10/13/2023 0 Comments Flic net![]() ![]() Income tax expense decreased $4.5 million and the effective tax rate declined from 20.2% to 11.6% when comparing the six-month periods. ![]() Salaries and benefits expense was down slightly when comparing the six-month periods mainly due to declines in incentive compensation and group health insurance expense offset by annual base salary increases and lower deferred compensation costs for loan originations. The increase in noninterest expense of $890,000 includes higher rent expense and FDIC insurance expense attributable to higher assessment rates. Recurring components of noninterest income including bank-owned life insurance (“BOLI”) and service charges on deposit accounts had increases of 5.6% and 2.3%, respectively. Partially offsetting these items was a gain of $240,000 in the second quarter of 2023 from the sale of our last building in Glen Head. The decline was mainly due to the nonservice cost component of the Bank’s defined benefit pension plan and a first quarter of 2022 payment received for the conversion of the Bank’s retail broker and advisory accounts. Noninterest income, excluding the loss on sale of securities of $3.5 million in 2023, declined $1.3 million when comparing the six-month periods. The credit provision for the current six-month period was mainly due to an improvement in historical loss rates and declines in outstanding loans and average growth rates, partially offset by deteriorating economic conditions and net chargeoffs of $409,000. The provision for credit losses decreased $2.2 million when comparing the six-month periods from a charge of $1.2 million in 2022 to a credit of $1.1 million in 2023. The origination volume and current loan pipeline reflect low demand for loans in the marketplace and high interest rates. The Bank’s total loan pipeline was $135 million at the end of the current quarter. ![]() The Bank expects that net interest margin will remain under pressure throughout 2023 and into 2024 unless the Federal Reserve Bank reduces short-term rates and the yield curve steepens.ĭuring the second quarter of 2023 we originated $76 million in loans at a weighted average rate of approximately 5.97% as compared to $38 million at a weighted average rate of approximately 6.05% during the first quarter of 2023. Net interest margin for the first six months of 2023 was 2.25% compared to 2.93% for the same period of 2022. The $300 million interest rate swap entered into during the first quarter of 2023 increased interest income for the first six months of 2023 by $912,000. Also contributing to the decline in net interest income was a shift in the mix of funding as average noninterest-bearing deposits decreased $200.8 million while average interest-bearing liabilities increased $263.5 million. The cost of interest-bearing liabilities increased 170 basis points while the yield on interest-earning assets increased 42 basis points when comparing the first six months of 20. An increase in interest expense of $22.5 million was only partially offset by a $10.2 million increase in interest income. Net interest income declined due to the significant rise in interest rates, which resulted in the cost of deposits and long-term debt increasing at a faster pace than the yields on interest-earning assets. #Flic net drivers#The primary drivers of the decrease were a decline in net interest income of $12.2 million and a loss on sale of securities of $3.5 million, partially offset by a decrease in income tax expense of $4.5 million. Net income for the first six months of 2023 was $13.4 million, representing a decrease of $11.2 million from the same period last year. We continue to take proactive steps to manage our business in the current interest rate environment, which includes continuing to execute on shifting our focus to commercial, relationship-based business as part of our strategic plan.” The increase in the upper limit of the Fed’s target range for the federal funds rate from 0.25% in March 2022 to the current 5.50%, as well as other monetary and industry conditions, has resulted in a significant increase in our cost of funds that has not been matched by the increase in our yield on earning assets. President and Chief Executive Officer Chris Becker commented on the Company’s earnings: “Our earnings continue to be significantly impacted by actions taken by the Federal Reserve to combat rising inflation. MELVILLE, N.Y., J(GLOBE NEWSWIRE) - The First of Long Island Corporation (Nasdaq: FLIC or the “Company”), the parent of The First National Bank of Long Island (the “Bank”), reported earnings for the three and six months ended June 30, 2023.Īnalysis of Earnings – Six Months Ended June 30, 2023 ![]()
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