Flushing Financial Corporation (NASDAQ:FFIC) Q1 2023 Earnings Conference Call April 26, 2023 9:30 AM ET

Company Participants

John Buran - President & CEO

Susan Cullen - Senior EVP, CFO, & Treasurer

Conference Call Participants

Mark Fitzgibbon - Piper Sandler

Chris O'Connell - KBW

Manuel Navas - D.A. Davidson

Operator

Welcome to Flushing Financial Corporation's First Quarter 2023 Earnings Conference Call. Hosting the call today are John Buran, President and Chief Executive Officer, and Susan Cullen, Senior Executive Vice President, Chief Financial Officer, and Treasurer. Today's call is being recorded. [Operator Instructions] A copy of the earnings press release and slide presentation that the company will be referencing today, are available on its Investor Relations website at flushingbank.com.

Before we begin, the company would like to remind you that discussions during this call contain forward-looking statements made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Such statements are subject to risks, uncertainties, and other factors that may cause actual results to differ materially from those contained in any such statements, including as set forth in the company's filings with the U.S. Securities and Exchange Commission, to which we prefer you. During this call, references will be made to non-GAAP financial measures as supplemental measures to review and assess operating performance. These non-GAAP financial measures are not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with US GAAP. For information about these non-GAAP measures and for a reconciliation to GAAP, please refer to the earnings release and/or the presentation.

I'd now like to introduce John Buran, President and Chief Executive Officer, who will provide an overview of the strategy and results.

John Buran

Thank you, operator. Good morning, and thank you for joining us for our first quarter 2023 earnings call. Following my prepared remarks, Susan will review the financial trends, and we will then answer any questions. The company reported first quarter 2023 GAAP EPS of $0.17 and core EPS of $0.10. The quarterly results were impacted by net interest margin compression and a charge-off of a previously identified credit placed on non-accrual in the second quarter of 2022. We were disappointed with these results, and we've implemented an action plan to enhance the resilience of our business model and improve future profitability. First, we're taking significant steps to move the balance sheet to more interest rate risk neutral, and have already achieved 40% of our goal. Second, we are increasing our focus on risk-adjusted returns and overall profitability. While this will take some time, we're encouraged by the results seen so far. Third, we're looking to expand our client base and build loyalty by emphasizing our brand of customer service and deep community relationships, while capitalizing on the recent market disruptions. Our bankers are seeing more activity in gathering both loans and deposits. Fourth, we are tightening up on expenses. We've taken actions to reduce non-interest expense growth, and will continue to focus on reducing discretionary expenses. Fifth, we are preparing for the next credit cycle. We are focusing more on recession-proof industries, and we'll continue to take early actions on weaker credits. Sixth, we will continue to focus on our strong liquidity and capital. Deposits are up for the quarter, and we have $3.7 billion of available liquidity. Overall, we expect these decisive actions to result in an improved earnings profile over time. These actions, along with our strong liquidity, will also allow us to continue our long track record of dividend payments into the future.