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Sep 30, 2023
Flushing Financial Q3 2023 Earnings Report
Delivered sequential EPS and GAAP NIM expansion as action plan continues to progress and opened 27th branch expanding Asian market presence.
Key Takeaways
Flushing Financial Corporation reported a GAAP EPS of $0.32 and core EPS of $0.31 for Q3 2023. The company delivered sequential EPS and GAAP NIM expansion through the continued execution of its action plan. Significant progress was made on reducing interest rate risk, increasing yields on new loans, and increasing noninterest-bearing deposits.
GAAP EPS of $0.32, up 10.3% QoQ, but down 57.9% YoY.
Core EPS totaled $0.31, an increase of 19.2% QoQ, but a decrease of 50.0% YoY.
GAAP NIM of 2.22% increased 4 bps QoQ but declined 85 bps YoY; while Core NIM of 2.14% compressed 3 bps QoQ and 89 bps YoY.
Nonperforming assets decreased 23.2% YoY and 3.1% QoQ while net recoveries were $42,000 in 3Q23.
Forward Guidance
The company is focused on positioning the balance sheet towards interest rate risk neutrality, maintaining credit quality, ensuring ample liquidity, and enhancing customer experience
Positive Outlook
- Continued to take actions to position the Company’s balance sheet more towards interest rate risk neutral
- During 3Q23, the Company added $100 million of interest rate hedges
- Approximately 60% of the loan pipeline consists of floating rate loans including back-to-back loan swaps
- Rate sensitivity to a +100 bps shock has been reduced by 66% over the past year
- Increased noninterest bearing deposits by $46.6 million QoQ
Challenges Ahead
- Manhattan office buildings are minimal at 0.6% of net loans
- Over 88% of the loan portfolio is collateralized by real estate with an average loan to value less than 36%
- Debt service coverage ratio is 1.8x for multifamily and investor commercial real estate loans that reprice through 2025
Historical Earnings Impact
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Avg. Return Before/After Earnings
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