The First of Long Island Corporation

Second-quarter net income was $4.8 million, up from $4.4 million in the linked quarter and down from $6.9 million a year ago. EPS was $0.21 versus $0.20 in the linked quarter and $0.31 in the prior-year quarter. Net interest margin was 1.80%, up from 1.79% linked quarter and down from 2.17% a year ago; ROA improved to 0.45% from 0.42%, ROE to 5.15% from 4.72%, and the efficiency ratio improved to 73.6% from 76.5%. Non-interest income was $2.9 million, non-interest expense was $15.8 million, the ACL was $28.5 million, and the provision for loan losses was $570,000. Book value per share was $16.71 and the leverage ratio was about 9.9%. Looking ahead, management said non-interest income for the last two quarters of 2024 should trend consistent with the first two quarters, non-interest expense should be comparable to the first two quarters, and the annualized effective tax rate is expected to be approximately 4%; on margin, each 25 basis point Fed cut was said to potentially add 4 to 5 basis points to NIM.

Chris Becker framed the quarter as a stabilization story, emphasizing linked-quarter improvement across profitability, funding, and margin metrics after a prolonged period of NIM pressure. He said the pace of asset repricing was basically in line with liabilities during the quarter and expects that trend to continue or improve, especially if short-term rates move lower. Strategically, he kept the focus on relationship-based C&I and owner-occupied commercial mortgages, saying the company is continuing to remix away from consumer/residential lending and build a more efficient franchise.

Janet Verneuille highlighted the incremental financial improvement: ROA rose to 0.45%, ROE to 5.15%, the efficiency ratio improved to 73.6%, and NIM ticked up to 1.80%. She attributed the EPS improvement to $270,000 more net interest income and a $474,000 decline in salaries and employee benefits, partially offset by a $570,000 provision for loan losses; she also noted net charge-offs were about $421,000 and ACL stood at $28.5 million with a 0.88% reserve coverage ratio. On funding, she said the company paid down about $143 million of wholesale borrowings, the weighted average cost of interest-bearing non-maturity deposits was 2.84% and CDs 4.24%, and there was very little additional CD repricing left. She also said the effective tax rate fell to 1.6% in the quarter, is expected to be about 4% for 2024, and could be around 7% in 2025 depending on income.

Analysts focused on how much NIM could rebound if the Fed cuts rates, with management reiterating a prior estimate that each 25 basis point cut could lift margin by 4 to 5 basis points. Questions also centered on the rise in non-performing loans; management said it was driven by one multifamily loan that was partially charged down and that the charge-off was about $175,000, with only six loans expected to need active monitoring through year-end. Analysts pressed on multifamily and non-owner occupied CRE repricing and stress; management said it has reviewed loans repricing through 2025 and is proactively contacting borrowers, with some already refinancing early or adding collateral. They also asked about buybacks, and Becker said the board reviews repurchases every quarter and that $13 million remains under the program.