medallion |
21,025 |
22,519 |
Commercial business and other |
479,085 |
447,500 |
Net unamortized premiums and unearned
loan fees |
14,129 |
11,719 |
Allowance for loan losses |
(22,973) |
(25,096) |
Net loans |
4,177,976 |
3,785,277 |
Interest and dividends receivable |
18,365 |
17,251 |
Bank premises and equipment, net |
25,517 |
21,868 |
Federal Home Loan Bank of New York stock |
53,391 |
46,924 |
Bank owned life insurance |
114,813 |
112,656 |
Goodwill |
16,127 |
16,127 |
Other assets |
46,647 |
69,335 |
Total assets |
$ 5,502,075 |
$ 5,077,013 |
|
|
|
LIABILITIES |
|
|
Due to depositors: |
|
|
Non-interest bearing |
$ 257,196 |
$ 255,834 |
Interest-bearing: |
|
|
Certificate of deposit accounts |
1,386,945 |
1,305,823 |
Savings accounts |
261,400 |
261,942 |
Money market accounts |
438,457 |
290,263 |
NOW accounts |
1,338,715 |
1,359,057 |
Total interest-bearing deposits |
3,425,517 |
3,217,085 |
Mortgagors' escrow deposits |
44,700 |
35,679 |
Borrowed funds |
1,236,577 |
1,056,492 |
Other liabilities |
66,895 |
55,676 |
Total liabilities |
5,030,885 |
4,620,766 |
|
|
|
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 September 30, 2015
and December 31, 2014; 28,830,210 shares and 29,403,823 shares
outstanding at September 30, 2015 and December 31, 2014,
respectively) |
315 |
315 |
Additional paid-in capital |
209,936 |
206,437 |
Treasury stock (2,700,385 shares and
2,126,772 shares at September 30, 2015 and December 31, 2014,
respectively) |
(48,873) |
(37,221) |
Retained earnings |
309,516 |
289,623 |
Accumulated other comprehensive income
(loss), net of taxes |
296 |
(2,907) |
Total stockholders' equity |
471,190 |
456,247 |
|
|
|
Total liabilities and stockholders'
equity |
$ 5,502,075 |
$ 5,077,013 |
|
FLUSHING FINANCIAL
CORPORATION and SUBSIDIARIES |
CONSOLIDATED STATEMENTS
OF INCOME |
(Dollars in thousands, except
per share data) |
(Unaudited) |
|
|
|
|
|
|
For the three months |
For the nine months |
|
ended September 30, |
ended September 30, |
|
2015 |
2014 |
2015 |
2014 |
|
|
|
|
|
Interest and dividend
income |
|
|
|
|
Interest and fees on loans |
$ 45,243 |
$ 42,668 |
$ 132,861 |
$ 127,277 |
Interest and dividends on securities: |
|
|
|
|
Interest |
6,508 |
6,309 |
18,366 |
20,051 |
Dividends |
119 |
190 |
355 |
574 |
Other interest income |
43 |
10 |
96 |
55 |
Total interest and dividend income |
51,913 |
49,177 |
151,678 |
147,957 |
|
|
|
|
|
Interest expense |
|
|
|
|
Deposits |
7,701 |
7,336 |
22,596 |
22,724 |
Other interest expense |
4,902 |
9,884 |
14,078 |
19,960 |
Total interest expense |
12,603 |
17,220 |
36,674 |
42,684 |
|
|
|
|
|
Net interest income |
39,310 |
31,957 |
115,004 |
105,273 |
Benefit for loan losses |
(370) |
(618) |
(1,620) |
(2,829) |
Net interest income after benefit for
loan losses |
39,680 |
32,575 |
116,624 |
108,102 |
|
|
|
|
|
Non-interest income |
|
|
|
|
Banking services fee income |
778 |
748 |
2,560 |
2,324 |
Net gain on sale of securities |
103 |
5,216 |
167 |
5,216 |
Net gain on sale of loans |
306 |
-- |
355 |
-- |
Net gain on sale of buildings |
-- |
-- |
6,537 |
-- |
Net loss from fair value adjustments |
(1,094) |
(474) |
(921) |
(1,520) |
Federal Home Loan Bank of New York stock
dividends |
480 |
463 |
1,455 |
1,444 |
Bank owned life insurance |
725 |
762 |
2,157 |
2,293 |
Other income |
399 |
408 |
1,264 |
1,062 |
Total non-interest income |
1,697 |
7,123 |
13,574 |
10,819 |
|
|
|
|
|
Non-interest expense |
|
|
|
|
Salaries and employee benefits |
12,648 |
12,164 |
40,471 |
36,686 |
Occupancy and equipment |
2,443 |
2,007 |
7,791 |
5,961 |
Professional services |
1,907 |
1,601 |
5,036 |
4,338 |
FDIC deposit insurance |
817 |
771 |
2,377 |
2,141 |
Data processing |
1,178 |
1,021 |
3,425 |
3,131 |
Depreciation and amortization |
993 |
690 |
2,528 |
2,122 |
Other real estate owned/foreclosure
expense |
110 |
372 |
717 |
907 |
Other operating expenses |
3,612 |
2,811 |
11,550 |
8,868 |
Total non-interest expense |
23,708 |
21,437 |
73,895 |
64,154 |
|
|
|
|
|
Income before income
taxes |
17,669 |
18,261 |
56,303 |
54,767 |
|
|
|
|
|
Provision for income
taxes |
|
|
|
|
Federal |
5,375 |
5,240 |
16,782 |
15,511 |
State and local |
1,286 |
1,820 |
4,946 |
6,074 |
Total taxes |
6,661 |
7,060 |
21,728 |
21,585 |
|
|
|
|
|
Net income |
$ 11,008 |
$ 11,201 |
$ 34,575 |
$ 33,182 |
|
|
|
|
|
|
|
|
|
|
Basic earnings per common share |
$ 0.38 |
$ 0.38 |
$ 1.18 |
$ 1.11 |
Diluted earnings per common share |
$ 0.38 |
$ 0.38 |
$ 1.18 |
$ 1.11 |
Dividends per common share |
$ 0.16 |
$ 0.15 |
$ 0.48 |
$ 0.45 |
|
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 nine months |
|
ended September 30, |
ended September 30, |
|
2015 |
2014 |
2015 |
2014 |
Per Share Data |
|
|
|
|
Basic earnings per share |
$ 0.38 |
$ 0.38 |
$ 1.18 |
$ 1.11 |
Diluted earnings per share |
$ 0.38 |
$ 0.38 |
$ 1.18 |
$ 1.11 |
Average number of shares outstanding
for: |
|
|
|
|
Basic earnings per common share
computation |
28,926,736 |
29,771,979 |
29,188,269 |
29,937,742 |
Diluted earnings per common share
computation |
28,946,497 |
29,796,325 |
29,209,369 |
29,968,361 |
Book value per common share (1) |
$16.34 |
$15.26 |
$16.34 |
$15.26 |
Tangible book value per common share (2) |
$15.80 |
$14.73 |
$15.80 |
$14.73 |
|
|
|
|
|
Average Balances |
|
|
|
|
Total loans, net |
$ 4,069,650 |
$ 3,566,358 |
$ 3,967,239 |
$ 3,481,844 |
Total interest-earning assets |
5,151,015 |
4,607,036 |
5,016,511 |
4,557,656 |
Total assets |
5,427,619 |
4,859,717 |
5,291,093 |
4,810,578 |
Total due to depositors |
3,473,264 |
3,121,175 |
3,403,654 |
3,083,870 |
Total interest-bearing liabilities |
4,643,161 |
4,150,065 |
4,526,227 |
4,120,690 |
Stockholders' equity |
464,180 |
454,580 |
463,316 |
449,097 |
Performance Ratios (3) |
|
|
|
|
Return on average assets |
0.81% |
0.92% |
0.87% |
0.92% |
Return on average equity |
9.49 |
9.86 |
9.95 |
9.85 |
Yield on average interest-earning assets |
4.03 |
4.27 |
4.03 |
4.33 |
Cost of average interest-bearing
liabilities |
1.09 |
1.66 |
1.08 |
1.38 |
Interest rate spread during period |
2.94 |
2.61 |
2.95 |
2.95 |
Net interest margin |
3.05 |
2.77 |
3.06 |
3.08 |
Core cost of average interest-bearing
liabilities (4) |
1.09 |
1.16 |
1.08 |
1.21 |
Core interest rate spread during period
(4) |
2.94 |
3.11 |
2.95 |
3.12 |
Core net interest margin (4) |
3.05 |
3.22 |
3.06 |
3.23 |
Non-interest expense to average assets |
1.75 |
1.76 |
1.86 |
1.78 |
Efficiency ratio (5) |
56.18 |
54.06 |
59.46 |
54.51 |
Average interest-earning assets to average
interest-bearing liabilities |
1.11 X |
1.11 X |
1.11 X |
1.11 X |
|
|
|
|
|
|
|
|
|
|
|
(1) Calculated by
dividing common stockholders' equity of $471.2 million and $452.4
million at September 30, 2015 and 2014, respectively, by 28,830,210
and 29,646,862 shares outstanding at September 30, 2015 and 2014,
respectively. |
(2) Calculated by
dividing tangible common stockholders' equity, a non-GAAP measure,
of $455.5 million and $436.7 million at September 30, 2015 and
2014, respectively, by 28,830,210 and 29,646,862 shares outstanding
at September 30, 2015 and 2014, respectively. Tangible common
stockholders' equity is total stockholders' equity less intangible
assets (goodwill, net of deferred taxes). |
(3) Ratios for the three
and nine months ended September 30, 2015 and 2014 are presented on
an annualized basis. |
(4) These Core measures
are non-GAAP and exclude the prepayment penalty on borrowings of
$5.2 million recorded during the three and nine months ended
September 30, 2014. There was no prepayment penalty on
borrowings for the three and nine months ended September 30,
2015. |
(5) 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 and non-interest income
(excluding net gains and losses from fair value adjustments, sale
of buildings and sale of securities). |
|
FLUSHING FINANCIAL
CORPORATION and SUBSIDIARIES |
SELECTED CONSOLIDATED
FINANCIAL DATA |
(Dollars in thousands) |
(Unaudited) |
|
|
|
|
At or for the nine |
At or for the year |
|
months ended |
ended |
|
September 30, 2015 |
December 31, 2014 |
|
|
|
Selected Financial Ratios and Other Data |
|
|
|
|
|
Regulatory capital ratios (for Flushing
Financial Corporation): |
|
|
Tier 1 leverage capital (well capitalized
= 5%) |
8.93% |
9.62% |
Common equity Tier 1 risk-based capital
(well capitalized = 6.5%) |
12.01 |
n/a |
Tier 1 risk-based capital (well
capitalized = 8.0%) |
12.74 |
13.87 |
Total risk-based capital (well
capitalized = 10.0%) |
13.34 |
14.61 |
|
|
|
Regulatory capital ratios (for Flushing Bank
only): |
|
|
Tier 1 leverage capital (well capitalized
= 5%) |
9.02% |
9.63% |
Common equity Tier 1 risk-based capital
(well capitalized = 6.5%) |
12.86 |
n/a |
Tier 1 risk-based capital (well
capitalized = 8.0%) |
12.86 |
13.87 |
Total risk-based capital (well
capitalized = 10.0%) |
13.47 |
14.60 |
|
|
|
Capital ratios: |
|
|
Average equity to average assets |
8.76% |
9.31% |
Equity to total assets |
8.56 |
8.99 |
Tangible common equity to tangible
assets |
8.30 |
8.70 |
|
|
|
Asset quality: |
|
|
Non-accrual loans (excludes performing
non-accrual TDR) |
$26,303 |
$31,890 |
Non-performing loans |
28,600 |
34,191 |
Non-performing assets |
33,455 |
40,517 |
Net charge-offs |
503 |
659 |
|
|
|
Asset quality ratios: |
|
|
Non-performing loans to gross loans |
0.68% |
0.90% |
Non-performing assets to total
assets |
0.61 |
0.80 |
Allowance for loan losses to gross
loans |
0.55 |
0.66 |
Allowance for loan losses to
non-performing assets |
68.67 |
61.94 |
Allowance for loan losses to
non-performing loans |
80.32 |
73.40 |
|
|
|
Full-service customer facilities |
19 |
17 |
|
FLUSHING FINANCIAL
CORPORATION and SUBSIDIARIES |
NET INTEREST
MARGIN |
(Dollars in thousands) |
(Unaudited) |
|
|
|
|
|
|
|
|
For the three months
ended September 30, |
|
2015 |
2014 |
|
Average |
|
Yield/ |
Average |
|
Yield/ |
|
Balance |
Interest |
Cost |
Balance |
Interest |
Cost |
Assets |
|
|
|
|
|
|
Interest-earning assets: |
|
|
|
|
|
|
Mortgage loans, net (1) |
$ 3,561,262 |
$ 40,754 |
4.58% |
$ 3,101,682 |
38,440 |
4.96% |
Other loans, net (1) |
508,388 |
4,489 |
3.53 |
464,676 |
4,228 |
3.64 |
Total loans, net |
4,069,650 |
45,243 |
4.45 |
3,566,358 |
42,668 |
4.79 |
Mortgage-backed securities |
692,777 |
4,307 |
2.49 |
727,935 |
4,761 |
2.62 |
Other securities |
312,115 |
2,320 |
2.97 |
286,789 |
1,738 |
2.42 |
Total securities |
1,004,892 |
6,627 |
2.64 |
1,014,724 |
6,499 |
2.56 |
Interest-earning deposits and federal
funds sold |
76,473 |
43 |
0.22 |
25,954 |
10 |
0.15 |
Total interest-earning assets |
5,151,015 |
51,913 |
4.03 |
4,607,036 |
49,177 |
4.27 |
Other assets |
276,604 |
|
|
252,681 |
|
|
Total assets |
$ 5,427,619 |
|
|
$ 4,859,717 |
|
|
|
|
|
|
|
|
|
Liabilities and Equity |
|
|
|
|
|
|
Interest-bearing liabilities: |
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
Savings accounts |
$ 262,535 |
297 |
0.45 |
$ 253,623 |
123 |
0.19 |
NOW accounts |
1,398,358 |
1,646 |
0.47 |
1,329,329 |
1,464 |
0.44 |
Money market accounts |
420,860 |
455 |
0.43 |
279,528 |
208 |
0.30 |
Certificate of deposit accounts |
1,391,511 |
5,276 |
1.52 |
1,258,695 |
5,492 |
1.75 |
Total due to depositors |
3,473,264 |
7,674 |
0.88 |
3,121,175 |
7,287 |
0.93 |
Mortgagors' escrow accounts |
44,606 |
27 |
0.24 |
41,510 |
49 |
0.47 |
Total deposits |
3,517,870 |
7,701 |
0.88 |
3,162,685 |
7,336 |
0.93 |
Borrowed funds |
1,125,291 |
4,902 |
1.74 |
987,380 |
9,884 |
4.00 |
Total interest-bearing liabilities |
4,643,161 |
12,603 |
1.09 |
4,150,065 |
17,220 |
1.66 |
Non interest-bearing deposits |
254,435 |
|
|
213,715 |
|
|
Other liabilities |
65,843 |
|
|
41,357 |
|
|
Total liabilities |
4,963,439 |
|
|
4,405,137 |
|
|
Equity |
464,180 |
|
|
454,580 |
|
|
Total liabilities and equity |
$ 5,427,619 |
|
|
$ 4,859,717 |
|
|
|
|
|
|
|
|
|
Net interest income / net interest rate
spread |
|
$ 39,310 |
2.94% |
|
$ 31,957 |
2.61% |
|
|
|
|
|
|
|
Net interest-earning assets / net interest
margin |
$ 507,854 |
|
3.05% |
$ 456,971 |
|
2.77% |
|
|
|
|
|
|
|
Ratio of interest-earning assets to
interest-bearing liabilities |
|
|
1.11 X |
|
|
1.11 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 $1.4 million and $1.3 million for the three months
ended September 30, 2015 and 2014, respectively. |
|
FLUSHING FINANCIAL
CORPORATION and SUBSIDIARIES |
NET INTEREST
MARGIN |
(Dollars in thousands) |
(Unaudited) |
|
|
|
|
|
|
|
|
For the nine months ended
September 30, |
|
2015 |
2014 |
|
Average |
|
Yield/ |
Average |
|
Yield/ |
|
Balance |
Interest |
Cost |
Balance |
Interest |
Cost |
Assets |
|
|
|
|
|
|
Interest-earning assets: |
|
|
|
|
|
|
Mortgage loans, net (1) |
$ 3,466,085 |
$ 119,931 |
4.61% |
$ 3,044,350 |
115,352 |
5.05% |
Other loans, net (1) |
501,154 |
12,930 |
3.44 |
437,494 |
11,925 |
3.63 |
Total loans, net |
3,967,239 |
132,861 |
4.47 |
3,481,844 |
127,277 |
4.87 |
Mortgage-backed securities |
700,563 |
13,028 |
2.48 |
755,620 |
15,471 |
2.73 |
Other securities |
288,682 |
5,693 |
2.63 |
280,075 |
5,154 |
2.45 |
Total securities |
989,245 |
18,721 |
2.52 |
1,035,695 |
20,625 |
2.66 |
Interest-earning deposits and federal
funds sold |
60,028 |
96 |
0.21 |
40,117 |
55 |
0.18 |
Total interest-earning assets |
5,016,512 |
151,678 |
4.03 |
4,557,656 |
147,957 |
4.33 |
Other assets |
274,581 |
|
|
252,922 |
|
|
Total assets |
$ 5,291,093 |
|
|
$ 4,810,578 |
|
|
|
|
|
|
|
|
|
Liabilities and Equity |
|
|
|
|
|
|
Interest-bearing liabilities: |
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
Savings accounts |
$ 265,831 |
852 |
0.43 |
$ 258,621 |
358 |
0.18 |
NOW accounts |
1,441,598 |
4,847 |
0.45 |
1,419,463 |
4,743 |
0.45 |
Money market accounts |
352,639 |
1,015 |
0.38 |
231,426 |
441 |
0.25 |
Certificate of deposit accounts |
1,343,588 |
15,809 |
1.57 |
1,174,360 |
17,088 |
1.94 |
Total due to depositors |
3,403,656 |
22,523 |
0.88 |
3,083,870 |
22,630 |
0.98 |
Mortgagors' escrow accounts |
51,772 |
73 |
0.19 |
47,333 |
94 |
0.26 |
Total deposits |
3,455,428 |
22,596 |
0.87 |
3,131,203 |
22,724 |
0.97 |
Borrowed funds |
1,070,801 |
14,078 |
1.75 |
989,487 |
19,960 |
2.69 |
Total interest-bearing liabilities |
4,526,229 |
36,674 |
1.08 |
4,120,690 |
42,684 |
1.38 |
Non interest-bearing deposits |
243,693 |
|
|
202,159 |
|
|
Other liabilities |
57,855 |
|
|
38,632 |
|
|
Total liabilities |
4,827,777 |
|
|
4,361,481 |
|
|
Equity |
463,316 |
|
|
449,097 |
|
|
Total liabilities and equity |
$ 5,291,093 |
|
|
$ 4,810,578 |
|
|
|
|
|
|
|
|
|
Net interest income / net interest rate
spread |
|
$ 115,004 |
2.95% |
|
$ 105,273 |
2.95% |
|
|
|
|
|
|
|
Net interest-earning assets / net interest
margin |
$ 490,283 |
|
3.06% |
$ 436,966 |
|
3.08% |
|
|
|
|
|
|
|
Ratio of interest-earning assets to
interest-bearing liabilities |
|
|
1.11 X |
|
|
1.11 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 $3.5 million for the nine months
ended September 30, 2015 and 2014, 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)
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