FIRST QUARTER 20201 HIGHLIGHTS
GAAP diluted EPS was ($0.05), compared to $0.45 in 4Q19 and $0.25 in 1Q19Core diluted EPS was $0.19, compared to $0.41 in 4Q19 and $0.33 in 1Q19Net interest margin was 2.44%, down 4bps QoQ and 13bps YoYCore net interest margin was 2.49%, up 16bps QoQ and down 3bps YoYGAAP net interest income of $40.8 million, down 0.9% QoQ and 2.3% YoYCore net interest income of $42.9 million, up 7.0% QoQ and 1.1% YoYGAAP and core ROAE (1.0)% and 3.8%, respectively, compared with 9.1% and 8.4%, respectively in 4Q19GAAP and core ROAA were (0.1)% and 0.3%, respectively, compared with 0.7% and 0.7%, respectively in 4Q19Loan pipeline remains strong at $324.4 millionProvision for credit losses of $7.2 million, $0.18 after-tax per diluted common share, driven mainly by economic conditions arising from COVID-19 pandemicNet charge-offs were $1.1 million, compare to net recoveries of $34,000 in 4Q19 and net charge-offs of $0.9 million in 1Q19UNIONDALE, N.Y., April 28, 2020 (GLOBE NEWSWIRE) — Flushing Financial Corporation (the “Company”) (Nasdaq-GS: FFIC), the parent holding company for Flushing Bank (the “Bank”), today announced its financial results for the first quarter ended March 31, 2020.John R. Buran, President and Chief Executive Officer stated, “Our thoughts go out to those most affected by COVID-19, especially those on the front lines. The health and welfare of our employees and customers remains our top priority as we navigate through the COVID-19 pandemic.”“We were quick to respond to the pandemic with new health and safety measures, including social distancing, appointment banking and expansion of our remote capabilities. Our staff responded to these changes in a superb fashion and continue to provide our customers with excellent service. Today we have the capability of having our entire staff work remotely. On any given day, as many as 85% of staff work from home.”“Our GAAP earnings for the quarter were affected by two COVID-19 related non-cash charges totaling $0.38 per share, after-tax, that caused the Company to record a loss of $0.05 per diluted share for the quarter. The Federal Reserve’s dramatic 150 basis point drop in rates provided the country with much needed liquidity to counteract the negative economic effects of the COVID-19 pandemic. As a result, we recorded mark to market adjustments on items carried at fair value under the fair value option and on our derivative portfolio totaling $0.20 per share, after-tax.”“Given the negative economic environment at the end of the quarter caused by the COVID-19 pandemic, we adjusted our economic forecast in our current expected credit loss (“CECL”) modeling resulting in a $7.2 million charge, or $0.18 per share, after-tax to earnings for the quarter. When the Company adopted CECL on January 1, 2020, in the then favorable economic environment resulted in a $1.3 million increase in the allowance. As a result of CECL, our overall allowance for credit losses increased by approximately 30%.”“Core earnings for the quarter were $5.5 million, or $0.19 per diluted share. Core earnings were driven by 3% (not annualized) loan growth for the quarter and a 16 basis point improvement in core net interest margin. Our core revenue before provision for credit losses and taxes totaled $46.1 million, an increase of $2.1 million quarter over quarter.” “Our non-performing assets at the end of the quarter were 23 basis points of total assets. Today, 87% of our portfolio is real estate based with an average loan to value of less than 40% and an average debt coverage ratio of 1.83.”“As a result of the pandemic, almost all industries have experienced adverse impact, including those represented in our loan portfolio. At March 31, 2020, we had approximately $1.5 billion in loans to industries severely impacted by COVID-19.”“During these tumultuous times, we are actively assisting our customers by providing short-term forbearances in the form of deferrals of interest, principal and/or escrow for terms ranging from one to six months. Through April 17th, we have approved forbearances for loans with an aggregate outstanding loan balance of approximately $839 million of which $673 million is in our real estate portfolio and $166 million is in our business banking portfolio. Given the pandemic and current economic environment, we continue to see the need for our customers to modify loans. We actively participated in the SBA Paycheck Protection Program, gaining approval to fund up to $64 million of these loans. We also expect to participate in the Main Street Lending Program in order to assist our customers.”Mr. Buran concluded, “When the restrictive economic environment begins to lift, we expect to be the beneficiaries of a workforce that is more flexible and dynamic as a result of this experience coupled with a customer base that is highly attuned to our online and mobile banking capabilities, which we have very recently expanded. We remain committed to helping our communities and customers get through this difficult time.”Summary of Strategic Objectives
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