Flushing Financial (FFIC) Q2 2024 earnings summary

Executive summary

• Second quarter 2024 GAAP and Core EPS were $0.18, up sequentially but down from $0.29 a year ago; net income was $5.3 million, up from $3.7 million in 1Q24 but down from $8.7 million in 2Q23.

• Net interest income rose 0.9% sequentially to $42.8 million but declined 1.4% year-over-year; NIM FTE was 2.05%, down 13 bps year-over-year and 1 bp sequentially.

• Credit quality remains strong, with nonperforming assets at 0.61% of total assets and criticized/classified loans at 1.13% of gross loans.

• Average total deposits increased 4.3% year-over-year and 1.6% sequentially, with a focus on improving funding mix and maintaining liquidity.

• The company remains well-capitalized, exceeding all regulatory capital requirements, with tangible common equity to tangible assets at 7.12%.

Financial highlights

• Net interest margin (NIM) was 2.05% GAAP and 2.03% core, near stabilization but down from 2.17% in 2Q23.

• Noninterest expense increased 11.2% year-over-year but declined 2.1% sequentially; efficiency ratio was 82.6% in 2Q24.

• Provision for credit losses was $0.8 million, down from $1.4 million a year ago but up from $0.6 million in 1Q24.

• Book value per share was $22.89 at June 30, 2024; tangible book value per share was $22.24.

• Return on average assets was 0.24% and return on average equity was 3.19% for Q2 2024.

Outlook and guidance

• NIM is expected to be near a bottom and should expand as funding costs stabilize; loan pipeline increased 88% sequentially to $327.7 million.

• Expense growth for 2024 projected to be in the mid-single digits, in line with historical trends.

• Non-interest income expected to benefit from closing back-to-back swap loans in the pipeline.

• Effective tax rate for 2024 expected in the mid-20% range.

• Management continues to focus on disciplined underwriting, credit quality, and maintaining strong capital and liquidity positions.