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Mar 31, 2024
Flushing Financial Q1 2024 Earnings Report
Reported GAAP and core EPS, driven by a low-risk credit profile and conservative underwriting.
Key Takeaways
Flushing Financial Corporation reported a mixed first quarter for 2024. While average deposits grew, both GAAP and Core EPS increased compared to the previous year but decreased from the prior quarter. NIM experienced compression, and noninterest income decreased. However, credit quality improved, with criticized and classified loans declining and net charge-offs remaining low. Capital remains solid.
GAAP EPS was $0.12, and core EPS was $0.14, compared to $0.13 and $0.06, respectively, a year ago.
GAAP and Core NIM were both 2.06%, down 21 bps year-over-year.
Criticized and classified loans to loans decreased to 0.87%, and nonperforming assets to total assets decreased to 0.53%.
Net charge-offs were only $4,000.
Forward Guidance
The report does not contain specific forward guidance. Instead, it focuses on four areas: increasing NIM and reducing volatility, maintaining credit discipline, preserving strong liquidity and capital, and bending the expense curve.
Positive Outlook
- Remain largely interest rate neutral to a 100 bps change in rates
- Approximately 89% of the loan portfolio is collateralized by real estate with an average loan to value of less than 36%
- Maintaining ample liquidity with $2.9 billion of undrawn lines and resources as of March 31, 2024; this increased to $3.3 billion as of April 15, 2024
- GAAP noninterest expense to average assets was 1.83% in 1Q24 compared to 1.85% in 1Q23 and 1.90% in 4Q23
- Weighted average debt service coverage ratio is approximately 1.8x for multifamily and investor commercial real estate loans
Challenges Ahead
- GAAP and Core NIM decreased as anticipated by 23 bps and 25 bps QoQ, respectively, in 1Q24
- Absent episodic items, the NIM was 2.01% in 1Q24 compared to 2.14% in 4Q23
Historical Earnings Impact
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Avg. Return Before/After Earnings
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