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Click to edit Master title style 8/21/2015 1 8/21/2015 Flushing Financial Corporation NASDAQ: FFIC Ricky Deng Summer 2014

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Page 1: FFIC-Ricky Deng

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Flushing Financial CorporationNASDAQ: FFIC

Ricky Deng

Summer 2014

Page 2: FFIC-Ricky Deng

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Executive Summary

• Market Capitalization: $ 609 mil

• Ticker: FFIC

• Fair Value: $20.08

• Current Price: $20.19

• Upside: -1%

• Average Volume: 82,989

• Recommendation: Sell 50K(25% of position)

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Company Overview

• Principal Business: Attract retail deposits from general public and invest those deposits into residential and commercial mortgage loans

• Main Office: Flushing, New York

• Operate 17 full-service offices towards local community

• Online banking division: iGObanking.com®

• America's 50 Most Trustworthy Financial Companies by Forbes (May, 2014)

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Sales Catalyst

• Stock is near fair value with limited loan growth potential

• Position is illiquid – unnecessary risk if the worst should

happen (own 10,200 shares-12% of daily average volume)

• SIF Portfolio is significantly overweight in financials (about 30% of current market value)

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Historical Performance

• 5 Year Revenue Growth: -1.5%

• 5 Year Net Income Growth: 11.2%

• 5 Year Average Profit Margin: 15.7%

• Spread=4.59%-1.38%=3.21% (FY2013)

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

2008 2009 2010 2011 2012 2013

Gross Loans & Total Deposits

Gross Loans Total Deposits

Total Assets: $4.7B

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Loan Portfolio

• Mortgage Loans/ Gross Loans: 88.47%

• Multi-family Residential/ Gross Loans: 50.02%

• (Maturity) Within One Year/ Total Loans: 13%

• (Maturity) Over Five Years/ Total Loans: 63%

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Highlight 2014 Q1

• Asset Quality (2014 Q1)

• Tier 1 Capital Ratio: 14.75% vs 15.22% (Peer Avg.)

• Nonperforming Assets/ Assets: 1.04% vs 1.99%

• Net Charge-offs/Avg Loans: 0.05% vs 0.42%

($000) 2014 Q1 2013 Q4

Efficiency Ratio 56.64 46.96

Net Income 10,290 11,948

Dividends 0.15 0.13

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Highlights Future Strategy

• Continue our emphasis on the origination of multi-family

residential mortgage loans

• Transition from a traditional thrift to a more ‘commercial-like’

banking institution

• Increase our commitment to the multi-cultural marketplace,

with a particular focus on the Asian community in Queens

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Insider Activity

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Risks

• Under the circumstance of rising federal funds rate, saving

rates are higher while loan demands are lower, which will

negatively affect the operations

• Improvements in unemployment have lagged and remained at

an elevated level of 7.5% at December 2013 for the New York

City region

• Position is illiquid – unnecessary risk if the worst should

happen (own 10,200 shares-12% of daily average volume)

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Comp Analysis

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Recommendations

• Fair Value: $20.08

• Current Price: $20.19

• Upside: -1%

• Recommendation: Sell 50K(25% of position)

Questions?Ricky Deng