Flushing Financial Corporation (the "Company") (NASDAQ: FFIC), the parent holding company for Flushing Savings Bank, FSB (the "Bank"), today announced its financial results for the three and six months ended June 30, 2006.
For the second quarter ended June 30, 2006, diluted earnings per share were $0.30, a decrease of $0.03, or 9.1%, from the $0.33 earned in the comparable quarter a year ago. Net income for the second quarter ended June 30, 2006 was $5.4 million, a decrease of $0.5 million, or 8.3%, from the $5.9 million earned in the second quarter ended June 30, 2005.
For the first half of 2006, diluted earnings per share were $0.63, a decrease of $0.03, or 4.5% from the $0.66 earned in the first half of 2005. Net income for the first half of 2006 was $11.3 million, a decrease of $0.5 million, or 4.6%, from the $11.9 million earned in the first half of 2005.
John R. Buran, President and Chief Executive Officer, stated: "The challenging interest rate environment we have faced for the past year continued during the second quarter of 2006. The Federal Reserve raised the overnight interest rate twice during the quarter to 5.25%, making it seventeen consecutive meetings at which they have raised this key rate. Longer-term rates have not increased at the same pace, causing a flat to inverted yield curve during the quarter.
"Given the uncertainty of the continued duration of the Fed's tightening of interest rates, we have focused on originating loans with yields that we believe will be beneficial to the long term profitability of the Company. We have slowed deposit growth as the premium for leveraging the balance sheet is limited in this environment. We have continued to fund loans through the reduction of our lower yielding securities portfolio. This has resulted in slower balance sheet growth. However, we believe this will help us limit the decline in our interest rate margin.
"The acquisition of Atlantic Liberty Financial Corporation was completed on June 30, 2006 through the issuance of 1.6 million shares of common stock and payment of $14.7 million in cash to Atlantic Liberty's stockholders. This acquisition increased our assets by $170.8 million and added two branches in Brooklyn in very attractive commercial markets. We believe our larger size and greater breadth of product offerings will enable us to provide an enhanced level of service to these markets.
"We originated $140.5 million in loans for the quarter, lowering our participation in product types where we view yields to be low given the uncertainties in the intermediate term interest rate environment. We originated of $64.1 million of multi-family residential and one-to-four family mixed-use property mortgage loans during the quarter. We also realized continued growth in our commercial real estate mortgage loan portfolio, originating $32.1 million of these loans during the quarter. As a result, loan growth, excluding the acquisition of Atlantic Liberty, was $57.4 million. At the end of the quarter, excluding the loans obtained in the Atlantic Liberty acquisition, our loan portfolio exceeded $2.0 billion. In addition, the yield on our loan portfolio, excluding prepayment penalty income, increased 4 basis points in the second quarter of 2006 from the first quarter of 2006.
"As we continue to evolve into a more 'commercial-like' banking institution, business development efforts have focused on developing deposit relationships with our commercial loan customers. We have accelerated our initiative in business banking with the hiring of several commercial bankers, including our new chief operating officer and a senior vice president of business banking.
"Total assets increased $287.0 million during the year, or 12.2%, to $2,640.2 million at June 30, 2006. This growth includes $170.8 million in assets obtained in the Atlantic Liberty merger, with the balance of the increase in the loan portfolio, which was funded with deposit growth and reductions in the lower-yielding securities portfolios. As we have grown the loan portfolio, we have continued to maintain strong asset quality.
"We have continued to grow our asset size while maintaining a strong capital position and focusing on shareholder value initiatives. This allowed us to maintain our quarterly dividend at $0.11 per common share in the second quarter of 2006, up 10% from the comparable quarter in 2005.
"We remain committed to structured and orderly growth, the continued expansion of the financial services we offer to our customers, and building a strong banking franchise in the multicultural communities we serve. Towards this end, we opened a new branch office along a busy retail strip in Bayside, Queens, in May 2006 and plan to open two branches in the first quarter of 2007. In the second half of 2006, we are planning the introduction of an internet banking division to capitalize on the growing use of the internet. We anticipate that this initiative will allow us to further reduce our reliance on wholesale borrowings. We will continue to focus on the origination of higher-yielding one-to-four family mixed-use property mortgage loans, multi-family residential mortgage loans, and commercial real estate loans, the enhanced integration of our deposit-gathering and lending efforts, and the expansion of our relationships with business banking customers."
Earnings Summary - Three Months Ended June 30, 2006
Net interest income for the three months ended June 30, 2006 was $16.7 million, a decrease of $0.5 million, or 2.9% from $17.2 million for the three months ended June 30, 2005. An increase in the average balance of interest-earning assets of $250.4 million, to $2,326.9 million, was offset by a decrease in the net interest spread of 48 basis points to 2.62% for the quarter ended June 30, 2006 from 3.10% for the comparable period in 2005. The yield on interest-earning assets increased 19 basis points to 6.45% for the three months ended June 30, 2006 from 6.26% in the three months ended June 30, 2005. However, this was more than offset by an increase in the cost of funds of 67 basis points to 3.83% for the three months ended June 30, 2006 from 3.16% for the comparable prior year period.
The increase in the yield of interest-earning assets is primarily due to an increase of $304.3 million in the average balance of the higher-yielding loan portfolio to $1,974.2 million, combined with a $74.8 million decrease in the average balance of the lower-yielding securities portfolios. The yield on the mortgage loan portfolio increased 2 basis points to 6.79% for the three months ended June 30, 2006 from 6.77% for the three months ended June 30, 2005. This increase is due to the average rate on new loans originated during the first half of 2006 being above the average rate on both the loan portfolio and loans which were paid-in-full during the period. In an effort to increase the yield on interest-earning assets, we continued to fund a portion of the growth in the higher-yielding mortgage loan portfolio through repayments received on the lower-yielding securities portfolio. The yield on the mortgage loan portfolio, excluding prepayment penalty income, increased 4 basis points for the three months ended June 30, 2006 compared to the three months ended March 31, 2006.
The increase in the cost of interest-bearing liabilities is primarily attributed to the Federal Reserve increasing overnight rates for seventeen consecutive meetings, which has resulted in an increase in our cost of funds. Certificate of deposits, savings accounts and money market accounts increased 72 basis points, 88 basis points and 134 basis points, respectively, for the three months ended June 30, 2006 compared to the three months ended June 30, 2005, resulting in an increase in the cost of customer deposits of 94 basis points for the three months ended June 30, 2006 compared to the three months ended June 30, 2005. The cost of borrowed funds also increased 35 basis points to 4.62% for the three months ended June 30, 2006 compared to 4.27% for the three months ended June 30, 2005.
The net interest margin decreased 45 basis points to 2.86% for the three months ended June 30, 2006 from 3.31% for the three months ended June 30, 2005. Excluding prepayment penalty income, the net interest margin would have been 2.69% and 3.11% for the three month periods ended June 30, 2006 and 2005, respectively.
The net interest margin for the three months ended June 30, 2006 declined 12 basis points to 2.86%, from 2.98% for the three months ended March 31, 2006. The yield on interest-earning assets increased 6 basis points during the quarter, which was more than offset by the cost of interest-bearing liabilities increasing 20 basis points. Excluding prepayment penalty income, the net interest margin declined 13 basis points to 2.69% for the quarter ended June 30, 2006 from 2.82% for the quarter ended March 31, 2006.
Non-interest income increased $0.7 million, or 39.0%, for the three months ended June 30, 2006 to $2.6 million, as compared to $1.9 million for the quarter ended June 30, 2005. This was attributed to increases of: $0.3 million from loan fees, $0.2 million on the gain on sale of loans, $0.1 million in dividends received on Federal Home Loan Bank of New York ("FHLB-NY") stock and $0.1 in BOLI dividends.
Non-interest expense was $10.4 million for the three months ended June 30, 2006, an increase of $1.0 million, or 11.0%, from $9.4 million for the three months ended June 30, 2005. The increase from the comparable prior year period is primarily attributed to increases of: $0.4 million in employee salary and benefit expenses related to additional employees for product development and stock option expense, $0.3 million in occupancy and equipment costs primarily related to rental expense due to new branch leases, and $0.1 million in data processing expense due to volume increases. Management continues to monitor expenditures resulting in efficiency ratios of 54.0% and 49.2% for three-month periods ended June 30, 2006 and 2005, respectively.
Net income for the three months ended June 30, 2006 was $5.4 million, a decrease of $0.5 million or 8.3%, as compared to $5.9 million for the three months ended June 30, 2005. Diluted earnings per share were $0.30 for the three month period ended June 30, 2006 and $0.33 for the comparable 2005 period.
Return on average equity was 12.18% for the three months ended June 30, 2006 compared to 14.5% for the three months ended June 30, 2005. Return on average assets was 0.9% for the three months ended June 30, 2006 compared to 1.1% for the three months ended June 30, 2005.
Earnings Summary - Six Months Ended June 30, 2006
Net interest income for the six months ended June 30, 2006 was $33.6 million, a decrease of $0.5 million, or 1.3 % from $34.0 million for the six months ended June 30, 2005. An increase in the average balance of interest-earning assets of $272.1 million to $2,297.5 million, was offset by a decrease in the net interest spread of 47 basis points to 2.69% for the six months ended June 30, 2006 from 3.16% for the comparable period in 2005. The yield on interest-earning assets increased 18 basis points to 6.42% for the six months ended June 30, 2006 from 6.24% in the six months ended June 30, 2005. However, this was more than offset by an increase in the cost of funds of 65 basis points to 3.73% for the six months ended June 30, 2006 from 3.08% for the comparable prior year period.
The increase in the yield of interest-earning assets is primarily due to an increase of $335.5 million in the average balance of the higher-yielding loan portfolio to $1,943.4 million, combined with an $81.0 million decrease in the average balance of the lower-yielding securities portfolios. The yield on the mortgage loan portfolio decreased 2 basis points to 6.77% for the six months ended June 30, 2006 from 6.79% for the six months ended June 30, 2005. However, the yield on the mortgage loan portfolio, excluding prepayment penalty income, increased 2 basis points for the six months ended June 30, 2006 compared to the six months ended June 30, 2005. While prepayment penalty income was the same for the six months ended June 30, 2006 and the comparable period in 2005, the growth in the mortgage loan portfolio reduced the effect of this income on the yield. In an effort to increase the yield on interest-earning assets, we continued to fund a portion of the growth in the higher-yielding mortgage loan portfolio through repayments received on the lower-yielding securities portfolio.
The increase in the cost of interest-bearing liabilities is primarily attributed to the Federal Reserve increasing overnight rates for seventeen consecutive meetings, which has resulted in an increase in our cost of funds. The cost of certificate of deposits, savings accounts and money market accounts increased 63 basis points, 91 basis points and 118 basis points, respectively, for the six months ended June 30, 2006 compared to the six months ended June 30, 2005, resulting in an increase in the cost of deposits of 84 basis points for the six months ended June 30, 2006 compared to the six months ended June 30, 2005. The cost of borrowed funds also increased 38 basis points to 4.57% for the six months ended June 30, 2006 compared to the six months ended June 30, 2005.
The net interest margin decreased 44 basis points to 2.92% for the six months ended June 30, 2006 from 3.36% for the six months ended June 30, 2005. Excluding prepayment penalty income, the net interest margin would have been 2.76% and 3.17% for the six month periods ended June 30, 2006 and 2005, respectively.
Non-interest income increased $1.4 million, or 42.0%, for the six months ended June 30, 2006 to $4.8 million, as compared to $3.4 million for the six months ended June 30, 2005. This was attributed to increases of: $0.4 million in miscellaneous loan fees, $0.3 million in dividends received on Federal Home Loan Bank of New York ("FHLB-NY") stock, $0.2 million on the gain on sale of loans held for sale and $0.3 million in other income.
Non-interest expense was $19.8 million for the six months ended June 30, 2006, an increase of $1.9 million, or 10.3%, from $18.0 million for the six months ended June 30, 2005. The increase from the comparable prior year period is primarily attributed to increases of: $0.9 million in employee salary and benefit expenses related to additional employees for product development, of which $0.2 million relates to the expensing of stock options, $0.4 million in occupancy and equipment costs primarily related to increased rental expense due to new branch leases, and $0.2 million in data processing expense due to volume increases. Management continues to monitor expenditures resulting in efficiency ratios of 51.8% and 48.0% for three-month periods ended June 30, 2006 and 2005, respectively.
Net income for the six months ended June 30, 2006 was $11.3 million, a decrease of $0.5 million or 4.6%, as compared to $11.9 million for the six months ended June 30, 2005. Diluted earnings per share were $0.63 for the six month period ended June 30, 2006 and $0.66 for the comparable 2005 period.
Return on average equity was 12.8% for the six months ended June 30, 2006 compared to 14.8% for the six months ended June 30, 2005. Return on average assets was 0.9% for the six months ended June 30, 2006 compared to 1.1% for the six months ended June 30, 2005.
Balance Sheet Summary
At June 30, 2006, total assets were $2,640.2 million, an increase of $287.0 million, or 12.2%, from $2,353.2 million at December 31, 2005, with $170.8 million of the increase attributed to the Atlantic Liberty acquisition. Total loans, net increased $243.3 million, or 12.9%, during the six months ended June 30, 2006 to $2,125 million from $1,881.9 million at December 31, 2005, with the acquisition of Atlantic Liberty adding $116.2 million. At June 30, 2006, loans in process totaled $185.3 million, compared to $222.5 million at June 30, 2005 and $179.4 million at December 31, 2005.
The following table shows loan originations and purchases for the periods indicated.
For the three months For the six months
ended June 30, ended June 30,
-------------------- --------------------
(In thousands) 2006 2005 2006 2005
----------------------------------------------------------------------
Multi-family residential $ 30,629 $ 62,921 $ 64,659 $ 136,844
Commercial real estate 32,070 32,171 74,327 56,497
One-to-four family -
mixed-use property 33,516 56,133 66,318 93,798
One-to-four family -
residential 2,357 5,302 6,516 7,424
Construction 16,723 9,369 31,327 16,354
Commercial business and
other loans 25,184 8,810 37,178 12,716
--------- --------- --------- ---------
Total $ 140,479 $ 174,706 $ 280,325 $ 323,633
========= ========= ========= =========
Loans acquired on June 30, 2006 in the purchase of Atlantic Liberty are excluded from the table above. Loan purchases of $2.0 million are included in the above table for the six months ended June 30, 2006. There were no loan purchases for the three month period ended June 30, 2006 and the six month and three month periods ended June 30, 2005.
As the Bank continues to increase its loan portfolio, management continues to adhere to the Bank's strict underwriting standards. As a result, the Bank has been able to minimize charge-offs of losses from impaired loans and maintain asset quality. Non-performing assets were $2.4 million at June 30, 2006 compared to $2.5 million at December 31, 2005 and $1.6 million at June 30, 2005. Total non-performing assets as a percentage of total assets was 0.09% at June 30, 2006 as compared to 0.10% at December 31, 2005 and 0.07% at June 30, 2005. The ratio of allowance for loan losses to total non-performing loans was 301% at June 30, 2006, compared to 260% at December 31, 2005 and 414% at June 30, 2005.
During the six months ended June 30, 2006, mortgage-backed securities increased $3.3 million to $304.5 million, with $30.8 million attributable to Atlantic Liberty's portfolio and purchases of $9.9 million. Offsetting the increases during this period were sales of $6.4 million and principal repayments of $25.0 million on the securities portfolio, which have primarily been reinvested in higher yielding loans. Other securities increased $3.2 million to $39.7 million and primarily consists of securities issued by government agencies and mutual or bond funds that invest in government and government agency securities.
During 2006, the Bank purchased an additional $10.0 million of Bank Owned Life Insurance ("BOLI"). The Bank also acquired $2.4 million of BOLI through the merger. The Bank utilizes BOLI to fund a substantial portion of its employee benefit costs. The tax advantages of BOLI allow a return that is comparable to, or better than, other investments.
Total liabilities were $2,432.3 million at June 30, 2006, an increase of $255.5 million, or 11.7%, from December 31, 2005, with $144.3 million of the increase attributed to the Atlantic Liberty acquisition. During the six months ended June 30, 2006, due to depositors increased $216.9 million to $1,664.8 million, with $105.3 million attributed to Atlantic Liberty. The increases are primarily a result of an increase of $119.4 million in certificates of deposit, of which $29.4 million are brokered deposits, while core deposits increased $97.6 million. Borrowed funds increased $27.5 million. In addition, mortgagors' escrow deposits increased $4.9 million during the six months ended June 30, 2006.
Total stockholders' equity increased $31.5 million, or 17.9%, to $208.0 million at June 30, 2006 from $176.5 million at December 31, 2005. This is primarily due to $26.6 million for the issuance of stock for the acquisition of Atlantic Liberty, net income of $11.3 million for the six months ended June 30, 2006 and a $1.4 million cumulative adjustment related to the adoption of SFAS No. 123R, Share-Based Compensation, which were partially offset by $4.2 million in treasury shares purchased through the Company's stock repurchase program, a net after tax decrease of $3.5 million on the market value of securities available for sale, and $3.9 million of cash dividends declared and paid during the six months ended June 30, 2006. The exercise of stock options increased stockholders' equity by $2.4 million, including the income tax benefit realized by the Company upon the exercise of the options. Book value per share was $9.86 at June 30, 2006, compared to $9.07 per share at December 31, 2005 and $8.75 per share at June 30, 2005.
Under its current stock repurchase program, the Company repurchased 257,000 shares during the six months ended June 30, 2006, at a total cost of $4.2 million, or an average of $16.49 per share. At June 30, 2006, 517,650 shares remain to be repurchased under the current stock repurchase program. Through June 30, 2006, the Company had repurchased approximately 48% of the common shares issued in connection with the Company's initial public offering at a cost of $116.0 million.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this Press Release relating to plans, strategies, economic performance and trends, projections of results of specific activities or investments and other statements that are not descriptions of historical facts may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking information is inherently subject to risks and uncertainties, and actual results could differ materially from those currently anticipated due to a number of factors, which include, but are not limited to, risk factors discussed in the Company's Annual Report on Form 10-K and in other documents filed by the Company with the Securities and Exchange Commission from time to time. Forward-looking statements may be identified by terms such as "may", "will", "should", "could", "expects", "plans", "intends", "anticipates", "believes", "estimates", "predicts", "forecasts", "potential" or "continue" or similar terms or the negative of these terms. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. The Company has no obligation to update these forward-looking statements.
Flushing Financial Corporation is the holding company for Flushing Savings Bank, FSB, a federally chartered stock savings bank insured by the Federal Deposit Insurance Corporation (FDIC). The Bank conducts its business through twelve banking offices located in Queens, Brooklyn, Manhattan and Nassau County.
Additional information on Flushing Financial Corporation may be obtained by visiting the Company's web site at http://www.flushingsavings.com.
FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollars in Thousands Except Per Share Data)
(Unaudited)
June 30, December 31,
2006 2005
------------ ------------
ASSETS
-------
Cash and due from banks $ 18,925 $ 26,754
Securities available for sale:
Mortgage-backed securities 304,454 301,194
Other securities 39,736 36,567
Loans:
Multi-family residential 815,318 788,071
Commercial real estate 476,351 399,081
One-to-four family - mixed-use property 527,706 477,775
One-to-four family - residential 171,554 134,641
Co-operative apartments 9,778 2,161
Construction 79,523 49,522
Small Business Administration 12,757 9,239
Commercial business and other 30,494 19,362
Net unamortized premiums and unearned
loan fees 8,877 8,409
Allowance for loan losses (7,148) (6,385)
------------ ------------
Net loans 2,125,210 1,881,876
Interest and dividends receivable 11,915 10,554
Bank premises and equipment, net 17,644 7,238
Federal Home Loan Bank of New York stock 31,663 29,622
Bank owned life insurance 39,634 26,526
Goodwill 12,857 3,905
Core Deposit Intangible 3,513 -
Other assets 34,691 28,972
------------ ------------
Total assets $ 2,640,242 $ 2,353,208
============ ============
LIABILITIES
-----------
Due to depositors:
Non-interest bearing $ 70,806 $ 58,678
Interest-bearing:
Certificate of deposit accounts 1,017,509 898,157
Savings accounts 274,601 273,753
Money market accounts 254,761 175,247
NOW accounts 47,100 42,029
------------ ------------
Total interest-bearing deposits 1,593,971 1,389,186
Mortgagors' escrow deposits 24,295 19,423
Borrowed funds 717,244 689,710
Other liabilities 25,937 19,744
------------ ------------
Total liabilities 2,432,253 2,176,741
------------ ------------
STOCKHOLDERS' EQUITY
--------------------
Preferred stock ($0.01 par value; 5,000,000
shares authorized; none issued) - -
Common stock ($0.01 par value; 40,000,000
shares authorized; 21,165,011 shares and
19,466,894 shares issued at June 30, 2006
and December 31, 2005, respectively;
21,102,652 shares and 19,465,844 shares
outstanding at June 30, 2006 and December
31, 2005, respectively) 211 195
Additional paid-in capital 69,221 39,635
Treasury stock (62,359 shares and 1,050
shares at June 30, 2006 and December 31,
2005, respectively) (1,046) (12)
Unearned compensation (3,270) (4,159)
Retained earnings 151,676 146,068
Accumulated other comprehensive loss,
net of taxes (8,803) (5,260)
------------ ------------
Total stockholders' equity 207,989 176,467
------------ ------------
Total liabilities and stockholders'
equity $ 2,640,242 $ 2,353,208
============ ============
FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in Thousands Except Per Share Data)
(Unaudited)
For the For the
three months six months
ended June 30, ended June 30,
------------------ ------------------
2006 2005 2006 2005
----------------------------------------------------------------------
Interest and dividend income
----------------------------
Interest and fees on loans $ 33,584 $ 28,236 $ 65,849 $ 54,501
Interest and dividends on
securities:
Interest 3,628 4,160 7,328 8,522
Dividends 76 81 153 162
Other interest income 258 9 428 17
--------- --------- --------- ---------
Total interest and
dividend income 37,546 32,486 73,758 63,202
--------- --------- --------- ---------
Interest expense
----------------
Deposits 13,224 8,088 24,734 15,771
Other interest expense 7,661 7,236 15,448 13,396
--------- --------- --------- ---------
Total interest expense 20,885 15,324 40,182 29,167
--------- --------- --------- ---------
Net interest income 16,661 17,162 33,576 34,035
Provision for loan losses - - - -
--------- --------- --------- ---------
Net interest income after
provision for loan losses 16,661 17,162 33,576 34,035
--------- --------- --------- ---------
Non-interest income
-------------------
Loan fee income 879 607 1,509 1,137
Banking services fee income 339 353 710 736
Net gain on sale of loans held
for sale 237 142 360 142
Net gain on sale of loans 73 - 100 19
Net gain on sale of securities - - 81 -
Federal Home Loan Bank of New
York stock dividends 380 268 759 432
Bank owned life insurance 401 285 671 564
Other income 277 206 603 346
--------- --------- --------- ---------
Total non-interest income 2,586 1,861 4,793 3,376
--------- --------- --------- ---------
Non-interest expense
--------------------
Salaries and employee benefits 4,813 4,413 9,567 8,691
Occupancy and equipment 1,261 1,011 2,370 1,974
Professional services 967 839 1,934 1,779
Data processing 656 534 1,294 1,069
Depreciation and amortization 364 398 731 801
Other operating expenses 2,324 2,165 3,921 3,649
--------- --------- --------- ---------
Total non-interest
expense 10,385 9,360 19,817 17,963
--------- --------- --------- ---------
Income before income taxes 8,862 9,663 18,552 19,448
--------- --------- --------- ---------
Provision for income taxes
--------------------------
Federal 2,863 2,991 5,804 5,985
State and local 593 778 1,431 1,600
--------- --------- --------- ---------
Total taxes 3,456 3,769 7,235 7,585
--------- --------- --------- ---------
Net income $ 5,406 $ 5,894 $ 11,317 $ 11,863
========= ========= ========= =========
Basic earnings per share $ 0.30 $ 0.34 $ 0.64 $ 0.68
Diluted earnings per share $ 0.30 $ 0.33 $ 0.63 $ 0.66
Dividends per share $ 0.11 $ 0.10 $ 0.22 $ 0.20
FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
SELECTED CONSOLIDATED FINANCIAL DATA
(Dollars in Thousands Except Share Data)
(Unaudited)
At or for At or for
the three months the six months
Ended June 30, Ended June 30,
------------------------- -------------------------
2006 2005 2006 2005
----------- ----------- ----------- -----------
Per Share Data
---------------
Basic earnings
per share $0.30 $0.34 $0.64 $0.68
Diluted
earnings per
share $0.30 $0.33 $0.63 $0.66
Average number
of shares
outstanding
for:
Basic
earnings
per share
computation 17,811,046 17,487,183 17,788,822 17,482,682
Diluted
earnings
per share
computation 18,079,904 17,937,463 18,078,845 17,969,690
Book value per
share (based
on 21,102,652
and 19,275,807
shares
outstanding at
June 30, 2006
and 2005,
respectively) $9.86 $8.75 $9.86 $8.75
Average
Balances
---------
Total loans,
net $ 1,974,209 $ 1,669,923 $ 1,943,425 $ 1,607,880
Total interest-
earning assets 2,326,946 2,076,587 2,297,538 2,025,450
Total assets 2,437,221 2,178,294 2,403,397 2,124,827
Total due to
depositors 1,486,338 1,232,722 1,447,301 1,227,368
Total interest-
bearing
liabilities 2,183,079 1,942,541 2,153,691 1,893,408
Stockholders'
equity 177,466 162,092 177,034 160,897
Performance
Ratios (1)
-----------
Return on
average assets 0.89 % 1.08 % 0.94 % 1.12 %
Return on
average equity 12.18 14.54 12.79 14.75
Yield on
average
interest-
earning assets 6.45 6.26 6.42 6.24
Cost of average
interest-
bearing
liabilities 3.83 3.16 3.73 3.08
Interest rate
spread during
period 2.62 3.10 2.69 3.16
Net interest
margin 2.86 3.31 2.92 3.36
Non-interest
expense to
average assets 1.70 1.72 1.65 1.69
Efficiency
ratio 53.96 49.20 51.76 48.02
Average
interest-
earning assets
to average
interest-
bearing
liabilities 1.07 X 1.07 X 1.07 X 1.07 X
(1) Ratios for the quarters and six months ended June 30, 2006 and
2005 are presented on an annualized basis.
FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
SELECTED CONSOLIDATED FINANCIAL DATA
(Dollars in Thousands)
(Unaudited)
At or for the At or for the
six months ended year ended
June 30, 2006 December 31, 2005
------------------- -------------------
Selected Financial Ratios and
Other Data
------------------------------
Regulatory capital ratios (for
Flushing Savings Bank only):
Tangible capital (minimum
requirement = 1.5%) 7.80 % 7.14 %
Leverage and core capital
(minimum requirement = 3%) 7.80 7.14
Total risk-based capital
(minimum requirement = 8%) 12.58 12.12
Capital ratios:
Average equity to average
assets 7.37 % 7.47 %
Equity to total assets 7.88 7.50
Asset quality:
Non-performing loans $2,373 $2,452
Non-performing assets 2,373 2,452
Net (recoveries) charge-offs (10) 148
Asset quality ratios:
Non-performing loans to
gross loans 0.11 % 0.13 %
Non-performing assets to
total assets 0.09 0.10
Allowance for loan losses
to gross loans 0.34 0.34
Allowance for loan losses
to non-performing assets 301.16 260.39
Allowance for loan losses
to non-performing loans 301.16 260.39
Full-service customer facilities 12 9
FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
NET INTEREST MARGIN
(Dollars in Thousands)
(Unaudited)
For the three months ended June 30,
-------------------------------------
2006
-------------------------------------
Average Interest Yield/
Balance (2) (2) Cost
-------------------------------------
Assets
Interest-earning assets:
Mortgage loans, net (1) $ 1,927,902 $ 32,745 6.79 %
Other loans, net (1) 46,307 839 7.25
-------------------------------------
Total loans, net 1,974,209 33,584 6.80
-------------------------------------
Mortgage-backed securities 290,519 3,255 4.48
Other securities 39,758 449 4.52
-------------------------------------
Total securities 330,277 3,704 4.49
-------------------------------------
Interest-earning deposits and
federal funds sold 22,460 258 4.59
-------------------------------------
Total interest-earning assets 2,326,946 37,546 6.45
------------------------
Other assets 110,275
------------
Total assets $ 2,437,221
============
Liabilities and Equity
Interest-bearing liabilities:
D
FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
NET INTEREST MARGIN
(Dollars in Thousands)
(Unaudited)
For the six months ended June 30,
-------------------------------------
2006
-------------------------------------
Average Interest Yield/
Balance (2) (2) Cost
-------------------------------------
Assets
Interest-earning assets:
Mortgage loans, net (1) $ 1,905,284 $ 64,465 6.77 %
Other loans, net (1) 38,141 1,384 7.26
-------------------------------------
Total loans, net 1,943,425 65,849 6.78
-------------------------------------
Mortgage-backed securities 296,426 6,647 4.48
Other securities 38,589 834 4.32
-------------------------------------
Total securities 335,015 7,481 4.47
-------------------------------------
Interest-earning deposits and
federal funds sold 19,098 428 4.48
-------------------------------------
Total interest-earning assets 2,297,538 73,758 6.42
------------------------
Other assets 105,859
------------
Total assets $ 2,403,397
============
Liabilities and Equity
Interest-bearing liabilities:
D