Flushing Financial Corporation · NASDAQ:FFIC
Flushing Financial — Q2 2022 Earnings Presentation
23 slides from Flushing Financial's earnings presentation, Jul 27, 2022
Slide 1: 2Q22 Earnings Conference Call July 27, 2022
2 Q22 Earnings Conference Call July 27, 2022
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
Slide 3: 2Q22 Highlights: Funding Mix, Loan Growth, Asset Quality, Investing in the Future
3 4 1 2 Improve and Grow Funding Mix Generate Appropriately Priced Loan Growth Average noninterest bearing deposits increased 13.1% YoY Core deposits are 87.3% of average deposits and mortgage escrow Core deposit yields increased 7 bps QoQ to 0.29%; Deposit beta of only 9% Record loan closin
Slide 4: Well-positioned to Benefit from Industry Merger Disruption
4 Well - positioned to Benefit from Industry Merger Disruption • 10 bank mergers have been announced or closed involving Long Island area banks 2 • Out of the $328B of total industry deposits in Nassau, Queens, Kings, and Suffolk Counties, $87B or 27% involve a merger participant 3 • 93% of FFIC’s d
Slide 5: Record Loan Closings; Loan Pipeline Remains At Elevated Levels
Record Loan Closings; Loan Pipeline Remains At Elevated Levels 5 Closings accelerated in 2Q22 – Closings up 63.0% YoY excluding PPP – Organic growth opportunity remains – Closings could slow with rising interest rates Pipeline up 34.7% YoY – Second highest level after a record last quarter – Com
Slide 6: Digital Banking Usage Continues to Increase
Digital Banking Usage Continues to Increase 6 Technology Enhancements Remain a Priority 28% Increase in Monthly Mobile Active Users YoY ~ 25,000 Active Online Banking Users 27% YoY Growth 14% Digital Banking Enrollment YoY Growth Numerated Small Business Lending Platform $10.7MM of Commitments in 1H
Slide 7: Opened New Branch in Elmhurst; Other Developments
Opened New Branch in Elmhurst Expanding Asian Market Footprint – Hired a team from merged institutions; growth has exceeded expectations; strong support from community Signed Lease for Hauppauge Branch – Expected to open by year end; Hauppauge is a business hub for Long Island Issued Inaugural
Slide 8: Continued Growth in Noninterest Bearing Deposits
Continued Growth in Noninterest Bearing Deposits 8 CDs Decline as a Percentage of Average Deposits 1 Total Average Deposits 1 ($MM) 1 Includes mortgage escrow deposits Average noninterest bearing deposit up 13.1% YoY Noninterest bearing deposits are 16.2% of average deposits 1 , up from 14.2% a
Slide 9: Limited Deposit Rate Increases in 2Q22
Limited Deposit Rate Increases in 2Q22 9 Weighted Average Deposit Beta of 9% in 1H22; Expect Beta to Accelerate 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 Average Fed Funds Deposit Costs
Slide 10: Loan Growth Returns; Yields Increase YoY and QoQ
$6,717 $6,627 $6,634 $6,601 $6,752 - 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 2Q21 3Q21 4Q21 1Q22 2Q22 Multifamily Commercial Real Estate Construction 1-4 Family Business Banking Loan Growth Returns; Yields Increase YOY and QoQ 10 Core Loan Yields 4.06% 4.09% 4.05% 4.04% 4.15% Loan Compositio
Slide 11: Significant Loan Repricing Within a Quarter and Over Time
Significant Loan Repricing Within a Quarter and Over Time 11 Floating rate loans include any loans (including swaps) tied to an index that reprices within 90 days Loans to reprice ~120 bps higher over time assuming index values as of June 30, 2022 15% of loans reprice within a q uarter ; while
Slide 12: Increase in Core Loan Yields > Increase in Core Deposit Yields
Increase in Core Loan Yields > Increase in Core Deposit Yields 12 Base NIM FTE 3.04% 3.15% 3.13% 3.22% 3.22% GAAP NIM FTE 3.14% 3.34% 3.29% 3.36% 3.35% $61.3 $62.2 $61.2 $62.7 $64.6 3.14% 3.27% 3.21% 3.31% 3.33% 4.06% 4.09% 4.05% 4.04% 4.15% 0.34% 0.30% 0.25% 0.22% 0.29% -0.25% 0.75% 1.75% 2.75% 3.7
Slide 13: Net Charge-offs Significantly Better Than the Industry; Strong DSR
Over two decades and multiple credit cycles, Flushing Financial has a history of better than industry credit quality Average LTVs on the Real Estate portfolio is < 38% 4 – Only $21.7MM of real estate loans (0.3% of gross loans) with an LTV of 75% or more 4 Net Charge - offs Significantly Better
Slide 14: Continued Strong Credit Quality
0.22% 0.25% 0.19% 0.17% 0.59% 2Q21 3Q21 4Q21 1Q22 2Q22 NPAs / Assets 14 Continued Strong Credit Quality NPAs / Assets Criticized and Classified Loans / Gross Loans ACL / Gross Loans & ACL / NPLs ACL by Loan Segment (2Q22) 50.7% LTV on 2 Q22 NPAs 1.03% 1.04% 0.87% 0.90% 0.85% 0.75% 0.85% 0.95% 1.05%
Slide 15: Higher Rates Negatively Impact TCE; ~4.1% Dividend Yield
Higher Rates Negatively Impact TCE by 19 bps; ~4.1% Dividend Yield 1 15 387,689 Shares Repurchased in 2Q22; 1MM Additional Share Repurchase Authorization in 2Q22 5.8% YoY Book Value Per Share Growth 5.9 % YoY Increase in Tangible Book Value Per Share 1 Calculated using 7/18/22 closing price of $ 21.
Slide 16: Summary and Outlook
16 Benefiting from merger disruption – Since March 31, 2021, added 42 people from announced/recently closed mergers; 18 are revenue producing – Record loan closings in 2Q22 – Record levels of DDA balances in 2Q22 Significant capital return; 4.1% 1 dividend yield – Repurchased 387,689 shares in 2
Slide 17: Appendix
Appendix [EEUFLUSHING 7
Slide 18: Reconciliation of GAAP Earnings and Core Earnings
Reconciliation of GAAP Earnings and Core Earnings 18 Non - cash Fair Value Adjustments to GAAP Earnings The variance in GAAP and core earnings is partly driven by the impact of non - cash net gains and losses from fair value adjustments .. These fair value adjustments relate primarily to swaps desig
Slide 19: Reconciliation of GAAP to Core Earnings
19 1 Core diluted earnings per common share may not foot due to rounding 2 Ratios are calculated on an annualized basis Reconciliation of GAAP to CORE Earnings (Dollars in thousands, except per share data) GAAP income before income taxes $ 34,971 $ 24,640 $ 22,826 $ 34,812 $ 25,416 $ 59,611 $ 51,640
Slide 20: Reconciliation of GAAP NII & NIM to Core and Base NII & NIM
20 1 Excludes purchase accounting average balances for all periods presented Reconciliation of GAAP NII & NIM to CORE and Base NII & NIM (Dollars in thousands) GAAP net interest income $ 64,730 $ 63,479 $ 62,674 $ 63,364 $ 61,039 $ 128,209 $ 121,931 Net (gain) loss from fair value adjustments on qua
Slide 21: Reconciliation of GAAP Revenue and Pre-provision Pre-tax Net Revenue
21 Reconciliation of GAAP Revenue and Pre - provision Pre - tax Net Revenue (Dollars in thousands) GAAP Net interest income $ 64,730 $ 63,479 $ 62,674 $ 63,364 $ 61,039 $ 128,209 $ 121,931 Net (gain) loss from fair value adjustments on qualifying hedges 60 129 (1,122) (194) 664 189 (763) Net amortiz
Slide 22: Contact Details
22 Contact Details Susan K. Cullen SEVP, CFO & Treasurer Phone: (718) 961 - 5400 Email: scullen@flushingbank.com Al Savastano, CFA Director of Investor Relations Phone: (516) 820 - 1146 Email: asavastano@flushingbank.com
Slide 23: Flushing Financial Corporation
[age LUSHING Financial Corporation