The First of Long Island (FLIC) - 2021 Q4 - Annual Report

Financial Performance - Net income for 2021 was $43.1 million, an increase of $1.9 million, or 4.6%, compared to 2020[134]. - Diluted earnings per share (EPS) for 2021 was $1.81, up from $1.72 in 2020, reflecting a 5.2% increase[133]. - Dividends per share increased by 5.4% from $0.74 in 2020 to $0.78 in 2021[133]. - Net income for 2020 was $41.2 million, a decrease of $352,000, or 0.8%, compared to 2019, primarily due to an increase in the provision for credit losses of $3.0 million[148]. - Noninterest income decreased by $60,000 in 2021, primarily due to a decline in investment services income[139]. - Noninterest income increased by $933,000, or 8.8%, mainly from the Bank's defined benefit pension plan and a transition payment from an independent broker-dealer[152]. Interest Income and Expenses - Net interest income grew by $4.8 million, driven by an increase in average noninterest-bearing checking deposits of $242.5 million[134][135]. - Net interest income for 2021 was $109.1 million, an increase of $4.4 million, or 4.2%, from $104.7 million in 2020[173]. - The average yield on interest-earning assets declined by 22 basis points from 3.37% in 2020 to 3.15% in 2021[174]. - The average cost of interest-bearing liabilities decreased by 44 basis points from 1.12% in 2020 to 0.68% in 2021[174]. - Net interest margin for 2021 was 2.74%, an increase of 10 basis points compared to 2.64% in 2020[174]. - Net interest income increased by $1.9 million, or 1.9%, due to a reduction in deposit rates and an increase in average checking deposits[149]. Credit Losses and Allowances - The provision for credit losses improved from a provision of $3.0 million in 2020 to a credit of $2.6 million in 2021[138]. - The allowance for credit losses was $29.8 million as of December 31, 2021, down from $33.0 million in 2020, reflecting improved asset quality[199]. - Nonaccrual loans increased to $1.235 million in December 2021 from $628,000 in December 2020, indicating a rise in credit risk[201]. - Net charge-offs for 2021 were $633,000, representing 0.02% of average loans outstanding, compared to $2,146,000, or 0.07%, in 2020[210]. - The Bank provided payment deferrals to borrowers during the pandemic, with all but seven loans totaling $440,000 having resumed payments by year-end[157]. Tax and Regulatory Compliance - The effective tax rate increased to 19.2% in 2021 from 16.8% in 2020 due to growth in pre-tax earnings[141]. - The effective tax rate increased from 16.5% in 2019 to 16.8% in 2020, attributed to a decline in tax-exempt income[154]. - The leverage ratio of the Corporation and the Bank was 10.23% at December 31, 2021, exceeding regulatory standards[220]. Assets and Liabilities - Total assets were $4.1 billion at December 31, 2021, with a decrease of $167.5 million in cash and cash equivalents used to fund increases in loans of $71.6 million (2.4%) and securities of $71.6 million (10.8%)[191]. - Total deposits remained unchanged at $3.3 billion for December 31, 2021, and 2020, while total borrowings increased by $5.2 million (1.7%) due to short-term borrowings[191]. - The Bank's loan portfolio totaled $3.1 billion as of December 31, 2021, with a notable increase in multifamily commercial mortgages to $864.2 million from $777.0 million in 2020[199]. - Total borrowings increased by $5.2 million from $306.1 million in 2020 to $311.3 million at year-end 2021, with short-term borrowings rising by $64.9 million[216]. Equity and Stock Performance - Stockholders' equity rose to $413.8 million at December 31, 2021, an increase of $6.7 million from $407.1 million at the end of 2020, driven by net income of $43.1 million[217]. - The Corporation's return on equity (ROE) was 10.34% for 2021, compared to 10.47% in 2020, while return on assets (ROA) improved to 1.04% from 1.00%[219]. - Book value per share increased by 4.1% during 2021 to $17.81, up from $17.11 at the end of 2020[219]. - The Corporation's stock repurchase program authorized the purchase of up to $65 million in shares, with $14.5 million spent to repurchase 679,873 shares in 2021[221]. Future Projections - The projected net interest income for the year ending December 31, 2022, under a static balance sheet scenario is $107.386 million[239]. - An immediate increase in interest rates of 100 basis points could negatively impact net interest income by 2.1%[239].