Earnings up at three Long Island banks

Three Long Island bank companies reported improved earnings Wednesday, variously crediting astute expansion strategies or more favorable economic conditions for their success.

Flushing Financial Corp., the Lake Success company that owns Flushing Savings Bank, reported record year-end earnings Wednesday of $38.8 million, up almost 52 percent from 2009.

Chief executive John Buran credited much of the gain to a larger spread between what the bank earns on the loans it makes and the interest it pays on deposits.

That gap was 3.25 percentage points in 2010, compared to 2.76 percentage points the previous year. The bank further took advantage of that gap by reducing its reliance on borrowed money as deposits increased from $2.6 billion to $3.1 billion.

At the same time, however, the bank's bad loans increased in the past year from $85.9 million to $126 million. That forced the bank to set aside more money to cover potential loan losses at a time when many banks are able to reduce that amount. The bank has assets of $4.3 billion and 16 branches in New York City and Nassau County.

New York Community Bancorp, the largest bank company based on Long Island, reported year-end earnings Wednesday of $541 million, up 36 percent from 2009.

The Westbury company's results reflected a full year of owning the former AmTrust Bank of Ohio, which the company acquired in December 2009. In addition to expanding the company's operations to Ohio, Florida and Arizona, the acquisition also provided the company with a significant residential mortgage banking business based in Cleveland.

Company chief executive Joseph Ficalora said in a statement that the strong performance in 2010 "demonstrated the benefits of our business strategies." Interest income from loans was up more than 30 percent, to $1.2 billion, he said. Bad loans totaled $624.4 million, or 2.23 percent of all loans. That represented a slight increase from 2.04 percent in 2009.

The company has assets of $41.2 billion, making it the 22nd largest bank holding company in the nation. It operates nine banking divisions, including Roslyn Savings Bank, through two subsidiaries, New York Community Bank and New York Commercial Bank. It has 276 branches in the metropolitan area, New Jersey, Ohio, Florida and Arizona.

Bridge Bancorp, the company that owns Bridgehampton National Bank, reported year-end earnings late Tuesday of $9.2 million, up 3 percent from the year before.

The improvement came during a year of expansion for the bank. It opened two new branches in 2010 as assets grew by 15 percent to more than $1 billion, lending increased by 13 percent and deposits grew by 16 percent.

"The ability to produce results while simultaneously expanding the franchise and enhancing our already rigorous risk management culture reflects the underlying strength and agility of the core franchise," company chief executive Kevin O'Connor said in a statement.

Bad loans increased by 14 percent, from $5.9 million in 2009 to $6.7 million, although one bad loan of $2.1 million was brought current in the fourth quarter.

"While it appears that the economy is improving, we remain cautious about sustaining this positive momentum and hope for continued progress on the employment front," O'Connor said. The coming year's challenges will include higher interest rates, new regulation and possibly new competitors, he said.