Slide 1: 4Q19 Earnings Conference Call
4Q19 Earnings Conference Call January 31, 2020 contact: susan.cullen@flushingbank.com | phone: (516) 209-3622 | website: www.flushingbank.com Exhibit 99.1
Slide 2: Safe Harbor Statement
Safe Harbor Statement “Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: The statements in this presentation relating to plans, strategies, economic performance and trends, projections of results of specific activities or investments and other statements that are not
Slide 3: Quarter Ended December 31, 2019 Highlights
Quarter Ended December 31, 2019 Highlights Earnings per share of $0.45 increased 22% QoQ Net interest income increased 6%, driven by the cost of funds NIM improved 11 basis points for the quarter Improvement in NIM primarily due to cost of funds decreasing 11 basis points Over $1B of retail CD’s mat
Slide 4: Summary of Strategic Objectives
Summary of Strategic Objectives Increase Core Deposits, with an Emphasis on Non-Interest Bearing DDA, and Continue to Improve Funding Mix Manage Net Loan Growth and Focus on Yield with an Emphasis on Assets with the Best Risk-Adjusted Returns Enhance Core Earnings Power by Improving Scalability and
Slide 5: Strategic objectives and the Empire acquisition
Increase core deposits, with an emphasis on non-interest bearing accounts, and continue to improve funding mix Lowers cost of deposits and loan-to-deposit ratio Increases non-interest-bearing deposits by 44% Creates LI’s 6th largest bank by deposit share among regional and community financial instit
Slide 6: FFIC / EMPK – 2021 Deal Accretion – Simplified Breakdown
FFIC / EMPK – 2021 Deal Accretion – Simplified Breakdown 1 Excludes purchase accounting and other merger adjustments for illustrative purposes. Source: Consensus Wall Streets estimates. SNL Financial. FFIC 2020E “pre-deal“ consensus net income / EPS estimates $48.4MM net income divided by ~28.8MM sh
Slide 7: Pending Acquisition to Significantly Improve Pro Forma Metrics
Pending Acquisition to Significantly Improve Pro Forma Metrics1 12.4x 0.67% 8.5% 65.0% P / LQA E2 ROAA ROATCE Efficiency 11.5x 0.75% 9.5% 62.8% P / LQA E ROAA ROATCE Efficiency 22.5x 0.48% 5.8% 79.8% P / LQA E2 ROAA ROATCE Efficiency Flushing Financial Standalone Source: Company reports, S&P Global
Slide 8: Key Messages
Key Messages Exceeding Customer Expectations Enhancing Earnings Power Strengthening Our Commercial Bank Balance Sheet Maintaining Our Strong Risk Management Philosophy Committed to being the preeminent community financial services company in our multicultural market area Competitive strength as a co
Slide 9: Net Interest Income
Net Interest Income Net Interest Income ($000s) NIM increased 11bps QoQ and decreased 9bps YoY NIM increase driven by a decrease in the cost of funds and a benefit of market value changes in fair value hedges Cost of funds decreased 11 bps in 4Q19 Core NIM1 was 2.33% in 4Q19 and 3Q19 and 2.49% in 4Q
Slide 10: Opportunity to Reduce Funding Costs with Maturing CDs
Opportunity to Reduce Funding Costs with Maturing CDs $1.0B of Retail CDs are scheduled to mature in 2020, representing 20% of total deposits as of 4Q19, at a weighted average cost of 2.20% Opportunity to re-price non-maturing deposits down CDs Maturing Replacement Funding Current deposit costs of r
Slide 11: Strong Real Estate Lender with Significant C&I Portfolio
Strong Real Estate Lender with Significant C&I Portfolio C&I closings totaled $82MM Mortgage loan closings total $187MM At December 31, 2019 the pipeline totaled $325MM at an average rate of 4.18% Loan Composition ($B) C&I Loan Growth ($MM) 4Q19 Yield on Total Loans: 4.49%
Slide 12: Credit Quality
Credit Quality 4Q19 Highlights Non-performing loans totaled $13.3MM, a decrease of 9.8% QoQ and 18.4% YoY Loan-to-value ratio on real estate dependent loans as of December 31, 2019 totaled 38.2% Average loan-to-value for non-performing loans collateralized by real estate at December 31, 2019 was 26.
Slide 13: Credit Discipline Paramount
Credit Discipline Paramount Over two decades and multiple credit cycles, Flushing has demonstrated superior credit metrics NCOs / Average Loans Source: SNL Financial. Financial data as of 4Q18. 1 “Industry” includes the ~400 banks that compose the SNL Bank and Thrift Index. 2 Includes $11.2MM in tax
Slide 14: Increasing Coverage Ratio
Increasing Coverage Ratio Loan Loss Reserve/NPL
Slide 15: Superior Asset Quality
Superior Asset Quality Current portfolio LTV ratio is less than 40% of origination value Conservative and thorough credit risk management through the life of a loan LTV of All Loans Secured by RE
Slide 16: Minimal Delinquencies on the Total Portfolio
Minimal Delinquencies on the Total Portfolio 1 Calculated by dividing current 90-day delinquencies by total loans originated by vintage period. 2 Represents one small business loan. 3 Represents four taxi medallion loans. 4 Represents one 1-4 family and one small business loan. 5 Represents one SBA
Slide 17: Continuing to Improve Funding Mix
Continuing to Improve Funding Mix Progress Made…More to Come $3.9B As of 12/31/10 $6.3B As of 12/31/2019 1 1 Includes Mortgagors’ escrow.
Slide 18: Consistent Core Deposit Growth
Consistent Core Deposit Growth Core deposits increased 7% YoY and 5% QoQ Deposit Composition ($B) 1 Includes NOW, demand and mortgagors‘ escrow deposits. 1 4Q19 Cost of Total Deposits: 1.71%
Slide 19: Strong Asian Banking Market within Marketplaces
Strong Asian Banking Market within Marketplaces Asian Bank within Flushing Bank New branch opened in Hicksville, NY in 4Q19 to expand our focus on the Asian population to the Long Island market Relocated branch to Bayside Queens in 4Q19 Loans in the Asian communities total over $650MM with deposits
Slide 20: Digital Transformation
Digital Transformation Modernize the customer experience without adding to infrastructure Anticipate completion in 2Q2020 Improves customer experience for both consumer and business customers Ability to secure customers outside our footprint and deepen relationships with our current customers Enhanc
Slide 21: Controlling Non-Interest Expense
Controlling Non-Interest Expense Non-Interest Expense ($000s) 2019 Highlights Non-interest expense increased $3.6MM, or 3.2% YoY Efficiency ratio was 63.9% for 2019 compared to 62.1% for 2018 Core non-interest expense was $113.2MM in 2019, an increase of $1.7MM or 1.5% from 2018
Slide 22: Improved Expense Control
Improved Expense Control Non-interest expenses as a percent of average assets has improved Remain disciplined in controlling expenses Non-Interest Expense / Average Assets
Slide 23: Strong Financial Performance
Strong Financial Performance Executing Strategic Objectives Management Culture & Track Record Attractive Markets & Customers 1 2 3 4 Long-standing, skilled management team Experienced lending in greater New York City markets 902% total return since IPO in 19951 Positive earnings through the cycle an
Slide 24: Appendix
Appendix
Slide 25: 4Q19 Operating Results
4Q19 Operating Results 4Q19 3Q19 4Q18 Earnings ($MM, except EPS data) GAAP Net Interest Income $41.2 $38.9 $40.6 Net Income $12.9 $10.7 $12.4 Core Net Income1 $11.9 $13.8 $15.4 EPS $0.45 $0.37 $0.44 Core EPS $0.41 $0.48 $0.54 Profitability Ratios ROAA 0.73% 0.62% 0.74% ROAE 9.11% 7.60% 9.18% Net Int
Slide 26: Non-GAAP Measures
Non-GAAP Measures Core Diluted EPS, Core ROAE, Core ROAA, Core Net Interest Income, Core Yield on Total Loans, Core Net Interest Margin and tangible book value per common share are each non-GAAP measures used in this presentation. A reconciliation to the most directly comparable GAAP financial measu
Slide 27: Reconciliation of GAAP Earnings and Core Earnings
Reconciliation of GAAP Earnings and Core Earnings Non-cash Fair Value Adjustments to GAAP Earnings During the current year, core earnings were higher than GAAP earnings primarily due to the impact of non-cash net losses from fair value adjustments. These fair value adjustments relate primarily to sw
Slide 28: Reconciliation of GAAP NII & NIM to CORE NII & NIM
Reconciliation of GAAP NII & NIM to CORE NII & NIM
Slide 29: New York City Multi-Family Housing Market
New York City Multi-Family Housing Market BACKGROUND June 2019 NYS approved sweeping reforms to existing rent regulations New rules tighten owner’s ability to obtain future rent increases above the annual increases recommended by the Rent Guidelines Board (RGB) Affected loan balances total $1.6B POT
Slide 30: Contact Details
Contact Details | Flushing Financial Corporation Susan Cullen SEVP, CFO & Treasurer (516) 209-3622 susan.cullen@flushingbank.com NASDAQ: FFIC
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