Skip to content
Business Plan

Business Plan

Business Reopen

Primary Menu Business Plan

Business Plan

  • Business Finance & Support
  • Business Plan
  • Their Business
  • Business & Finance News
  • Wealth Business
  • Financial Function
  • About Us
    • Advertise Here
    • Contact Us
    • Privacy Policy
    • Sitemap
  • Financial Function

Flushing Financial Stock: Low-Risk Loan Book With A 4% Dividend Yield (NASDAQ:FFIC)

Linda Caughey June 23, 2022
Brooklyn Bridge with Lower Manhattan skyline

stefanopolitimarkovina/iStock Editorial by way of Getty Photographs

Introduction

In a prior article on Flushing Financial (NASDAQ:FFIC), I was in awe of the pretty solid mortgage portfolio owned by this New York focused bank. The typical LTV ratio of the genuine estate loans was much less than 40% which in theory suggests that even if the worth of the fundamental home drops by 60%, the bank should really be capable to wander absent with out any decline. Of training course some financial loans have larger LTV ratios than other loans but to see an normal of fewer than 40% is definitely remarkable (and only .3% of the financial loans have an LTV ratio exceeding 75%). I have been preserving an eye on the bank considering the fact that then and I keep on to be amazed with how this reasonably compact lender is run.

Chart
Info by YCharts

Solid outcomes in the to start with quarter, with incredibly lower loan decline provisions

Flushing Fiscal in fact nevertheless is a rather small financial institution as the overall stability sheet incorporates considerably less than $8.2B in belongings whilst the fairness price is a lot less than $700M. But you never have to be a major bank to be profitable, and Flushing was able to raise its internet interest profits in the 1st quarter of this calendar year.

Though the fascination profits lowered from $72.1M to $71.3M, the complete amount of money of interest costs reduced at an even more rapidly pace, from $11.2M to $7.8M which resulted in an improve of the internet desire money by virtually 5% to $63.5M. Thanks to the sturdy financial loan ebook and extremely small LTV ratios, the financial institution was after once again ready to retain the allowance for mortgage loss provisions quite reduced: in the 1st quarter of this 12 months, it only recorded just beneath $1.4M in provisions.

Income Statement

FFIC Investor Relations

As the bank is a ‘pure’ business lender striving to make dollars on the variation involving the interest it pays on deposits and the curiosity it fees on loans, the non-desire revenue is exceptionally minimal advertisement just $1.3M in the initial quarter. To be reasonable, this integrated a $1.8M strike from the truthful value changes on loans and that made the end result appear a very little little bit even worse than it in fact is. Furthermore, the lender talked about it incurred about $4.3M of non-recurring bills in the very first quarter.

The total amount of money of non-desire fees remained reasonably secure (which is an accomplishment contemplating the inflationary pressure we are seeing somewhere else which prompted salaries to improve), and the base line reveals a pre-tax cash flow of $24.6M. Immediately after paying out the taxes owed on this, the internet income documented by Flushing Fiscal in the first quarter of this 12 months was $18.2M for an EPS of $.58. On an annualized basis, the EPS could now be expected to exceed $2.30 this year as the raising curiosity rates should really develop some added tailwinds for Flushing. On top rated of that, Flushing has been purchasing back again shares which suggests the internet income will have to be divided more than fewer shares outstanding and that will also provide a good enhance to the for every-share efficiency. Flushing just lately announced the boost of the complete size of the buyback plan. The firm experienced .35M shares remaining under the former acceptance but the board of directors has greater the complete volume of shares that could be repurchased by 1M. And as FFIC is obtaining back again inventory at a amount of close to 20,000 shares for each week, the financial institution must be delighted to gobble up shares at just $22.

The existing quarterly dividend is $.22 for every share resulting in a yield of about 4%. That is rather great taking into consideration the payout ratio is a lot less than 40% of the earnings.

Flushing is completely ready to just take advantage of the increased interest rates

Most scaled-down banking institutions seem to be investing about 20-30% of their asset foundation in dollars or securities but Flushing Economical has only invested 13.5% of its equilibrium sheet in people assets. And which is wonderful as 1 could argue its exceptionally lower average LTV ratio on the loan guide implies its bank loan e-book really should be safer than its peers as it can keep the bank loan losses restricted.

Non-Performing Loans

FFIC Investor Relations

As of the close of March, only $26.3M of the financial loans were being labeled as ‘past due’ which is a lot less than .4% of the full amount of money of loans fantastic ($6.6B). The full allowance for bank loan losses currently recorded by the financial institution exceeds $37M so even if all loans would default and the bank would foreclose on the property with no recouping a single greenback, the latest quantity of personal loan loss allowance must by now be enough to deal with those people losses. But all over again, with low LTV ratios throughout the portfolio, Flushing ought to be in a excellent posture to continue to keep the fallout confined.

Funding Profile

FFIC Investor Relations

Flushing Economical also discussed why it thinks it is in a greater position to commence the recent cycle of escalating desire rates as opposed to 2015. Its funding profile is now much more diversified with just 24.6% of the funding supplied by CDs and borrowings. Those people are usually larger-price sources of funding and weigh on the web fascination profits and which is why Flushing was not totally equipped to capture the added benefits of the fascination price cycle in 2015 when in surplus of 50% of its funding resources came from CDs and borrowings.

In accordance to flushing, each individual 50 foundation issue increase in the fascination fees without the need of a corresponding improve in the deposit rates would increase $5M for each year to the web desire cash flow. If we would now presume the net curiosity margin increases by 100 bp, it’s straightforward to see Flushing really should be capable to include a few dozen cents per year to its base line thanks to the better curiosity prices.

Financial commitment thesis

I like the way the Flushing Money management is running the enterprise. Basically, acquiring the stock of a financial institution is acquiring a basket of financial loans when hoping that basket is run well by the management. And it’s not constantly uncomplicated to find a financial institution whose basket of financial loans matches with your personal expenditure requirements.

A person may well hate New York actual estate but with an regular LTV ratio of all-around 38%, Flushing Monetary need to be really shielded from a deteriorating New York serious estate marketplace. Flushing is at present investing at just a fraction over its tangible ebook value, and I consider this is a fantastic instant to establish a long position. I have been trying to write place alternatives on FFIC but because of to the incredibly low volumes and wide spreads that hasn’t been productive, so I ought to likely just buy the stock outright.

Tags: American Express Business Cards, Att Business Customer Service, Att Business Internet, Att Business Login, Bad Business Codes, Bank Of America Small Business, Buffalo Business First, Business Administration Jobs, Business Administration Salary, Business Analyst Jobs, Business Card Dimensions, Business Casual Female, Business Casual For Women, Business Casual Women Outfits, Business Ideas 2021, Business Letter Example, Business License California, Business Name Search, Business Process Reengineering, Business Proposal Template, Buy A Business, Card For Business, Chase For Business, Chase Ink Business Card, Columbia Business School, Costco Business Center San Jose, Emirates Business Class, Facebook Business Account, Fictitious Business Name, Florida Business Entity Search, Ga Sos Business Search, Georgia Business Search, Google Business Email, Houston Business Journal, Illinois Business Search, Instagram Business Account, Is Lularoe Still In Business, London Business School, Master Of Business Administration, Men'S Business Casual, Pittsburgh Business Times, Qualified Business Income Deduction, Sacramento Business Journal, Secured Business Credit Card, Standard Business Card Size, T Mobile Business, Texas Business Search, Tië³´o The Business, Top Business Schools In Us, Types Of Business

Continue Reading

Previous Children’s chores improve brain function
Next ICA announces MENA financial crime compliance conference | Article

More Stories

What Will Your Buyer Be Looking For?
  • Financial Function

What Will Your Buyer Be Looking For?

Linda Caughey June 3, 2023 0
CBI warns that UK is about to fall into year-long recession
  • Financial Function

CBI warns that UK is about to fall into year-long recession

Linda Caughey May 29, 2023 0
14-big-ideas
  • Financial Function

14 Big Ideas From the Last Year of Side Hustle Show Guests

Linda Caughey May 26, 2023 0
June 2023
M T W T F S S
 1234
567891011
12131415161718
19202122232425
2627282930  
« May    

Archives

  • June 2023
  • May 2023
  • April 2023
  • March 2023
  • February 2023
  • January 2023
  • December 2022
  • November 2022
  • October 2022
  • September 2022
  • August 2022
  • July 2022
  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021
  • April 2021
  • March 2021
  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • November 2018
  • October 2018
  • December 2016

Recent Posts

  • Channel99 will help marketers measure the performance of channels and vendors
  • Leadership Spotlight on Telecommunications: Meet Amy Humphreys
  • 5 Books to Supercharge Your Creativity [Part 2 of 5]
  • A Great Way to Save Labour Cost
  • Creating A Free Website For Your Business

BL

Tags

Amazon Business Credit Card American Airlines Business Class Att Business Login Austin Business Journal Best Bank For Small Business Best Business Bank Accounts Best Business Schools In Us Best Business To Start British Airways Business Class Business Business Attire Men Business Card Ideas Business Casual Shoes For Women Business Continuity Planning Business Entity Search Business Letter Template Business Management Degree Business Manager Facebook Business Plan Outline Business School Rankings Colorado Business Search Delaware Business Entity Search Drop Shipping Business Family Business Bet Fox Business Live Georgia Sos Business Search Google Business Account Harvest Small Business Finance How To Build Business Credit Is Saturday A Business Day Is Sears Still In Business Microsoft 365 Business My Business Google Name Generator Business None Of Your Business Ny Sos Business Search Open A Business Bank Account Pa Business Search Plus Size Business Casual Pnc Business Banking Sos Business Search Ca Sunbiz Business Search Taking Care Of Business The Business Of Being Born Turbotax Home And Business 2020

Visit Now

Takeout Food

pest control las vegas scorpion 

getlinko

Related Article

Channel99 will help marketers measure the performance of channels and vendors
  • Their Business

Channel99 will help marketers measure the performance of channels and vendors

Linda Caughey June 4, 2023 0
Leadership Spotlight on Telecommunications: Meet Amy Humphreys
  • Wealth Business

Leadership Spotlight on Telecommunications: Meet Amy Humphreys

Linda Caughey June 4, 2023 0
5 Books to Supercharge Your Creativity [Part 2 of 5]
  • Business & Finance News

5 Books to Supercharge Your Creativity [Part 2 of 5]

Linda Caughey June 4, 2023 0
A Great Way to Save Labour Cost
  • Business & Finance News

A Great Way to Save Labour Cost

Linda Caughey June 3, 2023 0
  • Business Plan

Creating A Free Website For Your Business

Linda Caughey June 3, 2023 0
fit-body-24ua.xyz | CoverNews by AF themes.

WhatsApp us