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Sep 30, 2022
Flushing Financial Q3 2022 Earnings Report
Reported a decrease in earnings due to rising rates and NIM compression
Key Takeaways
Flushing Financial Corporation reported GAAP EPS of $0.76 for Q3 2022, a decrease of 6.2% year-over-year. The company experienced loan growth of 3.1% QoQ, excluding PPP loans, but also faced NIM compression due to rising rates. Credit quality remained solid with only 2 bps of net charge-offs.
GAAP EPS of $0.76, down 6.2% YoY
Loan growth of 3.1% QoQ, excluding PPP loans
NIM compressed 28 bps during the third quarter
Credit quality remained solid with only 2 bps of net charge-offs
Flushing Financial
Flushing Financial
Forward Guidance
Management expects loans to reprice higher over time and funding swaps to reprice lower through 2023.
Positive Outlook
- Loans are expected to reprice higher over time.
- Approximately $1.0 billion or 15% of loans reprice within 90 days of index changes
- $1.9 billion or 27% of loans are expected to contractually reprice higher by 200 bps through the end of 2024.
- Over $500 million of funding swaps have attractive rates now
- Funding swaps will reprice lower by approximately 70 bps through 2023.
Challenges Ahead
- The Fed rate movements resulted in the NIM compressing 28 bps during the third quarter
- Net interest income decreased 3.4% YoY and 5.4% QoQ, primarily due to the increased funding costs.
- Core NIM FTE decreased by 24 bps to 3.03% YoY and 30 bps QoQ.
- Average deposits, including mortgage escrow, decreased 2.6% QoQ and 2.1% YoY to $6.3 billion
- Tangible Common Equity to Tangible Assets was 7.62% down from 7.82% at 2Q22