Flushing Financial (FFIC) Q3 2024 earnings summary

Executive summary

• GAAP EPS was $0.30 and Core EPS $0.26 in 3Q24, the highest in seven quarters, aided by non-recurring items totaling $0.08 per share, including insurance recoveries and tax items.

• Net income for 3Q24 was $8.9M, up 13.7% year-over-year and 67.3% quarter-over-quarter, with net interest income rising 6.6% QoQ and 2.6% YoY.

• Credit quality remained strong with NPAs at 0.59% of assets, criticized/classified loans at 1.00% of gross loans, and net charge-offs at 0.18% of average loans.

• Average total deposits grew 9.4% YoY and 3.7% QoQ to $7.5B, with growth in CDs and noninterest-bearing deposits.

• The company remains well-capitalized with TCE/TA at 7.00% and $3.9B in unused credit lines.

Financial highlights

• Net interest income was $45.6M in 3Q24, up 6.6% QoQ and 2.6% YoY; NIM was 2.10% (GAAP), up 5 bps QoQ but down 12 bps YoY.

• Noninterest income was $6.3M, up 89.7% YoY and 48.9% QoQ, including $0.6M in swap fee income and fair value gains.

• Noninterest expense was $38.7M, up 6.3% YoY; core noninterest expense growth expected in mid-single digits for 2024.

• Book value per share was $22.94, and tangible book value per share was $22.29, both down slightly YoY.

• Return on average equity was 5.30% and return on average assets was 0.39% for 3Q24.

Outlook and guidance

• NIM expected to remain stable or improve as CDs and loans reprice and as the yield curve flattens or steepens.

• Core noninterest expense projected to rise mid-single digits in 2024, with continued investment in personnel and branches.

• Effective tax rate projected in the mid-twenties for 2024.

• Management focuses on expanding NIM, maintaining credit discipline, preserving liquidity/capital, and managing expenses.

• Loan pipeline at September 30, 2024 was $293.0M, up from $163.1M at year-end 2023.