Flushing Financial Corporation · NASDAQ:FFIC
Flushing Financial — Piper Sandler Investor Meetings (February 2021)
38 slides from Flushing Financial's conference presentation, Feb 4, 2021
Slide 1: Piper Sandler Investor Meetings
Piper Sandler Investor Meetings February 4, 2021 contact: susan.cullen@flushingbank.com | phone: 718.961.5400 | website: www.flushingbank.com
Slide 2: Safe Harbor Statement
Safe Harbor Statement 2 “Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: 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 d
Slide 3: Flushing Financial: Leading NYC Area Community Bank
Flushing Financial: Leading NYC Area Community Bank 3 .. Leading community bank in greater New York City area – $8.0 B assets, $6.7 B loans, $6.1 B deposits – Asian Bank Niche with over $650 MM of loans and greater than $900 MM of deposits – Online Banking Division - $225 MM of deposits .. Diversifi
Slide 4: Flushing Financial Corporate Profile
Flushing Financial Corporate Profile (NASDAQ: FFIC) 4 4Q20 Key Statistics Strong Franchise and Diverse Business Mix .. Leading community bank in greater New York City area .. Diversified loan portfolio with focus on commercial business loans, multi- family mortgages and commercial real estate .. Cur
Slide 5: Strong Asian Banking Market Focus
Strong Asian Banking Market Focus .. Asian Bank within Flushing Bank .. Loans in the Asian communities total over $650MM with deposits exceeding $900MM .. Multilingual branch staff serves our diverse customer base in New York City market area .. Growth aided by the Asian Advisory Board .. Sponsorshi
Slide 6: Experienced Executive Leadership Team
Experienced Executive Leadership Team 6 John Buran President and CEO FFIC: 19 years Industry: 43 years Maria Grasso SEVP, COO, Corporate Secretary FFIC: 14 years Industry: 34 years Susan Cullen SEVP, CFO, Treasurer FFIC: 5 years Industry: 29 years Francis Korzekwinski SEVP, Chief of Real Estate FFIC
Slide 7: Historical Highlights and Total Return Outperformance
Historical Highlights and Total Return Outperformance1 7 Timeline Highlights 1929 2018 2017 2014 2016 2008 2006 1995 2019 Source: Company filings, FactSet. Market data as of December 31, 2020. 1 Performance calculated from the later of 11/21/1995 or a company’s IPO. Price performance calculated on a
Slide 8: Republic New York First State Financial Services North Fork New York Community New York
Republic New York First State Financial Services North Fork New York Community New York Community Dime Bancorp BFS Bankorp New York Community Valley National Valley National GreenPoint Interchange Financial Services Astoria Astoria Flushing Financial Astoria Broad National Valley National Flushing F
Slide 9: Proven Track Record of Steady Growth
$4.86 $19.45 $0 $5 $10 $15 $20 $25 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 $0.7 $8.0 $0 $1 $2 $3 $4 $5 $6 $7 $8 $9 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 Proven Track Reco
Slide 10: Proven Track Record of Steady Growth
$0.00 $0.84 $0.00 $0.10 $0.20 $0.30 $0.40 $0.50 $0.60 $0.70 $0.80 $0.90 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 $0.25 $1.70 $0.00 $0.50 $1.00 $1.50 $2.00 $2.50 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13
Slide 11: Proven Track Record of Steady Growth
$0.6 $6.1 $0.0 $1.0 $2.0 $3.0 $4.0 $5.0 $6.0 $7.0 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 $0.3 $6.7 $0.0 $1.0 $2.0 $3.0 $4.0 $5.0 $6.0 $7.0 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18
Slide 12: Continued Strong Execution in 4Q20
Continued Strong Execution in 4Q20 12 .. Strong 4Q20: Core EPS up 4% QoQ, Record Net Interest Income – Core NIM expansion of 8 bps QoQ .. More opportunities to reprice deposits .. Benefits from balance sheet restructuring .. Cautiously optimistic on loan growth – Loan pipeline of $354.6 MM, up 9.3%
Slide 13: Strategic Objectives
Strategic Objectives 13 Manage cost of funds and continue to improve funding mix Manage credit risk Resume historical loan growth while achieving appropriate risk adjusted returns Enhance core earnings power by improving scalability and efficiency Remain well capitalized
Slide 14: Deposits Rise While Costs Fall
Deposits Rise While Costs Fall 14 $4,110 $4,447 $4,735 $5,013 $5,163 0.81% 0.91% 1.36% 1.76% 0.82% 2016 2017 2018 2019 2020 Increasing Deposits While Lowering Cost ($MM) Non-interest Bearing NOW Accounts Savings Money Market CDs Mortgage Escrow Total Average Deposits Deposit Cost .. Strategic Object
Slide 15: Continuing to Improve Funding Mix
Continuing to Improve Funding Mix 15 Reduced Reliance on CDs & Borrowings; Increased Non-interest Bearing 57% 10% 20% 2% 10% 37% 22% 28% 11% 2% $3.9B 4Q10 Avg $6.9B 4Q20 Avg CDs & Borrowings Money Market Now Non-interest Bearing Savings 1 1 Includes Mortgagors’ escrow. Percentages may not foot due t
Slide 16: Opportunities to Reprice Deposits Lower
16 CDs Maturing Replacement Funding .. Current deposit costs of replacement products significantly lower than maturing CD rates .. Yields rolling off exceed current market deposit costs 1.23% 0.74% 1.59% 0.59% 0.47% 1Q21 2Q21 3Q21 4Q21 0.38% 0.42% 0.64% 0.45% 0.35% 0.25% Borrowings Exp. Avg. Cost of
Slide 17: Digital Banking Grows
Digital Banking Grows 17 .. Strategic Objective #1: Manage cost of funds and continue to improve funding mix 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 Mobile Deposit Monthly Active Users Active Users 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 Active Online Banking Users
Slide 18: Loan Growth Improves
$4,819 $5,160 $5,536 $5,757 $6,702 4.07% 4.07% 4.25% 4.39% 4.07% 2016 2017 2018 2019 2020 Period End Loan Growth And Composition ($MM) Multi-family Commercial Real Estate Construction 1-4 Family Mixed Use Business Banking Total Loans Core Loan Yields 18 Loan Growth Improves .. Strategic Objective #2
Slide 19: NIM Expansion From Lower Deposit Costs
NIM Expansion From Lower Deposit Costs 19 1 Core NII, Loan Yields and NIM exclude prepayment penalties from loans and securities, recovered interest from delinquent loans, net gains and losses from fair value adjustments on qualifying hedges, and net amortization of purchase accounting adjustments.
Slide 20: 20% Earnings Accretion in 2021 From Empire Expected
20% Earnings Accretion in 2021 From Empire Expected 20 .. Strategic Objective #3: Enhance core earnings power by improving scalability and efficiency .. Closed the Empire transaction on October 31, 2020 – This added $982MM of assets, $685MM of loans and $854MM of deposits – Recorded goodwill of $1.5
Slide 21: Consistently Strong Credit Quality
Consistently Strong Credit Quality 21 $216.3MM .. Strategic Objective #4: Manage credit risk Adopted CECL on January 1, 2020
Slide 22: Historically Low Net Charge-offs
0.06% 0.45% -0.20% 0.30% 0.80% 1.30% 1.80% 2.30% 2.80% 3.30% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 FFIC Industry Low Historical Net Charge-offs NCOs / Average Loans Our Maximum Charge- offs were 64 bps, in Midst of the Great Recessio
Slide 23: Increased Coverage Ratio
Increased Coverage Ratio 23 24.7% 25.8% 34.6% 64.9% 73.4% 82.6% 103.8% 112.2% 128.9% 164.1% 214.3% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Loan Loss Reserve/NPL .. Strategic Objective #4: Manage credit risk
Slide 24: NPAs Remain Low
NPAs Remain Low 24 0.46% 0.35% 0.29% 0.24% 0.31% $21.9 $18.1 $16.3 $13.5 $21.1 2016 2017 2018 2019 2020 NPAs Remain Low NPAs/Loans&REO NPAs ($MM) 1.51% 1.21% 0.96% 0.67% 1.07% $72.6 $62.7 $53.1 $38.3 $71.7 2016 2017 2018 2019 2020 Criticized & Classified Loans Rise Mostly From Empire Acquisition Cri
Slide 25: Forbearance Loans Decline 57% from 3Q20
Forbearance Loans Decline 57% from 3Q20 25 Forbearance Trend from Peak to Remaining on Deferral $- $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 Peak Deferrals 5/31/20 9/30/2020 12/31/2020 ($MM) $1.5B $846.2MM $364.4MM1 % of Total Loan Portfolio 25.3% 14.2% 5.4% $148.1MM $216.3MM Interest Only Pay
Slide 26: Book Value of $20.11, Build Capital Ratios in 2021
Book Value of $20.11, Build Capital Ratios in 2021 26 $17.95 $18.63 $19.64 $20.59 $20.11 11.80% 11.60% 10.98% 10.95% 9.87% 9.00% 9.02% 8.74% 8.73% 8.38% 2016 2017 2018 2019 2020 Book Value Per Share CET1 Ratio Leverage Ratio .. Strategic Objective #5: Remain well capitalized
Slide 27: Tangible Book Value of $19.45 With 4.6% Dividend Yield
Tangible Book Value of $19.45 With 4.6%1 Dividend Yield 27 $17.40 $18.08 $19.07 $20.02 $19.45 8.24% 8.22% 7.83% 8.05% 7.52% 2016 2017 2018 2019 2020 Tangible Book Value Per Share Tangible Common Equity/Tangible Assets .. Strategic Objective #5: Remain well capitalized 1 Calculated using 2/1/21 closi
Slide 28: Outlook
Outlook 28 .. We are cautiously optimistic about the operating environment – Steeper yield curve – Fiscal stimulus and vaccine roll out should have a positive impact on the economy and borrowers .. We are concerned about – Rising COVID cases near term and what that might mean for the local economy –
Slide 29: Appendix
‘inancial Corporation Appendix
Slide 30: Multi-Family and CRE Property Type and Portfolio Highlights
Multi-Family and CRE Property Type and Portfolio Highlights 30 59% 12% 7% 8% 4% 5% 2% 3% $4.3B Total Portfolio .. Multi-Family: 59% . General Commercial: 12% .. CRE – Shopping Center: 7%. CRE – Strip Mall: 8% .. CRE – Single Tenant: 4% . Office: 5% .. Commercial Special Use: 2% . Industrial: 3% Mult
Slide 31: Commercial Business Exposures and Underwriting Standards
Commercial Business Exposures and Underwriting Standards 31 9% 11% 9% 6% 6% 4% 6% 7% 10% 4% 2% 5% 3% 18% $1.5 B Total Portfolio Real Estate Collateral $606.4 MM .. Hotels: 9%. Medical: 11% .. Auto/Marine Transportation: 9% . Airlines:6% .. Entertainment: 6% . Financing Company: 4% .. Manufacturers:
Slide 32: 4Q20 Highlights: NIM Increased Basis Points
4Q20 Highlights: NIM Increased 8 Basis Points 32 .. Core diluted EPS of $0.58, up 41.5%,GAAP diluted EPS totaled $0.11 compared to $0.45 a year ago .. Core ROA and ROE were 0.92% and 11.67%, respectively, and improved year over year .. Core NIM improved 8 bps during 4Q20 to 2.97%; funding costs decl
Slide 33: Reconciliation of GAAP Earnings and Core Earnings
Flushing Financial Corporation and Subsidiaries Reconciliation of GAAP Earnings and Core Earnings 33 Non-cash Fair Value Adjustments to GAAP Earnings The variance in GAAP and core earnings is primarily due to the impact of non-cash net gains and losses from fair value adjustments. These fair value a
Slide 34: Reconciliation of GAAP Earnings and Core Earnings
Reconciliation of GAAP Earnings and Core Earnings 34 1 Core diluted earnings per common share may not foot due to rounding. 2 Ratios are calculated on an annualized basis. GAAP income before income taxes $ 3,878 $ 18,820 $ 16,888 $ 45,182 $ 53,331 Day 1, Provision for Credit Losses - Empire transact
Slide 35: Reconciliation of GAAP NII & NIM to Core NII & NIM
Reconciliation of GAAP NII & NIM to CORE NII & NIM 35 1 Excludes purchase accounting average balances for year ended December 31, 2020.
Slide 36: Calculation of Tangible Stockholders' Common Equity to Tangible Assets
Calculation of Tangible Stockholders’ Common Equity to Tangible Assets 36 (Dollars in thousands) Total Equity $ 618,997 $ 586,406 $ 579,672 Less: Goodwill (17,636) (16,127) (16,127) Core deposit Intangibles (3,172) — — Intangible deferred tax liabilities 287 292 292 Tangible Stockholders' Common Equ
Slide 37: Contact Details
Contact Details | Flushing Financial Corporation 37 Susan Cullen SEVP, CFO & Treasurer (516) 209-3622 susan.cullen@flushingbank.com NASDAQ: FFIC
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