The First of Long Island Corporation (Nasdaq: FLIC), the parent
company of The First National Bank of Long Island, reported
increases in net income and earnings per share for the three and
six months ended June 30, 2019. In the highlights that
follow, all comparisons are of the current three or six-month
period to the same period last year unless otherwise indicated.
SECOND QUARTER HIGHLIGHTS
- Net Income and EPS were $10.7 million and $.43,
respectively, versus $10.3 million and $.40.
- Book Value Per Share increased 7.5% to $15.87 at
6/30/19 from $14.76 at 6/30/18.
- Cash Dividends Per Share increased 13.3% to $.17 from
$.15.
- ROA and ROE were strong at 1.02% and 11.00%,
respectively, compared to .97% and 11.08%.
- Net interest margin of 2.58% increased 2 basis points
over Q1 2019.
- Noninterest expense declined 2.4% versus Q1 2019
reflecting management’s ongoing expense control measures.
- Repurchased 240,300 shares during the quarter at a cost
of $5.3 million and 992,400 shares to date at a cost of $22.2
million.
- Total assets and loans were essentially unchanged from
year-end 2018 at $4.2 and $3.2 billion, respectively.
SIX MONTH HIGHLIGHTS
- Net Income and EPS were $21.6 million and $.86,
respectively, versus $21.4 million and $.84.
- ROA and ROE were strong at 1.03% and 11.15%,
respectively, compared to 1.05% and 11.77%.
- Effective tax rate was 16.9% versus
11.2%.
- The Credit Quality of the Bank’s loan and securities
portfolios remains strong.
Analysis of Earnings – Six Months Ended
June 30, 2019
Net income for the first six months of 2019 was
$21.6 million, an increase of $159,000, or .7%, versus the same
period last year. The increase is attributable to decreases
in the provision for loan losses of $2.4 million and noninterest
expense of $664,000. The impact of these decreases was
partially offset by declines in net interest income and noninterest
income of $352,000 and $810,000, respectively, and an increase in
income tax expense of $1.7 million.
The decline in net interest income occurred
because of yield curve flattening followed by inversion and
management’s resulting decision to slow loan and overall balance
sheet growth. Flattening and inversion of the yield curve
occurred as increases in the federal funds target rate were
initially accompanied by lesser increases in intermediate and
long-term U.S. treasury rates and then by declines in such
rates. The federal funds target rate drives the Bank’s cost
of deposits and short-term borrowings while intermediate and
long-term treasury rates drive the yields available to the Bank on
loan originations and repricings, securities purchases and the
reinvestment of cash flows. When comparing the current
six-month period to the same period last year, the cost of interest
bearing deposits and short-term borrowings increased by 46 basis
points and 71 basis points, respectively, while the yield on the
loan portfolio only increased by 10 basis points and the yield on
the securities portfolio increased by 53 basis points. Loan
portfolio yield improved largely because of a positive spread
between the rates on loans being originated and those paying down,
loans repricing at higher yields and a shift in originations from
lower yielding residential mortgages to higher yielding commercial
mortgages. The improvement in yield on the securities
portfolio largely resulted from restructuring of the taxable
securities portfolio in 2018.
Net interest margin for the first six months of
2019 was 2.57%, down 9 basis points from 2.66% for the same period
last year. The decrease is largely attributable to the
flattening and inversion of the yield curve and the resulting
impact on funding costs and asset yields. While net interest margin
and earnings could be negatively impacted by additional increases
in the federal funds target rate, a pause by the Federal Reserve or
a decrease in the federal funds target rate could relieve some of
the upward pressure on funding costs and may result in a decrease
in funding costs and improvement in net interest income and net
interest margin over time.
Management’s decision to slow loan growth
resulted in modest growth of 3.9%, or $120.5 million, in the
average balance of loans when comparing the current six-month
period to the same period last year. Loan growth was funded
by increases in the average balances of interest-bearing deposits
of $120.8 million, or 5.5%, short-term borrowings of $17.2 million,
or 9.6%, and stockholders’ equity of $23.3 million, or 6.4%.
These increases were partially offset by a decrease in long-term
borrowings of $69.5 million, or 16.1%. Substantial
contributors to the growth in deposits were the Bank’s ongoing
municipal deposit initiative and the issuance of brokered
certificates of deposit (“CDs”). The average balance of
brokered CDs increased $170.5 million as brokered CDs were used as
a lower cost alternative to Federal Home Loan Bank (“FHLB”)
advances. Substantial contributors to the growth in
stockholders’ equity were net income and the issuance of shares
under the Corporation’s Dividend Reinvestment and Stock Purchase
Plan during the early part of 2018, partially offset by cash
dividends declared and common stock repurchases which began in
December 2018.
Management has been proactive in addressing the
downward pressure on net interest income, net interest margin and
earnings caused by the flat and now inverted yield curve and the
low interest rate environment. Actions taken thus far
include, among others:
- Reducing overall balance sheet growth by slowing loan growth
and the related need for funding
- Slowing the pace of branch expansion
- Changing the mix of loans being originated to higher yielding
commercial mortgages from lower yielding residential mortgages
- Restructuring the securities portfolio
- Hedging a portion of short-term borrowings with an interest
rate swap
- Shifting a portion of borrowings from FHLB advances to brokered
CDs to reduce funding costs
- Maintaining tight control over operating expenses
- Focusing on improving the level of noninterest income
- Using excess capital to repurchase common stock which improves
EPS and ROE
Thus far in 2019, total loans, assets and
related funding, consisting of deposits and borrowings, have
declined modestly and the emphasis on commercial mortgages has
continued. Only one new branch was opened in 2019 and no
further branch openings are expected for the remainder of the year.
Management continues to evaluate additional steps that may be taken
to mitigate the impact on earnings of the current interest rate
environment including the hiring of additional lenders to grow the
commercial and industrial loan portfolio and related core
funding.
The modest mortgage loan pipeline at quarter end
of $49 million is reflective of management’s current plans to not
meaningfully change the size of the loan portfolio during the
remainder of 2019.
The most significant reason for the reduction in
the provision for loan losses of $2.4 million versus the same
period last year was that loans declined by $42 million in the
current period versus increased by $304 million in the comparable
period of 2018.
The decrease in noninterest income of $810,000,
or 13.6%, is primarily attributable to a bank-owned life insurance
(“BOLI”) death benefit in the first six months of 2018 of $565,000
and declines in the non-service cost components of the Bank’s
defined benefit pension plan of $412,000 and Investment Management
Division (“IMD”) income of $159,000. IMD income declined
mainly because of certain trust-related fees earned in the 2018
period and lower assets under management and held in a custodial
capacity in the current period. Partially offsetting these
items was an increase in service charges on deposit accounts of
$198,000 primarily related to higher overdraft and maintenance and
activity charges. Based on information currently known, we
believe that the level of noninterest income in the first half of
2019 is representative of the amount that will be recognized in the
second half of the year.
Noninterest expense decreased $664,000, or 2.2%,
versus the same period last year primarily because of decreases in
salaries and employee benefits expense of $733,000, or 3.9%, and
marketing expense of $510,000, partially offset by an increase in
technology and professional services fees of $604,000. The
decrease in salaries and employee benefits is largely attributable
to special salary-related accruals in the 2018 period and decreases
in placement and agency fees and group health insurance
expense. The increase in technology and professional services
fees includes an accrual of $300,000 for consulting fees.
Management is committed to maintaining tight
control over operating costs which should help to mitigate the
downward pressure on earnings arising from the current interest
rate environment. We believe that the level of noninterest
expense in the second quarter is representative of the amount of
noninterest expense that will be incurred in each of the remaining
quarters of 2019. Management’s expectation for noninterest
expense does not take into account a future credit of $960,000 that
would be applied against the Bank’s FDIC assessments over four or
more quarters once the FDIC’s reserve ratio reaches 1.38% and is
maintained at or above that level.
Income tax expense increased $1.7 million and
the effective tax rate increased from 11.2% to 16.9% when comparing
the first six months of 2019 to the same period last year.
These increases are primarily attributable to the recognition of
state and local net operating loss carryforwards and higher excess
tax benefits from stock-based compensation in the 2018 period and a
decline in the current period of tax-exempt income from municipal
securities and BOLI. The increase in income tax expense also
reflects higher pretax earnings in the current six-month period as
compared to the same period of 2018. Management expects the
Corporation’s effective tax rate in the remaining quarters of this
year to be approximately 17.0%.
Analysis of Earnings – Second Quarter
2019 Versus Second Quarter 2018
Net income for the second quarter of 2019 was
$10.7 million, representing an increase of $429,000, or 4.2%, over
$10.3 million earned in the same quarter of last year. The
increase is primarily attributable to declines in the provision for
loan losses of $381,000, salaries and employee benefits of $774,000
and occupancy and equipment expense of $162,000. Also
contributing to the increase is higher service charges on deposit
accounts of $193,000. Partially offsetting these items were a
decrease in net interest income of $606,000, or 2.3%, and an
increase in income tax expense of $315,000. Included in other
noninterest expense is a decline in marketing expense of $385,000
which was substantially offset by the aforementioned accrual for
consulting fees of $300,000 in the second quarter of 2019.
The variances in net interest income, provision for loan losses,
service charges on deposit accounts and salaries and employee
benefits occurred for substantially the same reasons discussed
above with respect to the six-month periods. The decline in
occupancy and equipment expense is due to lower maintenance and
repairs expense on the Bank’s facilities and equipment. The
increase in income tax expense is due to higher pretax earnings in
the current quarter and an increase in the effective tax rate from
14.4% for the second quarter of 2018 to 16.0% for the current
quarter largely due to a decline in the percentage of pretax income
derived from tax-exempt municipal securities and BOLI.
Net interest margin for the second quarter of
2019 was 2.58% as compared to 2.61% for the same quarter last
year. The 3 basis point decline was caused by the same
factors that led to the decrease in net interest margin for the
six-month periods including, among others, yield curve flattening
and inversion and deposit rate increases driven by competitive
pressure and the Bank’s desire to retain deposits.
Analysis of Earnings – Second Quarter
Versus First Quarter 2019
Net income for the second quarter of 2019
declined $97,000 from $10.8 million earned in the first quarter of
this year. The decrease is mainly due to an increase in the
provision for loan losses largely resulting from a $671,000
increase in net chargeoffs and the aforementioned consulting fee
accrual of $300,000 in the second quarter. These items were
partially offset by declines in salaries and employee benefits
expense of $535,000 and income tax expense of $281,000. The
decrease in salaries and employee benefits is mainly due to the
acceleration of stock-based compensation expense in the first
quarter for new awards granted to employees and directors that were
at retirement age on the grant date or would reach retirement age
before the vesting dates of the grant. The decrease in income
tax expense was due to a decline in pretax income in the second
quarter and a reduction in the effective tax rate largely resulting
from a lower amount of tax based on business capital.
Net interest margin was 2.58% for the second
quarter representing an increase of 2 basis points over 2.56% in
the first quarter. The increase reflects an increase in the
amount of prepayment penalties, a reduction in the amount of
short-term borrowings which is one of the Bank’s highest cost
funding sources and an improvement in loan portfolio yields.
Asset Quality
The Bank’s allowance for loan losses to total
loans (reserve coverage ratio) declined by 2 basis points from .94%
at year-end 2018 to .92% at June 30, 2019.
The provision (credit) for loan losses was
($35,000) and $2.3 million in the first six months of 2019 and
2018, respectively. The credit provision in the current
six-month period was driven mainly by declines in outstanding loans
and historical loss rates partially offset by net chargeoffs.
The provision in the 2018 period was driven mainly by loan growth
offset by improved economic conditions, reductions in historical
loss rates and growth rate trends.
The credit quality of the Bank’s loan and
securities portfolios remains strong. Nonaccrual loans,
troubled debt restructurings and loans past due 30 through 89 days
all remain at very low levels.
Capital
The Corporation’s Tier 1 leverage, Common Equity
Tier 1 risk-based, Tier 1 risk-based and Total risk-based capital
ratios were approximately 9.3%, 14.9%, 14.9% and 16.0%,
respectively, at June 30, 2019. The strength of the
Corporation’s balance sheet positions the Corporation to resume
growth in a measured and disciplined fashion when conditions
warrant.
The Corporation has a $50 million stock
repurchase program under which $22.2 million has been purchased to
date. Stock repurchases are currently being utilized by the
Corporation to prevent the buildup of excess capital and enhance
EPS and ROE.
Key Strategic Initiatives and Challenges
We Face
The Bank’s strategy remains focused on
increasing shareholder value through loan and deposit growth when
conditions warrant and the maintenance of strong credit quality, a
strong efficiency ratio and an optimal amount of capital. We
continue to adjust overall balance sheet and loan growth and
capital levels in response to market conditions to optimize current
results and best position the Bank for future increases in
profitability. We currently have 52 branches in Nassau and
Suffolk Counties, Long Island and the New York City (“NYC”)
boroughs of Queens, Brooklyn and Manhattan and will continue to
open new branches, albeit at a slower pace than in recent
years. Management is also focused on growing noninterest
income from existing and potential new sources, which may include
the development or acquisition of fee-based businesses.
Notwithstanding the actions taken by management
to mitigate the impact on earnings of the current interest rate
environment, net interest income and net interest margin remain
under pressure and could be negatively impacted by further yield
curve inversion, upward deposit repricings and increases in
borrowing costs. The Corporation’s profitability metrics
could be negatively impacted and may experience declines from
current levels due to one or both of the following: (1) rising
funding costs that are not accompanied by similar increases in
lending and investing rates, or (2) falling funding costs that are
accompanied by equal or greater declines in available yields on
loans and securities. Management will continue to be measured
and disciplined in its approach to deposit repricings and loan
growth and will not meaningfully loosen its underwriting standards
to improve net interest margin. Assuming no meaningful change
in the yield curve and upward pressure on deposit and borrowing
costs continue, management believes that net interest margin for
2019 should approximate 2.55%.
With respect to its lending activities, the Bank
will continue to prudently manage concentration and credit risk and
maintain its broker and correspondent relationships.
Commercial mortgage loans will be emphasized over residential
mortgage loans because of the better yield and shorter duration
that such mortgages generally provide. Small business credit
scored loans, along with the Bank’s traditional commercial and
industrial loan products, will be originated to diversify the
Bank’s loan portfolio and help mitigate the impact on net interest
margin of the current interest rate environment. Management
is currently exploring initiatives to grow its commercial and
industrial portfolio which, if undertaken, will happen in a
measured and disciplined fashion over an extended period of
time.
In June 2019, New York State ("NYS") passed The
Housing Stability and Tenant Protection Act of 2019 (“TPA”).
TPA represents a substantial change to the laws that have governed
landlord-tenant relations in NYC for decades and significantly
strengthens tenant protections. Among other changes, TPA limits the
ability of landlords to increase rents to recapture the cost of
individual apartment and building-wide capital improvements and
restricts the ability of landlords to deregulate rental units based
on vacancy, the earnings of occupants or reaching a defined rent
threshold. TPA could negatively impact landlords and the
value of regulated buildings and may discourage developers from
investing in new residential multifamily construction throughout
NYS. This may lead to a weakening of the financial strength
of some borrowers and deterioration in the value of certain
collateral.
In the current environment, banking regulators
are concerned about, among other things, growth, commercial real
estate concentrations, underwriting of commercial real estate and
commercial and industrial loans, capital levels, liquidity, cyber
security and predatory sales practices. Regulatory
requirements, the cost of compliance and vigilant supervisory
oversight are exerting downward pressure on revenues and upward
pressure on required capital levels and operating expenses.
Forward Looking Information
This earnings release contains various
“forward-looking statements” within the meaning of that term as set
forth in Rule 175 of the Securities Act of 1933 and Rule 3b-6 of
the Securities Exchange Act of 1934. Such statements are
generally contained in sentences including the words “may” or
“expect” or “could” or “should” or “would” or “believe” or
“anticipate”. The Corporation cautions that these
forward-looking statements are subject to numerous assumptions,
risks and uncertainties that could cause actual results to differ
materially from those contemplated by the forward-looking
statements. Factors that could cause future results to vary
from current management expectations include, but are not limited
to, changing economic conditions; legislative and regulatory
changes; monetary and fiscal policies of the federal government;
changes in interest rates; deposit flows and the cost of funds;
demand for loan products; competition; changes in management’s
business strategies; changes in accounting principles, policies or
guidelines; changes in real estate values; and other factors
discussed in the “risk factors” section of the Corporation’s
filings with the Securities and Exchange Commission (“SEC”).
The forward-looking statements are made as of the date of this
press release, and the Corporation assumes no obligation to update
the forward-looking statements or to update the reasons why actual
results could differ from those projected in the forward-looking
statements.
For more detailed financial information please
see the Corporation’s quarterly report on Form 10-Q for the quarter
ended June 30, 2019. The Form 10-Q will be available through
the Bank’s website at www.fnbli.com on or about August 9, 2019,
when it is electronically filed with the SEC. Our SEC filings
are also available on the SEC’s website at www.sec.gov.
For More Information Contact:Mark D. Curtis,
SEVP, CFO and Treasurer (516) 671-4900, Ext. 7413
CONSOLIDATED BALANCE
SHEETS(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6/30/19 |
|
12/31/18 |
|
|
|
|
|
|
|
(dollars in thousands) |
Assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
69,216 |
|
|
$ |
47,358 |
|
|
|
|
|
|
|
|
Investment securities: |
|
|
|
|
|
|
Held-to-maturity, at amortized cost (fair value of $4,522 and
$5,552) |
|
|
4,478 |
|
|
|
5,504 |
|
Available-for-sale, at fair value |
|
|
738,828 |
|
|
|
758,015 |
|
|
|
|
743,306 |
|
|
|
763,519 |
|
Loans: |
|
|
|
|
|
|
Commercial and industrial |
|
|
108,154 |
|
|
|
98,785 |
|
Secured by real estate: |
|
|
|
|
|
|
Commercial mortgages |
|
|
1,311,637 |
|
|
|
1,281,295 |
|
Residential mortgages |
|
|
1,732,301 |
|
|
|
1,809,651 |
|
Home equity lines |
|
|
66,018 |
|
|
|
67,710 |
|
Consumer and other |
|
|
3,477 |
|
|
|
5,958 |
|
|
|
|
3,221,587 |
|
|
|
3,263,399 |
|
Allowance for loan losses |
|
|
(29,768 |
) |
|
|
(30,838 |
) |
|
|
|
3,191,819 |
|
|
|
3,232,561 |
|
|
|
|
|
|
|
|
Restricted stock, at cost |
|
|
27,884 |
|
|
|
40,686 |
|
Bank premises and equipment, net |
|
|
40,806 |
|
|
|
41,267 |
|
Right-of-use asset - operating leases |
|
|
15,425 |
|
|
|
— |
|
Bank-owned life insurance |
|
|
82,012 |
|
|
|
80,925 |
|
Pension plan assets, net |
|
|
15,128 |
|
|
|
15,154 |
|
Deferred income tax benefit |
|
|
— |
|
|
|
3,447 |
|
Other assets |
|
|
16,545 |
|
|
|
16,143 |
|
|
|
$ |
4,202,141 |
|
|
$ |
4,241,060 |
|
Liabilities: |
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
Checking |
|
$ |
932,443 |
|
|
$ |
935,574 |
|
Savings, NOW and money market |
|
|
1,716,472 |
|
|
|
1,590,341 |
|
Time, $100,000 and over |
|
|
241,794 |
|
|
|
309,165 |
|
Time, other |
|
|
422,870 |
|
|
|
249,892 |
|
|
|
|
3,313,579 |
|
|
|
3,084,972 |
|
|
|
|
|
|
|
|
Short-term borrowings |
|
|
101,162 |
|
|
|
388,923 |
|
Long-term debt |
|
|
360,472 |
|
|
|
362,027 |
|
Operating lease liability |
|
|
16,266 |
|
|
|
— |
|
Accrued expenses and other liabilities |
|
|
19,144 |
|
|
|
16,951 |
|
Deferred income taxes payable |
|
|
81 |
|
|
|
— |
|
|
|
|
3,810,704 |
|
|
|
3,852,873 |
|
Stockholders'
Equity: |
|
|
|
|
|
|
Common stock, par value $.10 per share: |
|
|
|
|
|
|
Authorized, 80,000,000 shares; |
|
|
|
|
|
|
Issued and outstanding, 24,661,409 and 25,422,740 shares |
|
|
2,466 |
|
|
|
2,542 |
|
Surplus |
|
|
127,162 |
|
|
|
145,163 |
|
Retained earnings |
|
|
263,067 |
|
|
|
249,922 |
|
|
|
|
392,695 |
|
|
|
397,627 |
|
Accumulated other comprehensive loss, net of tax |
|
|
(1,258 |
) |
|
|
(9,440 |
) |
|
|
|
391,437 |
|
|
|
388,187 |
|
|
|
$ |
4,202,141 |
|
|
$ |
4,241,060 |
|
CONSOLIDATED STATEMENTS OF
INCOME(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended |
|
Three Months Ended |
|
|
6/30/19 |
|
6/30/18 |
|
6/30/19 |
|
6/30/18 |
|
|
|
|
|
|
|
|
|
|
|
(dollars in thousands) |
Interest and dividend
income: |
|
|
|
|
|
|
|
|
|
|
|
|
Loans |
|
$ |
59,029 |
|
|
$ |
55,170 |
|
$ |
29,613 |
|
$ |
28,506 |
Investment securities: |
|
|
|
|
|
|
|
|
|
|
|
|
Taxable |
|
|
7,968 |
|
|
|
5,210 |
|
|
3,923 |
|
|
3,001 |
Nontaxable |
|
|
6,046 |
|
|
|
6,870 |
|
|
2,954 |
|
|
3,439 |
|
|
|
73,043 |
|
|
|
67,250 |
|
|
36,490 |
|
|
34,946 |
Interest expense: |
|
|
|
|
|
|
|
|
|
|
|
|
Savings, NOW and money market deposits |
|
|
8,841 |
|
|
|
5,698 |
|
|
4,841 |
|
|
3,158 |
Time deposits |
|
|
7,331 |
|
|
|
4,577 |
|
|
3,933 |
|
|
2,869 |
Short-term borrowings |
|
|
2,507 |
|
|
|
1,656 |
|
|
542 |
|
|
873 |
Long-term debt |
|
|
3,675 |
|
|
|
4,278 |
|
|
1,895 |
|
|
2,161 |
|
|
|
22,354 |
|
|
|
16,209 |
|
|
11,211 |
|
|
9,061 |
Net interest income |
|
|
50,689 |
|
|
|
51,041 |
|
|
25,279 |
|
|
25,885 |
Provision (credit) for loan
losses |
|
|
(35 |
) |
|
|
2,315 |
|
|
422 |
|
|
803 |
Net interest income after provision (credit) for loan losses |
|
|
50,724 |
|
|
|
48,726 |
|
|
24,857 |
|
|
25,082 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest income: |
|
|
|
|
|
|
|
|
|
|
|
|
Investment Management Division income |
|
|
998 |
|
|
|
1,157 |
|
|
517 |
|
|
576 |
Service charges on deposit accounts |
|
|
1,485 |
|
|
|
1,287 |
|
|
780 |
|
|
587 |
Other |
|
|
2,678 |
|
|
|
3,527 |
|
|
1,420 |
|
|
1,516 |
|
|
|
5,161 |
|
|
|
5,971 |
|
|
2,717 |
|
|
2,679 |
Noninterest expense: |
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee benefits |
|
|
17,981 |
|
|
|
18,714 |
|
|
8,723 |
|
|
9,497 |
Occupancy and equipment |
|
|
5,840 |
|
|
|
5,878 |
|
|
2,903 |
|
|
3,065 |
Other |
|
|
6,090 |
|
|
|
5,983 |
|
|
3,150 |
|
|
3,145 |
|
|
|
29,911 |
|
|
|
30,575 |
|
|
14,776 |
|
|
15,707 |
Income before income taxes |
|
|
25,974 |
|
|
|
24,122 |
|
|
12,798 |
|
|
12,054 |
Income tax expense |
|
|
4,389 |
|
|
|
2,696 |
|
|
2,054 |
|
|
1,739 |
Net income |
|
$ |
21,585 |
|
|
$ |
21,426 |
|
$ |
10,744 |
|
$ |
10,315 |
EARNINGS PER
SHARE(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended |
|
Three Months Ended |
|
|
|
6/30/19 |
|
6/30/18 |
|
6/30/19 |
|
6/30/18 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(dollars in thousands, except per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
21,585 |
|
$ |
21,426 |
|
$ |
10,744 |
|
$ |
10,315 |
|
Income allocated to
participating securities |
|
|
— |
|
|
60 |
|
|
— |
|
|
23 |
|
Income allocated to common stockholders |
|
$ |
21,585 |
|
$ |
21,366 |
|
$ |
10,744 |
|
$ |
10,292 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares |
|
|
25,051,412 |
|
|
25,149,364 |
|
|
24,821,026 |
|
|
25,334,155 |
|
Dilutive stock options and restricted stock units |
|
|
169,048 |
|
|
188,918 |
|
|
181,751 |
|
|
173,661 |
|
|
|
|
25,220,460 |
|
|
25,338,282 |
|
|
25,002,777 |
|
|
25,507,816 |
|
Per Share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic EPS |
|
|
$.86 |
|
|
$.85 |
|
|
$.43 |
|
|
$.41 |
|
Diluted EPS |
|
|
.86 |
|
|
.84 |
|
|
.43 |
|
|
.40 |
|
Cash Dividends Declared |
|
|
.34 |
|
|
.30 |
|
|
.17 |
|
|
.15 |
|
FINANCIAL
RATIOS(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ROA |
|
|
1.03 |
% |
|
1.05 |
% |
|
1.02 |
% |
|
.97 |
% |
ROE |
|
|
11.15 |
% |
|
11.77 |
% |
|
11.00 |
% |
|
11.08 |
% |
Net Interest Margin |
|
|
2.57 |
% |
|
2.66 |
% |
|
2.58 |
% |
|
2.61 |
% |
Dividend Payout Ratio |
|
|
39.53 |
% |
|
35.71 |
% |
|
39.53 |
% |
|
37.50 |
% |
PROBLEM AND POTENTIAL PROBLEM LOANS AND
ASSETS(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6/30/19 |
|
|
12/31/18 |
|
|
|
|
|
|
|
|
|
|
|
(dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
Loans, excluding troubled debt
restructurings: |
|
|
|
|
|
|
|
|
Past due 30 through 89 days |
|
$ |
122 |
|
|
$ |
909 |
|
Past due 90 days or more and still accruing |
|
|
— |
|
|
|
— |
|
Nonaccrual |
|
|
2,260 |
|
|
|
1,663 |
|
|
|
|
2,382 |
|
|
|
2,572 |
|
Troubled debt
restructurings: |
|
|
|
|
|
|
|
|
Performing according to their modified terms |
|
|
1,119 |
|
|
|
1,289 |
|
Past due 30 through 89 days |
|
|
— |
|
|
|
— |
|
Past due 90 days or more and still accruing |
|
|
— |
|
|
|
— |
|
Nonaccrual |
|
|
469 |
|
|
|
472 |
|
|
|
|
1,588 |
|
|
|
1,761 |
|
Total past due, nonaccrual and
restructured loans: |
|
|
|
|
|
|
|
|
Restructured and performing according to their modified terms |
|
|
1,119 |
|
|
|
1,289 |
|
Past due 30 through 89 days |
|
|
122 |
|
|
|
909 |
|
Past due 90 days or more and still accruing |
|
|
— |
|
|
|
— |
|
Nonaccrual |
|
|
2,729 |
|
|
|
2,135 |
|
|
|
|
3,970 |
|
|
|
4,333 |
|
Other real estate owned |
|
|
— |
|
|
|
— |
|
|
|
$ |
3,970 |
|
|
$ |
4,333 |
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses |
|
$ |
29,768 |
|
|
$ |
30,838 |
|
Allowance for loan losses as a
percentage of total loans |
|
|
.92 |
% |
|
|
.94 |
% |
Allowance for loan losses as a
multiple of nonaccrual loans |
|
|
10.9 |
x |
|
|
14.4 |
x |
AVERAGE BALANCE SHEET, INTEREST RATES AND
INTEREST DIFFERENTIAL(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
|
|
2019 |
|
2018 |
|
|
Average |
|
Interest/ |
|
Average |
|
Average |
|
Interest/ |
|
Average |
(dollars in thousands) |
|
Balance |
|
Dividends |
|
Rate |
|
Balance |
|
Dividends |
|
Rate |
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-earning bank
balances |
|
$ |
25,253 |
|
|
$ |
300 |
|
2.40 |
% |
|
$ |
30,322 |
|
|
$ |
255 |
|
1.70 |
% |
Investment securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable |
|
|
368,572 |
|
|
|
7,668 |
|
4.16 |
|
|
|
340,633 |
|
|
|
4,955 |
|
2.91 |
|
Nontaxable (1) |
|
|
416,006 |
|
|
|
7,653 |
|
3.68 |
|
|
|
466,366 |
|
|
|
8,696 |
|
3.73 |
|
Loans (1) |
|
|
3,248,214 |
|
|
|
59,032 |
|
3.63 |
|
|
|
3,127,670 |
|
|
|
55,173 |
|
3.53 |
|
Total interest-earning
assets |
|
|
4,058,045 |
|
|
|
74,653 |
|
3.68 |
|
|
|
3,964,991 |
|
|
|
69,079 |
|
3.48 |
|
Allowance for loan losses |
|
|
(30,501 |
) |
|
|
|
|
|
|
|
|
(35,138 |
) |
|
|
|
|
|
|
Net interest-earning
assets |
|
|
4,027,544 |
|
|
|
|
|
|
|
|
|
3,929,853 |
|
|
|
|
|
|
|
Cash and due from banks |
|
|
36,252 |
|
|
|
|
|
|
|
|
|
36,685 |
|
|
|
|
|
|
|
Premises and equipment,
net |
|
|
41,217 |
|
|
|
|
|
|
|
|
|
40,145 |
|
|
|
|
|
|
|
Other assets |
|
|
128,493 |
|
|
|
|
|
|
|
|
|
118,561 |
|
|
|
|
|
|
|
|
|
$ |
4,233,506 |
|
|
|
|
|
|
|
|
$ |
4,125,244 |
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings, NOW & money
market deposits |
|
$ |
1,685,467 |
|
|
|
8,841 |
|
1.06 |
|
|
$ |
1,757,700 |
|
|
|
5,698 |
|
.65 |
|
Time deposits |
|
|
637,630 |
|
|
|
7,331 |
|
2.32 |
|
|
|
444,599 |
|
|
|
4,577 |
|
2.08 |
|
Total interest-bearing
deposits |
|
|
2,323,097 |
|
|
|
16,172 |
|
1.40 |
|
|
|
2,202,299 |
|
|
|
10,275 |
|
.94 |
|
Short-term borrowings |
|
|
196,481 |
|
|
|
2,507 |
|
2.57 |
|
|
|
179,291 |
|
|
|
1,656 |
|
1.86 |
|
Long-term debt |
|
|
362,461 |
|
|
|
3,675 |
|
2.04 |
|
|
|
431,985 |
|
|
|
4,278 |
|
2.00 |
|
Total interest-bearing
liabilities |
|
|
2,882,039 |
|
|
|
22,354 |
|
1.56 |
|
|
|
2,813,575 |
|
|
|
16,209 |
|
1.16 |
|
Checking deposits |
|
|
931,942 |
|
|
|
|
|
|
|
|
|
935,753 |
|
|
|
|
|
|
|
Other liabilities |
|
|
29,233 |
|
|
|
|
|
|
|
|
|
8,954 |
|
|
|
|
|
|
|
|
|
|
3,843,214 |
|
|
|
|
|
|
|
|
|
3,758,282 |
|
|
|
|
|
|
|
Stockholders' equity |
|
|
390,292 |
|
|
|
|
|
|
|
|
|
366,962 |
|
|
|
|
|
|
|
|
|
$ |
4,233,506 |
|
|
|
|
|
|
|
|
$ |
4,125,244 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income (1) |
|
|
|
|
$ |
52,299 |
|
|
|
|
|
|
|
$ |
52,870 |
|
|
|
Net interest spread (1) |
|
|
|
|
|
|
|
2.12 |
% |
|
|
|
|
|
|
|
2.32 |
% |
Net interest margin (1) |
|
|
|
|
|
|
|
2.57 |
% |
|
|
|
|
|
|
|
2.66 |
% |
(1) Tax-equivalent basis. Interest income on a
tax-equivalent basis includes the additional amount of interest
income that would have been earned if the Corporation's investment
in tax-exempt loans and investment securities had been made in
loans and investment securities subject to federal income taxes
yielding the same after-tax income. The tax-equivalent amount of
$1.00 of nontaxable income was $1.27 for each period presented
using the statutory federal income tax rate of 21%.
AVERAGE BALANCE SHEET, INTEREST RATES AND
INTEREST DIFFERENTIAL(Unaudited)
|
|
|
Three Months Ended June 30, |
|
|
|
2019 |
|
2018 |
|
(dollars in thousands) |
|
Average Balance |
|
Interest/ Dividends |
|
Average Rate |
|
Average Balance |
|
Interest/ Dividends |
|
Average Rate |
|
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-earning bank
balances |
|
$ |
25,701 |
|
|
$ |
154 |
|
2.40 |
% |
|
$ |
33,249 |
|
|
$ |
151 |
|
1.82 |
% |
|
Investment securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable |
|
|
363,080 |
|
|
|
3,769 |
|
4.15 |
|
|
|
381,433 |
|
|
|
2,850 |
|
2.99 |
|
|
Nontaxable (1) |
|
|
413,145 |
|
|
|
3,738 |
|
3.62 |
|
|
|
466,885 |
|
|
|
4,353 |
|
3.73 |
|
|
Loans (1) |
|
|
3,234,861 |
|
|
|
29,615 |
|
3.66 |
|
|
|
3,218,724 |
|
|
|
28,508 |
|
3.54 |
|
|
Total interest-earning
assets |
|
|
4,036,787 |
|
|
|
37,276 |
|
3.69 |
|
|
|
4,100,291 |
|
|
|
35,862 |
|
3.50 |
|
|
Allowance for loan losses |
|
|
(30,114 |
) |
|
|
|
|
|
|
|
|
(35,806 |
) |
|
|
|
|
|
|
|
Net
interest-earning assets |
|
|
4,006,673 |
|
|
|
|
|
|
|
|
|
4,064,485 |
|
|
|
|
|
|
|
|
Cash and due from banks |
|
|
35,834 |
|
|
|
|
|
|
|
|
|
36,075 |
|
|
|
|
|
|
|
|
Premises and equipment,
net |
|
|
41,125 |
|
|
|
|
|
|
|
|
|
40,324 |
|
|
|
|
|
|
|
|
Other assets |
|
|
127,614 |
|
|
|
|
|
|
|
|
|
121,096 |
|
|
|
|
|
|
|
|
|
|
$ |
4,211,246 |
|
|
|
|
|
|
|
|
$ |
4,261,980 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
and Stockholders' Equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings, NOW & money
market deposits |
|
$ |
1,728,112 |
|
|
|
4,841 |
|
1.12 |
|
|
$ |
1,810,311 |
|
|
|
3,158 |
|
.70 |
|
|
Time deposits |
|
|
668,217 |
|
|
|
3,933 |
|
2.36 |
|
|
|
536,713 |
|
|
|
2,869 |
|
2.14 |
|
|
Total
interest-bearing deposits |
|
|
2,396,329 |
|
|
|
8,774 |
|
1.47 |
|
|
|
2,347,024 |
|
|
|
6,027 |
|
1.03 |
|
|
Short-term borrowings |
|
|
92,475 |
|
|
|
542 |
|
2.35 |
|
|
|
158,505 |
|
|
|
873 |
|
2.21 |
|
|
Long-term debt |
|
|
369,142 |
|
|
|
1,895 |
|
2.06 |
|
|
|
428,675 |
|
|
|
2,161 |
|
2.02 |
|
|
Total
interest-bearing liabilities |
|
|
2,857,946 |
|
|
|
11,211 |
|
1.57 |
|
|
|
2,934,204 |
|
|
|
9,061 |
|
1.24 |
|
|
Checking deposits |
|
|
932,256 |
|
|
|
|
|
|
|
|
|
945,572 |
|
|
|
|
|
|
|
|
Other liabilities |
|
|
29,398 |
|
|
|
|
|
|
|
|
|
8,714 |
|
|
|
|
|
|
|
|
|
|
|
3,819,600 |
|
|
|
|
|
|
|
|
|
3,888,490 |
|
|
|
|
|
|
|
|
Stockholders' equity |
|
|
391,646 |
|
|
|
|
|
|
|
|
|
373,490 |
|
|
|
|
|
|
|
|
|
|
$ |
4,211,246 |
|
|
|
|
|
|
|
|
$ |
4,261,980 |
|
|
|
|
|
|
|
|
Net interest income (1) |
|
|
|
|
$ |
26,065 |
|
|
|
|
|
|
|
$ |
26,801 |
|
|
|
|
Net interest spread (1) |
|
|
|
|
|
|
|
2.12 |
% |
|
|
|
|
|
|
|
2.26 |
% |
|
Net interest margin (1) |
|
|
|
|
|
|
|
2.58 |
% |
|
|
|
|
|
|
|
2.61 |
% |
|
(1) Tax-equivalent basis. Interest income on a
tax-equivalent basis includes the additional amount of interest
income that would have been earned if the Corporation's investment
in tax-exempt loans and investment securities had been made in
loans and investment securities subject to federal income taxes
yielding the same after-tax income. The tax-equivalent amount of
$1.00 of nontaxable income was $1.27 for each period presented
using the statutory federal income tax rate of 21%.
First of Long Island (NASDAQ:FLIC)
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From Feb 2024 to Mar 2024
First of Long Island (NASDAQ:FLIC)
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From Mar 2023 to Mar 2024