The First of Long Island Corporation (Nasdaq: FLIC), the parent
company of The First National Bank of Long Island, reported net
income and earnings per share for the three and six months ended
June 30, 2020. 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 $10.8 million and $.45,
respectively, compared to $10.7 million and $.43
- ROA and ROE were 1.02% and 11.30%, respectively,
compared to 1.02% and 11.00%
- Net interest margin was 2.64% versus
2.58%
- Cost of interest-bearing deposits declined 51 basis
points to .96% and cost of interest-bearing liabilities declined 43
basis points to 1.14%
- Cash Dividends Per Share increased 5.9% to $.18 from
$.17
- Provided $621 million in loan modifications and
originated $171 million in SBA Paycheck Protection Program (“PPP”)
loans in support of customers during the pandemic
- Effective Tax Rate was 16.8% versus 16.0%
SIX MONTH HIGHLIGHTS
- Net Income and EPS were $19.9 million and $.83,
respectively, compared to $21.6 million and $.86
- ROA and ROE were .96% and 10.34%, respectively,
compared to 1.03% and 11.15%
- Net interest margin was 2.63% versus
2.57%
- Effective Tax Rate was 16.1% versus 16.9%
Analysis of Earnings – Six Months Ended
June 30, 2020
Net income for the first six months of 2020 was
$19.9 million, a decrease of $1.7 million, or 7.8%, versus the same
period last year. The decrease is due to increases in the
provision for credit losses of $2.5 million and noninterest expense
of $607,000, or 2.0%. These items were partially offset by
increases in net interest income of $405,000, or .8%, and
noninterest income of $428,000, or 8.3%, and a decrease in income
tax expense of $581,000.
The increase in net interest income is mainly
attributable to a reduction in deposit rates in response to
decreases in the Federal Funds Target Rate and a very low interest
rate environment. The cost of savings, NOW and money market
deposits declined 28 basis points to .78% and the cost of
interest-bearing liabilities declined 26 basis points to
1.30%. These decreases far outpaced the 10 basis point
decline in yield on securities and loans which are generally not
subject to immediate repricing with changes in market interest
rates. The increase in net interest income was also
attributable to income from SBA PPP loans of $896,000 and a
favorable shift in the mix of funding as an increase in average
checking deposits of $81.9 million and a decline in average
interest-bearing liabilities of $158.1 million resulted in average
checking deposits comprising a larger portion of total
funding. The increase in average checking deposits is mainly
attributable to the SBA PPP.
The decline in yield on securities and loans was
mainly attributable to an increase in prepayment speeds and lower
yields available on securities purchases and loan
originations. The economic impact of the COVID-19 pandemic
(“pandemic”) has slowed loan and overall balance sheet
growth. The average balance of loans decreased $77.8 million,
or 2.4%, and the average balance of investment securities declined
$64.3 million, or 8.2%. The average balance of loans includes
$62.7 million of SBA PPP loans at a weighted average yield of 2.9%
for the current six-month period. The pandemic and measures
taken to contain it significantly disrupted economic activity in
our area, causing businesses and schools to close and an increase
in unemployment. These disruptions made it difficult to
solicit new business, analyze the financial impact on new and
existing customers and grow our loan pipeline. The pandemic
was largely responsible for a mortgage loan pipeline at quarter end
of $39 million and an increase in average interest-earning bank
balances of $66.6 million.
Net interest margin for the second quarter and
first six months of 2020 was 2.64% and 2.63%, respectively, each
increasing 6 basis points over the comparable periods of 2019.
The increases were mainly attributable to our ability to
reduce the rates paid on interest-bearing deposits faster than our
interest-earning assets repriced downward as a significant portion
of our municipal bond and mortgage loan portfolios have fixed
rates.
The provision for credit losses was $2.5 million
for the first six months of 2020 on a current expected credit loss
(“CECL”) basis as compared to a credit provision of ($35,000) for
the 2019 period on an incurred loss basis. The $2.5 million
provision for the current six-month period was largely attributable
to the pandemic and includes $4.2 million to reflect current and
forecasted economic conditions and $576,000 for net chargeoffs,
partially offset by a decline in outstanding residential and
commercial mortgage loans and lower historical loss rates.
The credit provision of ($35,000) for the 2019 period was driven
mainly by declines in outstanding loans and historical loss rates
partially offset by net chargeoffs.
The increase in noninterest income of $428,000
is primarily attributable to an increase in the non-service
components of the Bank’s defined benefit pension plan of
$523,000. Management remains focused on revenue enhancement
initiatives; however, the pandemic is negatively affecting most
categories of noninterest income.
The increase in noninterest expense of $607,000
includes approximately $300,000 of expense attributable to the
pandemic and $128,000 of severance charges related to the pending
closure and consolidation of three branches. Pandemic
expenses include branch and office sanitizing expenses, cleaning
and safety equipment, IT-related expenditures and special staff
bonuses in recognition of COVID-19 work-related challenges and the
SBA PPP. Other factors which increased noninterest expense
include higher salaries, employee benefits and equity compensation
expense mainly related to hiring a middle market lending team,
salary adjustments and the immediate vesting of stock awards
granted to directors in the second quarter of 2020. These
expenses were partially offset by decreases in FDIC insurance
expense of $413,000 and marketing expense of $210,000. The
decrease in FDIC insurance expense was due to assessment credits
received by the Bank which are now fully utilized.
The decrease in income tax expense of $581,000
is primarily attributable to lower pretax earnings in the current
six-month period as compared to the 2019 period and a decline in
the effective tax rate to 16.1%.
Analysis of Earnings – Second Quarter
2020 Versus Second Quarter 2019
Net income for the second quarter of 2020 of
$10.8 million was relatively unchanged from the comparable period
of 2019. Earnings for the second quarter include an increase
in net interest income of $829,000 and a decrease in the provision
for credit losses of $330,000. Substantially offsetting these
items were increases in noninterest expense and income tax expense
of $884,000 and $114,000, respectively, and a decline in service
charges on deposit accounts of $161,000 due to the pandemic.
The increase in net interest income occurred for substantially the
same reasons discussed above with respect to the six-month periods.
The provision for credit losses was $92,000 for the current
quarter on a CECL basis. The $92,000 provision was mainly
attributable to the pandemic and includes $1.5 million to reflect
current and forecasted economic conditions and $146,000 for net
chargeoffs, partially offset by a decline in outstanding
residential and commercial mortgage loans and lower historical loss
rates. The increase in noninterest expense was primarily
attributable to the items discussed above with respect to the
six-month periods. The increase in income tax expense
reflects higher pretax earnings in the current quarter and an
increase in the effective tax rate to 16.8%.
Analysis of Earnings – Second Quarter
Versus First Quarter 2020
Net income for the second quarter of 2020
increased $1.6 million from $9.1 million earned in the first
quarter. The increase is primarily attributable to an
increase in net interest income of $1.1 million and a decrease in
the provision for credit losses of $2.3 million. Partially
offsetting these items were a decrease in service charges on
deposit accounts of $368,000 due to the pandemic and increases in
salaries, employee benefits and equity compensation expense of
$912,000 and income tax expense of $528,000. The increase in
net interest income occurred for substantially the same reasons
discussed above with respect to the six-month periods. The
decrease in the provision for credit losses reflects lower charges
for current and forecasted economic conditions in the second
quarter as a substantial portion of the estimated negative impact
of the pandemic was recorded in the first quarter, a larger decline
in outstanding residential and commercial mortgage loans in the
second quarter and higher net chargeoffs in the first
quarter. The increase in salaries, employee benefits and
equity compensation expense includes the aforementioned special
staff bonuses, severance charges and a charge for stock awards
granted to directors. The increase in income tax expense
reflects higher pretax earnings in the current quarter and an
increase in the effective tax rate.
Asset Quality
The Bank’s allowance for credit losses to total
loans (reserve coverage ratio) was 1.01% at January 1, 2020 on a
CECL basis, 1.09% at March 31, 2020 and 1.08% at June 30,
2020. The reserve coverage ratio increased 8 basis points
during the first quarter and, excluding Federally-guaranteed SBA
PPP loans, increased 4 basis points during the second quarter to
1.13% at June 30, 2020. The lower increase in the reserve
coverage ratio in the second quarter reflects lower charges for
current and forecasted economic conditions as a substantial portion
of the estimated negative impact of the pandemic was recorded in
the first quarter. The January 1, 2020 implementation of CECL
increased the reserve coverage ratio 9 basis points from .92% at
December 31, 2019 on an incurred loss basis.
Nonaccrual loans, troubled debt restructurings
and loans past due 30 through 89 days all remain at low levels.
Nonaccrual loans increased slightly by $2.1 million during
the second quarter with the increase unrelated to the pandemic or
loan modifications.
Loan Modifications
During the second quarter, the Bank entered into
$621 million of loan modifications on 775 loans. These
modifications were done to support borrowers experiencing financial
disruption and economic hardship as a result of the pandemic.
Loan modifications were evaluated on a case-by-case basis for
borrowers that were current as to principal and interest and were
not in default prior to the pandemic. Modifications
outstanding as of June 30, 2020 are as follows:
Type of Modification |
Number of Loans |
Type of Loans |
Outstanding Loan Balance |
Accrued Interest |
3 Month Deferral of Principal |
274 |
Small Business |
$23 million |
$94,000 |
|
|
|
|
|
|
3 Month Deferral of Principal and Interest |
28418928 |
Residential Mortgages Commercial MortgagesMainly C&I |
163 million423 million12 million |
1.4 million4.5 million161,000 |
Accrued interest on loan modifications of $6.2
million is included in interest income for the six months ended
June 30, 2020 and is a component of other assets on the balance
sheet.
As of July 27, 2020, approximately $217 million
of loan modifications came due with $189 million, or 87%, making
their scheduled payment, $16 million requesting and receiving a
further deferral of principal and interest and the remaining $12
million making only a partial payment or no payment at
all.
Second deferrals of principal and interest for
up to an additional three months are considered for certain
borrowers that continue to experience a significant reduction in
income or liquidity as a result of the pandemic. Payments on
all modified loans are scheduled to commence on or before October
1, 2020. Management is carefully monitoring the payment
status of modified loans and the extent such loans become past due
or are in default under their modified terms.
Modified residential and commercial mortgage
loans are secured by first liens on underlying real estate,
substantially all of which is in the New York City (“NYC”)
metropolitan area. Such residential and commercial mortgage
loans have median original loan-to-value ratios of 64% and 58%,
respectively. Concentrations of commercial mortgage loans are
as follows:
By
Location: |
|
By Property
Type: |
County |
Numberof Loans |
Balance at6/30/20 |
|
Type |
Numberof Loans |
Balance at6/30/20 |
Suffolk |
50 |
$97 million |
|
Multifamily |
79 |
$206 million |
Bronx |
27 |
90 million |
|
Retail |
40 |
100 million |
Kings |
29 |
62 million |
|
Office |
20 |
64 million |
New York |
19 |
49 million |
|
Mixed Use |
27 |
23 million |
Nassau |
38 |
46 million |
|
|
|
|
Queens |
13 |
34 million |
|
|
|
|
|
|
|
|
|
|
|
Loans to borrowers in the hospitality industry,
such as hotels and restaurants, are not significant.
Modified loans present an elevated level of
credit risk to the Bank because they involve borrowers adversely
affected by the pandemic. Such modifications could result in
a higher level of nonaccrual loans, reversal of accrued interest
and loan chargeoffs in the future which could have a material
negative effect on earnings.
Capital
The Corporation adopted the Community Bank
Leverage Ratio framework in 2020. The Corporation’s Leverage Ratio
was approximately 9.3% at June 30, 2020. The Corporation’s
balance sheet remains positioned for lending and growth.
Serving Customers
The Bank remains focused on serving customers
during the pandemic. Our employees have been heroic in their
efforts to assist customers especially during periods of limited
branch access, split shifts and working remotely. Loan
modifications and lending under the SBA’s PPP provide support to
customers adversely affected by the economic downturn. We
maintain open communication with customers, provide ready access to
deposits through our branch network, ATMs and digital offerings and
processed daily transactions such as deposits and fund
transfers.
The Bank’s participation in the SBA’s PPP for
small business customers began in the second quarter of 2020 and
includes 687 loans with a carrying value of $166 million as of June
30, 2020. PPP loans have a 1% rate of interest and 2-year
term with fees paid to the Bank by the SBA ranging from 1% to 5% of
each loan depending on the loan amount. Fees are amortized as
a yield adjustment over the expected life of the loans. PPP
loans are 100% guaranteed by the SBA.
The Bank’s strong capital and liquidity
positions, branch network, lending and deposit platforms and focus
on internal controls and cybersecurity provide a solid foundation
for serving customers during these challenging times. Our
liquidity position is monitored daily and remains strong and
stable. The Bank maintains a series of operating, health and
safety protocols through a pandemic committee to ensure business
continuity and protect customers and employees. As the
severity of the pandemic has subsided in the NYC metropolitan area,
which is the main market the Bank serves, our branches returned to
their traditional service model including hours and methods of
operating and staffing, and back office personnel returned to the
office.
Key Initiatives and Challenges We
Face
The Bank’s strategy is focused on increasing
shareholder value through loan and deposit growth, the maintenance
of strong credit quality, a strong efficiency ratio and an optimal
amount of capital. Key strategic initiatives in 2020 include
enhancing our brand, highlighting our digital offerings, refining
our branch strategy, building on our relationship banking business
and growing fee income. These initiatives are being
negatively impacted by the pandemic.
Notwithstanding the actions taken to mitigate
the impact on earnings of the current interest rate and economic
environment, net interest income, net interest margin, earnings,
profitability metrics and ability to grow remain under
pressure. These items could be negatively impacted by yield
curve inversion, low yields available on loans and securities and
potential credit losses arising from weak economic conditions and
loan modifications. In addition, during the fourth quarters
of 2020 and 2021, corporate bonds with current fair values of $77.6
million and $28.6 million, respectively, and a fixed rate yield of
5.14% will begin to reprice on a quarterly basis to a floating
rate. At current rates, the weighted average floating rate
yield would be approximately .77%.
The pandemic continues to create substantial
challenges for the Bank and its customers. Normal business
activity in the NYC metropolitan area was significantly disrupted
for an extended period of time due to government mandated business
and school closures and stay-at-home orders to protect public
health. As a result, many of the Bank’s customers, which
include small and medium-sized businesses, professionals,
consumers, municipalities and other organizations, experienced a
significant decline in, or complete discontinuance of, business
activity, earnings and cash flow. Although the local economy
is slowly reopening, the full impact of the pandemic on the Bank is
beyond the Bank’s current knowledge and will ultimately be
determined by the pace at which economic activity rebounds and the
extent to which the economy recovers from the high level of
unemployment and business disruption.
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”).
In addition, the pandemic is having an adverse impact on the
Corporation, its customers and the communities it serves. The
adverse effect of the pandemic on the Corporation, its customers
and the communities where it operates may adversely affect the
Corporation’s business, results of operations and financial
condition for an indefinite period of time. 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, 2020. The Form 10-Q will be available through
the Bank’s website at www.fnbli.com on or about August 6, 2020,
when it is electronically filed with the SEC. Our SEC filings are
also available on the SEC’s website at www.sec.gov.
CONSOLIDATED BALANCE
SHEETS(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6/30/20 |
|
12/31/19 |
|
|
(dollars in thousands) |
Assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
173,740 |
|
|
$ |
38,968 |
|
Investment securities available-for-sale, at fair value |
|
|
748,032 |
|
|
|
697,544 |
|
|
|
|
|
|
|
|
Loans: |
|
|
|
|
|
|
Commercial and industrial |
|
|
104,673 |
|
|
|
103,879 |
|
SBA Paycheck Protection Program |
|
|
165,704 |
|
|
|
— |
|
Secured by real estate: |
|
|
|
|
|
|
Commercial mortgages |
|
|
1,351,542 |
|
|
|
1,401,289 |
|
Residential mortgages |
|
|
1,470,181 |
|
|
|
1,621,419 |
|
Home equity lines |
|
|
58,945 |
|
|
|
59,231 |
|
Consumer and other |
|
|
1,416 |
|
|
|
2,431 |
|
|
|
|
3,152,461 |
|
|
|
3,188,249 |
|
Allowance for credit losses |
|
|
(34,051 |
) |
|
|
(29,289 |
) |
|
|
|
3,118,410 |
|
|
|
3,158,960 |
|
|
|
|
|
|
|
|
Restricted stock, at cost |
|
|
29,543 |
|
|
|
30,899 |
|
Bank premises and equipment, net |
|
|
39,463 |
|
|
|
40,017 |
|
Right of use asset - operating leases |
|
|
13,675 |
|
|
|
14,343 |
|
Bank-owned life insurance |
|
|
84,251 |
|
|
|
83,119 |
|
Pension plan assets, net |
|
|
18,407 |
|
|
|
18,275 |
|
Deferred income tax benefit |
|
|
3,856 |
|
|
|
317 |
|
Other assets |
|
|
18,951 |
|
|
|
15,401 |
|
|
|
$ |
4,248,328 |
|
|
$ |
4,097,843 |
|
Liabilities: |
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
Checking |
|
$ |
1,152,945 |
|
|
$ |
911,978 |
|
Savings, NOW and money market |
|
|
1,701,266 |
|
|
|
1,720,599 |
|
Time, $100,000 and over |
|
|
213,262 |
|
|
|
242,359 |
|
Time, other |
|
|
255,449 |
|
|
|
269,080 |
|
|
|
|
3,322,922 |
|
|
|
3,144,016 |
|
|
|
|
|
|
|
|
Short-term borrowings |
|
|
60,019 |
|
|
|
190,710 |
|
Long-term debt |
|
|
439,972 |
|
|
|
337,472 |
|
Operating lease liability |
|
|
14,561 |
|
|
|
15,220 |
|
Accrued expenses and other liabilities |
|
|
21,116 |
|
|
|
21,317 |
|
|
|
|
3,858,590 |
|
|
|
3,708,735 |
|
Stockholders'
Equity: |
|
|
|
|
|
|
Common stock, par value $.10 per share: |
|
|
|
|
|
|
Authorized, 80,000,000 shares; |
|
|
|
|
|
|
Issued and outstanding, 23,848,626 and 23,934,632 shares |
|
|
2,385 |
|
|
|
2,393 |
|
Surplus |
|
|
106,047 |
|
|
|
111,744 |
|
Retained earnings |
|
|
283,379 |
|
|
|
274,376 |
|
|
|
|
391,811 |
|
|
|
388,513 |
|
Accumulated other comprehensive income (loss), net of tax |
|
|
(2,073 |
) |
|
|
595 |
|
|
|
|
389,738 |
|
|
|
389,108 |
|
|
|
$ |
4,248,328 |
|
|
$ |
4,097,843 |
|
|
|
CONSOLIDATED STATEMENTS OF
INCOME(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended |
|
Three Months Ended |
|
|
|
6/30/20 |
|
6/30/19 |
|
6/30/20 |
|
6/30/19 |
|
|
(dollars in thousands) |
Interest and dividend
income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans |
|
$ |
|
56,888 |
|
$ |
|
59,029 |
|
|
$ |
|
27,957 |
|
$ |
|
29,613 |
|
Investment securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable |
|
|
|
6,749 |
|
|
|
7,968 |
|
|
|
|
3,323 |
|
|
|
3,923 |
|
Nontaxable |
|
|
|
5,066 |
|
|
|
6,046 |
|
|
|
|
2,501 |
|
|
|
2,954 |
|
|
|
|
|
68,703 |
|
|
|
73,043 |
|
|
|
|
33,781 |
|
|
|
36,490 |
|
Interest expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings, NOW and money market deposits |
|
|
|
6,639 |
|
|
|
8,841 |
|
|
|
|
2,359 |
|
|
|
4,841 |
|
Time deposits |
|
|
|
5,928 |
|
|
|
7,331 |
|
|
|
|
2,886 |
|
|
|
3,933 |
|
Short-term borrowings |
|
|
|
885 |
|
|
|
2,507 |
|
|
|
|
266 |
|
|
|
542 |
|
Long-term debt |
|
|
|
4,157 |
|
|
|
3,675 |
|
|
|
|
2,162 |
|
|
|
1,895 |
|
|
|
|
|
17,609 |
|
|
|
22,354 |
|
|
|
|
7,673 |
|
|
|
11,211 |
|
Net interest income |
|
|
|
51,094 |
|
|
|
50,689 |
|
|
|
|
26,108 |
|
|
|
25,279 |
|
Provision (credit) for credit
losses |
|
|
|
2,450 |
|
|
|
(35 |
) |
|
|
|
92 |
|
|
|
422 |
|
Net interest income after provision (credit) for credit losses |
|
|
|
48,644 |
|
|
|
50,724 |
|
|
|
|
26,016 |
|
|
|
24,857 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment Management Division income |
|
|
|
1,067 |
|
|
|
998 |
|
|
|
|
519 |
|
|
|
517 |
|
Service charges on deposit accounts |
|
|
|
1,606 |
|
|
|
1,485 |
|
|
|
|
619 |
|
|
|
780 |
|
Other |
|
|
|
2,916 |
|
|
|
2,678 |
|
|
|
|
1,433 |
|
|
|
1,420 |
|
|
|
|
|
5,589 |
|
|
|
5,161 |
|
|
|
|
2,571 |
|
|
|
2,717 |
|
Noninterest expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee benefits |
|
|
|
18,913 |
|
|
|
17,981 |
|
|
|
|
9,639 |
|
|
|
8,723 |
|
Occupancy and equipment |
|
|
|
6,133 |
|
|
|
5,840 |
|
|
|
|
3,061 |
|
|
|
2,903 |
|
Other |
|
|
|
5,472 |
|
|
|
6,090 |
|
|
|
|
2,960 |
|
|
|
3,150 |
|
|
|
|
|
30,518 |
|
|
|
29,911 |
|
|
|
|
15,660 |
|
|
|
14,776 |
|
Income before income taxes |
|
|
|
23,715 |
|
|
|
25,974 |
|
|
|
|
12,927 |
|
|
|
12,798 |
|
Income tax expense |
|
|
|
3,808 |
|
|
|
4,389 |
|
|
|
|
2,168 |
|
|
|
2,054 |
|
Net income |
|
$ |
|
19,907 |
|
$ |
|
21,585 |
|
|
$ |
|
10,759 |
|
$ |
|
10,744 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share and Per Share Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Common Shares |
|
|
|
23,871,245 |
|
|
|
25,051,412 |
|
|
|
|
23,838,224 |
|
|
|
24,821,026 |
|
Dilutive stock options and restricted stock units |
|
|
|
39,135 |
|
|
|
169,048 |
|
|
|
|
23,638 |
|
|
|
181,751 |
|
|
|
|
|
23,910,380 |
|
|
|
25,220,460 |
|
|
|
|
23,861,862 |
|
|
|
25,002,777 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic EPS |
|
|
$ |
0.83 |
|
|
$ |
0.86 |
|
|
|
$ |
0.45 |
|
|
$ |
0.43 |
|
Diluted EPS |
|
|
$ |
0.83 |
|
|
$ |
0.86 |
|
|
|
$ |
0.45 |
|
|
$ |
0.43 |
|
Cash Dividends Declared per share |
|
|
$ |
0.36 |
|
|
$ |
0.34 |
|
|
|
$ |
0.18 |
|
|
$ |
0.17 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCIAL RATIOS |
(Unaudited) |
ROA |
|
|
|
0.96 |
% |
|
|
1.03 |
|
% |
|
|
1.02 |
% |
|
|
1.02 |
% |
ROE |
|
|
|
10.34 |
% |
|
|
11.15 |
|
% |
|
|
11.30 |
% |
|
|
11.00 |
% |
Net Interest Margin |
|
|
|
2.63 |
% |
|
|
2.57 |
|
% |
|
|
2.64 |
% |
|
|
2.58 |
% |
Dividend Payout Ratio |
|
|
|
43.37 |
% |
|
|
39.53 |
|
% |
|
|
40.00 |
% |
|
|
39.53 |
% |
|
|
PROBLEM AND POTENTIAL PROBLEM LOANS AND
ASSETS(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6/30/20 |
|
|
12/31/19 |
|
|
|
|
(dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
Loans, excluding troubled debt
restructurings: |
|
|
|
|
|
|
|
|
Past due 30 through 89 days |
|
$ |
610 |
|
|
$ |
2,928 |
|
Past due 90 days or more and still accruing |
|
|
— |
|
|
|
— |
|
Nonaccrual |
|
|
6,964 |
|
|
|
423 |
|
|
|
|
7,574 |
|
|
|
3,351 |
|
Troubled debt
restructurings: |
|
|
|
|
|
|
|
|
Performing according to their modified terms |
|
|
1,346 |
|
|
|
1,070 |
|
Past due 30 through 89 days |
|
|
— |
|
|
|
— |
|
Past due 90 days or more and still accruing |
|
|
— |
|
|
|
— |
|
Nonaccrual |
|
|
— |
|
|
|
465 |
|
|
|
|
1,346 |
|
|
|
1,535 |
|
Total past due, nonaccrual and
restructured loans: |
|
|
|
|
|
|
|
|
Restructured and performing according to their modified terms |
|
|
1,346 |
|
|
|
1,070 |
|
Past due 30 through 89 days |
|
|
610 |
|
|
|
2,928 |
|
Past due 90 days or more and still accruing |
|
|
— |
|
|
|
— |
|
Nonaccrual |
|
|
6,964 |
|
|
|
888 |
|
|
|
|
8,920 |
|
|
|
4,886 |
|
Other real estate owned |
|
|
— |
|
|
|
— |
|
|
|
$ |
8,920 |
|
|
$ |
4,886 |
|
|
|
|
|
|
|
|
|
|
Allowance for credit
losses |
|
$ |
34,051 |
|
|
$ |
29,289 |
|
Allowance for credit losses as
a percentage of total loans |
|
|
1.08 |
% |
|
|
.92 |
% |
Allowance for credit losses as
a multiple of nonaccrual loans |
|
|
4.9 |
x |
|
|
33.0 |
x |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AVERAGE BALANCE SHEET, INTEREST RATES AND
INTEREST DIFFERENTIAL(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
|
|
2020 |
|
2019 |
|
|
Average |
|
Interest/ |
|
Average |
|
Average |
|
Interest/ |
|
Average |
(dollars in thousands) |
|
Balance |
|
Dividends |
|
Rate |
|
Balance |
|
Dividends |
|
Rate |
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-earning bank
balances |
|
$ |
91,821 |
|
|
$ |
120 |
|
.26 |
% |
|
$ |
25,253 |
|
|
$ |
300 |
|
2.40 |
% |
Investment securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable |
|
|
344,932 |
|
|
|
6,629 |
|
3.84 |
|
|
|
368,572 |
|
|
|
7,668 |
|
4.16 |
|
Nontaxable (1) |
|
|
375,326 |
|
|
|
6,412 |
|
3.42 |
|
|
|
416,006 |
|
|
|
7,653 |
|
3.68 |
|
Loans (1) |
|
|
3,170,449 |
|
|
|
56,891 |
|
3.59 |
|
|
|
3,248,214 |
|
|
|
59,032 |
|
3.63 |
|
Total interest-earning
assets |
|
|
3,982,528 |
|
|
|
70,052 |
|
3.52 |
|
|
|
4,058,045 |
|
|
|
74,653 |
|
3.68 |
|
Allowance for credit
losses |
|
|
(33,115 |
) |
|
|
|
|
|
|
|
|
(30,501 |
) |
|
|
|
|
|
|
Net interest-earning
assets |
|
|
3,949,413 |
|
|
|
|
|
|
|
|
|
4,027,544 |
|
|
|
|
|
|
|
Cash and due from banks |
|
|
32,925 |
|
|
|
|
|
|
|
|
|
36,252 |
|
|
|
|
|
|
|
Premises and equipment,
net |
|
|
39,814 |
|
|
|
|
|
|
|
|
|
41,217 |
|
|
|
|
|
|
|
Other assets |
|
|
134,421 |
|
|
|
|
|
|
|
|
|
128,493 |
|
|
|
|
|
|
|
|
|
$ |
4,156,573 |
|
|
|
|
|
|
|
|
$ |
4,233,506 |
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings, NOW & money
market deposits |
|
$ |
1,704,484 |
|
|
|
6,639 |
|
.78 |
|
|
$ |
1,685,467 |
|
|
|
8,841 |
|
1.06 |
|
Time deposits |
|
|
503,364 |
|
|
|
5,928 |
|
2.37 |
|
|
|
637,630 |
|
|
|
7,331 |
|
2.32 |
|
Total interest-bearing
deposits |
|
|
2,207,848 |
|
|
|
12,567 |
|
1.14 |
|
|
|
2,323,097 |
|
|
|
16,172 |
|
1.40 |
|
Short-term borrowings |
|
|
92,235 |
|
|
|
885 |
|
1.93 |
|
|
|
196,481 |
|
|
|
2,507 |
|
2.57 |
|
Long-term debt |
|
|
423,846 |
|
|
|
4,157 |
|
1.97 |
|
|
|
362,461 |
|
|
|
3,675 |
|
2.04 |
|
Total interest-bearing
liabilities |
|
|
2,723,929 |
|
|
|
17,609 |
|
1.30 |
|
|
|
2,882,039 |
|
|
|
22,354 |
|
1.56 |
|
Checking deposits |
|
|
1,013,832 |
|
|
|
|
|
|
|
|
|
931,942 |
|
|
|
|
|
|
|
Other liabilities |
|
|
31,819 |
|
|
|
|
|
|
|
|
|
29,233 |
|
|
|
|
|
|
|
|
|
|
3,769,580 |
|
|
|
|
|
|
|
|
|
3,843,214 |
|
|
|
|
|
|
|
Stockholders' equity |
|
|
386,993 |
|
|
|
|
|
|
|
|
|
390,292 |
|
|
|
|
|
|
|
|
|
$ |
4,156,573 |
|
|
|
|
|
|
|
|
$ |
4,233,506 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income (1) |
|
|
|
|
$ |
52,443 |
|
|
|
|
|
|
|
$ |
52,299 |
|
|
|
Net interest spread (1) |
|
|
|
|
|
|
|
2.22 |
% |
|
|
|
|
|
|
|
2.12 |
% |
Net interest margin (1) |
|
|
|
|
|
|
|
2.63 |
% |
|
|
|
|
|
|
|
2.57 |
% |
(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, |
|
|
|
2020 |
|
2019 |
|
(dollars in thousands) |
|
Average Balance |
|
Interest/ Dividends |
|
Average Rate |
|
Average Balance |
|
Interest/ Dividends |
|
Average Rate |
|
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-earning bank
balances |
|
$ |
153,565 |
|
|
$ |
38 |
|
0.10 |
% |
|
$ |
25,701 |
|
|
$ |
154 |
|
2.40 |
% |
|
Investment securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable |
|
|
347,202 |
|
|
|
3,285 |
|
3.78 |
|
|
|
363,080 |
|
|
|
3,769 |
|
4.15 |
|
|
Nontaxable (1) |
|
|
370,479 |
|
|
|
3,165 |
|
3.42 |
|
|
|
413,145 |
|
|
|
3,738 |
|
3.62 |
|
|
Loans (1) |
|
|
3,181,365 |
|
|
|
27,958 |
|
3.52 |
|
|
|
3,234,861 |
|
|
|
29,615 |
|
3.66 |
|
|
Total interest-earning
assets |
|
|
4,052,611 |
|
|
|
34,446 |
|
3.40 |
|
|
|
4,036,787 |
|
|
|
37,276 |
|
3.69 |
|
|
Allowance for credit
losses |
|
|
(34,119 |
) |
|
|
|
|
|
|
|
|
(30,114 |
) |
|
|
|
|
|
|
|
Net
interest-earning assets |
|
|
4,018,492 |
|
|
|
|
|
|
|
|
|
4,006,673 |
|
|
|
|
|
|
|
|
Cash and due from banks |
|
|
31,488 |
|
|
|
|
|
|
|
|
|
35,834 |
|
|
|
|
|
|
|
|
Premises and equipment,
net |
|
|
39,696 |
|
|
|
|
|
|
|
|
|
41,125 |
|
|
|
|
|
|
|
|
Other assets |
|
|
139,330 |
|
|
|
|
|
|
|
|
|
127,614 |
|
|
|
|
|
|
|
|
|
|
$ |
4,229,006 |
|
|
|
|
|
|
|
|
$ |
4,211,246 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
and Stockholders' Equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings, NOW & money
market deposits |
|
$ |
1,698,207 |
|
|
|
2,359 |
|
.56 |
|
|
$ |
1,728,112 |
|
|
|
4,841 |
|
1.12 |
|
|
Time deposits |
|
|
496,691 |
|
|
|
2,886 |
|
2.34 |
|
|
|
668,217 |
|
|
|
3,933 |
|
2.36 |
|
|
Total
interest-bearing deposits |
|
|
2,194,898 |
|
|
|
5,245 |
|
.96 |
|
|
|
2,396,329 |
|
|
|
8,774 |
|
1.47 |
|
|
Short-term borrowings |
|
|
61,133 |
|
|
|
266 |
|
1.75 |
|
|
|
92,475 |
|
|
|
542 |
|
2.35 |
|
|
Long-term debt |
|
|
448,351 |
|
|
|
2,162 |
|
1.94 |
|
|
|
369,142 |
|
|
|
1,895 |
|
2.06 |
|
|
Total
interest-bearing liabilities |
|
|
2,704,382 |
|
|
|
7,673 |
|
1.14 |
|
|
|
2,857,946 |
|
|
|
11,211 |
|
1.57 |
|
|
Checking deposits |
|
|
1,109,620 |
|
|
|
|
|
|
|
|
|
932,256 |
|
|
|
|
|
|
|
|
Other liabilities |
|
|
32,179 |
|
|
|
|
|
|
|
|
|
29,398 |
|
|
|
|
|
|
|
|
|
|
|
3,846,181 |
|
|
|
|
|
|
|
|
|
3,819,600 |
|
|
|
|
|
|
|
|
Stockholders' equity |
|
|
382,825 |
|
|
|
|
|
|
|
|
|
391,646 |
|
|
|
|
|
|
|
|
|
|
$ |
4,229,006 |
|
|
|
|
|
|
|
|
$ |
4,211,246 |
|
|
|
|
|
|
|
|
Net interest income (1) |
|
|
|
|
$ |
26,773 |
|
|
|
|
|
|
|
$ |
26,065 |
|
|
|
|
Net interest spread (1) |
|
|
|
|
|
|
|
2.26 |
% |
|
|
|
|
|
|
|
2.12 |
% |
|
Net interest margin (1) |
|
|
|
|
|
|
|
2.64 |
% |
|
|
|
|
|
|
|
2.58 |
% |
|
(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%.
For More Information Contact: Jay McConie, EVP
and CFO (516) 671-4900, Ext. 7404
First of Long Island (NASDAQ:FLIC)
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