First of Long Island Corp. (FLIC, Financial) filed Quarterly Report for the period ended 2010-06-30.
First Of Long Island Corp. has a market cap of $188.4 million; its shares were traded at around $25.97 with a P/E ratio of 12.2 and P/S ratio of 2.5. The dividend yield of First Of Long Island Corp. stocks is 3.1%. First Of Long Island Corp. had an annual average earning growth of 8.6% over the past 10 years. GuruFocus rated First Of Long Island Corp. the business predictability rank of 3.5-star.FLIC is in the portfolios of Diamond Hill Capital of Diamond Hill Capital Management Inc.
Earnings for the first half of 2010 grew primarily due to growth in the average balances of loans and tax-exempt securities and, to a much lesser extent, growth in taxable securities. Loan growth occurred as part of management s efforts to improve the Bank s current and future earnings prospects by making loans a larger portion of the overall balance sheet. The Bank was able to increase the size of its tax-exempt securities portfolio at what management believes to be attractive yields and, because of a provision in the American Recovery and Reinvestment Act of 2009, without the usual limitations imposed by the federal alternative minimum tax. The growth in taxable securities was principally in short duration mortgage securities that are full faith and credit obligations of the U.S. government. While not a significant contributor to current earnings, management believes that these securities enhance the Bank s liquidity position and will protect the Bank s earnings in the event of an increase in interest rates. Also contributing to earnings growth was a $772,000 increase in gains on sales of available-for-sale securities and the fact that the second quarter of 2009 included an FDIC special assessment of $647,000. The proceeds of the sales made in 2010, which amounted to $78.5 million, were used to repay overnight borrowings. Because the after tax impact of the gains increased the Bank s total capital and the repayment of borrowings reduced the overall size of the Bank s balance sheet, the Bank s Tier 1 leverage capital ratio improved. The repayment of overnight borrowings should also serve to reduce the potential adverse impact of an increase in interest rates.
When comparing average balances for the first half of 2010 to the same period last year, total loans grew by $177.9 million, or 26.6%, tax-exempt securities grew by $64.3 million, or 40.4%, and taxable securities grew by $90.8 million, or 22.9%. Growth in these asset categories was funded primarily with an increase in average total deposits of $312.1 million, or 31.6%. The loan growth principally occurred in what management considers to be lower risk loan categories, including multifamily commercial mortgages, owner occupied commercial mortgages, and first lien residential mortgages having terms generally between ten and fifteen years. By contrast, management considers construction and land development loans and unsecured loans to individuals to be high risk and has purposely not grown these categories. With respect to deposit growth, significant contributing factors were new branch openings and expansion of existing branches, deposit rate promotions, development of new commercial lending relationships, competitively priced deposit products and what is believed to be a high level of customer service.
The positive impact on earnings of the factors previously described was partially offset by a $1.5 million increase in the provision for loan losses. The elevated provision for the first six months of this year is primarily attributable to management s current assessment of national and local economic conditions. The provision for the first six months of last year was driven down by the reversal of previously established impairment reserves amounting to $300,000. The Bank s allowance for loan losses at June 30, 2010 was $11.9 million, or 1.38% of gross loans, compared to $10.3 million, or 1.25% of gross loans, at year-end 2009. Going forward, management will continue to carefully assess the adequacy of the Bank s allowance for loan losses in light of a variety of factors including national and local economic conditions and the specific composition and characteristics of the Bank s loan portfolio. Depending on this assessment, and even if there is no significant increase in identified problem loans, management may continue to increase the Bank s allowance for loan losses relative to gross loans.
The credit quality of the Bank s loan portfolio remains excellent as evidenced by, among other things, a very low level of delinquent loans. Total delinquent loans amounted to $2.8 million at June 30, 2010, comprised of four obligors with loans past due 30 to 89 days totaling $1.0 million and two obligors with nonaccrual loans totaling $1.8 million. The credit quality of the Bank s securities portfolio also remains excellent. All of the Bank s mortgage securities are backed by mortgages underwritten on conventional terms, and almost all of these securities and underlying mortgages are full faith and credit obligations of the U.S. government. The remainder of the Bank s securities portfolio consists principally of municipal securities rated A or better by major rating agencies.
The aforementioned growth in the average balances of loans, securities and deposits for the first six months of 2010 versus the same period last year is primarily attributable to strong growth in these items during 2009. By contrast, during the first six months of this year management deliberately reduced the overall size of the Bank s balance sheet by scaling back efforts to attract new deposits, even in the Bank s four new full service offices, and by using a significant portion of the cash flows from the maturity, amortization and sale of securities to repay overnight borrowings rather than to originate loans or purchase securities. As a result, between year end 2009 and the end of the second quarter, total loans only grew by $36 million, or 4.3%, total securities declined by $108 million, or 14.1%, total deposits declined by $4.3 million, or .3%, and overnight FHLB borrowings declined by $85.5 million.
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First Of Long Island Corp. has a market cap of $188.4 million; its shares were traded at around $25.97 with a P/E ratio of 12.2 and P/S ratio of 2.5. The dividend yield of First Of Long Island Corp. stocks is 3.1%. First Of Long Island Corp. had an annual average earning growth of 8.6% over the past 10 years. GuruFocus rated First Of Long Island Corp. the business predictability rank of 3.5-star.FLIC is in the portfolios of Diamond Hill Capital of Diamond Hill Capital Management Inc.
Highlight of Business Operations:
The Corporation earned $1.31 per share for the first half of 2010, an increase of $.30, or 29.7%, over $1.01 per share earned in the same period last year. Net income increased by $2,287,000, or 31.2%, from $7,336,000 for the first half of 2009 to $9,623,000 for the current six month period. Returns on average assets (ROA) and equity (ROE) were 1.19% and 15.90%, respectively, for the first six months of 2010 as compared to 1.14% and 13.85% for the same period last year. Earnings for the second quarter of 2010 were $.68 per share versus $.63 per share for the first quarter. The increase for the quarter is primarily attributable to an increase in gains on sales of securities of $587,000 which contributed $.05 to per share earnings.Earnings for the first half of 2010 grew primarily due to growth in the average balances of loans and tax-exempt securities and, to a much lesser extent, growth in taxable securities. Loan growth occurred as part of management s efforts to improve the Bank s current and future earnings prospects by making loans a larger portion of the overall balance sheet. The Bank was able to increase the size of its tax-exempt securities portfolio at what management believes to be attractive yields and, because of a provision in the American Recovery and Reinvestment Act of 2009, without the usual limitations imposed by the federal alternative minimum tax. The growth in taxable securities was principally in short duration mortgage securities that are full faith and credit obligations of the U.S. government. While not a significant contributor to current earnings, management believes that these securities enhance the Bank s liquidity position and will protect the Bank s earnings in the event of an increase in interest rates. Also contributing to earnings growth was a $772,000 increase in gains on sales of available-for-sale securities and the fact that the second quarter of 2009 included an FDIC special assessment of $647,000. The proceeds of the sales made in 2010, which amounted to $78.5 million, were used to repay overnight borrowings. Because the after tax impact of the gains increased the Bank s total capital and the repayment of borrowings reduced the overall size of the Bank s balance sheet, the Bank s Tier 1 leverage capital ratio improved. The repayment of overnight borrowings should also serve to reduce the potential adverse impact of an increase in interest rates.
When comparing average balances for the first half of 2010 to the same period last year, total loans grew by $177.9 million, or 26.6%, tax-exempt securities grew by $64.3 million, or 40.4%, and taxable securities grew by $90.8 million, or 22.9%. Growth in these asset categories was funded primarily with an increase in average total deposits of $312.1 million, or 31.6%. The loan growth principally occurred in what management considers to be lower risk loan categories, including multifamily commercial mortgages, owner occupied commercial mortgages, and first lien residential mortgages having terms generally between ten and fifteen years. By contrast, management considers construction and land development loans and unsecured loans to individuals to be high risk and has purposely not grown these categories. With respect to deposit growth, significant contributing factors were new branch openings and expansion of existing branches, deposit rate promotions, development of new commercial lending relationships, competitively priced deposit products and what is believed to be a high level of customer service.
The positive impact on earnings of the factors previously described was partially offset by a $1.5 million increase in the provision for loan losses. The elevated provision for the first six months of this year is primarily attributable to management s current assessment of national and local economic conditions. The provision for the first six months of last year was driven down by the reversal of previously established impairment reserves amounting to $300,000. The Bank s allowance for loan losses at June 30, 2010 was $11.9 million, or 1.38% of gross loans, compared to $10.3 million, or 1.25% of gross loans, at year-end 2009. Going forward, management will continue to carefully assess the adequacy of the Bank s allowance for loan losses in light of a variety of factors including national and local economic conditions and the specific composition and characteristics of the Bank s loan portfolio. Depending on this assessment, and even if there is no significant increase in identified problem loans, management may continue to increase the Bank s allowance for loan losses relative to gross loans.
The credit quality of the Bank s loan portfolio remains excellent as evidenced by, among other things, a very low level of delinquent loans. Total delinquent loans amounted to $2.8 million at June 30, 2010, comprised of four obligors with loans past due 30 to 89 days totaling $1.0 million and two obligors with nonaccrual loans totaling $1.8 million. The credit quality of the Bank s securities portfolio also remains excellent. All of the Bank s mortgage securities are backed by mortgages underwritten on conventional terms, and almost all of these securities and underlying mortgages are full faith and credit obligations of the U.S. government. The remainder of the Bank s securities portfolio consists principally of municipal securities rated A or better by major rating agencies.
The aforementioned growth in the average balances of loans, securities and deposits for the first six months of 2010 versus the same period last year is primarily attributable to strong growth in these items during 2009. By contrast, during the first six months of this year management deliberately reduced the overall size of the Bank s balance sheet by scaling back efforts to attract new deposits, even in the Bank s four new full service offices, and by using a significant portion of the cash flows from the maturity, amortization and sale of securities to repay overnight borrowings rather than to originate loans or purchase securities. As a result, between year end 2009 and the end of the second quarter, total loans only grew by $36 million, or 4.3%, total securities declined by $108 million, or 14.1%, total deposits declined by $4.3 million, or .3%, and overnight FHLB borrowings declined by $85.5 million.
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