Flushing Financial Corporation Reports Record 2001 First Quarter Results.Business Editors FLUSHING Flushing, part of Queens, New York City, United States Flushing, former village, now in N Queens borough of New York City, SE N.Y.; chartered 1645, inc. into Greater New York City with Queens in 1898. , N.Y.--(BUSINESS WIRE)--April 19, 2001 Flushing Financial Corporation (Nasdaq: FFIC FFIC Fitness Franchise Information Center (Camarillo, CA) FFIC Fault-Free Integrated Circuit ), the parent holding company for Flushing Savings Bank savings bank, financial institution that, until recently, performed only the following functions: receiving savings deposits of individuals, investing them, and providing a modest return to its depositors in the form of interest. , FSB (FrontSide Bus) See system bus. FSB - front side bus (the "Bank"), today announced its results for the first quarter ended March 31, 2001. Diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of for the first quarter of 2001 increased 7.7 percent to a record $0.42 as compared to $0.39 for the first quarter of 2000. Net income for the first quarter increased 6.1 percent to a record $3.6 million from the $3.4 million earned in the comparable prior year quarter. Michael Michael, archangel Michael (mī`kəl) [Heb.,=who is like God?], archangel prominent in Christian, Jewish, and Muslim traditions. In the Bible and early Jewish literature, Michael is one of the angels of God's presence. J. Hegarty, President and Chief Executive Officer, stated: "Our accomplishments in the first quarter of 2001 reflect the continuing implementation of our strategy of building a stronger, customer-oriented, full-service full-ser·vice adj. Associated with or offering complete service: full-service gasoline pumps; full-service banks. community bank to better serve and expand our customer base. "The record earnings in the first quarter of 2001 are a result of continued growth in our loan portfolio with a persistent focus on maintaining strong asset quality, increases in fee income, and control over operating costs operating costs npl → gastos mpl operacionales . Another factor that contributed to our solid performance was the lower interest rate environment in the first quarter of 2001, resulting in a reduction of our cost of funds Cost of Funds The interest rate paid on an outstanding loan. Notes: Money isn't free! Cost of funds is the cost of borrowing money. See also: Interest Rate Cost of funds Interest rate associated with borrowing money. from the fourth quarter of 2000. Looking ahead, we believe that we should see a further decrease in the cost of our interest-bearing Adj. 1. interest-bearing - of financial obligations on which interest is paid liabilities as they reprice in the current interest rate environment. "Our strong capital position enabled us to continue our stock repurchase Stock repurchase A firm's repurchase of outstanding shares of its common stock. program, and we were pleased to announce an increase in our quarterly cash dividend payout pay·out n. 1. The act or an instance of paying out. 2. A percentage of corporate earnings that is paid as dividends to shareholders. to shareholders by 10 percent to 11 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. - an indicated yearly rate of $0.44. "We are committed to a path of structured and orderly orderly /or·der·ly/ (or´der-le) an attendant in a hospital who works under the direction of a nurse. or·der·ly n. An attendant in a hospital. growth in 2001, while continuing to expand the financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. we offer to our customers. We will strive to deliver the financial performance which should advance our goal of increasing shareholder value." Earnings Summary -- Three Months Ended March 31, 2001 For the three months ended March 31, 2001, net interest income decreased 1.8 percent to $10.0 million from $10.2 million in the comparable 2000 period. This decrease in net interest income is primarily due to the sale of lower-yielding mortgage-backed securities Mortgage-backed securities (MSBs) Securities backed by a pool of mortgage loans. in the third quarter of 2000 and the reinvestment Reinvestment Using dividends, interest and capital gains earned in an investment or mutual fund to purchase additional shares or units, rather than receiving the distributions in cash. 1. In terms of stocks, it is the reinvestment of dividends to purchase additional shares. of the proceeds in $20.0 million of Bank Owned Life Insurance ("BOLI BOLI Bank-Owned Life Insurance BOLI Bureau of Labor and Industries "). The income on BOLI is included in Other Income, and amounted to $0.3 million for the first quarter of 2001. The net interest margin declined 28 basis points to 3.14 percent in the first quarter of 2001 from 3.42 percent in the comparable 2000 quarter. However, the net interest margin of 3.14 percent for the quarter ended March 31, 2001 represents a five basis point increase from the net interest margin of 3.09 percent for the immediately preceding quarter ended December December: see month. 31, 2000. Despite this decline in the net interest margin, net interest income only declined $0.2 million as average interest earning assets Earning Assets Any income-earning asset owned by a company. Notes: These assets are generally interest-bearing accounts, bonds, and securities available for sale. See also: Asset, Asset Valuation, Earnings, Net Interest Margin increased $81.9 million in the first quarter of 2001 from that reported for the first quarter of 2000. The yield on interest earning assets increased five basis points primarily due to an increase of $108.0 million in the average balance of the higher-yielding mortgage loan portfolio. The cost of funds increased 26 basis points as both certificate of deposit accounts and borrowed funds renewed at higher rates. In addition, the average balance of the higher costing certificate of deposit accounts and borrowed funds increased to fund asset growth. Non-interest income during the first quarter of 2001 increased by 60.1 percent to $1.7 million from $1.1 million for the first quarter of 2000. The increase is due to the income earned on BOLI, higher fee income from mortgage originations and banking services, an increase in dividends received on Federal Home Loan Bank of New York The Bank of New York, abbrieviated to BNY, was a global financial services company that existed until its merger with the Mellon Financial Corporation on July 2, 2007.[1] The bank now continues under the new name of The Bank of New York Mellon Corporation. stock, and an increase in gain on sales of securities and loans. Non-interest expense increased 3.8 percent to $6.0 million for the three months ended March 31, 2001 as compared to $5.7 million for the quarter ended March 31, 2000. Management continues to monitor expenditures resulting in efficiency ratios of 50.7 percent and 51.2 percent for the three months ended March 31, 2001 and 2000, respectively. Cash Earnings Cash earnings, which exclude the net of tax effect of non-cash expenses Noun 1. non-cash expense - an expense (such as depreciation) that is not paid for in cash disbursal, disbursement, expense - amounts paid for goods and services that may be currently tax deductible (as opposed to capital expenditures) associated with the stock-related benefit plans and goodwill, increased to $4.0 million, or $0.46 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, for the first quarter of 2001, from $3.7 million, or $0.43 per diluted share, for the comparable 2000 quarter. Cash return on average equity was 12.5 percent for the quarter ended March 31, 2001 compared to 12.9 percent for the quarter ended March 31, 2000. Cash return on average assets was 1.2 percent for the three months ended March 31, 2001 and 2000. Balance Sheet Summary At March 31, 2001, total assets were $1.37 billion, an increase of $30.4 million from December 31, 2000. During the first three months of 2001, loan originations The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. and purchases were $18.1 million for 1-4 family residential mortgage loans, $10.6 million for multi-family real estate loans, $23.6 million for commercial real estate loans and $2.1 million in construction loans. For the first three months of 2000, loan originations and purchases were $26.7 million for 1-4 family residential mortgage loans, $16.5 million for multi-family real estate loans, $8.6 million for commercial real estate loans and $0.8 million for construction loans. Total loans increased $27.9 million during the quarter to $1,014.3 million from $986.4 million at December 31, 2000. As the Company continues to increase its loan portfolio, management continues to adhere to adhere to verb 1. follow, keep, maintain, respect, observe, be true, fulfil, obey, heed, keep to, abide by, be loyal, mind, be constant, be faithful 2. the Bank's strict underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. standards, which has resulted in minimal charge-offs of losses from impaired loans in recent years. Non-performing assets were $1.8 million and $1.7 million at March 31, 2001 and December 31, 2000, respectively, and total non-performing assets as a percentage of total assets were 0.1 percent at March 31, 2001 and December 31, 2000. The allowance for loan losses to non-performing loans A non-performing loan is a loan that is in default or close to being in default. Many loans become non-performing after being in default for 3 months, but this can depend on the contract terms. was 395 percent at March 31, 2001 compared to 415 percent at December 31, 2000. Total liabilities increased $27.9 million to $1.24 billion at March 31, 2001 from $1.21 billion at December 31, 2000. Due to depositors increased $22.4 million as certificate of deposit accounts increased $9.8 million while lower costing deposits increased $12.6 million. Total stockholders' equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. increased $2.5 million to $129.2 million at March 31, 2001 from $126.7 million at December 31, 2000. The increase is due to $3.6 million in net income and an improvement of $1.0 million in the net unrealized after tax gain in the market value of securities available for sale, partially offset by $1.6 million in treasury shares purchased through the Company's stock repurchase plan stock repurchase plan 1. See buyback. 2. See self-tender. and $0.9 million in cash dividends. Quarterly dividends per share Dividends per share Dividend paid for the past 12 months divided by the number of common shares outstanding, as reported by a company. The number of shares often is determined by a weighted average of shares outstanding over the reporting term. were increased to $0.11 per share in the first quarter of 2001 from $0.10 per share per quarter in 2000. Book value per share is $14.05 at March 31, 2001 compared to $13.67 per share at December 31, 2000 and $12.45 per share at March 31, 2000. Under its stock repurchase programs, the Company repurchased 91,200 shares during the quarter ended March 31, 2001. At March 31, 2001, 287,800 shares remain to be repurchased under the current stock repurchase program. Through March 31, 2001, the Company had repurchased approximately 33 percent of the common shares issued in connection with the Company's initial public offering at a cost of $62.7 million. "Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. " Statement under the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995: Statements in this Press Release relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc 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 forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. 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 for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. 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 Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. 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. Flushing Financial Corporation is the holding company for Flushing Savings Bank, FSB, a federally chartered stock savings bank insured by the Federal Deposit Insurance Corporation Federal Deposit Insurance Corporation (FDIC), an independent U.S. federal executive agency designed to promote public confidence in banks and to provide insurance coverage for bank deposits up to $100,000. ("FDIC FDIC See: Federal Deposit Insurance Corporation FDIC See Federal Deposit Insurance Corporation (FDIC). "). The Bank conducts its business through ten banking offices located in Queens, Brooklyn Brooklyn (br  k`lĭn), borough of New York City (1990 pop. 2,300,664), 71 sq mi (184 sq km), coextensive with Kings co., SE N.Y. , Manhattan Manhattan, indigenous people of North AmericaManhattan (mănhăt`ən), indigenous people of North America of the Algonquian-Wakashan linguistic stock (see Native American languages). , Bronx Bronx, river, c.20 mi (30 km) long, issuing from Kensico Reservoir, SE N.Y., and flowing SW through the Bronx into the East River. The Bronx River Parkway, one of the first limited-access highways in the New York City area, parallels a portion of the river. and Nassau County Nassau County is the name of two counties in the United States of America:
Additional information on Flushing Financial Corporation may be obtained by visiting the Company's web site at http://www.flushingsavings.com.
FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
CONSOLIDATED STATEMENTS of FINANCIAL CONDITION
(Dollars in Thousands)
March 31, December 31,
2001 2000
(Unaudited)
ASSETS
Cash and due from banks $ 11,627 $ 10,235
Federal funds sold and overnight
interest-earning deposits 19,630 11,758
Securities available for sale:
Mortgage-backed securities 233,658 238,626
Other securities 15,752 16,594
Loans:
1-4 Family residential mortgage
loans 472,778 467,784
Multi-family mortgage loans 338,080 334,307
Commercial real estate loans 188,344 167,549
Co-operative apartments 7,488 8,009
Construction loans 8,184 8,304
Small Business Administration
loans 2,884 2,844
Consumer and other loans 2,610 3,704
Net unamortized premiums and
unearned loan fees 665 579
Allowance for loan losses (6,724) (6,721)
Net loans 1,014,309 986,359
Interest and dividends receivable 7,593 7,724
Real estate owned, net 51 44
Bank premises and equipment, net 6,088 6,311
Federal Home Loan Bank of New York
stock 24,932 24,932
Goodwill 4,180 4,272
Other assets 30,661 31,237
Total assets $ 1,368,481 $ 1,338,092
LIABILITIES
Due to depositors:
Non-interest bearing $ 23,588 $ 20,913
Interest bearing 680,869 661,145
Mortgagors' escrow deposits 15,142 7,753
Borrowed funds 504,727 508,839
Other liabilities 14,936 12,705
Total liabilities 1,239,262 1,211,355
STOCKHOLDERS' EQUITY
Preferred stock ($0.01 par value;
5,000,000 shares authorized) - -
Common stock ($0.01 par value;
20,000,000 shares authorized;
11,355,678 shares issued; 9,195,990
and 9,271,921 shares
outstanding at March 31, 2001
and December 31, 2000,
respectively) 114 114
Additional paid-in capital 76,458 76,396
Treasury stock (2,159,688 and
2,083,757 shares at
March 31, 2001 and December 31, 2000,
respectively) (33,163) (31,755)
Unearned compensation (7,583) (7,781)
Retained earnings 92,550 89,896
Accumulated other comprehensive
income, net of taxes 843 (133)
Total stockholders' equity 129,219 126,737
Total liabilities and
stockholders' equity $ 1,368,481 $ 1,338,092
FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
CONSOLIDATED STATEMENTS of OPERATIONS
(Unaudited, Dollars in Thousands Except Per Share Data)
For the Three Months
Ended March 31,
2001 2000
Interest and dividend income
Interest and fees on loans $ 20,443 $ 18,036
Interest and dividends on securities:
Interest 4,046 4,991
Dividends 56 67
Other interest income 506 182
Total interest and dividend income 25,051 23,276
Interest expense
Deposits 7,364 6,420
Other interest expense 7,716 6,700
Total interest expense 15,080 13,120
Net interest income 9,971 10,156
Provision for loan losses - -
Net interest income after provision
for loan losses 9,971 10,156
Non-interest income
Other fee income 561 524
Net gain on sales of securities
and loans 212 35
Other income 950 517
Total non-interest income 1,723 1,076
Non-interest expense
Salaries and employee benefits 3,132 2,954
Occupancy and equipment 577 517
Professional services 543 592
Data processing 345 331
Depreciation and amortization 272 264
Other operating expenses 1,098 1,090
Total non-interest expense 5,967 5,748
Income before income taxes 5,727 5,484
Provision for income taxes
Federal 1,808 1,675
State and local 310 409
Total taxes 2,118 2,084
Net income $ 3,609 $ 3,400
Basic earnings per share $0.44 $0.40
Diluted earnings per share $0.42 $0.39
FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
SELECTED CONSOLIDATED FINANCIAL DATA
(Unaudited, Dollars in Thousands Except Per Share Data)
At or For the Three Months
Ended March 31,
2001 2000
Per Share Data
Basic earnings per share $0.44 $0.40
Diluted earnings per share $0.42 $0.39
Average number of shares outstanding for:
Basic earnings per share computation 8,242,350 8,511,689
Diluted earnings per share computation 8,533,561 8,638,270
Book value per share (based on 9,195,990
and 9,580,471 shares outstanding at
March 31, 2001 and 2000, respectively) $14.05 $12.45
Average Balances
Total loans, net $ 996,104 $ 887,951
Total interest-earning assets 1,271,075 1,189,131
Total assets 1,358,170 1,240,802
Stockholders' equity 126,681 116,122
Performance Ratios (1)
Return on average assets 1.06% 1.10%
Return on average equity 11.40 11.71
Yield on average interest-earning assets 7.88 7.83
Cost of average interest-bearing liabilities 5.07 4.81
Interest rate spread during period 2.81 3.02
Net interest margin 3.14 3.42
Non-interest expense to average assets 1.76 1.85
Efficiency ratio 50.66 51.25
Average interest-earning assets to
average interest-bearing liabilities 1.07 x 1.09 x
Cash Earnings
Net income $ 3,609 $ 3,400
Non-cash amortization of stock
plans and goodwill 504 490
Tax effect of non-cash items (152) (151)
Cash earnings $ 3,961 $ 3,739
Cash earnings per basic share $0.48 $0.44
Cash earnings per diluted share $0.46 $0.43
Cash return on average assets (1) 1.17% 1.21%
Cash return on average equity (1) 12.51 12.88
Cash efficiency ratio 47.11 47.70
(1) Ratios for the quarters ended March 31, 2001 and 2000 are
presented on an annualized basis.
FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
SELECTED CONSOLIDATED FINANCIAL DATA
(Unaudited)
March 31, 2001 December 31, 2000
Selected Financial Ratios and
Other Data
Regulatory capital ratios
(for Flushing Savings Bank only):
Tangible capital
(minimum requirement = 1.5%) 8.12 % 8.02 %
Core
(minimum requirement = 3%) 8.12 8.02
Total risk-based capital
(minimum requirement = 8%) 15.62 15.77
Capital ratios:
Average equity to average assets 9.33 % 9.18 %
Equity to total assets 9.44 9.47
Asset quality:
Non-performing loans $1,703 $1,618
Non-performing assets 1,754 1,662
Net charge-offs (recoveries) (3) 97
Non-performing loans to gross loans 0.17 % 0.16 %
Non-performing assets to total
assets 0.13 0.12
Allowance for loan losses to gross
loans 0.66 0.68
Allowance for loan losses to total
non-performing assets 383.25 404.28
Allowance for loan losses to total
non-performing loans 394.72 415.32
Full-service customer facilities 10 10
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