Flushing Financial Corporation · NASDAQ:FFIC
Flushing Financial — Q2 2021 Earnings Presentation
21 slides from Flushing Financial's earnings presentation, Jul 28, 2021
Slide 1: 2Q21 Earnings Conference Call
“Small Enough To Know You. Large Enough To Help You.” 2Q21 Earnings Conference Call July 28, 2021 “Small Enough To Know You. Large Enough To Help You.”
Slide 2: Safe Harbor Statement
Safe Harbor Statement “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 des
Slide 3: Emerging from the Pandemic a Stronger Company
Emerging from the Pandemic a Stronger Company • Since the end of 2019 (the last pre-pandemic year): ‒ Closed the Empire National Bank acquisition; adding $1 billion of assets ‒ Enhanced earnings power • NIM expansion • Improved efficiency ‒ Asset quality remains pristine with minimal credit losses ‒
Slide 4: Strategic priorities and quarter results summary
Ensure appropriate risk-adjusted returns for loans while optimizing costs of funds • Fifth consecutive quarter of record net interest income • GAAP NIM decreased 4 bps; Core NIM up 8 bps QoQ • Tangible book value per share exceeds TBV/share at both announcement and consummation dates of the Empire N
Slide 5: Deposit Costs Continue to Fall; More Favorable Mix
Deposit Costs Continue to Fall; More Favorable Mix • Average deposits1 increased 29.1% YoY • Average deposit1 growth, excluding Empire was ~13% YoY • Non-interest bearing deposits are 14.2% of average deposits1, up from 11.1% a year ago • Core deposits increased to 84.0% of average deposits1, up fro
Slide 6: Record Core Net Interest Income for the Fifth Consecutive Quarter
$49.2 $49.8 $54.8 $58.7 $61.3 2.89% 2.98% 3.03% 3.06% 3.14% 4.10% 4.07% 4.06% 3.99% 4.06% 0.79% 0.57% 0.47% 0.39% 0.34% -0.25% 0.75% 1.75% 2.75% 3.75% 4.75% 5.75% 6.75% $0.0 $10.0 $20.0 $30.0 $40.0 $50.0 $60.0 $70.0 2Q20 3Q20 4Q20 1Q21 2Q21 Base NII FTE Net Prepayment Penalties Core NII FTE ($MM) Co
Slide 7: Disciplined Underwriting Standards; Pipelines Rise
Disciplined Underwriting Standards; Pipelines Rise 7 2 Core Loan Yields 4.10% 4.07% 4.06% 3.99% 4.06% Period End Loans Rise ___% ($MM) • Gross loans increased 12.5% YoY, but declined 1.7% linked quarter (annualized) primarily due to PPP forgiveness • Loan pipeline totaled $432.6MM at June 30, 2021,
Slide 8: PPP: Forgiveness Increases and Should Continue in 2H21
$70 $103 $144 $209 $233 1.80% 1.93% 1.99% 1.98% 3.02% 0 50 100 150 200 250 2Q20 3Q20 4Q20 1Q21 2Q21 PPP Yield PPP: Forgiveness Increases and Should Continue in 2H21 8 2 Period End PPP Loans ($MM) $93.2 $111.6 $151.9 $251.0 $197.3 • Lifetime originations and acquisitions of $310MM with a balance of $
Slide 9: In Early Stages of Our Technology Enhancements – More to Come
In Early Stages of Our Technology Enhancements – More to Come 38% Increase in Monthly Mobile Active Users YoY ~3,500 Monthly Mobile Deposit Items Processed 74% YoY Growth $6.6M+ Monthly Mobile Deposit Volume Processed 231% YoY Growth 21% Digital Banking Enrollment Growth YoY Growth ~20,000 Active On
Slide 10: Historical Net Charge-offs Significantly Better Than the Industry
Historical Net Charge-offs Significantly Better Than the Industry • Over two decades and multiple credit cycles, Flushing has a history of better than industry credit quality • Weighted Average LTVs on the Real Estate portfolio is 38% ‒ Only $38.3MM of real estate loans with an LTV of 75% or more 1
Slide 11: Rising Reserve Coverage; Declining NPAs
Rising Reserve Coverage; Declining NPAs Coverage Ratio Increases 2Q21 NPAs Have 30% LTV 4 11 $36.7 $38.3 $45.2 $45.1 $42.7 181.8% 154.7% 214.3% 212.9% 242.6% 0.5 1 1.5 2 2.5 3 3.5 4 $0.0 $5.0 $10.0 $15.0 $20.0 $25.0 $30.0 $35.0 $40.0 $45.0 $50.0 2Q20 3Q20 4Q20 1Q21 2Q21 LLRs ($MM) LLRs/NPLs $20.4 $2
Slide 12: Capital Levels Increase; ~3.8% Dividend Yield
Capital Levels Increase; ~3.8% Dividend Yield Book Value of $21.16, Build Capital Ratios in 2021 Recovered Empire National Bank TBV Acquisition Dilution 1 Calculated using 7/21/21 closing price of $21.91 12 $20.27 $20.78 $20.11 $20.65 $21.16 10.79% 11.02% 9.88% 10.13% 10.24% 8.64% 9.03% 8.38% 8.44%
Slide 13: Outlook and Key Messages
Outlook and Key Messages Loan growth, excluding PPP, poised to accelerate in 2H21 ‒ New York City economy reopening; full reopening expected ‒ Loan pipeline up 39% YoY; 15% QoQ ‒ Line utilization has rebounded ‒ $197MM PPP headwind as forgiveness continues Core Net Interest Income to benefit from lo
Slide 14: Appendix
FLUSHING FFIC | Appendix
Slide 15: 2Q21 Highlights: Increased GAAP EPS and Record Core EPS
2Q21 Highlights: Increased GAAP EPS and Record Core EPS • GAAP diluted EPS $0.61 compared to $0.63 a year ago; Record Core diluted EPS of $0.73, up 102.8% YoY • GAAP ROAA and ROAE 0.93% and 11.95%, respectively; Core ROAA and ROAE were 1.11% and 14.27%, respectively, and improved significantly YoY •
Slide 16: $201MM Office Real Estate Portfolio; WALTV of 54.8%
$201MM Office Real Estate Portfolio; WALTV of 54.8% 16 • ~3% of Total Loans ‒ WALTV of 54.8% ‒ Average loan size of $2.5MM • $5.7MM in Manhattan ‒ Less than 3% of Office CRE ‒ WALTV of 35.8% • 53% Healthcare or Medical Office ‒ WALTV of 53.1% Office CRE Geography Portfolio Concentration Property Typ
Slide 17: Reconciliation of GAAP Earnings and Core Earnings
Reconciliation of GAAP Earnings and Core Earnings 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 designated to
Slide 18: Reconciliation of GAAP Earnings and Core Earnings
Reconciliation of GAAP Earnings and Core Earnings 1 Core diluted earnings per common share may not foot due to rounding; 2 Ratios are calculated on an annualized basis 18 (Dollars In thousands, except per share data) GAAP income before income taxes $ 25,416 $ 26,224 $ 3,878 $ 18,820 $ 24,080 $ 51,64
Slide 19: Reconciliation of GAAP NII & NIM to CORE and Base NII & NIM
Reconciliation of GAAP NII & NIM to CORE and Base NII & NIM 1 Excludes purchase accounting average balances for the quarters ended June 30, 2021, March, 31, 2021, and December 31, 2020 19 (Dollars In thousands) GAAP net interest income $ 61,039 $ 60,892 $ 55,732 $ 49,924 $ 48,717 $ 121,931 $ 89,543
Slide 20: Contact Details
Contact Details Susan K. Cullen SEVP, CFO & Treasurer Phone: (718) 961-5400 Email: susan.cullen@flushingbank.com Al Savastano, CFA Director of Investor Relations Phone: (516) 820-1146 Email: asavastano@flushingbank.com 20
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