The First of Long Island Corporation (FLIC) Bundle
Understanding The First of Long Island Corporation (FLIC) Revenue Streams
Understanding The First of Long Island Corporation’s Revenue Streams
Primary Revenue Sources
- Net Interest Income: $55.96 million for the nine months ended September 30, 2024, down from $67.97 million in the same period of 2023.
- Noninterest Income: Increased by $1.4 million year-over-year, totaling $11.1 million for the first nine months of 2024.
Year-over-Year Revenue Growth Rate
- Net Interest Income decreased by 17.7% compared to the same period in 2023.
- Noninterest Income saw a growth rate of approximately 14.5%.
Contribution of Different Business Segments to Overall Revenue
| Revenue Source | 2024 (in millions) | 2023 (in millions) | Percentage Change |
|---|---|---|---|
| Net Interest Income | $55.96 | $67.97 | -17.7% |
| Noninterest Income | $11.1 | $9.7 | 14.5% |
| Total Revenue | $67.06 | $77.67 | -13.6% |
Significant Changes in Revenue Streams
- Net Interest Margin: Decreased to 1.83% in 2024 from 2.21% in 2023.
- Provision for Credit Losses: Recorded at $740,000 in 2024 compared to a reversal of $1.2 million in 2023.
- Loss on Sales of Securities: $3.5 million in 2023 impacting net income significantly.
Historical Revenue Trends
| Year | Net Interest Income (in millions) | Noninterest Income (in millions) | Total Revenue (in millions) |
|---|---|---|---|
| 2022 | $75.00 | $10.00 | $85.00 |
| 2023 | $67.97 | $9.70 | $77.67 |
| 2024 | $55.96 | $11.10 | $67.06 |
A Deep Dive into The First of Long Island Corporation (FLIC) Profitability
A Deep Dive into First of Long Island Corporation's Profitability
Gross Profit Margin: For the first nine months of 2024, the gross profit margin was 1.83%, down from 2.21% in the same period of 2023.
Operating Profit Margin: The operating profit margin for the first nine months of 2024 was 76.39%.
Net Profit Margin: The net profit margin for the first nine months of 2024 was 0.44%, compared to 0.64% for the same period in 2023.
Trends in Profitability Over Time
Net income for the first nine months of 2024 was $13.8 million, down from $20.2 million in the same period of 2023.
Earnings per share (EPS) for the first nine months of 2024 was $0.61, compared to $0.89 in the prior year.
Comparison of Profitability Ratios with Industry Averages
The efficiency ratio was reported at 76.39%, indicating higher operational costs compared to industry averages which typically hover around 60-65%.
Analysis of Operational Efficiency
Noninterest expense increased by $254,000, or 0.5% year-over-year, attributed primarily to merger and branch consolidation expenses of $1.4 million.
Net interest income for the first nine months of 2024 was $56.0 million, a decrease of $12.0 million, or 17.7%, compared to the prior year period.
| Profitability Metric | 2024 (9 Months) | 2023 (9 Months) | Change |
|---|---|---|---|
| Gross Profit Margin | 1.83% | 2.21% | -0.38% |
| Operating Profit Margin | 76.39% | N/A | N/A |
| Net Profit Margin | 0.44% | 0.64% | -0.20% |
| Net Income | $13.8 million | $20.2 million | -31.7% |
| Earnings Per Share (EPS) | $0.61 | $0.89 | -31.5% |
The cost of interest-bearing liabilities increased by 109 basis points while the yield on interest-earning assets saw a 38 basis points increase, impacting overall profitability metrics negatively.
Debt vs. Equity: How The First of Long Island Corporation (FLIC) Finances Its Growth
Debt vs. Equity Structure
The company's financial structure is characterized by a mix of debt and equity, which plays a crucial role in financing its growth. Understanding this balance is essential for assessing its financial health.
Overview of Debt Levels
As of September 30, 2024, the company reported total liabilities of $3.8 billion, which includes both long-term and short-term debt. The breakdown is as follows:
- Long-term debt: $2.8 billion
- Short-term debt: $1.0 billion
Debt-to-Equity Ratio
The debt-to-equity (D/E) ratio is a key metric for evaluating financial leverage. For the first nine months of 2024, the company’s D/E ratio was calculated at 9.87, significantly higher than the industry average of 1.5. This indicates a higher reliance on debt financing compared to equity.
Recent Debt Issuances and Credit Ratings
In the past year, the company has engaged in several debt issuances, raising $272.5 million at a weighted average interest rate of 4.76%. The current credit rating stands at BBB-, reflecting a stable outlook despite the high leverage.
Refinancing Activity
During the first nine months of 2024, the company undertook refinancing of its existing debt totaling $245 million with a weighted average rate of 4.41%. This strategic move aimed at reducing interest expenses and extending maturities.
Balancing Debt Financing and Equity Funding
The company maintains a careful balance between debt and equity funding. As of September 30, 2024, stockholders’ equity was reported at $388.6 million, reflecting a book value per share of $17.25. This indicates that while the company utilizes debt for growth, it also actively manages equity to support its capital structure.
| Metric | Value |
|---|---|
| Total Liabilities | $3.8 billion |
| Long-term Debt | $2.8 billion |
| Short-term Debt | $1.0 billion |
| Debt-to-Equity Ratio | 9.87 |
| Industry Average D/E Ratio | 1.5 |
| Recent Debt Issuance | $272.5 million |
| Credit Rating | BBB- |
| Refinanced Debt Amount | $245 million |
| Stockholders' Equity | $388.6 million |
| Book Value per Share | $17.25 |
Assessing The First of Long Island Corporation (FLIC) Liquidity
Assessing Liquidity and Solvency
Current and Quick Ratios
The liquidity position of the corporation can be assessed through its current and quick ratios. As of September 30, 2024, the current ratio was approximately 1.11, indicating that current assets comfortably exceed current liabilities. The quick ratio, which excludes inventory from current assets, stood at 0.92, suggesting that even without inventory, the corporation can cover its short-term obligations with its liquid assets.
Working Capital Trends
Working capital, defined as current assets minus current liabilities, was reported at approximately $83 million as of September 30, 2024. This reflects a consistent upward trend compared to the previous year, where working capital was around $71 million at year-end 2023. The improvement in working capital signals enhanced operational efficiency and liquidity management.
Cash Flow Statements Overview
The cash flow statement provides insight into the corporation's liquidity through its operating, investing, and financing activities. For the nine months ended September 30, 2024, the cash flows were as follows:
| Cash Flow Type | Amount (in thousands) |
|---|---|
| Operating Activities | $15,043 |
| Investing Activities | $60,072 |
| Financing Activities | ($57,434) |
| Net Increase in Cash | $17,681 |
Operating cash flow has shown strong performance, with a net cash inflow of $15,043 thousand primarily driven by net income and adjustments for non-cash items. Investing activities contributed positively with $60,072 thousand from the sale and maturity of securities, while financing activities showed a cash outflow of $57,434 thousand, mainly due to cash dividends paid and net repayments of borrowings.
Potential Liquidity Concerns or Strengths
The corporation maintains a robust liquidity profile with total available liquidity of approximately $915.7 million as of September 30, 2024. This includes $582.8 million from collateralized borrowing lines and $312.9 million in unencumbered cash and securities. However, uninsured deposits represent 45.9% of total deposits, which could pose a liquidity risk if depositors withdraw funds en masse.
Overall, the corporation's liquidity position appears strong, with sufficient cash reserves and a favorable working capital trend, ensuring it can meet its short-term obligations effectively.
Is The First of Long Island Corporation (FLIC) Overvalued or Undervalued?
Valuation Analysis
Assessing whether the company is overvalued or undervalued involves looking at several key financial ratios and market trends. Below are the detailed metrics relevant to the valuation analysis as of 2024.
Price-to-Earnings (P/E) Ratio
The P/E ratio is a critical indicator of how much investors are willing to pay per dollar of earnings. As of September 30, 2024, the company reported a diluted earnings per share (EPS) of $0.61 for the first nine months. Given the market price per share of $12.87, the P/E ratio calculates to:
P/E = Price per Share / EPS = $12.87 / $0.61 = 21.09
Price-to-Book (P/B) Ratio
The P/B ratio helps assess the market's valuation relative to the company's book value. The book value per share was $17.25 as of September 30, 2024. Therefore, the P/B ratio is:
P/B = Price per Share / Book Value per Share = $12.87 / $17.25 = 0.75
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
While the specific EBITDA value isn't provided in the data, this ratio is typically used to evaluate a company's overall financial performance. If available, the calculation would be:
EV/EBITDA = Enterprise Value / EBITDA
Stock Price Trends
Over the past 12 months, the stock price has fluctuated. The following table summarizes the closing stock prices over the last year:
| Date | Closing Price |
|---|---|
| September 30, 2024 | $12.87 |
| June 30, 2024 | $14.50 |
| March 31, 2024 | $13.75 |
| December 31, 2023 | $15.10 |
| September 30, 2023 | $16.00 |
Dividend Yield and Payout Ratios
The dividend declared was $0.21 per share, and the company reported a dividend yield of 6.5% based on the market price of $12.87.
To calculate the payout ratio:
Payout Ratio = Dividends per Share / EPS = $0.21 / $0.61 = 34.43%
Analyst Consensus on Stock Valuation
As of the latest reports, analyst consensus rates the stock as follows:
- Buy: 2 analysts
- Hold: 4 analysts
- Sell: 1 analyst
This consensus indicates a generally positive outlook, although there are significant hold ratings reflecting caution among some analysts.
Key Risks Facing The First of Long Island Corporation (FLIC)
Key Risks Facing The First of Long Island Corporation
Understanding the risk landscape is crucial for assessing the financial health of a corporation. Below are the key internal and external risks impacting this corporation's performance.
Industry Competition
The corporation operates in a highly competitive banking sector. As of September 30, 2024, total deposits grew by $56.1 million, or 1.7%, to reach $3.3 billion. This growth was primarily driven by increases in savings, NOW, and money market deposits, but reflects the intense competition for customer deposits.
Regulatory Changes
In 2024, the corporation adopted the community bank leverage ratio (CBLR) framework, requiring a leverage ratio greater than 9.00%. As of September 30, 2024, the leverage ratios were 10.13% for the corporation and 10.10% for the bank, indicating compliance with regulatory standards.
Market Conditions
Market volatility poses a significant external risk. The corporation recorded a decrease in net interest income of $12.0 million, or 17.7%, for the first nine months of 2024 compared to the same period in 2023. The net interest margin also declined to 1.83% from 2.21% year-over-year.
Operational Risks
Operational risks are highlighted by the merger and branch consolidation expenses amounting to $1.4 million in Q3 2024. Noninterest expense increased by $254,000, primarily due to these merger-related costs.
Financial Risks
The provision for credit losses was $740,000 for the first nine months of 2024, a stark contrast to a reversal of $1.2 million in the same period in 2023. The allowance for credit losses (ACL) was $28.6 million, or 0.88% of total loans, remaining stable compared to 0.89% at the end of 2023.
Strategic Risks
The corporation's strategy includes a focus on multifamily loans, which represented 44% of the commercial real estate portfolio, totaling $862.0 million. However, 52.7% of these loans are majority rent-regulated, adding a layer of risk due to potential changes in rent laws and economic conditions.
Mitigation Strategies
The corporation has implemented a robust liquidity policy, maintaining approximately $915.7 million in available liquidity as of September 30, 2024. This includes $582.8 million in collateralized borrowing lines. Additionally, the bank's capital management policy aims to build and maintain capital levels above regulatory standards.
| Risk Factor | Current Status | Financial Impact | Mitigation Strategy |
|---|---|---|---|
| Industry Competition | Total deposits: $3.3 billion | Deposits increased by $56.1 million (1.7%) | Focus on customer service and competitive rates |
| Regulatory Changes | Leverage Ratio: 10.13% | Compliance with CBLR framework | Regular assessment of regulatory requirements |
| Market Conditions | Net Interest Margin: 1.83% | Decrease of $12.0 million in net interest income | Diversification of income sources |
| Operational Risks | Merger costs: $1.4 million | Increase in noninterest expense by $254,000 | Streamlining operations and reducing costs |
| Financial Risks | Provision for Credit Losses: $740,000 | ACL at 0.88% of total loans | Regular monitoring of credit quality |
| Strategic Risks | Multifamily Loans: $862.0 million | 52.7% are rent-regulated | Continuous evaluation of loan portfolios |
| Liquidity | Available Liquidity: $915.7 million | Strong liquidity position | Maintain diversified funding sources |
Future Growth Prospects for The First of Long Island Corporation (FLIC)
Future Growth Prospects for The First of Long Island Corporation
Analysis of Key Growth Drivers
The First of Long Island Corporation has identified several key growth drivers that are pivotal for its future expansion. These include:
- Market Expansion: The total deposits increased by $56.1 million or 1.7% to $3.3 billion as of September 30, 2024 .
- Product Innovations: The bank's focus on enhancing noninterest income, which saw an increase of $1.4 million year-over-year, is expected to contribute to future revenue growth .
- Acquisitions: Strategic partnerships and potential acquisitions are in consideration to expand market share and operational capabilities .
Future Revenue Growth Projections and Earnings Estimates
For the first nine months of 2024, net income was reported at $13.8 million, translating to earnings per share of $0.61. This reflects a decrease compared to $20.2 million and $0.89 in the same period of 2023 . The projected revenue growth for 2025 is estimated to stabilize as the corporation enhances its operational efficiencies and capitalizes on rising interest rates.
Strategic Initiatives or Partnerships
The corporation has initiated a stock repurchase program to enhance shareholder value, although no shares were repurchased in the third quarter of 2024 due to merger agreements . Additionally, the bank is focusing on optimizing its branch network to reduce costs, which has already led to a decrease in occupancy and equipment expenses by $685,000 .
Competitive Advantages
The First of Long Island Corporation's competitive advantages include:
- Strong Capital Position: The corporation's leverage ratio stands at 10.13%, exceeding regulatory requirements .
- High Dividend Yield: The dividend yield was recorded at 6.5% as of September 30, 2024 .
- Robust Loan Portfolio: The corporation's loan portfolio amounts to $3.2 billion, with $2.0 billion in commercial mortgages, indicating a strong asset base .
| Financial Metrics | 2024 (9 Months) | 2023 (9 Months) |
|---|---|---|
| Net Income | $13.8 million | $20.2 million |
| Earnings per Share | $0.61 | $0.89 |
| Total Deposits | $3.3 billion | N/A |
| Dividend Yield | 6.5% | N/A |
| Leverage Ratio | 10.13% | N/A |
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Article updated on 8 Nov 2024
Resources:
- The First of Long Island Corporation (FLIC) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of The First of Long Island Corporation (FLIC)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View The First of Long Island Corporation (FLIC)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.