Financial Performance - Net income for the first nine months of 2024 was $13.8 million, down from $20.2 million in the same period last year, resulting in diluted earnings per share of $0.61 compared to $0.89[86] - Net income for Q3 2024 was $4.6 million, a decrease of $2.2 million, or 32.4%, from $6.8 million in Q3 2023[106] - The Corporation's capital position remains strong with a leverage ratio of approximately 10.13% and book value per share increased to $17.25 from $16.83 at year-end 2023[94] - Stockholders' equity increased to $388.6 million at September 30, 2024, from $380.1 million at December 31, 2023, driven by net income of $13.8 million[134] Income and Expenses - Net interest income declined by $11.7 million, with a provision for credit losses of $740,000 compared to a provision reversal of $1.2 million in the prior period[87] - Noninterest income, excluding a $3.5 million loss on securities sales in 2023, increased by $1.4 million, with bank-owned life insurance and service charges on deposit accounts rising by 8.0% and 13.4% respectively[90] - Noninterest expense increased by $254,000, primarily due to merger and branch consolidation expenses of $1.4 million[91] - Noninterest expense increased by $254,000, or 0.5%, primarily due to merger and branch consolidation expenses of $1.4 million recorded in Q3 2024[104] Asset and Liability Management - Total average deposits declined by $89.6 million, with uninsured deposits representing 45.9% of total deposits at September 30, 2024[93] - The net interest margin for the first nine months of 2024 was 1.83%, down from 2.21% in the same period last year[96] - The cost of interest-bearing liabilities increased by 109 basis points, while the yield on interest-earning assets increased by 38 basis points when comparing the first nine months of 2024 and 2023[100] - The Bank's loans and securities that reprice or mature within one year amounted to approximately $890.9 million, or 22.9% of the total[145] Credit Quality - The Bank's allowance for credit losses (ACL) to total loans remained stable at 0.88% as of September 30, 2024[89] - A $341,000 increase in the provision for credit losses was noted in Q3 2024[106] - The Bank recorded loan charge-offs of $1.1 million and a provision for credit loss of $740,000 during the first nine months of 2024[119] - As of September 30, 2024, the Allowance for Credit Losses (ACL) was $28.6 million, representing 0.88% of total loans, a decrease from $29.0 million or 0.89% at December 31, 2023[119] Tax and Regulatory Compliance - The effective tax rate decreased from 11.6% to (0.3%), reflecting a higher percentage of pre-tax income derived from the Bank's REIT[92] - The effective tax rate declined from 11.6% to (0.3%) due to an increase in pre-tax income derived from the Bank's REIT[105] - The leverage ratios for the Corporation and the Bank were 10.13% and 10.10%, respectively, as of September 30, 2024, exceeding regulatory capital requirements[136] Mergers and Acquisitions - The Corporation entered into a Merger Agreement with ConnectOne, with shareholders receiving 0.5175 shares of ConnectOne common stock for each share of the Corporation's common stock[107] - The Corporation has a stock repurchase program but did not repurchase any shares in the third quarter of 2024 due to merger agreement restrictions[137] Forward-Looking Statements and Risks - Forward-looking statements are subject to various risks, including economic conditions, interest rate fluctuations, and the proposed merger with ConnectOne[147] - The Bank's estimates for net interest income are sensitive to changes in rates paid on nonmaturity deposits, which could materially impact projected amounts[145] - The Bank utilizes interest rate sensitivity modeling to calculate EVE, which captures long-term interest rate risk not reflected in short-term projections[141] - Management's estimates include assumptions about future cash flows, prepayments, and discount rates applied to various cash flows[142]
The First of Long Island (FLIC) - 2024 Q3 - Quarterly Report