Flushing Financial (FFIC) Q1 2025 earnings summary

Executive summary

• Q1 2025 saw a GAAP loss per share of $(0.29) due to a $17.6M non-cash, non-tax deductible goodwill impairment, eliminating all goodwill; Core EPS was $0.23.

• Net interest margin expanded to 2.51% GAAP and 2.49% Core, the highest since 2022, driven by lower funding costs and loan repricing.

• Liquidity remains strong with $4.0B in undrawn lines and resources; tangible common equity to tangible assets at 7.79% as of March 31, 2025.

• Asset quality metrics softened, with NPAs to assets rising to 0.71%, mainly due to a multifamily relationship.

• Strategic focus remains on profitability, credit discipline, and capital preservation amid economic uncertainty.

Financial highlights

• Net interest income rose 25% YoY and 3.4% QoQ to $53.0M; provision for credit losses was $4.3M.

• Average total deposits increased 6.8% YoY and 1.5% QoQ to $7.6B; loan-to-deposit ratio improved to 87%.

• Cost of deposits declined to 3.02% in Q1 2025, with a 19 bps decrease during the quarter.

• Tangible book value per share was $20.78 at March 31, 2025, down 0.9% QoQ and 7.2% YoY.

• Dividend of $0.22 per share paid in Q1 2025.

Outlook and guidance

• Management expects further NIM expansion as real estate loans reprice higher; annualized interest income from repricing projected at $9M in 2025 and $13M in 2026.

• Non-interest expense expected to rise 5-8% in 2025 from a $160M base; effective tax rate forecasted at 25-28% for the remainder of 2025.

• Loan pipeline increased 21.5% YoY and 6.3% QoQ to $211.4M, with 22% consisting of back-to-back swap loans.

• Stable assets expected for the year; loan growth will depend on market conditions.

• Minimal exposure to Manhattan office buildings at 0.5% of gross loans; 90% of loan portfolio collateralized by real estate with average LTV below 35%.