Flushing Financial Corporation · NASDAQ:FFIC
Flushing Financial — Q1 2022 Earnings Presentation
25 slides from Flushing Financial's earnings presentation, Apr 27, 2022
Slide 1: 1Q22 Earnings Conference Call
1Q22 Earnings Conference Call April 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: 1Q22 Priorities and Highlights
3 4 1 2 Improve and Grow Funding Mix Generate Appropriately Priced Loan Growth Record low cost of deposits at 0.21% and cost of funds at 0.43% in in 1Q22 Record average noninterest bearing deposits of over $1B; increased 17.0% YoY Core deposits are 86.1% of average deposits and mortgage escrow
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: Metro New York City Economy Is Rebounding
5 Metro New York City Economy Is Rebounding 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 250 260 270 280 290 300 310 320 330 340 Jan-19 Mar-19 May-19 Jul-19 Sep-19 Nov-19 Jan-20 Mar-20 May-20 Jul-20 Sep-20 Nov-20 Jan-21 Mar-21 May-21 Jul-21 Sep-21 House Price Index for New York City MSA 1 Recession HPI 0
Slide 6: Record Loan Pipeline; Satisfactions Should Decline
Record Loan Pipeline; Satisfactions Should Decline 6 Closings poised to accelerate – Closings up 65% YoY excluding PPP – 10 bank mergers announced within footprint – Strong organic growth opportunity Pipeline up 55% QoQ – Commercial real estate is a larger driver – Business Banking pipeline up 4
Slide 7: Digital Banking Usage Continues to Increase
Digital Banking Usage Continues to Increase 7 Technology Enhancements Remain a Priority 28% Increase in Monthly Mobile Active Users YoY ~ 24,000 Active Online Banking Users 31% YoY Growth 15% Digital Banking Enrollment YoY Growth Numerated Small Business Lending Platform $4.1MM Originated in 1Q22 JA
Slide 8: Record Low Deposit Costs with Improving Mix
Record Low Deposit Costs with Improving Mix 8 Deposit Costs Fall Total Average Deposits 1 ($MM) 1 Includes mortgage escrow deposits Average noninterest bearing deposit up 17% YoY Noninterest bearing deposits are 15.6% of average deposits 1 , up from 13.6% a year ago 1Q22 checking account openi
Slide 9: Stable Loan Balances in 1Q22 Excluding PPP
$6,746 $6,717 $6,627 $6,634 $6,601 - 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 1Q21 2Q21 3Q21 4Q21 1Q22 Multifamily Commercial Real Estate Construction 1-4 Family Business Banking Stable Loan Balances in 1Q22 Excluding PPP 9 Core Loan Yields 3.99% 4.06% 4.09% 4.05% 4.04% Loan Composition Perio
Slide 10: NIM Expansion from Record Low Deposit Costs
NIM Expansion from Record Low Deposit Costs 10 Base NIM FTE 3.01% 3.04% 3.15% 3.13% 3.22% GAAP NIM FTE 3.18 % 3.14% 3.34 % 3.29% 3.36% $58.7 $61.3 $62.2 $61.2 $62.7 3.06% 3.14% 3.27% 3.21% 3.31% 3.99% 4.06% 4.09% 4.05% 4.04% 0.39% 0.34% 0.29% 0.25% 0.21% -0.25% 0.75% 1.75% 2.75% 3.75% 4.75% 5.75% 6.
Slide 11: Better Funding Profile Today Versus the Last Rising Rate Cycle
Better Funding Profile Today Versus the Last Rising Rate Cycle 11 Prior to the first rate increase in the 2015 - 2019 cycle, higher yielding CDs and borrowings were 52.8% of funding; in this cycle, the starting point declined significantly to 24.5% Funding swaps to reprice 98 bps lower in 2Q22 a
Slide 12: Rising Rate Offsets – Asset Profile
Rising Rate Offsets – Asset Profile 12 We have several items that can mitigate rising rates including: – Business Banking portfolio that has increased to 21.6% of loans in this cycle compared to only 12.2% of loans last cycle – $410MM of loan swaps that convert fixed rate loans to floating rate –
Slide 13: Net Charge-offs Significantly Better Than the Industry
Net Charge - offs Significantly Better Than the Industry 13 NCOs / Average Loans 0.06% 0.25% 1 -0.2% 0.3% 0.8% 1.3% 1.8% 2.3% 2.8% 3.3% 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 FFIC Industry 6 basis points of Net Charge - offs to Average Loans in 1Q22 1 Note: Includes $11.2MM in taxi m
Slide 14: Continued Strong Credit Quality
0.26% 0.22% 0.25% 0.19% 0.17% 1Q21 2Q21 3Q21 4Q21 1Q22 NPAs / Assets 14 Continued Strong Credit Quality NPAs / Assets Criticized and Classified Loans / Gross Loans ACL / Gross Loans & ACL / NPLs ACL by Loan Segment (1Q22) 36.8% LTV on 1Q22 NPAs 0.94% 1.03% 1.04% 0.87% 0.90% 0.75% 0.85% 0.95% 1.05% 1
Slide 15: TCE Ratio >8%; ~4.1% Dividend Yield
TCE Ratio >8%; ~4.1% Dividend Yield 1 15 360,000 Shares Repurchased in 1Q22; 84% of 1Q22 Earnings Returned to Shareholders 7.8% YoY Book Value Per Share Growth 8.1 % YoY Increase in Tangible Book Value Per Share 1 Calculated using 4/19/22 closing price of $ 21.66 $19.99 $20.51 $21.13 $21.61 $21.61 7
Slide 16: Better positioned for higher rates
16 Better positioned for higher rates – Funding costs are at record lows and funding is more favorable versus the last rising rate cycle; noninterest bearing deposits more than doubled as a percentage of funding – Swap repricing starts in 2Q22 and is mostly done by the end of 2023 reducing swaps c
Slide 17: Appendix
Appendix [EEUFLUSHING 7
Slide 18: PPP: 86% of Lifetime Originations and Acquisitions Forgiven
PPP: 86% of Lifetime Originations and Acquisitions Forgiven 18 Period End PPP Loans ($MM) $251.0 $197.3 $ 130.8 $77.4 $43.2 Average PPP Loans ($MM) PPP NIM Benefit/(Drag) ( 0.04)% 0.00% 0.02% 0.03% 0.03% Lifetime originations and acquisitions of $310MM with a balance of $43.2MM at 1Q22 and remaini
Slide 19: Swaps Help Protect NIM from Rising Short-Term Rates
$125 $321 $121 $25 $125 $230 $50 1.86% 2.09% 1.96% 0.47% 0.88% 0.70% 0.80% 2Q22 2023 2024 2025 Effective Swaps Maturities Forward Swaps Start Date Effective WA Rate Forward WA Rate $MM 19 Swaps Help Protect NIM from Rising Short - Term Rates The balance sheet naturally improves over the next two y
Slide 20: Reconciliation of GAAP Earnings and Core Earnings
Reconciliation of GAAP Earnings and Core Earnings 20 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 21: Reconciliation of GAAP to Core Earnings
21 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 $ 24,640 $ 22,826 $ 34,812 $ 25,416 $ 26,224 Net (gain) loss f
Slide 22: Reconciliation of GAAP NII & NIM to Core and Base NII & NIM
22 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 $ 63,479 $ 62,674 $ 63,364 $ 61,039 $ 60,892 Net (gain) loss from fair value adjustments on qualifying hedges 129 (
Slide 23: Reconciliation of GAAP Revenue and Pre-provision Pre-tax Net Revenue
23 Reconciliation of GAAP Revenue and Pre - provision Pre - tax Net Revenue (Dollars in thousands) GAAP Net interest income $ 63,479 $ 62,674 $ 63,364 $ 61,039 $ 60,892 Net (gain) loss from fair value adjustments on qualifying hedges 129 (1,122) (194) 664 (1,427) Net amortization of purchase account
Slide 24: Contact Details
24 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 25: Flushing Financial Corporation
[age LUSHING Financial Corporation