Flushing Financial Corporation Reports Record Earnings Per Share and Loan Originations in Fiscal 2005.LAKE SUCCESS, N.Y. -- 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. 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 financial results for the three months and year ended December December: see month. 31, 2005. For the year ended December 31, 2005, 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 were $1.31, an increase of $0.06 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, or 4.8%, from the $1.25 per diluted share earned in the year ended December 31, 2004. Net income for the year ended December 31, 2005 was $23.5 million, an increase of $0.9 million, or 3.9%, from the $22.6 million earned in the year ended December 31, 2004. For the fourth quarter ended December 31, 2005, diluted earnings per share were $0.32, an increase of $0.04 per diluted share, or 14.3%, from the $0.28 per diluted share earned in the fourth quarter of 2004. Net income for the fourth quarter of 2005 was $5.7 million, an increase of $0.6 million, or 12.6%, from $5.1 million for the comparable quarter a year ago. During the fourth quarter of 2005, $29.9 million of securities with an average yield of 3.23% were sold, with the proceeds invested in $29.6 million of securities with an average yield of 5.58%. This resulted in a net loss from the sale of these securities of $0.6 million, $0.4 million on an after-tax basis After-tax basis The comparison basis used to analyze the net after-tax returns on a corporate taxable bond and a municipal tax-free bond. or $0.02 per diluted share. Excluding this charge, diluted earnings per share would have been $0.34 for the quarter ended December 31, 2005. The fourth quarter of 2004 included charges of $1.1 million, $0.7 million on an after-tax basis or $0.04 per diluted share, related to the retirement of an executive, the relocation RELOCATION, Scotch law, contracts. To let again to renew a lease, is called a relocation. 2. When a tenant holds over after the expiration of his lease, with the consent of his landlord, this will amount to a relocation. of various departments as a result of the move of our executive offices to Nassau County Nassau County is the name of two counties in the United States of America:
The increase in net income for the year ended December 31, 2005 is primarily the result of an increase in net interest income of $1.7 million, or 2.6%, for the year ended December 31, 2005 compared to the year ended December 31, 2004. Partially offsetting this increase in net interest income was the loss on securities mentioned above, along with a charge in the third quarter of 2005 of $0.5 million, $0.3 million on an after-tax basis or $0.02 per diluted share, for expenses incurred in connection with our terminated ter·mi·nate v. ter·mi·nat·ed, ter·mi·nat·ing, ter·mi·nates v.tr. 1. To bring to an end or halt: negotiations to acquire another financial institution. The year ended December 31, 2004 included, in addition to the fourth quarter charge mentioned above, an adjustment related to compensation expense for certain of the Company's restricted stock awards and supplemental retirement benefits. This adjustment, which related to prior periods, was a charge to earnings in the first quarter of 2004 of $1.1 million, $0.7 million on an after-tax basis or $0.04 per diluted share. John R. Buran bu·ran n. A violent windstorm of the Eurasian steppes, accompanied in summer by dust and in winter by snow. [Russian, probably from Tatar.] , President and Chief Executive Officer, stated: "We are pleased to report that 2005 was another year of record earnings per share and 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. . Diluted earnings per share increased 4.8% to a record $1.31 for 2005. Our loan originations were a record $598.7 million for the year, an increase of $103.1 million, or 20.8%, from the prior year. As a result, the loan portfolio increased $365.4 million, or 24.1%, during the year. Deposits increased $171.5 million, or 13.4%, for the year. We were able to produce this growth in both a challenging interest rate environment and a highly competitive market for both loans and deposits. Importantly, yields on our originated loans improved throughout the year. "Demand for our loan products has remained strong. Consistent with our efforts to originate o·rig·i·nate v. 1. To bring into being; create. 2. To come into being; start. higher yielding loans, we originated $409.8 million of multi-family residential Multi-family residential is a classification of housing where multiple separate housing units are contained within one building. The most common form is an apartment building. Many intentional communities incorporate multi-family residences, such as in cohousing projects. and one-to-four family mixed-use mixed-use adj. Containing or zoned for commercial and residential facilities or development: a 40-story mixed-use tower; a mixed-use parcel of land. property mortgage loans. We have, at the same time, continued to grow our commercial real estate loan portfolio, originating $103.1 million of these loans during the year ended December 31, 2005. At December 31, 2005, loans in process totaled $179.4 million, compared to $170.0 million at December 31, 2004. "Net interest income for the year ended December 31, 2005 increased by $1.7 million, or 2.6%, which was the result of the growth in our loan portfolio. This growth has been achieved while facing a flattening
The flattening, ellipticity, or oblateness of an oblate spheroid is the "squashing" of the spheroid's pole, down towards its equator. yield curve. Short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. rates have been increasing for the past year, while longer-term rates have not increased at the same rate. This has put increased pressure on our net interest margin. This resulted in a net interest margin of 3.24% for the year ended December 31, 2005, as compared to 3.49% for the same period in 2004. Our continued focus on the origination Origination The process through which a mortgage lender creates a mortgage secured by some amount of the mortgagor's real property. Notes: Also known as loan origination, everyone must go through the origination process when securing a mortgage for a piece of real of higher yielding mortgage loan products allowed us to maintain a higher return on our mortgage loan portfolio than we would have otherwise experienced. "We took advantage of an opportunity to restructure a portion of the securities portfolio in the fourth quarter of 2005. The increased yield on the securities we purchased should allow us to recover the restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). loss incurred within one year. "During the fourth quarter, we began a program to focus on acquiring more deposit business from our loan customers. In addition, we revised some of our marketing strategies and media selection for our customer base. We pursued certificates of deposit while pricing competitively. This effort resulted in an increase in these deposits of $104.3 million during the quarter. In addition, during the fourth quarter we purchased $26.3 million of brokered deposits with maturities of 3 to 5 years. These new deposits were obtained at a lower cost than additional borrowings, and allowed us to reduce borrowings by $69.0 million in the fourth quarter. "In December, we announced the purchase of Atlantic Liberty Financial Corporation, which will enhance our franchise with two additional branches in 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. and increase our assets by approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $177 million. The transaction is expected to be completed near the end of the second quarter of 2006, subject to the approval of the shareholders of Atlantic Liberty and regulatory authorities Noun 1. regulatory authority - a governmental agency that regulates businesses in the public interest regulatory agency administrative body, administrative unit - a unit with administrative responsibilities . We expect this transaction to be accretive to both earnings per share and tangible Possessing a physical form that can be touched or felt. Tangible refers to that which can be seen, weighed, measured, or apprehended by the senses. A tangible object is something that is real and substantial. An automobile is an example of tangible Personal Property. book value per share. We plan to continue to seek and review potential acquisition opportunities that complement our current business, are consistent with our strategy to build a bank that is focused on the unique personal and small business banking needs of the multi-ethnic Adj. 1. multi-ethnic - involving several ethnic groups multiethnic social - living together or enjoying life in communities or organized groups; "a human being is a social animal"; "mature social behavior" communities we serve, and will be accretive to earnings. "Total assets increased $295.2 million during the year, or 14.3%, to $2,353.2 million at December 31, 2005. We continue to maintain strong asset quality. The growth in the loan portfolio was funded with deposit growth, reductions in the securities portfolio and borrowings. "We have been able to continue to grow our asset size while maintaining our strong capital position and focusing on other shareholder value initiatives. In the year ended December 31, 2005, we paid our shareholders dividends totaling $0.40 per common share, an increase of 14.3% compared to the year ended December 31, 2004. "We remain committed to 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, the continued expansion of 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, and building a strong banking franchise in the multicultural mul·ti·cul·tur·al adj. 1. Of, relating to, or including several cultures. 2. Of or relating to a social or educational theory that encourages interest in many cultures within a society rather than in only a mainstream culture. communities we serve. Towards this end, we plan to open a new branch office in Queens in early 2006. We also look forward to welcoming the customers and shareholders of Atlantic Liberty Financial Corporation to the Flushing Financial family when that acquisition is completed. Our focus remains on the origination of higher-yielding one-to-four family mixed-use property mortgage loans, multi-family residential mortgage loans, and commercial real estate loans, and the enhanced integration of our deposit-gathering and lending efforts. "Optimizing our shareholders' return on their investment is a goal we strive for every day." Earnings Summary - Three Months Ended December 31, 2005 Net interest income for the three months ended December 31, 2005 increased $0.7 million, or 4.2%, to $17.0 million from $16.3 million for the three months ended December 31, 2004. The increase in net interest income is primarily attributed to the growth in the average balance of interest-earning assets, which increased $261.3 million to $2,213.4 million, while the net interest spread decreased 29 basis points to 2.86% for the quarter ended December 31, 2005 from 3.15 % for the same period in 2004. The yield on interest-earning assets increased 20 basis points to 6.35% for the three months ended December 31, 2005 from 6.15% in the three months ended December 31, 2004. At the same time, the 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. increased 49 basis points to 3.49% for the three months ended December 31, 2005 from 3.00% for the three months ended December 31, 2004. The increase in the yield of interest-earning assets is primarily due to an increase of $368.0 million in the average balance of the loan portfolio to $1,848.6 million, combined with a $93.4 million and $13.2 million decrease in the average balances of the lower-yielding securities portfolio and interest-earning deposits and federal funds Federal Funds Funds deposited to regional Federal Reserve Banks by commercial banks, including funds in excess of reserve requirements. Notes: These non-interest bearing deposits are lent out at the Fed funds rate to other banks unable to meet overnight reserve sold, respectively. However, the yield on the mortgage loan portfolio decreased 7 basis points from 6.82% for the three months ended December 31, 2004 to 6.75% for the three months ended December 31, 2005. This decrease is due to the average rate on new loans originated during the year being below the average rate on both the loan portfolio and loans which were paid-in-full. In an effort to increase the yield on interest-earning assets, we continued to fund a portion of the growth in the higher-yielding mortgage loan portfolio through repayments received on the lower-yielding securities portfolio. The increase in the cost of interest-bearing Adj. 1. interest-bearing - of financial obligations on which interest is paid liabilities was primarily attributed to increases in the average balance of certificates of deposit and borrowed funds of $124.7 million and $148.4 million, respectively, combined with increases of 49 basis points and 36 basis points in the cost of deposits and borrowed funds, respectively. This increase in the cost of deposits and borrowings is due to the Federal Reserve increasing overnight rates by 200 basis points during 2005, which then resulted in an increase in our sources of funds. The net interest margin decreased 27 basis points to 3.08% for the three months ended December 31, 2005 from 3.35% for the three months ended December 31, 2004. Excluding prepayment penalty Prepayment penalty A fee a borrower pays a lender when the borrower repays a loan before its scheduled time of maturity. income, the net interest margin would have been 2.89% and 3.19% for the three month periods ended December 31, 2005 and 2004, respectively. The net interest margin for the three months ended December 31, 2005 declined nine basis points from the quarter ended September September: see month. 30, 2005. While the yield on interest-earning assets increased four basis points during the quarter, this was more than offset by the cost of interest-bearing liabilities increasing 14 basis points. The higher increase in the cost of interest-bearing liabilities is primarily due to the increase in short-term rates. The cost of savings accounts Savings Account A deposit account intended for funds that are expected to stay in for the short term. A savings account offers lower returns than the market rates. Notes: increased 31 basis points in the fourth quarter of 2005 compared to the third quarter of 2005. In addition, the average balance of higher costing certificates of deposit increased $81.6 million, during the quarter, with the cost increasing 17 basis points. Non-interest income decreased $0.1 million or 10.7% for the three months ended December 31, 2005 to $1.2 million, as compared to $1.3 million for the quarter ended December 31, 2004. This was attributed to the net loss on the sale of securities of $0.6 million due to a restructuring of the portfolio, offset by increases of $0.3 million 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. ("FHLB-NY") stock and $0.2 million in loan fee income. Non-interest expense was $8.9 million for the three months ended December 31, 2005, a decrease of $0.6 million, or 6.1%, from $9.4 million for the three months ended December 31, 2004. The reduction from the prior year period is primarily attributed to decreases of $0.8 million in employee salary and benefit expenses related to the retirement of the former President and Chief Executive Officer; $0.3 million in expenses primarily related to the relocation of various departments and the additional expenses incurred for the initial compliance with the provisions of the Sarbanes-Oxley Act. These reductions were offset by increases of $0.3 million in advertising costs for campaigns to attract new deposits and $0.2 million in data processing data processing or information processing, operations (e.g., handling, merging, sorting, and computing) performed upon data in accordance with strictly defined procedures, such as recording and summarizing the financial transactions of a expense. Management continues to monitor expenditures resulting in efficiency ratios of 47.0% and 53.2% for three-month periods ended December 31, 2005 and 2004, respectively. Net income for the three months ended December 31, 2005 was $5.7 million, an increase of $0.6 million or 12.6%, as compared to $5.1 million for the three months ended December 31, 2004. Diluted earnings per share were $0.32, an increase of $0.04 per diluted share for the three months ended December 31, 2005 from $0.28 per diluted share for the three months ended December 31, 2004. Return on average equity was 13.4% for the three months ended December 31, 2005 compared to 13.0% for the three months ended December 31, 2004. Return on average assets was 1.0% for each of the three-month periods ended December 31, 2005 and 2004. Earnings Summary - Year Ended December 31, 2005 Net interest income for the year ended December 31, 2005 increased $1.7 million, or 2.6%, to $68.2 million from $66.5 million for the year ended December 31, 2004. The increase in net interest income is primarily attributed to the growth in the average balance of interest-earning assets, which increased $199.6 million to $2,106.9 million, while the net interest spread decreased 27 basis points to 3.03% for the year ended December 31, 2005 from 3.30% for the same period in 2004. The cost of interest-bearing liabilities increased 34 basis points to 3.26% for the year ended December 31, 2005 from 2.92% for the year ended December 31, 2004. The yield on interest-earning assets rose by seven basis points to 6.29% due to an increase of $321.4 million in the average balance of the higher-yielding loan portfolio to $1,710.8 million for the year ended December 31, 2005 from $1,389.4 million for the year ended December 31, 2004, combined with a decline of $107.3 million and $14.5 million in the average balance of the lower-yielding securities portfolio and interest-earning deposits and federal funds sold, respectively. The yield on the mortgage loan portfolio declined 30 basis points to 6.77% for the year ended December 31, 2005 from 7.07% for the year ended December 31, 2004. This decrease is due to the average rate on new loans originated during the year being below the average rate on both the loan portfolio and loans which were paid-in-full. In an effort to increase the yield on interest-earning assets, we used repayments on the lower-yielding securities portfolio to partially fund the growth in the higher-yielding mortgage loan portfolio. The increase in the cost of interest-bearing liabilities was attributed to an increase in the average balances of certificates of deposit, borrowed funds and savings accounts of $104.4 million, $102.5 million and $22.8 million, respectively, combined with 11 basis point, 32 basis point and 42 basis point increases in their respective cost. The net interest margin decreased 25 basis points to 3.24% for the year ended December 31, 2005 from 3.49% for the year ended December 31, 2004. Excluding prepayment penalty income, the net interest margin would have been 3.04% and 3.26% for the years ended December 31, 2005 and 2004, respectively. Non-interest income increased $0.7 million, or 11.8%, to $6.6 million for the year ended December 31, 2005, as compared to $5.9 million for same period in 2004. The increase was primarily attributed to increases of $0.3 million in gains on the sale of loans originated for sale, $0.7 million in dividends received on FHLB-NY stock, and $0.2 million in loan fee income, partially offset by an increase of $0.5 million in the net loss on the sale of securities. Non-interest expense was $36.3 million for the year ended December 31, 2005, an increase of $0.9 million, or 2.5%, from $35.4 million for the year ended December 31, 2004. The increase from the prior year period is attributed to increases of: $0.5 million in occupancy Gaining or having physical possession of real property subject to, or in the absence of, legal right or title. In a fire insurance policy, for example, the term occupancy and equipment primarily due to the relocation expenses of the Company's executive offices and various departments during the second half of 2004; $0.3 million in audit and exam fees related to increased compliance requirements Compliance requirements are a series of directives established by United States Federal government agencies that summarize hundreds of Federal laws and regulations applicable to Federal assistance (also known as Federal aid or Federal funds). due to the Sarbanes-Oxley Act; $0.5 million for legal expenses, charged in the third quarter in connection with the terminated negotiations to acquire another financial institution; $0.4 million in advertising costs for campaigns to attract new deposits; $0.4 million in data processing expense; $0.4 in employee pension and health benefits: $0.2 million for the cost of certain restricted stock unit awards granted in the current period as the participants have no risk of forfeiture The involuntary relinquishment of money or property without compensation as a consequence of a breach or nonperformance of some legal obligation or the commission of a crime. The loss of a corporate charter or franchise as a result of illegality, malfeasance, or Nonfeasance. ; and $0.3 million in board of director fees due to the increases in the size of the board of directors and the number of meetings. The increased cost of restricted stock units Restricted stock units Similar to restricted stock. However, the unit represents a promise that employees will receive stock in the future. The units do not pay dividends until the stock is vested. in the current period compared to the prior period is due to the increased level of the awards to non-employee directors. The 2005 Omnibus omnibus: see bus. Incentive Plan, approved at the annual stockholders meeting, increased annual grants to each non-employee director to 3,600 restricted stock units, while eliminating grants of stock options for non-employee directors. This will provide an expense benefit in future years when we will be required to expense stock option grants. These increases were offset by decreases in salaries and employee benefits and other operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. of $0.9 million and $0.2 million, respectively, due to the 2004 adjustment to amortization of compensation expense for certain of the Company's restricted stock awards and supplemental retirement benefits, and $0.8 million recorded in December 2004 related to the announcement of the retirement the former President and Chief Executive Officer. Management continues to monitor expenditures resulting in efficiency ratios of 48.0% and 48.8% for years ended December 31, 2005 and 2004, respectively. Net income for the year ended December 31, 2005 was $23.5 million, an increase of $0.9 million, or 3.9%, from $22.6 million for the year ended December 31, 2004. Diluted earnings per share increased $0.06 per diluted share to $1.31 per diluted share for the year ended December 31, 2005 from $1.25 per diluted share for the year ended December 31, 2004. Return on average equity was 14.3% for the year ended December 31, 2005 compared to 15.0% for the year ended December 31, 2004. Return on average assets remained at 1.1% for both years ended December 31, 2005 and 2004. Balance Sheet Summary At December 31, 2005, total assets were $2,353.2 million, an increase of $295.2 million, or 14.3%, from $2,058.0 million at December 31, 2004. Total loans, net increased $365.4 million, or 24.1%, during the year ended December 31, 2005 to $1,881.9 million from $1,516.5 million at December 31, 2004. At December 31, 2005, loans in process totaled $179.4 million, compared to $170.0 million at December 31, 2004. The following table shows loan originations and purchases for the periods indicated.
For the three months For the year
ended December 31, ended December 31,
--------------------- ---------------------
(In thousands) 2005 2004 2005 2004
----------------------------------------------------------------------
Multi-family residential $ 37,047 $ 45,683 $ 223,074 $ 203,741
Commercial real estate 22,347 21,142 103,090 92,526
One-to-four family -
mixed-use property 36,333 32,618 186,700 136,804
One-to-four family -
residential 2,453 2,956 13,186 17,699
Co-operative apartments - - - 302
Construction 11,063 6,760 46,414 25,923
Commercial business and
other loans 5,736 6,679 26,196 18,595
---------- ---------- ---------- ----------
Total $ 114,979 $ 115,838 $ 598,660 $ 495,590
========== ========== ========== ==========
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. As a result, the Company has been able to minimize In a graphical environment, to hide an application that is currently displayed on screen. For example, in Windows and Mac, the application's window is removed from the screen and represented by an icon on the Windows Taskbar. In the Mac, the icon is placed in the Dock. See Win Minimize windows. charge-offs of losses from impaired See assistive technology. loans and maintain asset quality. Non-performing assets were $2.5 million at December 31, 2005 compared to $0.9 million at December 31, 2004. Total non-performing assets as a percentage of total assets was 0.10% at December 31, 2005 compared to 0.04% at December 31, 2004. The ratio of allowance for loan losses to total 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 260% at December 31, 2005 compared to 717% at December 31, 2004. During the year ended December 31, 2005, mortgage-backed securities Mortgage-backed securities (MSBs) Securities backed by a pool of mortgage loans. decreased $94.4 million to $301.2 million, while other securities decreased $3.5 million to $36.6 million. As funds became available from principal reductions on the securities portfolio during the year, they have been reinvested in higher yielding loans. Other securities primarily consists of securities issued by government agencies and mutual or bond funds that invest in government and government agency securities. Total liabilities were $2,176.7 million at December 31, 2005, an increase of $279.3 million, or 14.7%, from December 31, 2004. During the year ended December 31, 2005, due to depositors increased $171.5 million to $1,447.9 million, primarily as a result of increased marketing to attract deposits in this highly competitive market. Certificate of deposit accounts increased $194.8 million, while core deposits decreased $23.3 million. Borrowed funds increased $105.0 million during the year ended December 31, 2005 to partially fund the growth in the loan portfolio. Mortgagors' escrow escrow Instrument, such as a deed, money, or property, that constitutes evidence of obligations between two or more parties and is held by a third party. It is delivered by the third party only upon fulfillment of some condition. deposits increased $3.0 million during the year ended December 31, 2005. 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 $15.8 million, or 9.8%, to $176.5 million at December 31, 2005, from $160.7 million at December 31, 2004. Net income of $23.5 million for the year ended December 31, 2005 was partially offset by $2.6 million in treasury shares purchased through the Company's stock repurchase Stock repurchase A firm's repurchase of outstanding shares of its common stock. program, a net after tax decrease of $4.2 million on the market value of securities available for sale, and $7.0 million of cash dividends paid during the year ending December 31, 2005. The exercise of stock options increased stockholders' equity by $4.0 million, including the income tax benefit realized by the Company upon the exercise of the options. Book value per share was $9.07 at December 31, 2005 compared to $8.35 per share at December 31, 2004. Under its current stock repurchase program, the Company repurchased 144,700 shares during the year ended December 31, 2005, at a total cost of $2.6 million, at an average of $17.74 per share. At December 31, 2005, 774,650 shares remain to be repurchased under the current stock repurchase program. Through December 31, 2005, the Company had repurchased approximately 47% of the common shares issued in connection with the Company's initial public offering at a cost of $111.8 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 The person who obtains or is otherwise covered by insurance on his or her health, life, or property. The insured in a policy is not limited to the insured named in the policy but applies to anyone who is insured under the policy. insured n. 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 nine banking offices located in Queens, Brooklyn, Manhattan Manhattan, indigenous people of North America Manhattan (mănhăt`ən), indigenous people of North America of the Algonquian-Wakashan linguistic stock (see Native American languages). and Nassau County. 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 Except Per Share Data)
(Unaudited)
December 31, December 31,
2005 2004
-------------- --------------
ASSETS
------
Cash and due from banks $ 26,754 $ 14,661
Securities available for sale:
Mortgage-backed securities 301,194 395,629
Other securities 36,567 40,116
Loans:
Multi-family residential 788,071 646,922
Commercial real estate 399,081 334,048
One-to-four family - mixed-use
property 477,775 332,805
One-to-four family - residential 134,641 151,737
Co-operative apartments 2,161 3,132
Construction 49,522 31,460
Small Business Administration 9,239 5,633
Commercial business and other 19,362 12,505
Net unamortized premiums and
unearned loan fees 8,409 4,798
Allowance for loan losses (6,385) (6,533)
-------------- --------------
Net loans 1,881,876 1,516,507
Interest and dividends receivable 10,554 8,868
Bank premises and equipment, net 7,238 7,558
Federal Home Loan Bank of New York
stock 29,622 22,261
Bank owned life insurance 26,526 25,399
Goodwill 3,905 3,905
Other assets 28,972 23,140
-------------- --------------
Total assets $ 2,353,208 $ 2,058,044
============== ==============
LIABILITIES
-----------
Due to depositors:
Non-interest bearing $ 58,678 $ 49,540
Interest-bearing:
Certificate of deposit
accounts 898,157 703,314
Savings accounts 273,753 216,772
Money market accounts 175,247 258,235
NOW accounts 42,029 48,463
-------------- --------------
Total interest-bearing
deposits 1,389,186 1,226,784
Mortgagors' escrow deposits 19,423 16,473
Borrowed funds 689,710 584,736
Other liabilities 19,744 19,858
-------------- --------------
Total liabilities 2,176,741 1,897,391
-------------- --------------
STOCKHOLDERS' EQUITY
--------------------
Preferred stock ($0.01 par value;
5,000,000 shares authorized; none
issued) - -
Common stock ($0.01 par value;
40,000,000 shares authorized;
19,466,894 shares and 19,456,696
shares issued at December 31, 2005
and 2004, respectively; 19,465,844
shares and 19,232,248 shares
outstanding at December 31, 2005
and 2004, respectively) 195 195
Additional paid-in capital 39,635 37,187
Treasury stock (1,050 shares and
224,448 shares at December 31, 2005
and December 31, 2004, respectively) (12) (3,893)
Unearned compensation (4,159) (5,117)
Retained earnings 146,068 133,290
Accumulated other comprehensive loss,
net of taxes (5,260) (1,009)
-------------- --------------
Total stockholders' equity 176,467 160,653
-------------- --------------
Total liabilities and
stockholders' equity $ 2,353,208 $ 2,058,044
============== ==============
FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in Thousands Except Per Share Data)
(Unaudited)
For the three months For the year
ended December 31, ended December 31,
--------------------- ---------------------
2005 2004 2005 2004
----------------------------------------------------------------------
Interest and dividend income
----------------------------
Interest and fees on loans $ 31,247 $ 25,231 $ 115,850 $ 98,154
Interest and dividends on
securities:
Interest 3,688 4,578 16,098 19,963
Dividends 130 133 374 389
Other interest income 74 94 117 218
---------- ---------- ---------- ----------
Total interest and
dividend income 35,139 30,036 132,439 118,724
---------- ---------- ---------- ----------
Interest expense
----------------
Deposits 10,013 7,778 34,657 28,972
Other interest expense 8,090 5,911 29,572 23,261
---------- ---------- ---------- ----------
Total interest
expense 18,103 13,689 64,229 52,233
---------- ---------- ---------- ----------
Net interest income 17,036 16,347 68,210 66,491
Provision for loan losses - - - -
---------- ---------- ---------- ----------
Net interest income after
provision for loan losses 17,036 16,347 68,210 66,491
---------- ---------- ---------- ----------
Non-interest income
-------------------
Loan fee income 541 377 2,162 1,924
Banking services fee income 368 382 1,454 1,588
Net gain on sale of loans
held for sale 41 79 583 306
Net gain on sale of loans - - 19 -
Net loss on sale of
securities (647) (89) (647) (100)
Federal Home Loan Bank of
New York stock dividends 395 127 1,163 441
Bank owned life insurance 275 283 1,127 1,157
Other income 209 165 786 627
---------- ---------- ---------- ----------
Total non-interest
income 1,182 1,324 6,647 5,943
---------- ---------- ---------- ----------
Non-interest expense
--------------------
Salaries and employee
benefits 4,021 4,783 17,096 18,403
Occupancy and equipment 1,200 1,078 4,170 3,653
Professional services 1,269 1,006 4,489 3,497
Data processing 658 424 2,290 1,892
Depreciation and
amortization 373 391 1,553 1,487
Other operating expenses 1,347 1,767 6,666 6,457
---------- ---------- ---------- ----------
Total non-interest
expense 8,868 9,449 36,264 35,389
---------- ---------- ---------- ----------
Income before income taxes 9,350 8,222 38,593 37,045
---------- ---------- ---------- ----------
Provision for income taxes
--------------------------
Federal 2,891 2,874 11,896 11,454
State and local 755 281 3,155 2,942
---------- ---------- ---------- ----------
Total taxes 3,646 3,155 15,051 14,396
---------- ---------- ---------- ----------
Net income $ 5,704 $ 5,067 $ 23,542 $ 22,649
========== ========== ========== ==========
Basic earnings per share $ 0.32 $ 0.29 $ 1.34 $ 1.30
Diluted earnings per share $ 0.32 $ 0.28 $ 1.31 $ 1.25
Dividends per share $ 0.10 $ 0.09 $ 0.40 $ 0.35
FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
SELECTED CONSOLIDATED FINANCIAL DATA
(Dollars in Thousands Except Share Data)
(Unaudited)
At or for
the three months At or for the year
ended December 31, ended December 31,
---------------------- ----------------------
2005 2004 2005 2004
---------- ---------- ---------- ----------
Per Share Data
------------------
Basic earnings per
share $ 0.32 $ 0.29 $ 1.34 $ 1.30
Diluted earnings
per share $ 0.32 $ 0.28 $ 1.31 $ 1.25
Average number of
shares outstanding
for:
Basic earnings
per share
computation 17,672,525 17,443,625 17,555,289 17,429,226
Diluted earnings
per share
computation 18,030,766 18,068,807 18,001,265 18,092,104
Book value per share
(based on 19,465,844
and 19,232,248
shares outstanding
at December 31,
2005 and 2004,
respectively) $ 9.07 $ 8.35 $ 9.07 $ 8.35
Average Balances
----------------
Total loans, net $1,848,595 $1,480,598 $1,710,837 $1,389,427
Total interest-
earning assets 2,213,385 1,952,070 2,106,936 1,907,323
Total assets 2,315,364 2,046,186 2,207,662 2,002,554
Total due to
depositors 1,327,618 1,232,617 1,261,819 1,186,719
Total interest-
bearing liabilities 2,073,239 1,823,834 1,972,195 1,787,751
Stockholders' equity 169,866 156,405 164,951 151,295
Performance Ratios(1)
---------------------
Return on average
assets 0.99% 0.99% 1.07% 1.13%
Return on average
equity 13.43 12.96 14.27 14.97
Yield on average
interest-earning
assets 6.35 6.15 6.29 6.22
Cost of average
interest-bearing
liabilities 3.49 3.00 3.26 2.92
Interest rate
spread during
period 2.86 3.15 3.03 3.30
Net interest
margin 3.08 3.35 3.24 3.49
Non-interest
expense to average
assets 1.53 1.85 1.64 1.77
Efficiency ratio 47.01 53.20 48.03 48.79
Average interest-
earning assets to
average interest-
bearing liabilities 1.07X 1.07X 1.07X 1.07X
(1) Ratios for the quarters ended December 31, 2005 and 2004
are presented on an annualized basis.
FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
SELECTED CONSOLIDATED FINANCIAL DATA
(Dollars in Thousands)
(Unaudited)
At or for the At or for the
year ended year ended
December 31, December 31,
2005 2004
-------------- -------------
Selected Financial Ratios and Other Data
----------------------------------------
Regulatory capital ratios (for Flushing
Savings Bank only):
Tangible capital
(minimum requirement = 1.5%) 7.14% 7.89%
Leverage and core capital
(minimum requirement = 3%) 7.14 7.89
Total risk-based capital
(minimum requirement = 8%) 12.12 14.01
Capital ratios:
Average equity to average assets 7.47% 7.56%
Equity to total assets 7.50 7.81
Asset quality:
Non-performing loans $2,452 $911
Non-performing assets 2,452 911
Net charge-offs 148 20
Asset quality ratios:
Non-performing loans to gross loans 0.13% 0.06%
Non-performing assets to total
assets 0.10 0.04
Allowance for loan losses to gross
loans 0.34 0.43
Allowance for loan losses to non-
performing assets 260.39 717.29
Allowance for loan losses to non-
performing loans 260.39 717.29
Full-service customer facilities 9 10
FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
NET INTEREST MARGIN
(Dollars in Thousands)
(Unaudited)
For the three months ended December 31,
----------------------------------------------------
2005 2004
------------------------- -------------------------
Average Yield/ Average Yield/
Balance Interest Cost Balance Interest Cost
------------------------- -------------------------
Assets
Interest-earning
assets:
Mortgage loans,
net (1) $1,822,156 $ 30,764 6.75% $1,463,966 $ 24,966 6.82%
Other loans,
net (1) 26,439 483 7.31 16,632 265 6.37
------------------------- -------------------------
Total loans, net 1,848,595 31,247 6.76 1,480,598 25,231 6.82
------------------------- -------------------------
Mortgage-backed
securities 318,477 3,386 4.25 410,196 4,306 4.20
Other securities 38,590 432 4.48 40,308 405 4.02
------------------------- -------------------------
Total securities 357,067 3,818 4.28 450,504 4,711 4.18
------------------------- -------------------------
Interest-earning
deposits and
federal funds
sold 7,723 74 3.83 20,968 94 1.79
------------------------- -------------------------
Total interest-
earning assets 2,213,385 35,139 6.35 1,952,070 30,036 6.15
-------------- --------------
Other assets 101,979 94,116
---------- ----------
Total assets $2,315,364 $2,046,186
========== ==========
Liabilities and
Equity
Interest-bearing
liabilities:
Deposits:
Savings accounts $ 271,482 938 1.38 $ 216,871 273 0.50
NOW accounts 39,878 51 0.51 46,376 59 0.51
Money market
accounts 190,357 1,178 2.48 268,128 1,253 1.87
Certificate of
deposit accounts 825,901 7,831 3.79 701,242 6,180 3.53
------------------------- -------------------------
Total due to
depositors 1,327,618 9,998 3.01 1,232,617 7,765 2.52
Mortgagors'
escrow accounts 29,474 15 0.20 23,424 13 0.22
------------------------- -------------------------
Total deposits 1,357,092 10,013 2.95 1,256,041 7,778 2.48
Borrowed funds 716,147 8,090 4.52 567,793 5,911 4.16
------------------------- -------------------------
Total interest-
bearing
liabilities 2,073,239 18,103 3.49 1,823,834 13,689 3.00
-------------- --------------
Non interest-
bearing deposits 53,335 47,403
Other liabilities 18,924 18,544
---------- ----------
Total
liabilities 2,145,498 1,889,781
Equity 169,866 156,405
---------- ----------
Total
liabilities
and equity $2,315,364 $2,046,186
========== ==========
Net interest
income /
net interest
rate spread $ 17,036 2.86% $ 16,347 3.15%
============== ==============
Net interest-
earning assets /
net interest
margin $ 140,146 3.08% $ 128,236 3.35%
========== ===== ========== =====
Ratio of interest-
earning assets to
interest-bearing
liabilities 1.07X 1.07X
===== =====
(1) Loan interest income includes loan fee income (which includes net
amortization of deferred fees and costs, late charges, and
prepayment penalties) of approximately $1.1 million and $0.8
million for the three-month periods ended December 31, 2005 and
2004, respectively.
FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
NET INTEREST MARGIN
(Dollars in Thousands)
(Unaudited)
For the year ended December 31,
----------------------------------------------------
2005 2004
------------------------- -------------------------
Average Yield/ Average Yield/
Balance Interest Cost Balance Interest Cost
------------------------- -------------------------
Assets
Interest-earning
assets:
Mortgage loans,
net (2) $1,687,701 $114,319 6.77% $1,376,685 $ 97,367 7.07%
Other loans,
net (2) 23,136 1,531 6.62 12,742 787 6.18
------------------------- -------------------------
Total loans, net 1,710,837 115,850 6.77 1,389,427 98,154 7.06
------------------------- -------------------------
Mortgage-backed
securities 353,364 14,949 4.23 447,209 18,516 4.14
Other securities 39,149 1,523 3.89 52,621 1,836 3.49
------------------------- -------------------------
Total securities 392,513 16,472 4.20 499,830 20,352 4.07
------------------------- -------------------------
Interest-earning
deposits and
federal funds
sold 3,586 117 3.26 18,066 218 1.21
------------------------- -------------------------
Total interest-
earning assets 2,106,936 132,439 6.29 1,907,323 118,724 6.22
-------------- --------------
Other assets 100,726 95,231
---------- ----------
Total assets $2,207,662 $2,002,554
========== ==========
Liabilities and
Equity
Interest-bearing
liabilities:
Deposits:
Savings accounts $ 241,121 2,225 0.92 $ 218,336 1,092 0.50
NOW accounts 43,133 216 0.50 44,103 221 0.50
Money market
accounts 228,818 5,199 2.27 279,952 5,122 1.83
Certificate of
deposit accounts 748,747 26,960 3.60 644,328 22,487 3.49
------------------------- -------------------------
Total due to
depositors 1,261,819 34,600 2.74 1,186,719 28,922 2.44
Mortgagors'
escrow accounts 27,337 57 0.21 20,482 50 0.24
------------------------- -------------------------
Total deposits 1,289,156 34,657 2.69 1,207,201 28,972 2.40
Borrowed funds 683,039 29,572 4.33 580,550 23,261 4.01
------------------------- -------------------------
Total interest-
bearing
liabilities 1,972,195 64,229 3.26 1,787,751 52,233 2.92
-------------- --------------
Non interest-
bearing deposits 52,017 45,093
Other liabilities 18,499 18,415
---------- ----------
Total
liabilities 2,042,711 1,851,259
Equity 164,951 151,295
---------- ----------
Total
liabilities
and equity $2,207,662 $2,002,554
========== ==========
Net interest
income /
net interest
rate spread $ 68,210 3.03% $ 66,491 3.30%
============== ==============
Net interest-
earning assets /
net interest
margin $ 134,741 3.24% $ 119,572 3.49%
========== ===== ========== =====
Ratio of interest-
earning assets to
interest-bearing
liabilities 1.07X 1.07X
===== =====
(2) Loan interest income includes loan fee income (which includes net
amortization of deferred fees and costs, late charges, and
prepayment penalties) of approximately $4.2 million and $4.6
million for the year ended December 31, 2005 and 2004,
respectively.
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