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The First of Long Island , parent of The First National Bank of Long Island, reported net income of $4.4 million and earnings per share of $0.20 for Q1 2024, down from $6.5 million and $0.29 in Q1 2023. Lower earnings were driven by a decline in net interest income and a credit provision. Noninterest income increased, while noninterest expenses decreased. The Bank did not record a credit loss provision in Q1 2024. The effective tax rate declined, and overall credit quality remains strong. Net income for Q1 2024 decreased compared to Q4 2023 due to lower net interest income and higher employee benefits. Liquidity and capital positions are strong, with a leverage ratio of 10.0% and book value per share of $16.78 on March 31, 2024.
The First of Long Island, società madre della First National Bank of Long Island, ha riportato un reddito netto di 4,4 milioni di dollari e un utile per azione di 0,20 dollari per il primo trimestre del 2024, in calo rispetto ai 6,5 milioni di dollari e 0,29 dollari del primo trimestre del 2023. La diminuzione degli utili è stata causata da una riduzione del reddito netto da interessi e da una provvista per crediti. I ricavi non derivanti dagli interessi sono aumentati, mentre le spese non derivanti dagli interessi sono diminuite. La banca non ha registrato provviste per perdite su crediti nel primo trimestre del 2024. Il tasso di imposizione effettivo è diminuito e la qualità del credito rimane elevata. Il reddito netto per il primo trimestre del 2024 è diminuito rispetto al quarto trimestre del 2023 a causa di una riduzione del reddito netto da interessi e di un aumento dei benefici per i dipendenti. La liquidità e la posizione patrimoniale rimangono solide, con un rapporto di leva del 10,0% e un valore contabile per azione di 16,78 dollari al 31 marzo 2024.
The First of Long Island, matriz de The First National Bank of Long Island, reportó unas ganancias netas de 4.4 millones de dólares y unas ganancias por acción de 0.20 dólares para el primer trimestre de 2024, una disminución desde los 6.5 millones de dólares y 0.29 dólares en el primer trimestre de 2023. Las ganancias menores fueron impulsadas por una caída en los ingresos netos por intereses y una provisión de crédito. Los ingresos no derivados de intereses aumentaron, mientras que los gastos no derivados de intereses disminuyeron. El banco no registró una provisión para pérdidas crediticias en el primer trimestre de 2024. La tasa impositiva efectiva disminuyó y la calidad crediticia general sigue siendo fuerte. Los ingresos netos para el primer trimestre de 2024 disminuyeron en comparación con el cuarto trimestre de 2023 debido a menores ingresos netos por intereses y mayores beneficios para empleados. La liquidez y la posición de capital son fuertes, con una relación de apalancamiento del 10.0% y un valor en libros por acción de 16.78 dólares al 31 de marzo de 2024.
The First of Long Island, 롱아일랜드 국립 은행의 모회사는 2024년 1분기에 440만 달러의 순수익과 주당 0.20달러의 수익을 보고했으며, 이는 2023년 1분기의 650만 달러 및 주당 0.29달러에서 감소한 수치입니다. 순이자수익의 감소와 신용조항에 의해 이익이 감소하였습니다. 비이자수익은 증가한 반면 비이자비용은 감소하였습니다. 은행은 2024년 1분기에 신용손실준비금을 설정하지 않았습니다. 유효세율이 감소했으며 전반적인 신용품질은 여전히 강합니다. 순수익은 2023년 4분기에 비해 순이자수익 감소와 직원혜택 증가로 인해 2024년 1분기에 감소했습니다. 유동성과 자본상태는 강하며, 2024년 3월 31일 기준으로 레버리지 비율은 10.0%, 주당 장부가치는 16.78달러입니다.
The First of Long Island, société mère de la First National Bank of Long Island, a déclaré un résultat net de 4,4 millions de dollars et un bénéfice par action de 0,20 dollars pour le premier trimestre 2024, en baisse par rapport aux 6,5 millions de dollars et 0,29 dollars au premier trimestre 2023. Cette baisse des bénéfices a été entraînée par une diminution du revenu net d'intérêts et une provision pour crédit. Les revenus non liés aux intérêts ont augmenté, tandis que les dépenses non liées aux intérêts ont diminué. La banque n'a pas enregistré de provision pour pertes sur créances au premier trimestre 2024. Le taux d'imposition effectif a diminué et la qualité globale du crédit reste solide. Le revenu net pour le premier trimestre 2024 a diminué par rapport au quatrième trimestre 2023 en raison d'une baisse du revenu net d'intérêts et d'une augmentation des avantages pour les employés. La liquidité et la position en capital sont fortes, avec un ratio de levier de 10,0 % et une valeur comptable par action de 16,78 dollars au 31 mars 2024.
The First of Long Island, Muttergesellschaft der First National Bank of Long Island, verzeichnete für das erste Quartal 2024 einen Nettogewinn von 4,4 Millionen Dollar und einen Gewinn pro Aktie von 0,20 Dollar, ein Rückgang gegenüber 6,5 Millionen Dollar und 0,29 Dollar im ersten Quartal 2023. Der Rückgang der Gewinne wurde durch einen Rückgang des Nettozinsen-Ertrags und eine Kreditrückstellung verursacht. Die Nichtzins-Einnahmen stiegen, während die Nichtzins-Ausgaben sanken. Die Bank verzeichnete im ersten Quartal 2024 keine Kreditverlust-Rückstellung. Der effektive Steuersatz sank und die allgemeine Kreditqualität bleibt stark. Der Nettogewinn für das erste Quartal 2024 sank im Vergleich zum vierten Quartal 2023 aufgrund niedrigerer Netto-Zinseinnahmen und höherer Mitarbeiterleistungen. Liquidität und Kapitalposition sind stark, mit einer Verschuldungsquote von 10,0% und einem Buchwert pro Aktie von 16,78 Dollar am 31. März 2024.
Positive
Net income and earnings per share for The First of Long Island in Q1 2024 were $4.4 million and $0.20, respectively, compared to $6.5 million and $0.29 in Q1 2023.
Lower earnings were influenced by a decline in net interest income and a credit provision for credit losses in Q1 2023.
Noninterest income increased by 10.9% in Q1 2024 compared to Q1 2023.
Noninterest expenses decreased by $365,000, driven by reductions in legal fees, occupancy and equipment expenses, and director fees.
The Bank did not record a credit loss provision in Q1 2024, unlike the $1.1 million provision in Q1 2023.
The effective tax rate declined from 9.1% in Q1 2023 to 6.2% in Q1 2024.
Net income for Q1 2024 decreased compared to Q4 2023, mainly due to lower net interest income and higher employee benefits.
The 's capital position remains strong with a leverage ratio of approximately 10.0% on March 31, 2024.
Book value per share was $16.78 on March 31, 2024, compared to $16.43 on March 31, 2023.
The Bank repurchased 167,526 shares in Q1 2024 at a cost of $2.0 million and declared a quarterly cash dividend of $0.21 per share.
Negative
Net income and earnings per share decreased in Q1 2024 compared to Q1 2023.
A credit provision for credit losses was taken in Q1 2023.
Net interest income declined in Q1 2024 due to an increase in interest expense.
An increase in salaries and employee benefits in Q1 2024 contributed to the decrease in net income compared to Q4 2023.
The weighted average cost of new FHLB borrowings in Q1 2024 was considerably higher than the weighted average cost of total deposits.
The 's capital position includes an accumulated other comprehensive loss due to a net unrealized loss in the available-for-sale securities portfolio.
Insights
The First of Long Island Corporation's reported decrease in net income and earnings per share highlights the challenges faced in the current rate environment. The expansion of interest expense, outstripping the growth in interest income, indicates the pressure on the net interest margin, important for banking profitability. The reported efficiency ratio shows potential operational headwinds; the lower it is, the more efficiently a bank operates. Investors should monitor this alongside the net interest margin as these are key indicators of a bank's financial health.
A deeper dive into The First of Long Island Corporation's loan and deposit portfolios reveals industry trends affecting liquidity. The significant shift from noninterest-bearing to interest-bearing liabilities mirrors broader banking sector movements towards higher cost funding in a rising rate environment. The Bank's ability to navigate these shifts without compromising its strong credit quality will be a critical factor for investors to watch, especially considering the potential impacts on liquidity and capital management strategies going forward.
The First of Long Island Corporation's effective tax rate reduction stems from an increased proportion of income from lower-taxed segments like real estate investment trust operations and BOLI. This strategy can provide a buffer against declining net income, but it's a nuanced aspect of fiscal management that retail investors should understand. The sustainability of such tax advantages may influence the company's net earnings trajectory and, consequently, shareholder returns in the longer term.
MELVILLE, N.Y., April 25, 2024 (GLOBE NEWSWIRE) -- The First of Long Island Corporation (Nasdaq: FLIC, the “Company” or the “Corporation”), the parent of The First National Bank of Long Island (the “Bank”), reported net income and earnings per share for the three months ended March 31, 2024.
Analysis of First Quarter Earnings
Net income and earnings per share for the quarter ended March 31, 2024, were $4.4 million and $0.20, respectively, compared to $6.5 million and $0.29, respectively, for the comparable quarter in 2023. The principal drivers of the lower earnings were a decline in net interest income of $5.5 million, or 23.2%, and a $1.1 million credit provision for credit losses taken in the first quarter of 2023, partially offset by a loss on sales of securities of $3.5 million in the first quarter of 2023. The decline in net interest income primarily resulted from the current rate environment’s impact on the Bank’s liability sensitive balance sheet. The quarter produced a return on average assets of 0.42%, return on average equity of 4.72%, net interest margin of 1.79%, and an efficiency ratio of 76.48%.
Net interest income declined when comparing the first quarters of 2024 and 2023 due to an increase in interest expense of $11.0 million that was only partially offset by a $5.5 million increase in interest income. The cost of interest-bearing liabilities increased 151 basis points while the yield on interest-earning assets increased 52 basis points when comparing the two quarters. Also contributing to the decline in net interest income was a shift in the mix of funding as average noninterest-bearing deposits decreased $155.4 million while average interest-bearing liabilities increased $137.3 million.
Noninterest income, excluding the loss on sales of securities, increased $272,000, or 10.9%, when comparing the first quarters of 2024 and 2023. Recurring components of noninterest income including bank-owned life insurance (“BOLI”) and service charges on deposit accounts had increases of 7.7% and 11.8%, respectively. Other noninterest income increased 12.7% and included increases of $106,000 in real estate tax refunds and $52,000 in merchant card services.
Noninterest expense declined $365,000, or 2.2%, for the first quarter of 2024, as compared to the first quarter of 2023. Reductions in legal fees of $233,000, occupancy and equipment expense of $111,000 and director fees of $82,000 primarily drove the decline. These items were partially offset by an increase of $209,000 in salaries and employee benefits due to higher incentive compensation and group health costs in the current quarter.
The Bank did not record a credit loss provision in the first quarter of 2024, compared to a credit provision of $1.1 million in the prior year’s first quarter. Changes in the credit loss reserve were driven largely by net chargeoffs of $657,000. The reserve coverage ratio on March 31, 2024, was 0.88% of total loans as compared to 0.89% of total loans at December 31, 2023. Past due loans and nonaccrual loans were modest at $292,000 and $1.2 million, respectively, on March 31, 2024. Overall credit quality in the loan and investment portfolios remains strong.
Income tax expense decreased $357,000, and the effective tax rate declined from 9.1% in the first quarter of 2023 to 6.2% in the current quarter. The decline in the effective tax rate is mainly due to an increase in the percentage of pre-tax income derived from the Bank’s real estate investment trust and BOLI. The decrease in income tax expense reflects the lower effective tax rate and a decline in pre-tax income.
Analysis of Earnings – First Quarter 2024 Versus Fourth Quarter 2023
Net income for the first quarter of 2024 declined $1.6 million compared to the fourth quarter of 2023. The decrease was mainly due to a decrease in net interest income of $1.8 million, primarily due to higher cost of funds on total interest-bearing liabilities, and an increase in salaries and employee benefits of $1.9 million. Salaries and employee benefit expenses were considerably lower in the fourth quarter of 2023 as the Company fell short of established performance metrics for short-term incentive and stock-based compensation payouts. Partially offsetting these items was the fourth quarter provision for credit losses of $901,000, an increase in noninterest income of $377,000 and a reduction in the provision for off-balance sheet commitments of $227,000.
The decline in the net interest margin to 1.79% in the first quarter of 2024 from 2.00% in the fourth quarter of 2023 was largely due to the change in the mix of funding. Average deposits decreased $100.6 million while overnight and other borrowings increased $107.7 million. The weighted average cost of $100 million of new FHLB borrowings taken during the first quarter was 4.72%, considerably more than the weighted average cost of total deposits of 2.08% during the quarter. The change in average funding mix was mainly related to decreases in average tax escrow accounts and municipal deposits.
Liquidity
Total average deposits declined by $162.6 million, or 4.7%, comparing the first quarters of 2024 to 2023, reflecting industry trends. On March 31, 2024, short term borrowings were down $70 million from year-end 2023. Long-term borrowings increased $42.5 million in the quarter to $515.0 million on March 31, 2024. The Bank had $1.1 billion in collateralized borrowing lines with the Federal Home Loan Bank of New York and the Federal Reserve Bank, as well as a $20 million unsecured line of credit with a correspondent bank. We also had $375 million in unencumbered cash and securities. In total, we had approximately $1.5 billion of available liquidity on March 31, 2024.
Capital
The Corporation’s capital position remains strong with a leverage ratio of approximately 10.0% on March 31, 2024. Book value per share was $16.78 on March 31, 2024, versus $16.43 on March 31, 2023. The accumulated other comprehensive loss component of stockholders’ equity is mainly comprised of a net unrealized loss in the available-for-sale securities portfolio due to higher market interest rates. We repurchased 167,526 shares in the first quarter of 2024 at a cost of $2.0 million and the Bank declared its quarterly cash dividend of $0.21 per share. The Board and management continue to evaluate both capital management tools to provide the best opportunity to maximize shareholder value.
Looking Forward
President and Chief Executive Officer Chris Becker commented on the Company’s financial position: “Historically the Bank experiences seasonal deposit outflows at year-end and deposits generally build throughout the year. While average deposits declined approximately $100 million during the first quarter, on March 31, 2024, total deposits were $55.5 million higher than on December 31, 2023. During the first quarter the Bank repriced $62.5 million of wholesale funding with a weighted average cost of 1.36% to current market rates with a weighted average cost of 4.78%. The first quarter 2024 repricing of wholesale funding represented the final tranches of wholesale funding with a significant increase in interest costs. Our retail certificates of deposit have largely repriced to market although the 2024 tranches in April and May have a weighted average cost of approximately 4% and will likely reprice higher during the second quarter of 2024.”
Mr. Becker added: “The combination of deposit stabilization since year-end 2023’s seasonal outflows and wholesale funding and retail certificates of deposit largely repriced to market rates should stabilize our margin in the coming quarter. Improvement in the margin in second half of 2024 is dependent on an improving yield curve.”
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 March 31, 2024. The Form 10-Q will be available through the Bank’s website at www.fnbli.com on or about May 10, 2024, when it is anticipated to be electronically filed with the SEC. Our SEC filings are also available on the SEC’s website at www.sec.gov.
CONSOLIDATED BALANCE SHEETS (Unaudited)
3/31/2024
12/31/2023
(dollars in thousands)
Assets:
Cash and cash equivalents
$
106,878
$
60,887
Investment securities available-for-sale, at fair value
677,112
695,877
Loans:
Commercial and industrial
123,333
116,163
Secured by real estate:
Commercial mortgages
1,922,275
1,919,714
Residential mortgages
1,148,719
1,166,887
Home equity lines
41,085
44,070
Consumer and other
1,162
1,230
3,236,574
3,248,064
Allowance for credit losses
(28,335
)
(28,992
)
3,208,239
3,219,072
Restricted stock, at cost
31,344
32,659
Bank premises and equipment, net
30,957
31,414
Right-of-use asset - operating leases
21,932
22,588
Bank-owned life insurance
114,460
114,045
Pension plan assets, net
10,634
10,740
Deferred income tax benefit
30,137
28,996
Other assets
24,006
19,622
$
4,255,699
$
4,235,900
Liabilities:
Deposits:
Checking
$
1,102,284
$
1,133,184
Savings, NOW and money market
1,564,153
1,546,369
Time
660,070
591,433
3,326,507
3,270,986
Overnight advances
—
70,000
Other Borrowings
515,000
472,500
Operating lease liability
24,269
24,940
Accrued expenses and other liabilities
12,800
17,328
3,878,576
3,855,754
Stockholders' Equity:
Common stock, par value $0.10 per share:
Authorized, 80,000,000 shares;
Issued and outstanding, 22,477,928 and 22,590,942 shares
2,248
2,259
Surplus
78,190
79,728
Retained earnings
355,605
355,887
436,043
437,874
Accumulated other comprehensive loss, net of tax
(58,920
)
(57,728
)
377,123
380,146
$
4,255,699
$
4,235,900
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
Three Months Ended
3/31/2024
3/31/2023
(dollars in thousands)
Interest and dividend income:
Loans
$
33,543
$
30,405
Investment securities:
Taxable
6,993
3,669
Nontaxable
960
1,945
41,496
36,019
Interest expense:
Savings, NOW and money market deposits
10,083
5,775
Time deposits
6,977
3,069
Overnight advances
263
108
Other borrowings
6,012
3,433
23,335
12,385
Net interest income
18,161
23,634
Credit provision for credit losses
—
(1,056
)
Net interest income after credit provision for credit losses
18,161
24,690
Noninterest income:
Bank-owned life insurance
840
780
Service charges on deposit accounts
880
787
Net loss on sales of securities
—
(3,489
)
Other
1,054
935
2,774
(987
)
Noninterest expense:
Salaries and employee benefits
9,974
9,765
Occupancy and equipment
3,214
3,325
Other
3,018
3,481
16,206
16,571
Income before income taxes
4,729
7,132
Income tax expense
294
651
Net income
$
4,435
$
6,481
Share and Per Share Data:
Weighted Average Common Shares
22,520,568
22,493,437
Dilutive restricted stock units
73,827
86,807
22,594,395
22,580,244
Basic EPS
$
0.20
$
0.29
Diluted EPS
0.20
0.29
Cash Dividends Declared per share
0.21
0.21
FINANCIAL RATIOS
(Unaudited)
ROA
0.42
%
0.62
%
ROE
4.72
7.09
Net Interest Margin
1.79
2.34
Dividend Payout Ratio
105.00
72.41
Efficiency Ratio
76.48
62.17
PROBLEM AND POTENTIAL PROBLEM LOANS AND ASSETS (Unaudited)
3/31/2024
12/31/2023
(dollars in thousands)
Loans including modifications to borrowers experiencing financial difficulty:
Modified and performing according to their modified terms
$
429
$
431
Past due 30 through 89 days
292
3,086
Past due 90 days or more and still accruing
—
—
Nonaccrual
1,172
1,053
1,893
4,570
Other real estate owned
—
—
$
1,893
$
4,570
Allowance for credit losses
$
28,335
$
28,992
Allowance for credit losses as a percentage of total loans
0.88
%
0.89
%
Allowance for credit losses as a multiple of nonaccrual loans
24.2
x
27.5
x
AVERAGE BALANCE SHEET, INTEREST RATES AND INTEREST DIFFERENTIAL (Unaudited)
Three Months Ended March 31,
2024
2023
Average
Interest/
Average
Average
Interest/
Average
(dollars in thousands)
Balance
Dividends
Rate
Balance
Dividends
Rate
Assets:
Interest-earning bank balances
$
55,117
$
751
5.48
%
$
49,156
$
547
4.51
%
Investment securities:
Taxable (1)
638,857
6,242
3.91
467,444
3,122
2.67
Nontaxable (1) (2)
153,417
1,215
3.17
303,273
2,462
3.25
Loans (1) (2)
3,243,445
33,543
4.14
3,287,664
30,407
3.70
Total interest-earning assets
4,090,836
41,751
4.08
4,107,537
36,538
3.56
Allowance for credit losses
(28,947
)
(31,424
)
Net interest-earning assets
4,061,889
4,076,113
Cash and due from banks
31,703
31,015
Premises and equipment, net
31,257
31,782
Other assets
120,884
115,173
$
4,245,733
$
4,254,083
Liabilities and Stockholders' Equity:
Savings, NOW & money market deposits
$
1,534,081
10,083
2.64
$
1,677,634
5,775
1.40
Time deposits
643,854
6,977
4.36
507,475
3,069
2.45
Total interest-bearing deposits
2,177,935
17,060
3.15
2,185,109
8,844
1.64
Overnight advances
18,846
263
5.61
8,811
108
4.97
Other borrowings
504,258
6,012
4.80
369,867
3,433
3.76
Total interest-bearing liabilities
2,701,039
23,335
3.47
2,563,787
12,385
1.96
Checking deposits
1,126,593
1,281,991
Other liabilities
40,014
37,692
3,867,646
3,883,470
Stockholders' equity
378,087
370,613
$
4,245,733
$
4,254,083
Net interest income (2)
$
18,416
$
24,153
Net interest spread (2)
0.61
%
1.60
%
Net interest margin (2)
1.79
%
2.34
%
(1) The average balances of loans include nonaccrual loans. The average balances of investment securities exclude unrealized gains and losses on available-for-sale securities.
(2) 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: Janet Verneuille, SEVP and CFO (516) 671-4900, Ext. 7462
FAQ
What were the net income and earnings per share for The First of Long Island in Q1 2024?
The net income was $4.4 million, and earnings per share were $0.20.
What were the main drivers of lower earnings in Q1 2024 compared to Q1 2023?
Lower earnings were driven by a decline in net interest income and a credit provision for credit losses.
Did the Bank record a credit loss provision in Q1 2024?
No, the Bank did not record a credit loss provision in Q1 2024.
How did noninterest income change in Q1 2024 compared to Q1 2023?
Noninterest income increased by 10.9% in Q1 2024 compared to Q1 2023.
What was the effective tax rate in Q1 2024 compared to Q1 2023?
The effective tax rate declined from 9.1% in Q1 2023 to 6.2% in Q1 2024.
What was the capital position of The First of Long Island on March 31, 2024?
The 's capital position remains strong with a leverage ratio of approximately 10.0%.
How many shares did the Bank repurchase in Q1 2024, and at what cost?
The Bank repurchased 167,526 shares in Q1 2024 at a cost of $2.0 million.
