Flushing Financial (FFIC) Q4 2024 earnings summary

Executive summary

• Completed a $70 million equity raise and major balance sheet restructuring in December 2024, incurring a $76 million pre-tax loss but positioning for NIM expansion and improved profitability in 2025.

• GAAP net interest margin (NIM) increased 29 basis points to 2.39% and core NIM rose 18 basis points to 2.25% in Q4 2024, driven by lower funding costs and higher loan repricing.

• Reported a GAAP loss per share of $1.61 for Q4 2024 and $1.05 for 2024, primarily due to restructuring; core EPS was $0.14 for Q4 2024 and $0.73 for 2024.

• Asset quality remained stable, with tangible common equity ratio improving to 7.82% at year-end and net charge-offs at 11 basis points for 2024.

Financial highlights

• Net interest income for Q4 2024 was $51.2 million, up 12.4% quarter-over-quarter; core net interest income was $48.1 million.

• Average total deposits increased 8.2% year-over-year to $7.4 billion; non-interest-bearing deposits stabilized at 12% of total.

• Loan-to-deposit ratio improved to 94% from 101% a year ago.

• Cost of deposits decreased by 34 basis points in Q4 2024; interest-bearing deposit betas were 51% as rates declined.

• Retained 78% of maturing CDs in Q4, with a weighted average rate reduction of 88 basis points.

Outlook and guidance

• Core NIM expected to expand by 10-15 basis points in Q1 2025 from restructuring, with further benefits from CD and loan repricing.

• Non-interest expense projected to rise 5%-8% in 2025 from a $160 million base, driven by investments in branches, SBA team, and compensation.

• Effective tax rate for 2025 expected to be 25%-28%.

• Slight loan growth anticipated, with stable assets and continued focus on remixing balance sheet.

• NIM guidance for year-end 2025 is in the 2.30%-2.40% range.