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 June 30, 2000
Commission file number 000-24272
FLUSHING FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 11-3209278
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
144-51 Northern Boulevard, Flushing, New York 11354 (Address of
principal executive offices)
(718) 961-5400
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: None.
Securities registered pursuant to Section 12(g) of the Act:
Common Stock $0.01 par value.
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
The number of shares of the registrant's Common Stock outstanding as of July 26,
2000 was 9,402,179.
<PAGE>
TABLE OF CONTENTS
PAGE
PART I - FINANCIAL INFORMATION
--------------------------------
ITEM 1. Financial Statements
Consolidated Statements of Financial Condition ....................... 1
Consolidated Statements of Operations and Comprehensive Income ....... 2
Consolidated Statements of Cash Flows ................................ 3
Consolidated Statements of Changes in Stockholders' Equity ........... 4
Notes to Consolidated Statements ..................................... 5
ITEM 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations ............................................ 6
ITEM 3. Qualitative and Quantitative Disclosures About Market Risk ....... 18
PART II. -- OTHER INFORMATION
------------------------------
ITEM 1. Legal Proceedings ................................................ 18
ITEM 2. Changes in Securities ............................................ 18
ITEM 3. Defaults Upon Senior Securities .................................. 18
ITEM 4. Submission of Matters To A Vote of Security Holders .............. 18
ITEM 5. Other Information ................................................ 19
ITEM 6. Exhibits and Reports on Form 8-K ................................. 19
SIGNATURES ................................................................ 20
EXHIBITS .................................................................. 21
i
<PAGE>
PART I -- FINANCIAL INFORMATION
FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
Consolidated Statements of Financial Condition
<TABLE>
<CAPTION>
(Dollars in thousands, except share data) June 30, 2000 December 31, 1999
=========================================================================================================================
<S> <C> <C>
ASSETS (Unaudited)
Cash and due from banks $ 9,665 $ 29,059
Federal funds sold and overnight interest-earning deposits 5,270 5,875
Securities available for sale:
Mortgage-backed securities 264,775 269,022
Other securities 15,929 15,994
Loans:
1-4 Family residential mortgage loans 454,245 414,194
Multi-family mortgage loans 331,053 310,594
Commercial real estate loans 154,915 137,072
Co-operative apartment loans 8,458 8,926
Construction loans 8,081 6,198
Small Business Administration loans 4,321 2,369
Consumer and other loans 3,077 3,379
Net unamortized premiums and unearned loan fees 282 (28)
Allowance for loan losses (6,720) (6,818)
------------------- -------------------
Net loans 957,712 875,886
Interest and dividends receivable 7,414 6,812
Real estate owned, net 191 368
Bank premises and equipment, net 6,489 6,202
Federal Home Loan Bank of New York stock 24,434 22,592
Goodwill 4,455 4,638
Other assets 12,779 13,081
------------------- -------------------
Total assets $ 1,309,113 $ 1,249,529
=================== ===================
LIABILITIES
Due to depositors:
Non-interest bearing $ 23,700 $ 20,490
Interest-bearing 647,577 635,428
Mortgagors' escrow deposits 11,468 11,023
Borrowed funds 493,369 451,831
Other liabilities 12,809 12,581
------------------- -------------------
Total liabilities 1,188,923 1,131,353
------------------- -------------------
STOCKHOLDERS' EQUITY
Preferred stock ($0.01 par value; 5,000,000 shares authorized) -- --
Common stock ($0.01 par value; 20,000,000 shares authorized; 11,355,678 114 114
shares issued; 9,422,244 and 9,725,971 shares outstanding at
June 30, 2000 and December 31, 1999, respectively)
Additional paid-in capital 76,092 75,952
Treasury stock (1,933,434 and 1,629,707 shares at June 30, 2000 and (29,441) (25,308)
December 31, 1999, respectively)
Unearned compensation (8,483) (9,142)
Retained earnings 85,891 81,056
Accumulated other comprehensive income:
Net unrealized loss on securities available for sale, net of taxes (3,983) (4,496)
------------------- -------------------
Total stockholders' equity 120,190 118,176
------------------- -------------------
Total liabilities and stockholders' equity $ 1,309,113 $ 1,249,529
=================== ===================
<FN>
The accompanying notes are an integral part of these consolidated financial statements.
</FN>
</TABLE>
-1-
<PAGE>
PART I -- FINANCIAL INFORMATION
FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
Consolidated Statements of Operations and Comprehensive Income
<TABLE>
<CAPTION>
For the three months For the six months
ended June 30, ended June 30,
--------------------------- ---------------------------
(In thousands, except per share data) 2000 1999 2000 1999
==========================================================================================================================
<S> <C> <C> <C> <C>
INTEREST AND DIVIDEND INCOME (Unaudited)
Interest and fees on loans $ 18,883 $ 16,462 $ 36,919 $ 32,353
Interest and dividends on securities:
Interest 5,066 4,810 10,057 9,442
Dividends 66 57 133 115
Other interest income 138 129 320 304
------------- ------------- ------------- -------------
Total interest and dividend income 24,153 21,458 47,429 42,214
------------- ------------- ------------- -------------
INTEREST EXPENSE
Deposits 6,712 6,162 13,132 12,381
Other interest expense 7,254 5,290 13,954 10,357
------------- ------------- ------------- -------------
Total interest expense 13,966 11,452 27,086 22,738
------------- ------------- ------------- -------------
NET INTEREST INCOME 10,187 10,006 20,343 19,476
Provision for loan losses -- 12 -- 36
------------- ------------- ------------- -------------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 10,187 9,994 20,343 19,440
------------- ------------- ------------- -------------
NON-INTEREST INCOME
Other fee income 488 496 1,012 954
Net gain on sales of securities and loans 1 25 36 145
Other income 476 398 993 810
------------- ------------- ------------- -------------
Total non-interest income 965 919 2,041 1,909
------------- ------------- ------------- -------------
NON-INTEREST EXPENSE
Salaries and employee benefits 3,079 2,820 6,033 5,604
Occupancy and equipment 529 429 1,046 942
Professional services 579 654 1,171 1,250
Data processing 310 295 641 591
Depreciation and amortization 266 258 530 514
Other operating expenses 1,187 1,240 2,277 2,401
------------- ------------- ------------- -------------
Total non-interest expense 5,950 5,696 11,698 11,302
------------- ------------- ------------- -------------
INCOME BEFORE INCOME TAXES 5,202 5,217 10,686 10,047
------------- ------------- ------------- -------------
Provision for income taxes
Federal 1,578 1,611 3,253 3,121
State and local 399 396 808 697
------------- ------------- ------------- -------------
Total taxes 1,977 2,007 4,061 3,818
------------- ------------- ------------- -------------
NET INCOME $ 3,225 $ 3,210 $ 6,625 $ 6,229
============= ============= ============= =============
OTHER COMPREHENSIVE INCOME, NET OF TAX UNREALIZED (LOSSES) GAINS ON SECURITIES:
Unrealized holding (losses) gains arising during period $ 350 $ (2,502) $ 513 $ (2,921)
Less: reclassification adjustments for gains included in income -- -- -- (35)
------------- ------------- ------------- -------------
Net unrealized holding (losses) gains 350 (2,502) 513 (2,956)
------------- ------------- ------------- -------------
COMPREHENSIVE NET INCOME $ 3,575 $ 708 $ 7,138 $ 3,273
============= ============= ============= =============
Basic earnings per share $0.38 $0.35 $0.78 $0.67
Diluted earnings per share $0.38 $0.34 $0.77 $0.65
<FN>
The accompanying notes are an integral part of these consolidated financial statements.
</FN>
</TABLE>
-2-
<PAGE>
PART I -- FINANCIAL INFORMATION
FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
For the six months ended
June 30,
----------------------------------------
(In thousands) 2000 1999
=========================================================================================================================
(Unaudited)
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 6,625 $ 6,229
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses -- 36
Depreciation and amortization of bank premises and equipment 530 514
Amortization of goodwill 183 183
Net gain on sales of securities -- (64)
Net gain on sales of loans (36) (81)
Net (gain) loss on sales of real estate owned (126) 10
Amortization of unearned premium, net of accretion of unearned discount 663 1,426
Amortization of deferred income (392) (640)
Deferred income tax provision (benefit) 323 (39)
Deferred compensation 104 86
Net (decrease) increase in other assets and liabilities (808) 3,267
Unearned compensation 747 618
------------------- -------------------
Net cash provided by operating activities 7,813 11,545
------------------- -------------------
INVESTING ACTIVITIES
Purchases of bank premises and equipment (817) (220)
Purchases of Federal Home Loan Bank shares (1,842) (1,631)
Purchases of securities available for sale (12,274) (45,817)
Proceeds from sales and calls of securities available for sale -- 7,540
Proceeds from maturities and prepayments of securities available for sale 17,108 57,688
Net originations and repayment of loans (68,087) (50,152)
Purchases of loans (13,741) (7,879)
Proceeds from sales of real estate owned 494 67
------------------- -------------------
Net cash used by investing activities (79,159) (40,404)
------------------- -------------------
FINANCING ACTIVITIES
Net increase in non-interest bearing deposits 3,210 1,648
Net increase (decrease) in interest-bearing deposits 12,149 (4,915)
Net increase in mortgagors' escrow deposits 445 2,099
Net increase in short-term borrowed funds 17,696 10,000
Net increase in long-term borrowed funds 23,842 33,559
Purchases of treasury stock, net (4,267) (10,073)
Cash dividends paid (1,728) (1,510)
------------------- -------------------
Net cash provided by financing activities 51,347 30,808
------------------- -------------------
Net (decrease) increase in cash and cash equivalents (19,999) 1,949
Cash and cash equivalents, beginning of period 34,934 22,734
------------------- -------------------
Cash and cash equivalents, end of period $ 14,935 $ 24,683
=================== ===================
SUPPLEMENTAL CASH FLOW DISCLOSURE
Interest paid $ 26,906 $ 22,795
Income taxes paid 3,929 1,773
Non-cash activities:
Loans transferred through foreclosure of a related
mortgage loan to real estate owned (182) (339)
<FN>
The accompanying notes are an integral part of these consolidated financial statements.
</FN>
</TABLE>
-3-
<PAGE>
PART I -- FINANCIAL INFORMATION
FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
Consolidated Statements of Changes in Stockholders' Equity
(Unaudited)
<TABLE>
<CAPTION>
For the six months ended
(In thousands, except share data) June 30, 2000
===========================================================================================================================
<S> <C>
COMMON STOCK
Balance, beginning of period $ 114
No activity --
--------------------------------
Balance, end of period $ 114
================================
ADDITIONAL PAID-IN CAPITAL
Balance, beginning of period $ 75,952
Award of shares released from Employee Benefit Trust (2,534 common shares) 16
Tax benefit of unearned compensation 124
--------------------------------
Balance, end of period $ 76,092
================================
TREASURY STOCK
Balance, beginning of period $ (25,308)
Purchases of common shares outstanding (299,000 common shares) (4,084)
Repurchase of restricted stock awards (22,327 common shares) (319)
Restricted stock awards (5,000 common shares) 78
Options exercised (12,600 common shares) 192
--------------------------------
Balance, end of period $ (29,441)
================================
UNEARNED COMPENSATION
Balance, beginning of period $ (9,142)
Restricted stock award expense 553
Restricted stock awards (5,000 common shares) (72)
Release of shares from Employee Benefit Trust (23,090 common shares) 178
--------------------------------
Balance, end of period $ (8,483)
================================
RETAINED EARNINGS
Balance, beginning of period $ 81,056
Net income 6,625
Restricted stock awards (5,000 common shares) (6)
Options exercised (12,600 common shares) (56)
Cash dividends declared and paid (1,728)
--------------------------------
Balance, end of period $ 85,891
================================
ACCUMULATED OTHER COMPREHENSIVE INCOME
Balance, beginning of period $ (4,496)
Change in net unrealized gain (loss), net of taxes of approximately $437 on
securities available for sale 513
--------------------------------
Balance, end of period $ (3,983)
================================
<FN>
The accompanying notes are an integral part of these consolidated financial statements.
</FN>
</TABLE>
-4-
<PAGE>
PART I -- FINANCIAL INFORMATION
FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
Notes to Consolidated Financial Statements
1. BASIS OF PRESENTATION
The primary business of Flushing Financial Corporation is the operation of its
wholly-owned subsidiary, Flushing Savings Bank, FSB (the "Bank"). The
consolidated financial statements presented in this Form 10-Q reflect
principally the Bank's activities.
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 periods of Flushing Financial Corporation and Subsidiaries (the
"Company"). Such adjustments are of a normal recurring nature, unless otherwise
disclosed in this Form 10-Q. The results of operations in the interim statements
are not necessarily indicative of the results that may be expected for the full
year.
Certain information and note disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principals
("GAAP") have been condensed or omitted pursuant to the rules and regulations of
the Securities and Exchange Commission ("SEC"). The interim financial
information should be read in conjunction with the Company's 1999 Annual Report
on Form 10-K.
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 reported amounts of revenue and expenses during the
reporting period. Actual results could differ from these estimates.
<PAGE>
3. EARNINGS PER SHARE
Basic earnings per share for the three and six month periods ended June 30, 2000
and 1999 was computed by dividing net income by the total weighted average
number of common shares outstanding, including only the vested portion of
restricted stock awards. Diluted earnings per share includes the additional
dilutive effect of stock options outstanding and the unvested portion of
restricted stock awards during the period. Earnings per share has been computed
based on the following:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------------ -------------------------
(Amounts in thousands, except per share data) 2000 1999 2000 1999
==========================================================================================================================
<S> <C> <C> <C> <C>
Net income $3,225 $3,210 $6,625 $6,229
Divided by:
Weighted average common shares outstanding 8,390 9,161 8,451 9,334
Weighted average common stock equivalents 142 169 130 178
Total weighted average common shares & common stock equivalents 8,532 9,330 8,581 9,512
Basic earnings per share $0.38 $0.35 $0.78 $0.67
Diluted earnings per share $0.38 $0.34 $0.77 $0.65
Dividends per share $0.10 $0.08 $0.20 $0.16
Dividend payout ratio 26.32% 23.53% 25.97% 24.62%
</TABLE>
-5-
<PAGE>
PART I -- FINANCIAL INFORMATION
FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations
GENERAL
Flushing Financial Corporation, a Delaware corporation, was organized in May
1994 to serve as the holding company for Flushing Savings Bank, FSB (the
"Bank"), a federally chartered, FDIC insured savings institution, originally
organized in 1929. The Bank is a consumer-oriented savings institution and
conducts its business through ten banking offices located in Queens, Brooklyn,
Manhattan, Bronx and Nassau County. The tenth branch was opened in Flushing,
Queens on July 12, 2000. Flushing Financial Corporation's common stock is
publicly traded on the Nasdaq National Market under the symbol "FFIC". The
following discussion of financial condition and results of operations includes
the collective results of Flushing Financial Corporation and the Bank
(collectively, the "Company"), but reflects principally the Bank's activities.
The Company's principal business is attracting retail deposits from the general
public and investing those deposits, together with funds generated from
operations and borrowings, primarily in (i) origination and purchases of
one-to-four family residential mortgage loans, multi-family income-producing
property loans and commercial real estate loans, (ii) mortgage loan surrogates
such as mortgage-backed securities; and (iii) U.S. government and federal agency
securities, corporate fixed-income securities and other marketable securities.
To a lesser extent, the Company originates certain other loans, including
construction loans, Small Business Administration loans and other small business
loans.
The Company's results of operations depend primarily on net interest income,
which is the difference between the interest income earned on its loan and
securities portfolios, and its cost of funds, consisting primarily of interest
paid on deposit accounts and borrowed funds. Net interest income is the result
of the Company's interest rate margin, which is the difference between the
average yield earned on interest-earning assets and the average cost of
interest-bearing liabilities, and the average balance of interest-earning assets
compared to the average balance of interest-bearing liabilities. The Company
also generates non-interest income from loan fees, service charges on deposit
accounts, mortgage servicing fees, late charges and other fees and net gains and
losses on sales of securities and loans. The Company's operating expenses
consist principally of employee compensation and benefits, occupancy and
equipment costs, other general and administrative expenses and income tax
expense. The Company's results of operations also can be significantly affected
by its periodic provision for loan losses and specific provision for losses on
real estate owned. Such results also are significantly affected by general
economic and competitive conditions, including changes in market interest rates,
the strength of the local economy, government policies and actions of regulatory
authorities.
Statements contained in this Quarterly Report relating to plans, strategies,
objectives, economic performance and trends and other statements that are not
descriptions of historical facts may be forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. Forward-looking information is inherently
subject to risks and uncertainties, and actual results could differ materially
from those currently anticipated due to a number of factors, which include, but
are not limited to, the factors set forth in the preceding paragraph and
elsewhere in this Quarterly Report, and in other documents filed by the Company
with the Securities and Exchange Commission from time to time, including,
without limitation, the Company's 1999 Annual Report to Shareholders and the SEC
Report on Form 10-K for the year ended December 31, 1999. Forward-looking
statements may be identified by terms such as "may", "will", "should", "could",
"expects", "plans", "intends", "anticipates", "believes", "estimates",
"predicts", "forecasts", "potential" or "continue" or similar terms or the
negative of these terms. Although we believe that the expectations reflected in
the forward-looking statements are reasonable, we cannot guarantee future
results, levels of activity, performance or achievements. The Company has no
obligation to update these forward-looking statements
-6-
<PAGE>
PART I -- FINANCIAL INFORMATION
FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations
COMPARISON OF OPERATING RESULTS FOR THE THREE MONTHS ENDED
JUNE 30, 2000 AND 1999
GENERAL. Net income for the three months ended June 30, 2000 was $3.2 million,
the same as that reported for the three months ended June 30, 1999. Earnings per
diluted share were $0.38 for the three months ended June 30, 2000, an increase
of 11.8% from the $0.34 per diluted share earned in the three months ended June
30, 1999. The return on average assets for the three months ended June 30, 2000
was 1.01% compared to 1.11% for the three months ended June 30, 1999, while the
return on average equity for the three months ended June 30, 2000 increased to
11.07% from 10.21% for the three months ended June 30, 1999.
INTEREST INCOME. Total interest and dividend income increased $2.7 million, or
12.6%, to $24.2 million for the three months ended June 30, 2000 from $21.5
million for the three months ended June 30, 1999. This increase was primarily
the result of a $123.3 million increase in the average earning balances of
interest-earning assets for the three months ended June 30, 2000 as compared to
the three months ended June 30, 1999. The average balance of mortgage loans,
net, increased $139.4 million for the three months ended June 30, 2000 as
compared to the three months ended June 30, 1999. This increase was partially
offset by $9.9 million, $4.9 million and $2.4 million decreases in the average
balances of mortgage-backed securities, other securities and interest-earning
deposits and federal funds, respectively, for the three months ended June 30,
2000 compared to the three months ended June 30, 1999. The yield on
interest-earning assets improved 10 basis points to 7.85% for the three months
ended June 30, 2000 from 7.75% for the three months ended June 30, 1999 due to
an increase in the average balance of mortgage loans, which have a higher yield
than the yield on total interest earning assets.
INTEREST EXPENSE. Interest expense increased $2.5 million, or 22.0%, to $14.0
million for the three months ended June 30, 2000 from $11.5 million for the
three months ended June 30, 1999, primarily due to a $133.6 million increase in
the average balance of interest-bearing liabilities. This was coupled with a 35
basis point increase in the average cost of interest-bearing liabilities to
4.94% in the three months ended June 30, 2000 from 4.59% in the three months
ended June 30, 1999, as certificates of deposit renewed at higher rates, and
both the cost of borrowed funds and the average balance of higher costing
borrowed funds increased.
NET INTEREST INCOME. For the three months ended June 30, 2000, net interest
income increased $0.2 million, or 1.8%, to $10.2 million from $10.0 million in
the three months ended June 30, 1999, for reasons stated above. The net interest
margin declined 30 basis points to 3.31% for the three months ended June 30,
2000 from 3.61% for the three months ended June 30, 1999.
PROVISION FOR LOAN LOSSES. There was no provision for loan losses for the three
months ended June 30, 2000 as compared to $12,000 for the three months ended
June 30, 1999 period. The level of the allowance for loan losses reflects the
Bank's evaluation of current economic conditions, the overall trend of
non-performing loans in the loan portfolio (see Asset Section), its analysis of
specific loan situations, and the size and composition of the loan portfolio.
NON-INTEREST INCOME. Total non-interest income increased by 5.0% to $965,000 for
the three months ended June 30, 2000 from $919,000 for the three months ended
June 30, 1999. The increase is due primarily to an increase in dividends
received on FHLB-NY stock.
-7-
<PAGE>
PART I -- FINANCIAL INFORMATION
FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations
NON-INTEREST EXPENSE. Non-interest expense was $6.0 million for the three months
ended June 30, 2000, an increase of $254,000, or 4.5%, from that reported for
the three months ended June 30, 1999. Management continues to monitor
expenditures resulting in efficiency ratios, which exclude distortions from
non-recurring items, of 52.7% and 51.3% for the three months ended June 30, 2000
and 1999, respectively.
INCOME BEFORE INCOME TAXES. Total income before provision for income taxes was
$5.2 million for the three months ended June 30, 2000 and 1999.
PROVISION FOR INCOME TAXES. Income tax expense was $2.0 million for the three
months ended June 30, 2000 and 1999.
COMPARISON OF OPERATING RESULTS FOR THE SIX MONTHS ENDED
JUNE 30, 2000 AND 1999
GENERAL. Net income for the six months ended June 30, 2000 increased 6.4% to
$6.6 million from the $6.2 million reported for the six months ended June 30,
1999. Earnings per diluted share were $0.77 for the six months ended June 30,
2000, an increase of 18.5% from the $0.65 per diluted share earned in the six
months ended June 30, 1999. The return on average assets for the six months
ended June 30, 2000 was 1.05% compared to 1.09% for the six months ended June
30, 1999, while the return on average equity for the six months ended June 30,
2000 increased to 11.39% from 9.73% for the six months ended June 30, 1999.
INTEREST INCOME. Total interest and dividend income increased $5.2 million, or
12.4%, to $47.4 million for the six months ended June 30, 2000 from $42.2
million for the six months ended June 30, 1999. This increase was primarily the
result of a $115.7 million increase in the average earning balances of
interest-earning assets for the six months ended June 30, 2000 as compared to
the six months ended June 30, 1999. The average balance of mortgage loans, net,
increased $132.1 million for the six months ended June 30, 2000 as compared to
the six months ended June 30, 1999. This increase was partially offset by $14.8
million and $1.9 million decreases in the average balances of mortgage-backed
securities and interest-earning deposits and federal funds, respectively, for
the six months ended June 30, 2000 compared to the six months ended June 30,
1999. The yield on interest-earning assets improved 12 basis points to 7.84% for
the six months ended June 30, 2000 from 7.72% for the six months ended June 30,
1999, primarily due to an increase in the average balance of mortgage loans,
which have a higher yield than the yield on total interest earning assets.
INTEREST EXPENSE. Interest expense increased $4.4 million, or 19.1%, to $27.1
million for the six months ended June 30, 2000 from $22.7 million for the six
months ended June 30, 1999. The average balance of interest-bearing liabilities
increased $125.5 million to $1.1 billion for the six months ended June 30, 2000
compared to the six months ended June 30, 1999. In addition, the weighted
average cost of interest-bearing liabilities increased 27 basis points to 4.88%
for the six months ended June 30, 2000 compared to 4.61% for the six months
ended June 30, 1999. The increase in the cost of interest-bearing liabilities is
due to certificates of deposit renewing at higher rates, and both the cost of
borrowed funds and the average balance of higher costing borrowed funds
increasing.
NET INTEREST INCOME. For the six months ended June 30, 2000, net interest income
increased $0.8 million, or 4.5%, to $20.3 million from $19.5 million in the six
months ended June 30, 1999, for reasons stated above. The net interest margin
declined 20 basis points to 3.36% for the six months ended June 30, 2000 from
3.56% for the six months ended June 30, 1999.
-8-
<PAGE>
PART I -- FINANCIAL INFORMATION
FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations
PROVISION FOR LOAN LOSSES. There was no provision for loan losses for the six
months ended June 30, 2000 compared to $36,000 for the six months ended June 30,
1999. The level of the allowance for loan losses reflects the Bank's evaluation
of current economic conditions, the overall trend of non-performing loans in the
loan portfolio (see Asset Section), its analysis of specific loan situations,
and the size and composition of the loan portfolio.
NON-INTEREST INCOME. Total non-interest income increased by 6.9% to $2.0 million
for the six months ended June 30, 2000 from $1.9 million for the six months
ended June 30, 1999. The increase is due to increases in fee income from
mortgage operations and banking services and an increase in dividends received
on FHLB-NY stock.
NON-INTEREST EXPENSE. Non-interest expense increased by $0.4 million, or 3.5%,
to $11.7 million for the six months ended June 30, 2000 as compared to $11.3
million for the six months ended June 30, 1999. Management continues to monitor
expenditures resulting in efficiency ratios, which exclude distortions from
non-recurring items, of 52.0% for the six months ended June 30, 2000 and 1999.
INCOME BEFORE INCOME TAXES. Total income before provision for income taxes
increased $0.7 million, or 6.4%, to $10.7 million for the six months ended June
30, 2000 as compared to $10.0 million for the six months ended June 30, 1999 for
reasons stated above.
PROVISION FOR INCOME TAXES. Income tax expense increased $0.3 million to $4.1
million for the six months ended June 30, 2000 as compared to $3.8 million for
the six months ended June 30, 1999. This is due to the $0.7 million increase in
income before taxes.
FINANCIAL CONDITION
ASSETS. Total assets at June 30, 2000 were $1.31 billion, a $60 million increase
from December 31, 1999. During the six months ended June 30, 2000, loan
originations and purchases were $58.5 million for 1-4 family residential
mortgage loans, $37.0 million for multi-family real estate loans, $25.0 million
for commercial real estate loans and $2.3 million in construction loans. During
the six months ended June 30, 1999, loan originations and purchases were $48.9
million for 1-4 family residential mortgage loans, $50.6 million for
multi-family real estate loans, $17.0 million for commercial real estate loans
and $5.0 million in construction loans. Total loans, net, increased $81.8
million during the six months ended June 30, 2000 to $957.7 million from $875.9
million at December 31, 1999.
As the Company continues to increase its loan portfolio, management continues to
adhere to the Bank's strict underwriting standards. As a result, the Company has
been able to minimize charge-offs of losses from impaired loans and maintain
asset quality. Non-performing assets were $2.2 million at June 30, 2000 compared
to $3.6 million at December 31, 1999 and $5.5 million at June 30, 1999. Total
non-performing assets as a percentage of total assets were 0.17% at June 30,
2000 compared to 0.29% at December 31, 1999 and 0.46% at June 30, 1999. The
ratio of allowance for loan losses to total non-performing loans was 331.66% at
June 30, 2000 compared to 213.29% at December 31, 1999 and 135.27% at June 30,
1999.
-9-
<PAGE>
PART I -- FINANCIAL INFORMATION
FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations
LIABILITIES. Total liabilities increased $58 million to $1.19 billion at June
30, 2000 from $1.13 billion at December 31, 1999. The change in total
liabilities was due primarily to increases in borrowings and deposits of $41.5
million and $15.4 million, respectively, during the six months ended June 30,
2000.
EQUITY. Total stockholders' equity increased $2.0 million to $120.2 million at
June 30, 2000 from $118.2 million at December 31, 1999. The increase is
primarily due to $6.6 million in net income for the six months ended June 30,
2000 and an improvement of $0.5 million in the net unrealized loss in the market
value of securities available for sale, partially offset by $4.1 million in
treasury shares purchased through the Company's stock repurchase plans and $1.7
million in cash dividends paid during the six month period. Quarterly dividends
per share were increased to $0.10 per share for the first and second quarter of
2000 from $0.08 per share in the fourth quarter of 1999. Book value per share
improved to $12.76 per share at June 30, 2000 from $12.15 per share at December
31, 1999 and June 30, 1999.
Under its stock repurchase program, the Company repurchased 299,000 shares for
the six months ended June 30, 2000, leaving 89,945 shares to be repurchased
under the current stock repurchase program.
LIQUIDITY. The Bank, as a federal savings bank, is subject to Office of Thrift
Supervision ("OTS") guidelines regarding liquidity requirements. Pursuant to
these requirements, the Bank is required to maintain an average daily balance of
liquid assets (cash and certain securities with detailed maturity limitations
and marketability requirements) equal to a monthly average of not less than a
specified percentage of its net withdrawable deposit accounts plus short-term
borrowings. This liquidity requirement may be changed from time to time by the
OTS to any amount within the range of 4% to 10% depending upon economic
conditions and the savings flows of member institutions, and is currently 4%.
Monetary penalties may be imposed by the OTS for failure to meet these liquidity
requirements. At June 30, 2000 and December 31, 1999, the Bank's liquidity
ratio, computed in accordance with the OTS requirement was 15.24% and 9.72%,
respectively. Management anticipates that the Bank will continue to meet OTS
liquidity requirements. Unlike the Bank, Flushing Financial Corporation is not
subject to OTS regulatory requirements on the maintenance of minimum levels of
liquid assets.
CASH FLOW. During the six months ended June 30, 2000, funds provided by the
Company's operating activities amounted to $7.8 million. These funds, together
with $51.3 million provided by financing activities, were utilized to fund net
investing activities of $79.2 million. The Company's primary business objective
is the origination and purchase of 1-4 family residential, multi-family and
commercial real estate loans. During the six months ended June 30, 2000, the net
total of loan originations less loan repayments was $68.1 million, and the total
amount of real estate loans purchased was $13.7 million. The Company also
invests in other securities including mortgage loan surrogates such as
mortgage-backed securities. During the six months ended June 30, 2000, the
Company purchased a total of $12.3 million in securities available for sale.
Funds for investment were also provided by $17.1 million in prepayments of
securities available for sale, and $41.5 million of net increased borrowings.
The Company also used funds of $4.3 million for treasury stock repurchases and
$1.7 million in dividend payments during the six months ended June 30, 2000.
-10-
<PAGE>
PART I -- FINANCIAL INFORMATION
FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations
INTEREST RATE RISK
The Consolidated Financial Statements have been prepared in accordance with
generally accepted accounting principles, which requires the measurement of
financial position and operating results in terms of historical dollars without
considering the changes in fair value of certain investments due to changes in
interest rates. Generally, the fair value of financial investments such as loans
and securities fluctuates inversely with changes in interest rates. As a result,
increases in interest rates could result in decreases in the fair value of the
Company's interest-earning assets which could adversely affect the Company's
results of operation if such assets were sold, or, in the case of securities
classified as available-for-sale, decreases in the Company's stockholders'
equity, if such securities were retained.
The Company manages the mix of interest-earning assets and interest-bearing
liabilities on a continuous basis to maximize return and adjust its exposure to
interest rate risk. On a quarterly basis, management prepares the "Earnings and
Economic Exposure to Changes In Interest Rate" report for review by the Board of
Directors, as summarized below. This report quantifies the potential changes in
net interest income and net portfolio value should interest rates go up or down
(shocked) 300 basis points, assuming the yield curves of the rate shocks will be
parallel to each other. Net portfolio value is defined as the market value of
assets net of the market value of liabilities. The market value of assets and
liabilities is determined using a discounted cash flow calculation. The net
portfolio value ratio is the ratio of the net portfolio value to the market
value of assets. All changes in income and value are measured as percentage
changes from the projected net interest income and net portfolio value at the
base interest rate scenario. The base interest rate scenario assumes interest
rates at June 30, 2000. Various estimates regarding prepayment assumptions are
made at each level of rate shock. Actual results could differ significantly from
these estimates. The Company is within the guidelines set forth by the Board of
Directors for each interest rate level for Net Interest Income and the Net
Portfolio Value Ratio. However, for Net Portfolio Value, the Company does not
meet the guidelines established by the Board of Directors for plus 100 and plus
300 basis points, which exceed the Board's guidelines of minus 15% and minus
45%, respectively. The Company continues to monitor its interest rate risk
exposure and take prudent steps to bring all measurements within guidelines.
<TABLE>
<CAPTION>
Projected Percentage Change In
------------------------------------------
Net Portfolio
Change in Interest Rate Net Interest Income Net Portfolio Value Value Ratio
=====================================================================================================
<S> <C> <C> <C>
-300 Basis points 8.28% 18.50% 12.89%
-200 Basis points 8.51 20.11 13.32
-100 Basis points 5.90 14.86 13.04
Base interest rate -- -- 11.74
+100 Basis points -7.03 -17.19 10.10
+200 Basis points -14.53 -34.40 8.31
+300 Basis points -22.33 -50.60 6.49
</TABLE>
-11-
<PAGE>
PART I -- FINANCIAL INFORMATION
FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations
REGULATORY CAPITAL POSITION
Under Office of Thrift Supervision ("OTS") capital regulations, the Bank is
required to comply with each of three separate capital adequacy standards. At
June 30, 2000, the Bank exceeded each of the three OTS capital requirements and
is categorized as "well-capitalized" by the OTS under the prompt corrective
action regulations. Set forth below is a summary of the Bank's compliance with
OTS capital standards as of June 30, 2000.
<TABLE>
<CAPTION>
(Dollars in thousands) Amount Percent of Assets
================================================================================
<S> <C> <C>
Tangible Capital:
Capital level $109,668 8.44 %
Requirement 19,489 1.50
Excess 90,179 6.94
Core Capital:
Capital level $109,668 8.44 %
Requirement 38,978 3.00
Excess 70,690 5.44
Risk-Based Capital:
Capital level $116,388 15.59 %
Requirement 59,728 8.00
Excess 56,660 7.59
</TABLE>
-12-
<PAGE>
PART I -- FINANCIAL INFORMATION
FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations
AVERAGE BALANCES
Net interest income represents the difference between income on interest-earning
assets and expense on interest-bearing liabilities. Net interest income depends
upon the relative amount of interest-earning assets and interest-bearing
liabilities and the interest rate earned or paid on them. The following table
set forth certain information relating to the Company's consolidated statements
of financial condition and consolidated statements of operations for the three
month periods ended June 30, 2000 and 1999, and reflects the average yield on
assets and average cost of liabilities for the periods indicated. Such yields
and costs are derived by dividing income or expense by the average balance of
assets or liabilities, respectively, for the periods shown. Average balances are
derived from average daily balances. The yields include amortization of fees
which are considered adjustments to yields.
<TABLE>
<CAPTION>
For the three months ended June 30,
------------------------------------------------------------------------------
2000 1999
-------------------------------------- --------------------------------------
Average Interest Average Average Interest Average
(Dollars in thousands) Balance Yield/Cost Balance Yield/Cost
=======================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Interest-earning assets:
Mortgage loans, net $924,738 $18,718 8.10% $785,371 $16,328 8.32%
Other loans 6,528 165 10.11 5,407 134 9.91
Mortgage-backed securities 275,871 4,845 7.03 285,804 4,568 6.39
Other securities 16,316 287 7.04 21,194 299 5.64
Interest-earning deposits and
federal funds sold 7,379 138 7.48 9,802 129 5.26
-------------------------------------- --------------------------------------
Total interest-earning assets 1,230,832 24,153 7.85 1,107,578 21,458 7.75
-------------------------- --------------------------
Non-interest earning assets 52,088 52,342
------------- -------------
Total assets $1,282,920 $1,159,920
============= =============
LIABILITIES AND EQUITY
Interest-bearing liabilities:
Passbook accounts $190,743 980 2.06 $202,041 1,043 2.06
NOW accounts 28,162 134 1.90 27,249 128 1.88
Money market accounts 43,532 366 3.36 34,417 256 2.98
Certificate of deposit accounts 380,643 5,206 5.47 363,360 4,714 5.19
Mortgagors' escrow deposits 16,170 26 0.64 13,846 21 0.61
Borrowed funds 472,055 7,254 6.15 356,807 5,290 5.93
-------------------------------------- --------------------------------------
Total interest-bearing
liabilities 1,131,305 13,966 4.94 997,720 11,452 4.59
-------------------------- --------------------------
Other liabilities 35,102 36,408
------------- -------------
Total liabilities 1,166,407 1,034,128
Equity 116,513 125,792
------------- -------------
Total liabilities and equity $1,282,920 $1,159,920
============= =============
Net interest income/Interest rate spread $10,187 2.91% $10,006 3.16%
========================== ==========================
Net interest-earning assets /
Net interest margin $99,527 3.31% $109,858 3.61%
============= ============== ============= =============
Ratio of interest-earning assets to
interest-bearing liabilities 1.09X 1.11X
============== =============
</TABLE>
-13-
<PAGE>
PART I -- FINANCIAL INFORMATION
FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations
AVERAGE BALANCES (continued)
The following tables set forth certain information relating to the Company's
consolidated statements of financial condition and consolidated statements of
operations for the six month periods ended June 30, 2000 and 1999, and reflects
the average yield on assets and average cost of liabilities for the periods
indicated. Such yields and costs are derived by dividing income or expense by
the average balance of assets or liabilities, respectively, for the periods
shown. Average balances are derived from average daily balances. The yields
include amortization of fees which are considered adjustments to yields.
<TABLE>
<CAPTION>
For the six months ended June 30,
------------------------------------------------------------------------------
2000 1999
-------------------------------------- --------------------------------------
Average Interest Average Average Interest Average
(Dollars in thousands) Balance Yield/Cost Balance Yield/Cost
=======================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Interest-earning assets:
Mortgage loans, net $903,437 $36,602 8.10% $771,294 $32,116 8.33%
Other loans 6,172 317 10.27 4,962 237 9.55
Mortgage-backed securities 274,580 9,615 7.00 289,377 9,054 6.26
Other securities 16,318 575 7.05 17,273 503 5.82
Interest-earning deposits and
federal funds sold 9,476 320 6.75 11,376 304 5.34
-------------------------------------- --------------------------------------
Total interest-earning assets 1,209,983 47,429 7.84 1,094,282 42,214 7.72
-------------------------- --------------------------
Non-interest earning assets 51,878 53,328
------------- -------------
Total assets $1,261,861 $1,147,610
============= =============
LIABILITIES AND EQUITY
Interest-bearing liabilities:
Passbook accounts $192,230 1,980 2.06 $202,295 2,080 2.06
NOW accounts 27,493 261 1.90 26,654 251 1.88
Money market accounts 42,569 705 3.31 32,644 470 2.88
Certificate of deposit accounts 376,045 10,150 5.40 365,732 9,540 5.22
Mortgagors' escrow deposits 14,376 36 0.50 11,707 40 0.68
Borrowed funds 458,305 13,954 6.09 346,528 10,357 5.98
-------------------------------------- --------------------------------------
Total interest-bearing
liabilities 1,111,018 27,086 4.88 985,560 22,738 4.61
-------------------------- --------------------------
Other liabilities 34,526 34,073
------------- -------------
Total liabilities 1,145,544 1,019,633
Equity 116,317 127,977
------------- -------------
Total liabilities and equity $1,261,861 $1,147,610
============= =============
Net interest income/Interest rate spread $20,343 2.96% $19,476 3.11%
========================== ==========================
Net interest-earning assets /
Net Interest margin $98,965 3.36% $108,722 3.56%
============= ============== ============= =============
Ratio of interest-earning assets to
interest-bearing liabilities 1.09X 1.11X
============== =============
</TABLE>
-14-
<PAGE>
PART I -- FINANCIAL INFORMATION
FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations
LOANS
The following table sets forth the Company's loan originations (including the
net effect of refinancing) and the changes in the Company's portfolio of loans,
including purchases, sales and principal reductions for the periods indicated.
<TABLE>
<CAPTION>
Six Months Ended
----------------------------------
(In thousands) June 30, 2000 June 30, 1999
========================================================================
<S> <C> <C>
MORTGAGE LOANS
At beginning of period $876,984 $754,065
Mortgage loans originated:
One-to-four family 44,750 40,822
Cooperative 65 300
Multi-family real estate 36,995 50,641
Commercial real estate 25,002 17,000
Construction 2,325 4,999
----------- -----------
Total mortgage loans originated 109,137 113,762
----------- -----------
Acquired loans:
Loans purchased 13,640 7,814
----------- -----------
Total acquired loans 13,640 7,814
----------- -----------
Less:
Principal and other reductions 42,827 64,047
Mortgage loan foreclosures 182 339
=========== ===========
At end of period $956,752 $811,255
=========== ===========
OTHER LOANS
At beginning of period $5,748 $4,515
Other loans originated:
Small Business Administration 2,138 1,176
Small business loans 185 1,542
Other loans 925 496
----------- -----------
Total other loans originated 3,248 3,214
----------- -----------
Less:
Sales -- 1,004
Principal and other reductions 1,598 1,101
=========== ===========
At end of period $7,398 $5,624
=========== ===========
</TABLE>
-15-
<PAGE>
PART I -- FINANCIAL INFORMATION
FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations
NON-PERFORMING ASSETS
The Company reviews loans in its portfolio on a monthly basis to determine
whether any problem loans require classification in accordance with internal
policies and applicable regulatory guidelines. The following table sets forth
information regarding all non-accrual loans, loans which are 90 days or more
delinquent, and real estate owned at the dates indicated.
<TABLE>
<CAPTION>
(Dollars in thousands) June 30, 2000 December 31, 1999
================================================================================
<S> <C> <C>
Non-accrual mortgage loans $1,973 $3,157
Other non-accrual loans 53 39
--------- ---------
Total non-accrual loans 2,026 3,196
Mortgage loans 90 days or more delinquent
and still accruing -- --
Other loans 90 days or more delinquent
and still accruing -- --
--------- ---------
Total non-performing loans 2,026 3,196
Real estate owned (foreclosed real estate) 191 368
========= =========
Total non-performing assets $2,217 $3,564
========= =========
Non-performing loans to gross loans 0.21% 0.36%
Non-performing assets to total assets 0.17% 0.29%
</TABLE>
-16-
<PAGE>
PART I -- FINANCIAL INFORMATION
FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations
ALLOWANCE FOR LOAN LOSSES
The Company has established and maintains on its books an allowance for loan
losses that is designed to provide a reserve against estimated losses inherent
in the Company's overall loan portfolio. The allowance is established through a
provision for loan losses based on management's evaluation of the risk inherent
in the various components of its loan portfolio and other factors, including
historical loan loss experience, changes in the composition and volume of the
portfolio, collection policies and experience, trends in the volume of
non-accrual loans and regional and national economic conditions. 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 regional economic conditions and other factors. In
connection with the determination of the allowance, the market value of
collateral ordinarily is evaluated by the Company's staff appraiser; however,
the Company may from time to time obtain independent appraisals for significant
properties. Current year charge-offs, charge-off trends, new loan production and
current balance by particular loan categories are also taken into account in
determining the appropriate amount of allowance. The Board of Directors reviews
and approves the adequacy of the loan loss reserves on a quarterly basis.
The following table sets forth the activity in the Bank's allowance for loan
losses for the periods indicated.
<TABLE>
<CAPTION>
Six Months Ended
------------------------------------------
(Dollars in thousands) June 30, 2000 June 30, 1999
================================================================================
<S> <C> <C>
Balance at beginning of period $6,818 $6,762
Provision for loan losses -- 36
Loans charged-off:
One-to-four family 3 8
Co-operative -- --
Multi-family -- --
Commercial -- --
Construction -- --
Other 95 3
--------- ---------
Total loans charged-off 98 11
--------- ---------
Recoveries:
Mortgage loans -- 153
Other loans -- --
--------- ---------
Total recoveries -- 153
--------- ---------
Balance at end of period $6,720 $6,940
========= =========
Ratio of net charge-offs(recoveries) during
the year to average loans outstanding
during the period 0.01% (0.02)%
Ratio of allowance for loan losses to loans
at the end of period 0.70% 0.85%
Ratio of allowance for loan losses to
non-performing assets at end of period 303.04% 127.03%
Ratio of allowance for loan losses to
non-performing loans at end of period 331.66% 135.27%
</TABLE>
-17-
<PAGE>
PART I -- FINANCIAL INFORMATION
FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations
ITEM 3. QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK
For a discussion of the qualitative and quantitative disclosures about market
risk, see the information under the caption "Management's Discussion and
Analysis of Financial Condition and Results of Operations - Interest Rate Risk".
PART II -- OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
The Company is a defendant in various lawsuits. Management of the Company, after
consultation with outside legal counsel, believes that the resolution of these
various matters will not result in any material adverse effect on the Company's
consolidated financial condition, results of operations and cash flows.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.
Not applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
At the Company's Annual Meeting of Shareholders held on May 16, 2000, as
contemplated by the Company's definitive proxy material for the meeting, certain
matters were submitted to a vote of shareholders. The following table summarizes
the results of voting with respect to each matter.
For Withheld Abstain
--------------- ---------------- ----------------
Election of Directors (four directors were elected to serve until the 2003
Annual Meeting of Shareholders and until their successors are elected and
qualified).
Louis C. Grassi 8,100,431 190,909
Robert A. Marani 8,131,992 159,348
Franklin F. Regan, Jr. 8,087,926 203,414
John E. Roe, Sr. 8,097,376 193,964
Ratification of
PricewaterhouseCoopers LLP as
the independent auditors
of the Company 8,162,670 96,329 32,341
-18-
<PAGE>
PART I -- FINANCIAL INFORMATION
FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations
ITEM 5. OTHER INFORMATION.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
a) EXHIBIT.
Exhibit No. Description
---------- -------------------------------------------------------------
27. Financial data schedule
b) REPORTS ON FORM 8-K.
Not applicable.
-19-
<PAGE>
FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Flushing Financial Corporation,
Dated: August 2, 2000 By: /s/ Michael J. Hegarty
-------------- ------------------------------------------
Michael J. Hegarty
President and Chief Executive Officer
Dated: August 2, 2000 By: /s/ Monica C. Passick
-------------- ------------------------------------------
Monica C. Passick
Senior Vice President, Treasurer and
Chief Financial Officer
-20-
<PAGE>
FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
EXHIBIT INDEX
Exhibit No. Description
----------- ----------------------------------------------------------------
27 Financial Data Schedule.
-21-
<PAGE>
