Flushing Financial net rises; credit quality higher

Flushing Financial Corp. of Lake Success said third quarter net income rose by almost 19 percent from a year earlier despite a drop in net interest income from a one-time charge.

The Lake Success-based parent of the 17-branch Flushing Bank said net income for the three months ended Sept. 30 was $11.2 million or 38 cents a share, up from $9.4 million or 32 cents a share a year earlier.

Flushing said credit quality continued to improve as nonaccrual loans fell 19.4 percent, to $34.5 million, the lowest level since Sept. 30 of 2008.

The company said it sold $95.2 million in securities during the quarter, recording a net gain of $5.2 million on the sale, and used the funds to prepay $96.9 million in long-term borrowings. That resulted in a prepayment penalty of $5.2 million, which reduced net interest income and net interest margin.

Net interest income, the difference between the revenue generated from a bank's assets and the expenses associated with liabilities, was $32.0 million, down $5.0 million, or 13.6 percent from a year earlier.

Noninterest income for the quarter was $7.1 million, up almost sevenfold from $900,000 a year earlier, primarily due to the $5.2 million net gain from that sale of securities.

The provision for loan losses was reduced by $600,000, from $3.4 million a year earlier.

Total assets at Sept. 30 were $4.86 billion, up from $4.62 billion a year earlier.