Thursday, January 27, 2011

Flushing Financial's (NASDAQ:FFIC) 2011 EPS Lowered on Higher Credit Costs

Flushing Financial Corp.'s (NASDAQ:FFIC) fourth quarter performance didn't quite reach expectations, as credit costs rose a little and and there was an unexpected 15 bps of NIM compression.

FBR says, "In 4Q10, Flushing's results didn't quite live up to our expectations, given a slight uptick in credit costs and 15 bps of NIM compression. Still, operating pre-provision, pretax earnings were very close to 3Q10's record levels, efficiency was strong, and credit trends remain better than those of peers. While the NIM compression was a bit of a surprise, the redeployment of excess liquidity near the end of the quarter gives FFIC a more stable outlook. Flushing generated solid profitability, with an operating ROA of 85 bps and a ROTCE of 9.7%. With a TCE ratio of 8.7%, we like Flushing Financial's capital flexibility and note that the shares have a dividend yield of 3.7%, despite a dividend payout ratio below 50%. We adjust our 2011 operating EPS estimate to $1.30 (from $1.35) to reflect slightly higher credit costs and reiterate our 2012 estimate of $1.55."

FBR Capital maintains an "Outperform" rating on Flushing Financial Corp (FFIC), which closed Wednesday at $14.30, gaining $0.05, or 0.35 percent. FBR raised their price target on Flushing from $15 to $16.

No comments: