Financial Performance - Net income for Q1 2025 was $3.8 million, down from $4.4 million in Q1 2024, resulting in diluted earnings per share of $0.17 compared to $0.20[93]. - The effective tax rate increased from 6.2% in Q1 2024 to 11.5% in Q1 2025, contributing to a $193,000 rise in income tax expense[98][110]. - The Corporation's return on assets (ROA) and return on equity (ROE) for Q1 2025 were 0.37% and 3.98%, respectively, compared to 0.42% and 4.72% for the same period in 2024[139]. Income and Expenses - Net interest income increased by $661,000, while noninterest expense rose by $922,000, primarily due to merger-related costs[93][97]. - Noninterest income decreased by $57,000, or 2.1%, mainly due to nonrecurring items in 2024, despite increases in merchant card service fees and BOLI accretion[96][107]. - Noninterest expense increased by 5.7% year-over-year, largely due to merger expenses and system conversion costs[97][109]. Credit Losses and Provisions - The provision for credit losses was $168,000 in Q1 2025, compared to no provision in Q1 2024, with the allowance for credit losses to total loans ratio at 0.89%[95]. - The Bank recorded loan charge-offs of $370,000 and recoveries of $179,000 in Q1 2025, with a provision for credit loss of $168,000[122]. - As of March 31, 2025, the Allowance for Credit Losses (ACL) was stable at $28.3 million, representing 0.89% of total loans, compared to 0.88% at year-end 2024[122]. Deposits and Liquidity - Total average deposits declined by $51.9 million year-over-year, with uninsured deposits at 49.5% of total deposits as of March 31, 2025[99]. - Total deposits remained flat at $3.3 billion during Q1 2025, with savings and money market deposits increasing by $12.9 million, or 0.8%[132]. - As of March 31, 2025, the Bank had $878.1 million in available liquidity, including $653.3 million in collateralized borrowing lines and $204.8 million in unencumbered securities[137]. Loan Portfolio - The Bank's loan portfolio totaled $3.2 billion, with $725.2 million, or 22.9%, expected to reprice by March 31, 2026[131]. - At March 31, 2025, the commercial mortgage portfolio comprised $1.9 billion, or 61% of total loans, with an average loan size of $2.4 million and a weighted average loan-to-value (LTV) of 50.1%[120]. - Approximately 96% of the Bank's total loans outstanding are secured by real estate, which poses risks related to economic conditions in Long Island and NYC[124]. Interest Rates and Projections - The net interest margin improved to 1.91% in Q1 2025 from 1.79% in Q1 2024, driven by a decrease in interest expense[105]. - The Bank's net interest income is projected to be $84.440 million for the year ending March 31, 2026, under the base case scenario with no rate change[150]. - An immediate increase in interest rates of 100 basis points could negatively impact net interest income by 3.1%[150]. - Approximately $934.5 million, or 24.7% of total assets, will reprice or mature within one year as of March 31, 2025[150]. Capital and Equity - The Bank's leverage ratio was approximately 10.29% at March 31, 2025, with a book value per share of $16.91[100]. - Stockholders' equity increased to $382.8 million at March 31, 2025, driven by a net income of $3.8 million and a decrease in unrealized after-tax losses of $4.8 million[138]. - The leverage ratios for the Corporation and the Bank were 10.29% and 10.28%, respectively, as of March 31, 2025, exceeding regulatory capital requirements[141]. Other Considerations - The Corporation has a stock repurchase program but did not repurchase any shares in Q1 2025 due to merger agreement restrictions[142]. - Uninsured and uncollateralized deposits represented 32.7% of total deposits, amounting to approximately $1.1 million[137]. - The Corporation's forward-looking statements are subject to various risks, including economic conditions, interest rate changes, and the proposed merger with ConnectOne[152].
The First of Long Island (FLIC) - 2025 Q1 - Quarterly Report