Flushing Financial Corp. said its profit fell by a penny a share in the first quarter from a year earlier as loan originations and net interest income declined.
The Lake Success-based parent of Flushing Bank said net income for the three months ended March 31 was $6.8 million, down 5.2 percent from a year earlier. Earnings per share were 22 cents.
Loan originations during the first quarter were $121.4 million, which the bank termed "below our expectations." It said that slower loan closings during the first quarter followed strong loan closings in the fourth quarter, so that "it appears loan closings were pulled into the fourth quarter that would have closed in the first quarter of 2013."
Flushing's net interest income fell by 8.5 percent from a year earlier to $34,146,000. Flushing said the decline was primarily attributable to a $2.6 million prepayment penalty recorded on borrowings repaid during the quarter.
But the 17-branch banking company also cited improvements in credit quality and said nonperforming loans decreased by $2.3 million from last year's final quarter, to $87.6 million, the lowest level since the fourth quarter of 2009.
The low level of interest rates presents challenges, Flushing said, because it is lending and investing money "at rates well below our portfolio average yield, and higher yielding loans and securities are prepaid. We also continued to experience higher than average activity in loans refinancing during the first quarter of 2013, which further reduced the yield on our loan portfolio."
Flushing said total assets at March 31, 2013, were $4.48 billion, an increase of $25.1 million from Dec. 31.