10-Q 1 f10q_051115.htm FORM 10-Q f10q_051115.htm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2015

Commission file number 001-33013

FLUSHING FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of incorporation or organization)

11-3209278
(I.R.S. Employer Identification No.)

220 RXR Plaza, Uniondale, New York 11556
(Address of principal executive offices)

(718) 961-5400
(Registrant's telephone number, including area code)

1979 Marcus Avenue, Suite E140, Lake Success, New York 11042
(Former address of Principal executive offices)


Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.       X  Yes    __ No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).      X   Yes    __ No

 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
 
Large accelerated filer __
Non-accelerated filer   __
Accelerated filer     X
Smaller reporting company  __

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).          ___Yes      X   No

The number of shares of the registrant’s Common Stock outstanding as of April 30, 2015 was 29,408,584.

 
 

 
TABLE OF CONTENTS

 
PAGE
PART I  —  FINANCIAL INFORMATION
 
   
 
   
   
   
   
   
   
   
   
   
   
PART II  —  OTHER INFORMATION
 
   
   
   
   
   
   
   
   


 
i

 
PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
(Unaudited)
Item 1.    Financial Statements
 
(Dollars in thousands, except per share data)
 
March 31,
2015
   
December 31,
2014
 
ASSETS
           
Cash and due from banks
  $ 21,104     $ 34,265  
Securities available for sale:
               
Mortgage-backed securities (including assets pledged of $470,116 and $464,626 at March 31, 2015 and December 31, 2014, respectively; $4,458 and $4,678 at fair value pursuant to the fair value option at March 31, 2015 and December 31, 2014, respectively)
    717,729       704,933  
Other securities (including assets pledged of $69,372 and $57,562 at March 31, 2015 and December 31, 2014, respectively; $28,170 and $27,915 at fair value pursuant to the fair value option at March 31, 2015 and December 31, 2014, respectively)
    289,955       268,377  
Loans:
               
Multi-family residential
    2,013,249       1,923,460  
Commercial real estate
    687,823       621,569  
One-to-four family ― mixed-use property
    573,927       573,779  
One-to-four family ― residential
    190,366       187,572  
Co-operative apartments
    9,413       9,835  
Construction
    2,828       5,286  
Small Business Administration
    8,005       7,134  
Taxi medallion
    21,346       22,519  
Commercial business and other
    477,823       447,500  
Net unamortized premiums and unearned loan fees
    13,274       11,719  
Allowance for loan losses
    (24,091 )     (25,096 )
Net loans
    3,973,963       3,785,277  
Interest and dividends receivable
    17,263       17,251  
Bank premises and equipment, net
    30,167       21,868  
Federal Home Loan Bank of New York stock
    50,488       46,924  
Bank owned life insurance
    113,373       112,656  
Goodwill
    16,127       16,127  
Other assets
    40,326       69,335  
Total assets
  $ 5,270,495     $ 5,077,013  
                 
LIABILITIES
               
Due to depositors:
               
Non-interest bearing
  $ 250,084     $ 255,834  
Interest-bearing:
               
Certificate of deposit accounts
    1,292,721       1,305,823  
Savings accounts
    269,610       261,942  
Money market accounts
    301,587       290,263  
NOW accounts
    1,438,239       1,359,057  
Total interest-bearing deposits
    3,302,157       3,217,085  
Mortgagors' escrow deposits
    53,901       35,679  
Borrowed funds ($28,244 and $28,771 at fair value pursuant to the fair value option at March 31, 2015 and December 31, 2014, respectively)
    1,019,291       940,492  
Securities sold under agreements to repurchase
    116,000       116,000  
Other liabilities
    63,176       55,676  
Total liabilities
    4,804,609       4,620,766  
                 
Commitments and contingencies (Notes 4 & 5)
               
                 
STOCKHOLDERS' EQUITY
               
Preferred stock ($0.01 par value; 5,000,000 shares authorized; None issued)
    -       -  
Common stock ($0.01 par value; 100,000,000 shares authorized; 31,530,595 shares issued at March 31, 2015 and December 31, 2014; 29,407,259 shares and 29,403,823 shares outstanding at March 31, 2015 and December 31, 2014, respectively)
    315       315  
Additional paid-in capital
    208,368       206,437  
Treasury stock, at average cost (2,123,336 shares and 2,126,772 shares at March 31, 2015 and December 31, 2014, respectively)
    (37,521 )     (37,221 )
Retained earnings
    293,131       289,623  
Accumulated other comprehensive income (loss), net of taxes
    1,593       (2,907 )
Total stockholders' equity
    465,886       456,247  
                 
Total liabilities and stockholders' equity
  $ 5,270,495     $ 5,077,013  
 
The accompanying notes are an integral part of these consolidated financial statements.
 
 
- 1 -

 
PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
Consolidated Statements of Income
(Unaudited)
 
   
For the three months
ended March 31,
 
(Dollars in thousands, except per share data)
 
2015
   
2014
 
             
Interest and dividend income
           
Interest and fees on loans
  $ 43,534     $ 42,120  
Interest and dividends on securities:
               
Interest
    5,870       6,875  
Dividends
    118       189  
Other interest income
    21       27  
Total interest and dividend income
    49,543       49,211  
                 
Interest expense
               
Deposits
    7,458       7,718  
Other interest expense
    4,531       5,006  
Total interest expense
    11,989       12,724  
                 
Net interest income
    37,554       36,487  
Provision (benefit) for loan losses
    (734 )     (1,119 )
Net interest income after provision (benefit) for loan losses
    38,288       37,606  
                 
Non-interest income
               
Banking services fee income
    884       709  
Net gain on sale of loans
    2       -  
Net loss from fair value adjustments
    (595 )     (644 )
Federal Home Loan Bank of New York stock dividends
    518       551  
Bank owned life insurance
    717       776  
Other income
    404       318  
Total non-interest income
    1,930       1,710  
                 
Non-interest expense
               
Salaries and employee benefits
    14,666       12,578  
Occupancy and equipment
    2,713       2,035  
Professional services
    1,779       1,210  
FDIC deposit insurance
    749       697  
Data processing
    1,075       1,068  
Depreciation and amortization
    668       715  
Other real estate owned/foreclosure expense
    520       256  
Other operating expenses
    3,769       3,534  
Total non-interest expense
    25,939       22,093  
                 
Income before income taxes
    14,279       17,223  
                 
Provision for income taxes
               
Federal
    4,252       4,758  
State and local
    1,294       2,169  
Total taxes
    5,546       6,927  
                 
Net income
  $ 8,733     $ 10,296  
                 
                 
Basic earnings per common share
  $ 0.30     $ 0.34  
Diluted earnings per common share
  $ 0.30     $ 0.34  
Dividends per common share
  $ 0.16     $ 0.15  

The accompanying notes are an integral part of these consolidated financial statements.

 
- 2 -

 
PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
(Unaudited)


   
For the three months ended
March 31,
 
(Dollars in thousands)
 
2015
   
2014
 
             
             
Comprehensive Income, net of tax
           
Net income
  $ 8,733     $ 10,296  
Amortization of actuarial losses
    174       63  
Amortization of prior service credits
    (6 )     (3 )
Net unrealized gains on securities
    4,332       5,360  
Comprehensive income
  $ 13,233     $ 15,716  


The accompanying notes are an integral part of these consolidated financial statements.
 
 
- 3 -

 
PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
(Unaudited)
 
   
For the three months ended
March 31,
 
(Dollars in thousands)
 
2015
   
2014
 
CASH FLOWS FROM OPERATING ACTIVITIES
           
Net income
  $ 8,733     $ 10,296  
Adjustments to reconcile net income to net cash provided by operating activities:
               
Provision (benefit) for loan losses
    (734 )     (1,119 )
Depreciation and amortization of bank premises and equipment
    668       715  
Amortization of premium, net of accretion of discount
    2,143       1,821  
Net loss from fair value adjustments
    595       644  
Net gain from sale of loans
    (2 )     -  
Income from bank owned life insurance
    (717 )     (776 )
Stock-based compensation expense
    2,778       2,581  
Deferred compensation
    (1,392 )     (1,192 )
Excess tax benefit from stock-based payment arrangements
    (318 )     (675 )
Deferred income tax provision
    1,925       2,925  
Decrease in other liabilities
    (4,403 )     (2,748 )
Decrease in other assets
    3,336       1,917  
Net cash provided by operating activities
    12,612       14,389  
                 
CASH FLOWS FROM INVESTING ACTIVITIES
               
Purchases of bank premises and equipment
    (5,229 )     (342 )
Net (purchases) redemptions of Federal Home Loan Bank of New York shares
    (3,564 )     1,327  
Purchases of securities available for sale
    (48,962 )     (48,277 )
Proceeds from sales and calls of securities
    -       1,871  
Proceeds from maturities and prepayments of securities available for sale
    31,019       20,715  
Net (originations) and repayment of loans
    (59,071 )     (57,488 )
Purchases of loans
    (111,296 )     (11,649 )
Proceeds from sale of real estate owned
    1,594       1,062  
Proceeds from sale of delinquent loans
    1,522       5,424  
Net cash used in investing activities
    (193,987 )     (87,357 )
                 
CASH FLOWS FROM FINANCING ACTIVITIES
               
Net increase (decrease) in non-interest bearing deposits
    (5,750 )     3,604  
Net increase in interest-bearing deposits
    84,816       98,091  
Net increase in mortgagors' escrow deposits
    18,222       16,072  
Net proceeds (repayments) from short-term borrowed funds
    41,500       (29,500 )
Proceeds from long-term borrowings
    47,706       -  
Repayment of long-term borrowings
    (10,000 )     -  
Purchases of treasury stock
    (3,876 )     (1,659 )
Excess tax benefit from stock-based payment arrangements
    318       675  
Proceeds from issuance of common stock upon exercise of stock options
    -       343  
Cash dividends paid
    (4,722 )     (4,513 )
Net cash provided by financing activities
    168,214       83,113  
                 
Net increase (decrease) in cash and cash equivalents
    (13,161 )     10,145  
Cash and cash equivalents, beginning of period
    34,265       33,485  
Cash and cash equivalents, end of period
  $ 21,104     $ 43,630  
                 
SUPPLEMENTAL CASH FLOW DISCLOSURE
               
Interest paid
  $ 11,948     $ 12,646  
Income taxes paid
    1,596       4,680  
Taxes paid if excess tax benefits were not tax deductible
    1,914       5,355  
Non-cash activities:
               
Securities purchased not yet settled
    9,877       1,000  
Loans transferred to Other Real Estate Owned
    483       115  
Loans provided for the sale of Other Real Estate Owned
    175       308  

The accompanying notes are an integral part of these consolidated financial statements.
 
 
- 4 -

 
PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
Consolidated Statements of Changes in Stockholders’ Equity
(Unaudited)
 
 
   
For the three months ended
March 31,
 
(Dollars in thousands, except per share data)
 
2015
   
2014
 
Common Stock
           
Balance, beginning of period
  $ 315     $ 315  
No activity
    -       -  
Balance, end of period
  $ 315     $ 315  
Additional Paid-In Capital
               
Balance, beginning of period
  $ 206,437     $ 201,902  
Award of common shares released from Employee Benefit Trust (136,114 and 126,650 common shares for the three months ended March 31, 2015 and 2014, respectively)
    1,917       1,929  
Shares issued upon vesting of restricted stock unit awards (59,532 and 1,000 common shares for the three months ended March 31, 2015 and 2014, respectively)
    160       3  
Issuance upon exercise of stock options (1,100 and 50,215 common shares for the three months ended March 31, 2015 and 2014, respectively)
    1       122  
Stock-based compensation activity, net
    (465 )     (26 )
Stock-based income tax benefit
    318       675  
Balance, end of period
  $ 208,368     $ 204,605  
Treasury Stock
               
Balance, beginning of period
  $ (37,221 )   $ (22,053 )
Purchases of outstanding shares (142,315 and 28,120 common shares for the three months ended March 31, 2015 and 2014, respectively)
    (2,766 )     (556 )
Shares issued upon vesting of restricted stock unit awards (204,110 and 183,864 common shares for the three months ended March 31, 2015 and 2014, respectively)
    3,577       2,897  
Issuance upon exercise of stock options (1,100 and 50,215 common shares for the three months ended March 31, 2015 and 2014, respectively)
    19       797  
Purchases of shares to fund options exercised (998 and 23,003 common shares for the three months ended March 31, 2015 and 2014, respectively)
    (20 )     (478 )
Repurchase of shares to satisfy tax obligations (58,461 and 53,504 common shares for the three months ended March 31, 2015 and 2014, respectively)
    (1,110 )     (1,103 )
Balance, end of period
  $ (37,521 )   $ (20,496 )
Retained Earnings
               
Balance, beginning of period
  $ 289,623     $ 263,743  
Net income
    8,733       10,296  
Cash dividends declared and paid on common shares ($0.16 and $0.15 per common share for the three months ended March 31, 2015 and 2014, respectively)
    (4,722 )     (4,513 )
Issuance upon exercise of stock options (7,140 common shares for the three months ended March 31, 2014)
    -       (44 )
Shares issued upon vesting of restricted stock unit awards (144,578 and 182,864 common shares for the three months ended March 31, 2015 and 2014, respectively)
    (503 )     (389 )
Balance, end of period
  $ 293,131     $ 269,093  
Accumulated Other Comprehensive Income (loss)
               
Balance, beginning of period
  $ (2,907 )   $ (11,375 )
Change in net unrealized gains on securities available for sale, net of taxes of approximately ($3,293) and ($4,237) for the three months ended March 31, 2015 and 2014, respectively
    4,332       5,360  
Amortization of actuarial losses, net of taxes of approximately ($133) and ($112) for the three months ended March 31, 2015 and 2014, respectively
    174       63  
Amortization of prior service credits, net of taxes of approximately $5 and $8 for the three months ended March 31, 2015 and 2014, respectively)
    (6 )     (3 )
Balance, end of period
  $ 1,593     $ (5,955 )
                 
Total Stockholders' Equity
  $ 465,886     $ 447,562  
 
The accompanying notes are an integral part of these consolidated financial statements.
 
 
- 5 -

 
PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
 
1. Basis of Presentation
 
The primary business of Flushing Financial Corporation (the “Holding Company”), a Delaware corporation, is the operation of its wholly-owned subsidiary, Flushing Bank (the “Bank”).
 
The unaudited consolidated financial statements presented in this Quarterly Report on Form 10-Q (“Quarterly Report”) include the collective results of the Holding Company and its direct and indirect wholly-owned subsidiaries, including the Bank, Flushing Preferred Funding Corporation, Flushing Service Corporation, and FSB Properties Inc., which are collectively herein referred to as “we,” “us,” “our” and the “Company.”
 
The Holding Company also owns Flushing Financial Capital Trust II, Flushing Financial Capital Trust III, and Flushing Financial Capital Trust IV (the “Trusts”), which are special purpose business trusts. The Trusts are not included in the Company’s consolidated financial statements as the Company would not absorb the losses of the Trusts if any losses were to occur.
 
The accompanying unaudited consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and general practices within the banking industry. The information furnished in these interim statements reflects all adjustments which are, in the opinion of management, necessary for a fair statement of the results for such presented periods of the Company.  Such adjustments are of a normal recurring nature, unless otherwise disclosed in this Quarterly Report. All inter-company balances and transactions have been eliminated in consolidation.  The results of operations in the interim statements are not necessarily indicative of the results that may be expected for the full year.
 
The accompanying unaudited consolidated financial statements have been prepared in conformity with the instructions to Quarterly Report on Form 10-Q and Article 10, Rule 10-01 of Regulation S-X for interim financial statements.  Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The unaudited consolidated interim financial information should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2014.
 
2.  
Use of Estimates
 
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements, and reported amounts of revenue and expenses during the reporting period. Estimates that are particularly susceptible to change in the near term are used in connection with the determination of the allowance for loan losses (“ALLL”), the evaluation of goodwill for impairment, the evaluation of the need for a valuation allowance of the Company’s deferred tax assets, the evaluation of other-than-temporary impairment (“OTTI”) on securities and the valuation of certain financial instruments. The current economic environment has increased the degree of uncertainty inherent in these material estimates.  Actual results could differ from these estimates.
 
3.  
Earnings Per Share
 
Basic earnings per common share is computed by dividing net income available to common shareholders by the total weighted average number of common shares outstanding, which includes unvested participating securities. Unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and as such are included in the calculation of earnings per share.  The Company’s unvested restricted stock and restricted stock unit awards are considered participating securities. Therefore, weighted average common shares outstanding used for computing basic earnings per common share includes common shares outstanding plus unvested restricted stock and restricted stock unit awards. The computation of diluted earnings per share includes the additional dilutive effect of stock options outstanding and other common stock equivalents during the period.  Common stock equivalents that are anti-dilutive are not included in the computation of diluted earnings per common share. The numerator for calculating basic and diluted earnings per common share is net income available to common shareholders. The shares held in the Company’s Employee Benefit Trust are not included in shares outstanding for purposes of calculating earnings per common share.
 
 
- 6 -

 
PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
 
Earnings per common share have been computed based on the following:

   
For the three months ended
March 31,
 
(In thousands, except per share data)
 
2015
   
2014
 
             
Net income, as reported
  $ 8,733     $ 10,296  
Divided by:
               
Weighted average common shares outstanding
    29,397       29,984  
Weighted average common stock equivalents
    22       38  
Total weighted average common shares outstanding and common stock equivalents
    29,419       30,022  
                 
Basic earnings per common share
  $ 0.30     $ 0.34  
Diluted earnings per common share (1)
  $ 0.30     $ 0.34  
Dividend payout ratio
    53.3 %     44.1 %
 
(1)  
For the three months ended March 31, 2015 and 2014, there were no stock options that were anti-dilutive.

4.  
Debt and Equity Securities
 
The Company’s investments in equity securities that have readily determinable fair values and all investments in debt securities are classified in one of the following three categories and accounted for accordingly: (1) trading securities, (2) securities available for sale and (3) securities held-to-maturity.
 
The Company did not hold any trading securities or securities held-to-maturity during the three months ended March 31, 2015 and December 31, 2014. Securities available for sale are recorded at fair value.
 
The following table summarizes the Company’s portfolio of securities available for sale at March 31, 2015:
 
   
Amortized
Cost
   
Fair Value
   
Gross
Unrealized
Gains
   
Gross
Unrealized
Losses
 
   
(In thousands)
 
Corporate
  $ 95,785     $ 95,750     $ 939     $ 974  
Municipals
    144,152       148,377       4,258       33  
Mutual funds
    21,278       21,278       -       -  
Other
    24,550       24,550       2       2  
Total other securities
    285,765       289,955       5,199       1,009  
REMIC and CMO
    514,592       521,312       8,857       2,137  
GNMA
    13,359       13,733       455       81  
FNMA
    166,451       168,556       2,786       681  
FHLMC
    13,912       14,128       216       -  
Total mortgage-backed securities
    708,314       717,729       12,314       2,899  
Total securities available for sale
  $ 994,079     $ 1,007,684     $ 17,513     $ 3,908  
 
 Mortgage-backed securities shown in the table above include three private issue collateralized mortgage obligations (“CMOs”) that are collateralized by commercial real estate mortgages with amortized cost and market value of $12.4 million at March 31, 2015.
 
 
- 7 -

 
PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)

The following table shows the Company’s available for sale securities with gross unrealized losses and their fair value aggregated by category and length of time the individual securities had been in a continuous unrealized loss position at March 31, 2015:
 
   
Total
   
Less than 12 months
   
12 months or more
 
   
Fair Value
   
Unrealized
Losses
   
Fair Value
   
Unrealized
Losses
   
Fair Value
   
Unrealized
Losses
 
   
(In thousands)
 
Corporate
  $ 49,026     $ 974     $ 19,389     $ 611     $ 29,637     $ 363  
Municipals
    5,268       33       5,268       33       -       -  
Other
    298       2       -       -       298       2  
Total other securities
    54,592       1,009       24,657       644       29,935       365  
REMIC and CMO
    158,838       2,137       55,749       134       103,089       2,003  
GNMA
    8,099       81       8,099       81       -       -  
FNMA
    62,834       681       29,897       179       32,937       502  
Total mortgage-backed securities
    229,771       2,899       93,745       394       136,026       2,505  
Total securities available for sale
  $ 284,363     $ 3,908     $ 118,402     $ 1,038     $ 165,961     $ 2,870  
 
OTTI losses on impaired securities must be fully recognized in earnings if an investor has the intent to sell the debt security or if it is more likely than not that the investor will be required to sell the debt security before recovery of its amortized cost. However, even if an investor does not expect to sell a debt security, the investor must evaluate the expected cash flows to be received and determine if a credit loss has occurred. In the event that a credit loss has occurred, only the amount of impairment associated with the credit loss is recognized in earnings in the Consolidated Statements of Income. Amounts relating to factors other than credit losses are recorded in accumulated other comprehensive income (“AOCI”) within Stockholders’ Equity.
 
The Company reviewed each investment that had an unrealized loss at March 31, 2015. An unrealized loss exists when the current fair value of an investment is less than its amortized cost basis. Unrealized losses on available for sale securities, that are deemed to be temporary, are recorded in AOCI, net of tax.  Unrealized losses that are considered to be other-than-temporary are split between credit related and noncredit related impairments, with the credit related impairment being recorded as a charge against earnings and the noncredit related impairment being recorded in AOCI, net of tax.
 
Corporate:
The unrealized losses in Corporate securities at March 31, 2015 consist of losses on six Corporate securities. The unrealized losses were caused by movements in interest rates. It is not anticipated that these securities would be settled at a price that is less than the amortized cost of the Company’s investment. Each of these securities is performing according to its terms and, in the opinion of management, will continue to perform according to its terms. The Company does not have the intent to sell these securities and it is more likely than not the Company will not be required to sell the securities before recovery of the securities’ amortized cost basis. This conclusion is based upon considering the Company’s cash and working capital requirements and contractual and regulatory obligations, none of which the Company believes would cause the sale of the securities. Therefore, the Company did not consider these investments to be other-than-temporarily impaired at March 31, 2015.
 
Municipal Securities:
The unrealized losses in Municipal securities at March 31, 2015, consist of losses on two municipal securities. The unrealized losses were caused by movements in interest rates. It is not anticipated that these securities would be settled at a price that is less than the amortized cost of the Company’s investment. Each of these securities is performing according to its terms and, in the opinion of management, will continue to perform according to its terms. The Company does not have the intent to sell these securities and it is more likely than not the Company will not be required to sell the securities before recovery of the securities amortized cost basis. This conclusion is based upon considering the Company’s cash and working capital requirements and contractual and regulatory obligations, none of which the Company believes would cause the sale of the securities. Therefore, the Company did not consider these investments to be other-than-temporarily impaired at March 31, 2015.
 
 
- 8 -

 
PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
 
Other Securities:
The unrealized losses in Other Securities at March 31, 2015, consist of a loss on one single issuer trust preferred security. The unrealized losses on this security were caused by market interest volatility, a significant widening of credit spreads across markets for these securities and illiquidity and uncertainty in the financial markets. This security is currently rated below investment grade. It is not anticipated that this security would be settled at a price that is less than the amortized cost of the Company’s investment. This security is performing according to its terms and, in the opinion of management, will continue to perform according to its terms. The Company does not have the intent to sell this security and it is more likely than not the Company will not be required to sell this security before recovery of the security’s amortized cost basis. This conclusion is based upon considering the Company’s cash and working capital requirements and contractual and regulatory obligations, none of which the Company believes would cause the sale of the security. Therefore, the Company did not consider this investment to be other-than-temporarily impaired at March 31, 2015.
 
REMIC and CMO:
The unrealized losses in Real Estate Mortgage Investment Conduit (“REMIC”) and CMO securities at March 31, 2015 consist of six issues from the Federal Home Loan Mortgage Corporation (“FHLMC”), 10 issues from the Federal National Mortgage Association (“FNMA”), six issues from Government National Mortgage Association (“GNMA”) and one private issue CMO collateralized by commercial real estate mortgages.
 
The unrealized losses on the REMIC and CMO securities issued by FHLMC, FNMA, GNMA and the one private issue were caused by movements in interest rates. It is not anticipated that these securities would be settled at a price that is less than the amortized cost of the Company’s investment. Each of these securities is performing according to its terms, and, in the opinion of management, will continue to perform according to its terms. The Company does not have the intent to sell these securities and it is more likely than not the Company will not be required to sell the securities before recovery of the securities amortized cost basis. This conclusion is based upon considering the Company’s cash and working capital requirements, and contractual and regulatory obligations, none of which the Company believes would cause the sale of the securities.  Therefore, the Company did not consider these investments to be other-than-temporarily impaired at March 31, 2015.
 
GNMA:
The unrealized losses in GNMA securities at March 31, 2015 consist of a loss on one security. The unrealized losses were caused by movements in interest rates. It is not anticipated that this security would be settled at a price that is less than the amortized cost of the Company’s investment. This security is performing according to its terms and, in the opinion of management, will continue to perform according to its terms. The Company does not have the intent to sell this security and it is more likely than not the Company will not be required to sell the security before recovery of the security’s amortized cost basis. This conclusion is based upon considering the Company’s cash and working capital requirements and contractual and regulatory obligations, none of which the Company believes would cause the sale of the security. Therefore, the Company did not consider this security to be other-than-temporarily impaired at March 31, 2015.

FNMA:
The unrealized losses in FNMA securities at March 31, 2015 consist of losses on nine securities. The unrealized losses were caused by movements in interest rates. It is not anticipated that these securities would be settled at a price that is less than the amortized cost of the Company’s investment. Each of these securities is performing according to its terms and, in the opinion of management, will continue to perform according to its terms. The Company does not have the intent to sell these securities and it is more likely than not the Company will not be required to sell the securities before recovery of the securities amortized cost basis. This conclusion is based upon considering the Company’s cash and working capital requirements and contractual and regulatory obligations, none of which the Company believes will cause the sale of the securities. Therefore, the Company did not consider these investments to be other-than-temporarily impaired at March 31, 2015.
 
 
- 9 -

 
PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
 
The following table represents the activity related to the credit loss component recognized in earnings on debt securities held by the Company for which a portion of OTTI was recognized in AOCI for the periods indicated:
 
   
For the three months ended
March 31,
 
   
2015
   
2014
 
   
(In thousands)
 
Beginning balance
  $ -     $ 3,738  
Recognition of actual losses
    -       -  
OTTI charges due to credit loss recorded in earnings
    -       -  
Securities sold during the period
    -       -  
Securities where there is an intent to sell or requirement to sell
    -       -  
Ending balance
  $ -     $ 3,738  
 
The following table details the amortized cost and estimated fair value of the Company’s securities classified as available for sale at March 31, 2015, by contractual maturity. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
 
   
Amortized
Cost
   
Fair Value
 
   
(In thousands)
 
             
Due in one year or less
  $ 37,469     $ 37,706  
Due after one year through five years
    26,104       26,768  
Due after five years through ten years
    79,662       79,130  
Due after ten years
    142,530       146,351  
Total other securities
    285,765       289,955  
Mortgage-backed securities
    708,314       717,729  
Total securities available for sale
  $ 994,079     $ 1,007,684  
 
We did not sell any securities during the three months ended March 31, 2015 and 2014.

 
- 10 -

 
PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
 
The following table summarizes the Company’s portfolio of securities available for sale at December 31, 2014:
 
   
Amortized
Cost
   
Fair Value
   
Gross
Unrealized
Gains
   
Gross
Unrealized
Losses
 
   
(In thousands)
 
Corporate
  $ 90,719     $ 91,273     $ 1,268     $ 714  
Municipals
    145,864       148,896       3,093       61  
Mutual funds
    21,118       21,118       -       -  
Other
    7,098       7,090       -       8  
Total other securities
    264,799       268,377       4,361       783  
REMIC and CMO
    504,207       505,768       6,188       4,627  
GNMA
    13,862       14,159       421       124  
FNMA
    169,956       170,367       2,128       1,717  
FHLMC
    14,505       14,639       142       8  
Total mortgage-backed securities
    702,530       704,933       8,879       6,476  
Total securities available for sale
  $ 967,329     $ 973,310     $ 13,240     $ 7,259  
 
Mortgage-backed securities shown in the table above include three private issue CMOs that are collateralized by commercial real estate mortgages with an amortized cost and market value of $12.4 million at December 31, 2014.
 
The following table shows the Company’s available for sale securities with gross unrealized losses and their fair value, aggregated by category and length of time that individual securities have been in a continuous unrealized loss position, at December 31, 2014.
 
   
Total
   
Less than 12 months
   
12 months or more
 
   
Fair Value
   
Unrealized
Losses
   
Fair Value
   
Unrealized
Losses
   
Fair Value
   
Unrealized
Losses
 
   
(In thousands)
 
Corporate
  $ 39,287     $ 714     $ 9,573     $ 428     $ 29,714     $ 286  
Municipals
    8,810       61       3,546       11       5,264       50  
Other
    292       8       -       -       292       8  
Total other securities
    48,389       783       13,119       439       35,270       344  
REMIC and CMO
    216,190       4,627       77,382       399       138,808       4,228  
GNMA
    8,358       124       -       -       8,358       124  
FNMA
    95,148       1,717       -       -       95,148       1,717  
FHLMC
    6,773       8       6,773       8       -       -  
Total mortgage-backed securities
    326,469       6,476       84,155       407       242,314       6,069  
Total securities available for sale
  $ 374,858     $ 7,259     $ 97,274     $ 846     $ 277,584     $ 6,413  
 
5. Loans
 
Loans are reported at their principal outstanding balance net of any unearned income, charge-offs, deferred loan fees and costs on originated loans and unamortized premiums or discounts on purchased loans. Interest on loans is recognized on the accrual basis. The accrual of income on loans is generally discontinued when certain factors, such as contractual delinquency of 90 days or more, indicate reasonable doubt as to the timely collectability of such income. Uncollected interest previously recognized on non-accrual loans is reversed from interest income at the time the loan is placed on non-accrual status. A non-accrual loan can be returned to accrual status when contractual delinquency returns to less than 90 days delinquent. Subsequent cash payments received on non-accrual loans that do not bring the loan to less than 90 days delinquent are recorded on a cash basis. Subsequent cash payments can also be applied first as a reduction of principal until all principal is recovered and then subsequently to interest, if in management’s opinion, it is evident that recovery of all principal due is likely to occur. Loan fees and certain loan origination costs are deferred. Net loan origination costs and premiums or discounts on loans purchased are amortized into interest income over the contractual life of the loans using the level-yield method. Prepayment penalties received on loans which pay in full prior to their scheduled maturity are included in interest income in the period they are collected.
 
 
- 11 -

 
PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
 
The Company maintains an allowance for loan losses at an amount, which, in management’s judgment, is adequate to absorb probable estimated losses inherent in the loan portfolio. Management’s judgment in determining the adequacy of the allowance is based on evaluations of the collectability of loans. This evaluation is inherently subjective, as it requires estimates that are susceptible to significant revisions as more information becomes available.  The allowance is established through a provision for loan losses based on management’s evaluation of the risk inherent in the various components of the loan portfolio and other factors, including historical loan loss experience (which is updated quarterly), current economic conditions, delinquency and non-accrual trends, classified loan levels, risk in the portfolio and volumes and trends in loan types, recent trends in charge-offs, changes in underwriting standards, experience, ability and depth of the Company’s  lenders, collection policies and experience, internal loan review function and other external factors.  The Company segregated its loans into two portfolios based on year of origination. One portfolio was reviewed for loans originated after December 31, 2009 and a second portfolio for loans originated prior to January 1, 2010. Our decision to segregate the portfolio based upon origination dates was based on changes made in our underwriting standards during 2009. By the end of 2009, all loans were being underwritten based on revised and tightened underwriting standards.  Loans originated prior to 2010 have a higher delinquency rate and loss history. Each of the years in the portfolio for loans originated prior to 2010 has a similar delinquency rate. The determination of the amount of the allowance for loan losses includes estimates that are susceptible to significant changes due to changes in appraisal values of collateral, national and local economic conditions and other factors. We review our loan portfolio by separate categories with similar risk and collateral characteristics. Impaired loans are segregated and reviewed separately. All non-accrual loans are classified as impaired loans. The Company’s Board of Directors reviews and approves management’s evaluation of the adequacy of the allowance for loan losses on a quarterly basis.
 
The allowance for loan losses is established through charges to earnings in the form of a provision for loan losses. Increases and decreases in the allowance other than charge-offs and recoveries are included in the provision for loan losses. When a loan or a portion of a loan is determined to be uncollectible, the portion deemed uncollectible is charged against the allowance, and subsequent recoveries, if any, are credited to the allowance.
 
The Company recognizes a loan as non-performing when the borrower has demonstrated the inability to bring the loan current, or due to other circumstances which, in management’s opinion, indicate the borrower will be unable to bring the loan current within a reasonable time. All loans classified as non-performing, which includes all loans past due 90 days or more, are classified as non-accrual unless there is, in our opinion, compelling evidence the borrower will bring the loan current in the immediate future. Appraisals are obtained and/or updated internal evaluations are prepared as soon as practical, and before the loan becomes 90 days delinquent. The loan balances of collateral dependent impaired loans are compared to the property’s updated fair value. The Company considers fair value of collateral dependent loans to be 85% of the appraised or internally estimated value of the property. The balance which exceeds fair value is generally charged-off.  The 85% is based on the actual net proceeds the Bank has received from the sale of other real estate owned (“OREO”) as a percentage of OREO’s appraised value.
 
A loan is considered impaired when, based upon current information, the Company believes it is probable that it will be unable to collect all amounts due, both principal and interest, in accordance with the original terms of the loan. Impaired loans are measured based on the present value of the expected future cash flows discounted at the loan’s effective interest rate or at the loan’s observable market price or, as a practical expedient, the fair value of the collateral if the loan is collateral dependent. Interest income on impaired loans is recorded on the cash basis. The Company’s management considers all non-accrual loans impaired.
 
The Company reviews each impaired loan on an individual basis to determine if either a charge-off or a valuation allowance needs to be allocated to the loan. The Company does not charge-off or allocate a valuation allowance to loans for which management has concluded the current value of the underlying collateral will allow for recovery of the loan balance either through the sale of the loan or by foreclosure and sale of the property.
 
The Company evaluates the underlying collateral through a third party appraisal, or when a third party appraisal is not available, the Company will use an internal evaluation. The internal evaluations are prepared using an income approach or a sales approach. The income approach is used for income producing properties and uses current revenues less operating expenses to determine the net cash flow of the property. Once the net cash flow is determined, the value of the property is calculated using an appropriate capitalization rate for the property. The sales approach uses comparable sales prices in the market.  When an internal evaluation is used, we place greater reliance on the income approach to value the collateral.
 
 
- 12 -

 
PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
 
In preparing internal evaluations of property values, the Company seeks to obtain current data on the subject property from various sources, including: (1) the borrower; (2) copies of existing leases; (3) local real estate brokers and appraisers; (4) public records (such as for real estate taxes and water and sewer charges); (5) comparable sales and rental data in the market; (6) an inspection of the property and (7) interviews with tenants. These internal evaluations primarily focus on the income approach and comparable sales data to value the property.
 
As of March 31, 2015, we utilized recent third party appraisals of the collateral to measure impairment for $31.0 million, or 66.4%, of collateral dependent impaired loans, and used internal evaluations of the property’s value for $15.7 million, or 33.6%, of collateral dependent impaired loans.

The Company may restructure a loan to enable a borrower experiencing financial difficulties to continue making payments when it is deemed to be in the Company’s best long-term interest. This restructure may include reducing the interest rate or amount of the monthly payment for a specified period of time, after which the interest rate and repayment terms revert to the original terms of the loan. We classify these loans as Troubled Debt Restructured (“TDR”).
 
These restructurings have not included a reduction of principal balance. The Company believes that restructuring these loans in this manner will allow certain borrowers to become and remain current on their loans. Restructured loans are classified as a TDR when the Bank grants a concession to a borrower who is experiencing financial difficulties. All loans classified as TDR are considered impaired, however TDR loans which have been current for six consecutive months at the time they are restructured as TDR remain on accrual status and are not included as part of non-performing loans. Loans which were delinquent at the time they are restructured as a TDR are placed on non-accrual status and reported as non-performing loans until they have made timely payments for six consecutive months. Loans that are restructured as TDR but are not performing in accordance with the restructured terms are placed on non-accrual status and reported as non-performing loans.
 
The allocation of a portion of the allowance for loan losses for a performing TDR loan is based upon the present value of the future expected cash flows discounted at the loan’s original effective rate, or for a non-performing TDR which is collateral dependent, the fair value of the collateral. At March 31, 2015, there were no commitments to lend additional funds to borrowers whose loans were modified to a TDR. The modification of loans to a TDR did not have a significant effect on our operating results, nor did it require a significant allocation of the allowance for loan losses.
 
The following table shows loans modified and classified as TDR during the period indicated:
 
   
For the three months ended
March 31, 2015
(Dollars in thousands)
 
Number
   
Balance
 
Modification description
Small Business Administration
    1     $ 41  
Received a below market
interest rate and the loan
amortization was extended
Total
    1     $ 41    
 
The Bank did not modify and classify any loans as TDR during the three months ended March 31, 2014.
 
The recorded investment of the loan modified and classified to a TDR, presented in the table above, was unchanged as there was no principal forgiven in this modification.

 
- 13 -

 
PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
 
The following table shows our recorded investment for loans classified as TDR that are performing according to their restructured terms at the periods indicated:
 
   
March 31, 2015
   
December 31, 2014
 
(Dollars in thousands)
 
Number
of contracts
   
Recorded
investment
   
Number
of contracts
   
Recorded
investment
 
                         
Multi-family residential
    9     $ 2,669       10     $ 3,034  
Commercial real estate
    3       2,364       3       2,373  
One-to-four family - mixed-use property
    7       2,369       7       2,381  
One-to-four family - residential
    1       351       1       354  
Small business administration
    1       41       -       -  
Commercial business and other
    4       2,208       4       2,249  
Total performing troubled debt restructured
    25     $ 10,002       25     $ 10,391  
 
During the three months ended March 31, 2015 one TDR loan of $0.4 million was transferred to non-performing status, which resulted in this loan being included in non-performing loans.
 
The following table shows our recorded investment for loans classified as TDR that are not performing according to their restructured terms at the periods indicated:
 
   
March 31, 2015
   
December 31, 2014
 
(Dollars in thousands)
 
Number
of contracts
   
Recorded
investment
   
Number
of contracts
   
Recorded
investment
 
                         
Multi-family residential
    1     $ 359       -     $ -  
Commercial real estate
    -       -       1       2,252  
One-to-four family - mixed use property
    1       188       1       187  
Total troubled debt restructurings that subsequently defaulted
    2     $ 547       2     $ 2,439  
 
 
- 14 -

 
PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
 
The following table shows our non-performing loans at the periods indicated:
 
(In thousands)
 
March 31,
2015
   
December 31,
2014
 
Loans ninety days or more past due and still accruing:
           
Multi-family residential
  $ -     $ 676  
Commercial real estate
    753       820  
One-to-four family - mixed-use property
    195       405  
One-to-four family - residential
    13       14  
Commercial Business and other
    1,932       386  
Total
    2,893       2,301  
                 
Non-accrual mortgage loans:
               
Multi-family residential
    6,902       6,878  
Commercial real estate
    3,021       5,689  
One-to-four family - mixed-use property
    7,224       6,936  
One-to-four family - residential
    11,212       11,244  
Total
    28,359       30,747  
                 
Non-accrual non-mortgage loans:
               
Small business administration
    232       -  
Commercial business and other
    1,035       1,143  
Total
    1,267       1,143  
Total non-accrual loans
    29,626       31,890  
Total non-accrual loans and loans ninety days or more past due and still accruing
  $ 32,519     $ 34,191  
 
The following is a summary of interest foregone on non-accrual loans and loans classified as TDR for the periods indicated:
 
   
For the three months ended
March 31,
 
   
2015
   
2014
 
   
(In thousands)
 
Interest income that would have been recognized had the loans performed in accordance with their original terms
  $ 691     $ 1,067  
Less: Interest income included in the results of operations
    148       155  
Total foregone interest
  $ 543     $ 912  
 
 
- 15 -

 
PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
 
The following table shows an age analysis of our recorded investment in loans at March 31, 2015:
 
(in thousands)
 
30 - 59 Days
ast Due
   
60 - 89 Days
Past Due
   
Greater
than
90 Days
   
Total Past
Due
   
Current
   
Total Loans
 
Multi-family residential
  $ 8,595     $ -     $ 6,903     $ 15,498     $ 1,997,751     $ 2,013,249  
Commercial real estate
    3,202       -       3,774       6,976       680,847       687,823  
One-to-four family - mixed-use property
    10,522       -       7,418       17,940       555,987       573,927  
One-to-four family - residential
    1,694       175       11,022       12,891       177,475       190,366  
Co-operative apartments
    -       -       -       -       9,413       9,413  
Construction loans
    -       -       -       -       2,828       2,828  
Small Business Administration
    56       93       232       381       7,624       8,005  
Taxi medallion
    -       -       -       -       21,346       21,346  
Commercial business and other
    4       -       2,688       2,692       475,131       477,823  
Total
  $ 24,073     $ 268     $ 32,037     $ 56,378     $ 3,928,402     $ 3,984,780  
 
 
The following table shows an age analysis of our recorded investment in loans at December 31, 2014:
 
(in thousands)
 
30 - 59 Days
Past Due
   
60 - 89 Days
Past Due
   
Greater
than
90 Days
   
Total Past
Due
   
Current
   
Total Loans
 
Multi-family residential
  $ 7,721     $ 1,729     $ 7,554     $ 17,004     $ 1,906,456     $ 1,923,460  
Commercial real estate
    2,171       1,344       6,510       10,025       611,544       621,569  
One-to-four family - mixed-use property
    10,408       1,154       7,341       18,903       554,876       573,779  
One-to-four family - residential
    1,751       2,244       11,051       15,046       172,526       187,572  
Co-operative apartments
    -       -       -       -       9,835       9,835  
Construction loans
    3,000       -       -       3,000       2,286       5,286  
Small Business Administration
    90       -       -       90       7,044       7,134  
Taxi medallion
    -       -       -       -       22,519       22,519  
Commercial business and other
    6       1,585       740       2,331       445,169       447,500  
Total
  $ 25,147     $ 8,056     $ 33,196     $ 66,399     $ 3,732,255     $ 3,798,654  
 
 
- 16 -

 
PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
 
The following table shows the activity in the allowance for loan losses for the three months ended March 31, 2015:
 
(in thousands)
 
Multi-family
residential
   
Commercial
real estate
   
One-to-four
family -
mixed-use
property
   
One-to-four
family-
residential
   
Co-operative
apartments
   
Construction
loans
   
Small Business
Administration
   
Taxi
Medallion
   
Commercial
business and
other
   
Total
 
                                                             
Allowance for credit losses:
                                                           
Beginning balance
  $ 8,827     $ 4,202     $ 5,840     $ 1,690     $ -     $ 42     $ 279     $ 11     $ 4,205     $ 25,096  
Charge-offs
    (97 )     (18 )     (78 )     (153 )     -       -       -       -       (51 )     (397 )
Recoveries
    23       72       3       -       -       -       20       -       8       126  
Provision (Benefit)
    (124 )     (354 )     (336 )     (72 )     -       (19 )     (33 )     -       204       (734 )
Ending balance
  $ 8,629     $ 3,902     $ 5,429     $ 1,465     $ -     $ 23     $ 266     $ 11     $ 4,366     $ 24,091  
Ending balance: individually evaluated for impairment
  $ 267     $ 19     $ 566     $ 54     $ -     $ -     $ -     $ -     $ 139     $ 1,045  
Ending balance: collectively evaluated for impairment
  $ 8,362     $ 3,883     $ 4,863     $ 1,411     $ -     $ 23     $ 266     $ 11     $ 4,227     $ 23,046  
                                                                                 
Financing Receivables:
                                                                               
Ending Balance
  $ 2,013,249     $ 687,823     $ 573,927     $ 190,366     $ 9,413     $ 2,828     $ 8,005     $ 21,346     $ 477,823     $ 3,984,780  
Ending balance: individually evaluated for impairment
  $ 13,743     $ 6,575     $ 14,548     $ 13,954     $ -     $ -     $ 359     $ -     $ 8,848     $ 58,027  
Ending balance: collectively evaluated for impairment
  $ 1,999,506     $ 681,248     $ 559,379     $ 176,412     $ 9,413     $ 2,828     $ 7,646     $ 21,346     $ 468,975     $ 3,926,753  
 
 
- 17 -

 
PART I – FINANCIAL INFORMATION

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
 
The following table shows the activity in the allowance for loan losses for the three months ended March 31, 2014:
 
(in thousands)
 
Multi-family
residential
   
Commercial
real estate
   
One-to-four
family -
mixed-use
property
   
One-to-four
family-
residential
   
Co-operative
apartments
   
Construction
loans
   
Small Business
Administration
   
Taxi
Medallion
   
Commercial
business and
other
   
Total
 
                                                             
Allowance for credit losses:
                                                           
Beginning balance
  $ 12,084     $ 4,959     $ 6,328     $ 2,079     $ 104     $ 444     $ 458     $ -     $ 5,320     $ 31,776  
Charge-offs
    (605 )     (47 )     (83 )     (42 )     -       -       -       -       (124 )     (901 )
Recoveries
    7       382       40       68       7       -       10       -       -       514  
Provision (Benefit)
    (383 )     85       857       (161 )     (111 )     (404 )     (77 )     14       (939 )     (1,119 )
Ending balance
  $ 11,103     $ 5,379     $ 7,142     $ 1,944     $ -     40     $ 391     $ 14     $ 4,257     $ 30,270  
Ending balance: individually evaluated for impairment
  $ 304     $ 210     $ 617     $ 57     $ -     $ 9     $ -     $ -     $ 218     $ 1,415  
Ending balance: collectively evaluated for impairment
  $ 10,799     $ 5,169     $ 6,525     $ 1,887     $ -     $ 31     $ 391     $ 14     $ 4,039     $ 28,855  
Financing Receivables:
                                                                               
Ending Balance
  $ 1,722,764     $ 509,728     $ 587,482     $ 194,611     $ 9,974     $ 4,859     $ 7,628     $ 24,127     $ 427,406     $ 3,488,579  
Ending balance: individually evaluated for impairment
  $ 20,898     $ 19,558     $ 16,060     $ 13,941