Flushing Financial reports Q1 net loss due to goodwill impairment, core margins expand

• Flushing Financial Corp reports 1Q25 results • Net interest income and margin expand • Goodwill impairment causes loss • GAAP and Core Net Interest Margins up 12 and 24 basis points QoQ • Non-cash goodwill impairment charge of $17.6 million • No impact on regulatory capital ratios or liquidity position • Strategic progress amidst economic challenges.

Flushing Financial Corporation (FFC) reported its 1Q25 results, demonstrating strategic progress amidst shifting economic conditions. The company achieved notable improvements in core operations, with GAAP and Core Net Interest Margins expanding by 12 and 24 basis points quarter-over-quarter (QoQ), respectively [1]. This expansion was driven by a decline in the cost of funds, partially offset by a decrease in the yield on interest-earning assets.

Despite these gains, FFC recorded a non-cash goodwill impairment charge of $17.6 million in the recent quarter. This accounting adjustment, stemming from declining stock prices and the company's long-standing acquisitions, had no impact on regulatory capital ratios or liquidity position [1]. The company's liquidity remains robust, with $4.0 billion in undrawn lines and resources, and a TCE/TA1 ratio of 7.79% as of March 31, 2025 [1].

While asset quality metrics softened, FFC's strong underwriting discipline, low loan-to-value ratios, and high debt service coverage ratios position the company to effectively manage credit risk going forward. The company's net interest margin (FTE) increased 45 basis points year-over-year (YoY) and 12 basis points QoQ to 2.51%, while core net interest margin FTE increased 43 basis points YoY and 24 basis points QoQ to 2.49% [1].

FFC's strategic priorities for 2025 include improving profitability, maintaining credit discipline, and preserving strong liquidity and capital. These priorities are aimed at navigating the current economic environment while continuing to build long-term value for shareholders, customers, and communities [1].

References:
[1] https://finance.yahoo.com/news/flushing-financial-corporation-reports-1q25-205500945.html