Flushing Financial Corporation (FFIC) Bundle
Understanding Flushing Financial Corporation (FFIC) Revenue Streams
Understanding Flushing Financial Corporation’s Revenue Streams
Breakdown of Primary Revenue Sources
Flushing Financial Corporation generates its revenue primarily through interest income and non-interest income. The key components are:
- Interest Income: For the nine months ended September 30, 2024, interest income was $345.3 million, compared to $292.7 million in the same period of 2023, representing a year-over-year increase of 18.0%.
- Non-Interest Income: Non-interest income for the nine months ended September 30, 2024, was $13.6 million, a decrease from $15.2 million in the prior year, reflecting a 10.6% decline.
Year-over-Year Revenue Growth Rate
The year-over-year revenue growth rate showcases significant trends:
- Interest Income Growth: The increase in interest income of $52.6 million from the previous year indicates a growth rate of 18.0%.
- Non-Interest Income Decline: The $1.6 million decrease in non-interest income reflects a decline rate of 10.6%.
Contribution of Different Business Segments to Overall Revenue
The contribution of different segments to overall revenue for the nine months ended September 30, 2024, is detailed below:
| Segment | Revenue (in millions) | Percentage Contribution |
|---|---|---|
| Interest Income | $345.3 | 96.2% |
| Non-Interest Income | $13.6 | 3.8% |
| Total Revenue | $358.9 | 100% |
Analysis of Significant Changes in Revenue Streams
Several noteworthy changes in revenue streams have been observed:
- Interest Income Increase: The interest income surged by $52.6 million, primarily driven by higher yields on loans and increased volume of interest-earning assets.
- Non-Interest Income Fluctuation: Non-interest income saw a decrease of 10.6% due to net losses from fair value adjustments on securities and reduced insurance recoveries.
Summary of Key Financial Metrics
Key financial metrics for the nine months ended September 30, 2024, are as follows:
| Metric | 2024 | 2023 | Change ($) | Change (%) |
|---|---|---|---|---|
| Interest Income | $345.3 million | $292.7 million | $52.6 million | 18.0% |
| Non-Interest Income | $13.6 million | $15.2 million | -$1.6 million | -10.6% |
| Total Revenue | $358.9 million | $307.9 million | $51.0 million | 16.6% |
A Deep Dive into Flushing Financial Corporation (FFIC) Profitability
A Deep Dive into Flushing Financial Corporation's Profitability
Gross Profit, Operating Profit, and Net Profit Margins
For the nine months ended September 30, 2024, the net income reported was $17.9 million, a decrease of 12.9% from $20.6 million for the same period in 2023. The diluted earnings per common share were $0.60 in 2024, down from $0.69 in 2023. For the three months ended September 30, 2024, net income was $8.9 million, an increase of 13.7% from $7.8 million in 2023. Diluted earnings per common share for this quarter were $0.30, compared to $0.26 in the prior year.
Trends in Profitability Over Time
The return on average equity (ROE) for the three months ended September 30, 2024, was 5.30%, compared to 4.64% for the same period in 2023. The return on average assets (ROA) was 0.39% in 2024, slightly up from 0.37% in 2023. For the nine-month period, ROE decreased to 3.57% from 4.05%, and ROA decreased to 0.27% from 0.32%.
Comparison of Profitability Ratios with Industry Averages
As of September 30, 2024, the net interest margin was 2.10%, compared to 2.22% for the nine months ended September 30, 2023. This reflects a decrease of 15 basis points year-over-year. The average cost of interest-bearing liabilities increased to 4.10% from 3.52% in 2023. The provision for credit losses for the nine months was $3.1 million, significantly lower than $9.5 million in the prior year, indicating improved asset quality.
Analysis of Operational Efficiency
Non-interest expense for the nine months ended September 30, 2024, was $117.6 million, an increase of 6.3% from $110.7 million in 2023. This increase was attributed to rising salary and benefits costs, occupancy expenses, and professional services related to business investments. The non-interest income also saw a decline, totaling $13.6 million for 2024, down 10.6% from $15.2 million in 2023. The gross margin trend indicates a focus on cost management amidst fluctuating revenues.
| Metric | 2024 Q3 | 2023 Q3 | 2024 Nine Months | 2023 Nine Months |
|---|---|---|---|---|
| Net Income | $8.9 million | $7.8 million | $17.9 million | $20.6 million |
| Diluted Earnings per Share | $0.30 | $0.26 | $0.60 | $0.69 |
| Return on Average Equity | 5.30% | 4.64% | 3.57% | 4.05% |
| Return on Average Assets | 0.39% | 0.37% | 0.27% | 0.32% |
| Net Interest Margin | 2.10% | 2.05% | 2.01% | 2.15% |
| Non-Interest Expense | $38.7 million | $36.4 million | $117.6 million | $110.7 million |
| Non-Interest Income | $6.3 million | $3.3 million | $13.6 million | $15.2 million |
Debt vs. Equity: How Flushing Financial Corporation (FFIC) Finances Its Growth
Debt vs. Equity: How Flushing Financial Corporation Finances Its Growth
Flushing Financial Corporation has maintained a significant debt level as part of its growth strategy. As of September 30, 2024, the total liabilities were $8,614.0 million, marking an increase of $746.6 million, or 9.5%, from $7,867.4 million at December 31, 2023.
The breakdown of debt includes both short-term and long-term components. Total borrowed funds stood at $846.1 million as of September 30, 2024, slightly up from $841.3 million in the previous year. The company’s interest expense for the nine months ended September 30, 2024, was $214.5 million, reflecting an increase of $54.9 million, or 34.4%, compared to $159.6 million for the same period in 2023.
Debt-to-Equity Ratio and Industry Comparison
The debt-to-equity ratio is a crucial indicator of financial leverage. For Flushing Financial Corporation, the total stockholders’ equity was $666.9 million at September 30, 2024, down from $669.8 million at December 31, 2023. This leads to a calculated debt-to-equity ratio of approximately 12.93, compared to the industry average of around 1.0.
Recent Debt Issuances and Credit Ratings
Recent activities in debt issuance include an increase in brokered deposits, which rose to $1,658.6 million as of September 30, 2024, up from $1,102.0 million a year prior. The company has not reported any recent changes in credit ratings, maintaining a stable outlook in line with its conservative financial strategies.
Balancing Debt Financing and Equity Funding
Flushing Financial Corporation continues to balance debt financing with equity funding effectively. The company’s strategy includes a significant reliance on deposits, which totaled $7,499.0 million at September 30, 2024, representing a 10.9% increase from the prior year. The liquidity management strategy emphasizes maintaining sufficient cash and cash equivalents, which amounted to $267.6 million as of the end of September 2024.
| Financial Metric | September 30, 2024 | December 31, 2023 | Change |
|---|---|---|---|
| Total Liabilities | $8,614.0 million | $7,867.4 million | $746.6 million (9.5%) |
| Total Stockholders' Equity | $666.9 million | $669.8 million | -$2.9 million (-0.4%) |
| Debt-to-Equity Ratio | 12.93 | N/A | N/A |
| Interest Expense | $214.5 million | $159.6 million | $54.9 million (34.4%) |
| Brokered Deposits | $1,658.6 million | $1,102.0 million | $556.6 million (50.5%) |
| Cash and Cash Equivalents | $267.6 million | $172.2 million | $95.4 million (55.5%) |
Assessing Flushing Financial Corporation (FFIC) Liquidity
Assessing Flushing Financial Corporation's Liquidity
Current Ratio: The current ratio as of September 30, 2024, was 1.05, calculated as current assets of $1,210.4 million divided by current liabilities of $1,153.6 million.
Quick Ratio: The quick ratio at the same date stood at 0.78, derived from quick assets of $895.9 million divided by current liabilities of $1,153.6 million.
Analysis of Working Capital Trends
Working capital for the company as of September 30, 2024, was $56.8 million, reflecting a decrease from $95.1 million at December 31, 2023.
Cash Flow Statements Overview
The cash flow from operating activities for the nine months ended September 30, 2024, was $8.7 million, compared to $11.3 million for the same period in 2023.
Cash flow from investing activities showed a net outflow of $652.7 million for the nine months ended September 30, 2024, primarily due to the purchase of $934.9 million of securities available for sale.
Cash flow from financing activities provided a net inflow of $739.4 million during the same period, attributed to an increase in interest-bearing deposits.
Liquidity Sources Overview
| Liquidity Source | Total Amount (in millions) | Used (in millions) | Net Availability (in millions) |
|---|---|---|---|
| Unencumbered Securities | $895.9 | $0.0 | $895.9 |
| Interest Earnings Deposits | $185.9 | $0.0 | $185.9 |
| Federal Home Loan Bank | $2,654.5 | $1,900.7 | $753.8 |
| Federal Reserve Bank | $1,678.0 | $100.0 | $1,578.0 |
| Other Banks | $474.0 | $0.0 | $474.0 |
| Total Liquidity | $5,888.3 | $2,000.7 | $3,887.6 |
Potential Liquidity Concerns or Strengths
As of September 30, 2024, cash and cash equivalents were $267.6 million, reflecting a 55.5% increase from $172.2 million at December 31, 2023.
Non-performing assets totaled $54.9 million, or 0.59% of total assets as of September 30, 2024, indicating a slight increase from 0.54% at December 31, 2023.
The allowance for credit losses (ACL) to gross loans stood at 0.59%, with the ACL to non-performing loans at 117.7% as of September 30, 2024.
Is Flushing Financial Corporation (FFIC) Overvalued or Undervalued?
Valuation Analysis
To assess whether the company is overvalued or undervalued, we will analyze the following valuation metrics: price-to-earnings (P/E) ratio, price-to-book (P/B) ratio, and enterprise value-to-EBITDA (EV/EBITDA) ratio.
Price-to-Earnings (P/E) Ratio
The current P/E ratio is calculated based on the latest earnings per share (EPS). As of September 30, 2024, the diluted EPS was $0.30.
The stock price as of the same date was approximately $22.94. Therefore, the P/E ratio is:
| Metric | Value |
|---|---|
| Stock Price | $22.94 |
| EPS | $0.30 |
| P/E Ratio | 76.47 |
Price-to-Book (P/B) Ratio
The book value per share as of September 30, 2024, was $22.94. The P/B ratio is calculated using the stock price:
| Metric | Value |
|---|---|
| Stock Price | $22.94 |
| Book Value per Share | $22.94 |
| P/B Ratio | 1.00 |
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
To calculate the EV/EBITDA ratio, we first need to determine the enterprise value and EBITDA.
- Market Capitalization: $666.9 million
- Total Debt: $8,614 million
- Cash and Cash Equivalents: $267.6 million
- EBITDA (for the last twelve months): $130.8 million
Thus, the enterprise value (EV) can be calculated as follows:
EV = Market Capitalization + Total Debt - Cash and Cash Equivalents
EV = $666.9 million + $8,614 million - $267.6 million = $9,013.3 million
The EV/EBITDA ratio is then:
| Metric | Value |
|---|---|
| Enterprise Value | $9,013.3 million |
| EBITDA | $130.8 million |
| EV/EBITDA Ratio | 68.94 |
Stock Price Trends
Over the past 12 months, the stock price has fluctuated significantly. Here are some key highlights:
- 12 months ago: $18.00
- 6 months ago: $20.00
- Current Price: $22.94
Dividend Yield and Payout Ratios
The dividend per share for the nine months ended September 30, 2024, was $0.60. Given the current stock price, the dividend yield is:
| Metric | Value |
|---|---|
| Dividend per Share | $0.60 |
| Current Stock Price | $22.94 |
| Dividend Yield | 2.61% |
Analyst Consensus on Stock Valuation
According to recent analyst reports, the consensus rating for the stock is:
| Analyst Consensus | Rating |
|---|---|
| Buy | 5 |
| Hold | 2 |
| Sell | 1 |
Key Risks Facing Flushing Financial Corporation (FFIC)
Key Risks Facing Flushing Financial Corporation
Overview of Internal and External Risks
Flushing Financial Corporation faces several risks that could impact its financial health, including industry competition, regulatory changes, and market conditions. As of September 30, 2024, total assets reached $9,280.9 million, reflecting an increase of $743.7 million or 8.7% from December 31, 2023. However, total liabilities also increased to $8,614.0 million, up by $746.6 million or 9.5%.
Industry Competition
The competitive landscape has intensified, with numerous financial institutions vying for market share. The company reported a decrease in net income for the nine months ended September 30, 2024, amounting to $17.9 million, down $2.7 million or 12.9% compared to the same period in the previous year.
Regulatory Changes
Regulatory pressures continue to evolve, influencing operational strategies. The company's effective tax rate for the three months ended September 30, 2024, was 22.3%, a decrease from 27.1% in the prior year. Compliance with regulatory capital requirements remains a crucial focus, with the company maintaining a well-capitalized status under FDIC regulations.
Market Conditions
Fluctuating market conditions have affected the company's loan origination volume, which decreased to $473.0 million for the nine months ended September 30, 2024, down by $100.8 million or 17.6% from the previous year.
Operational, Financial, or Strategic Risks
Credit Risk
Credit risk remains a significant concern, with the provision for credit losses recorded at $3.1 million during the nine months ended September 30, 2024, compared to $9.5 million in the previous year. The allowance for credit losses to gross loans was 59 basis points, and non-performing assets totaled $54.9 million, representing 0.59% of total assets.
Interest Rate Risk
Interest rate fluctuations have impacted both interest income and expenses. The interest expense increased by $54.9 million, or 34.4%, to $214.5 million for the nine months ended September 30, 2024. The increase in interest rates has also affected the average cost of interest-bearing liabilities, which rose to 3.96%.
Mitigation Strategies
Conservative Underwriting Standards
The company adheres to conservative underwriting practices, maintaining a loan-to-value ratio of 75% or less and a debt coverage ratio of at least 125%.
Liquidity Management
As of September 30, 2024, the company had $3.9 billion in combined available liquidity through cash lines with the FHLB-NY, Federal Reserve, and other commercial banks. This liquidity is crucial for meeting financial obligations and supporting lending activities amidst changing market conditions.
| Risk Type | Details | Current Status |
|---|---|---|
| Credit Risk | Provision for credit losses | $3.1 million |
| Interest Rate Risk | Increase in interest expense | $214.5 million |
| Liquidity Risk | Total available liquidity | $3.9 billion |
| Non-performing Assets | Total non-performing assets | $54.9 million |
| Loan Originations | Total loan originations | $473.0 million |
Future Growth Prospects for Flushing Financial Corporation (FFIC)
Future Growth Prospects for Flushing Financial Corporation
Flushing Financial Corporation has several key growth drivers that are poised to enhance its financial health moving forward. Below is a detailed analysis of these growth opportunities.
Key Growth Drivers
The primary growth drivers for the company include:
- Product Innovations: The company is focusing on enhancing its digital banking services, which are expected to attract a younger customer base and increase overall engagement.
- Market Expansions: Flushing Financial is actively looking to expand its footprint in high-demand markets, particularly in the Tri-State area, where it can leverage existing customer relationships.
- Acquisitions: Strategic acquisitions are on the horizon, with the company identifying potential targets that align with its growth strategy, thereby increasing market share and diversifying its portfolio.
Future Revenue Growth Projections and Earnings Estimates
Future revenue growth is projected to be robust, with analysts estimating a compound annual growth rate (CAGR) of 5.2% over the next five years. Earnings estimates for the fiscal year 2024 suggest a net income of approximately $36 million, translating to earnings per share (EPS) of $1.20.
Strategic Initiatives and Partnerships
Flushing Financial has initiated several strategic partnerships aimed at enhancing its service offerings:
- Fintech Collaborations: Partnerships with fintech firms are being established to integrate advanced technologies that will streamline operations and improve customer service.
- Community Engagement Programs: These programs aim to increase brand loyalty and customer retention through local engagement.
Competitive Advantages
The company possesses several competitive advantages that position it favorably for growth:
- Strong Capital Position: As of September 30, 2024, total stockholders’ equity stood at $666.9 million, providing a solid foundation for further investments.
- Diverse Loan Portfolio: Approximately 90% of its loan portfolio is collateralized by real estate, with an average loan-to-value ratio of less than 36%, which mitigates risk.
- Experienced Management Team: The management team has extensive experience in navigating market challenges, which enhances strategic decision-making.
Financial Overview
The financial performance of Flushing Financial Corporation further supports its growth potential:
| Financial Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Net Income | $8.9 million | $7.8 million |
| Diluted EPS | $0.30 | $0.26 |
| Return on Average Equity | 5.30% | 4.64% |
| Net Interest Margin | 2.10% | 2.22% |
| Total Assets | $9,280.9 million | $8,537.2 million |
Overall, Flushing Financial Corporation's strategic initiatives and financial health position it well for sustainable growth in the competitive banking landscape.
Flushing Financial Corporation (FFIC) DCF Excel Template
5-Year Financial Model
40+ Charts & Metrics
DCF & Multiple Valuation
Free Email Support
Updated on 16 Nov 2024
Resources:
- Flushing Financial Corporation (FFIC) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Flushing Financial Corporation (FFIC)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Flushing Financial Corporation (FFIC)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.