Executive Summary

Q3 2024 diluted EPS was $0.20; net interest margin improved to 1.89% from 1.80% in Q2, while total revenue declined year over year to $22.064M from $23.943M as funding costs remained elevated .
Management highlighted a second consecutive linked-quarter improvement in key metrics and expressed optimism NIM expansion would continue into Q4, supported by lower-cost wholesale funding and rising asset yields .
Credit quality remained solid: allowance coverage was 0.88% of loans, nonaccrual loans were $2.899M, and available liquidity was ~$915.7M (FHLB/FRB collateral lines $582.8M; unencumbered cash/securities $312.9M); uninsured deposits were 45.9% .
The announced merger with ConnectOne (CNOB) on Sept 5, 2024 provides a strategic catalyst: all-stock deal valued at ~$284M, 0.5175 CNOB shares per FLIC share, with anticipated mid-2025 close subject to approvals .

What Went Well and What Went Wrong

What Went Well

Net interest margin expanded 9 bps linked-quarter to 1.89% as wholesale funding repriced lower and asset yields rose; CEO: “margin increased nine basis points... we are optimistic the trend will continue during the fourth quarter” .
Noninterest income improved year over year by $966K in Q3, with increases in merchant card services (+$469K YTD), back-to-back swap fees (+$232K in Q3), and BOLI/service charges; adjusted efficiency ratio improved linked-quarter to 72.69% .
Capital and dividend stability: leverage ratio ~10.13%, book value per share $17.25; quarterly cash dividend maintained at $0.21 per share .

What Went Wrong

Net interest income fell $2.8M YoY in Q3 and efficiency ratio deteriorated YoY to 79.09% as deposit and borrowing costs remained high relative to asset yields .
Provision for credit losses increased YoY (+$341K), reflecting macro headwinds (rent-stabilized multifamily adjustments) even as overall credit quality remained strong .
Total average deposits declined 2.6% YoY and uninsured deposits were 45.9%, underscoring funding sensitivity in a higher-rate environment .

Financial Results

Headline Income and Ratios

Metric	Q3 2023	Q2 2024	Q3 2024
Total Revenue ($USD Millions)	$23.943	$22.114	$22.064
Net Interest Income ($USD Millions)	$21.699	$21.841	$18.854
Noninterest Income ($USD Millions)	$2.244	$2.864	$3.210
Diluted EPS ($)	$0.30	$0.21	$0.20
Net Interest Margin (%)	2.13%	1.80%	1.89%
Efficiency Ratio (%)	67.51%	73.55%	79.09%
ROA (%)	0.63%	0.45%	0.44%
ROE (%)	7.34%	5.15%	4.77%

Notes: Total revenue is defined by the company as net interest income plus noninterest income (non-GAAP table) .

Balance Sheet and Loan Composition

Loans ($USD Thousands)	12/31/2023	6/30/2024	9/30/2024
Commercial & Industrial	116,163	150,587	146,440
Commercial Mortgages	1,919,714	1,936,691	1,950,008
Residential Mortgages	1,166,887	1,122,866	1,103,937
Home Equity Lines	44,070	39,665	36,962
Consumer & Other	1,230	1,330	1,150
Total Loans	3,248,064	3,251,139	3,238,497
Allowance for Credit Losses	(28,992)	(28,484)	(28,647)

KPIs and Risk Metrics

KPI	Q3 2023 / YE 2023	Q2 2024	Q3 2024
Available Liquidity ($USD Millions)	N/A	~1,400	~915.7
FHLB/FRB Collateral Lines ($USD Millions)	N/A	~1,100	$582.8
Unencumbered Cash & Securities ($USD Millions)	N/A	$282.5	$312.9
Uninsured Deposits (% of Total)	N/A	N/A	45.9%
ACL Coverage (% of Loans)	0.89% (12/31/2023)	0.88%	0.88%
Nonaccrual Loans ($USD Thousands)	1,053 (12/31/2023)	2,370	2,899
Book Value Per Share ($)	N/A	$16.71	$17.25
Leverage Ratio (%)	N/A	~9.91	~10.13

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net Interest Margin sensitivity	2024 scenario analysis	Each 25 bps Fed cut → +4–5 bps NIM	“Optimistic trend will continue in Q4” with lower-cost wholesale funding and rising asset yields	Maintained/Improving
Noninterest Income	Quarterly 2024	~$2.6M per quarter (management guidance)	Q3 actual $3.210M (above guidance); management expects stability of service charges, merchant trends	Raised (actual above guide)
Noninterest Expense	Quarterly 2024	~$16.25M per quarter (management guidance)	Q3 GAAP $17.451M; adjusted $16.038M (ex merger/branch)	Maintained on adjusted basis; GAAP elevated due to one-time items
Effective Tax Rate	2024	~4% annualized (Q2 call)	Nine months ETR −0.3% (higher tax-advantaged income mix)	Lowered
Dividend	Q3 2024	$0.21/share quarterly dividend typical	Declared $0.21/share on Oct 1, 2024	Maintained

Earnings Call Themes & Trends

Note: A Q3 2024 earnings call transcript was not available in our document set; we use Q1/Q2 transcripts and Q3 press release for current period narrative .

Topic	Previous Mentions (Q1 2024)	Previous Mentions (Q2 2024)	Current Period (Q3 2024)	Trend
Net interest margin	NIM at 1.79%; “margin should be at the bottom” absent adverse mix	NIM improved to 1.80%; stabilization expected; each 25 bps cut adds 4–5 bps	NIM rose to 1.89%; management optimistic for continued improvement in Q4	Improving
Funding mix & repricing	Seasonal deposit outflows, wholesale funding repriced to market; CDs largely at market	CDs/borrowings mostly repriced; limited upward repricing left	Wholesale funding repriced at lower costs; average interest-bearing deposits and borrowings down	Improving
Credit quality / multifamily	Strong credit; DSCRs ~1.8x, LTV ~50%; monitoring rent-regulated impacts	One MF loan to nonperforming; proactive borrower outreach and stress mitigations	Allowance stable at 0.88%; nonaccrual $2.9M; overall credit quality “remained strong”	Stable with vigilance
Noninterest income/expense	NI income slightly ahead guidance; expense slightly below guidance	NI income exceeded ~$2.6M guidance; expense ~$15.8M, below ~$16.25M guide	NI income up YoY; adjusted expense down YoY; one-time merger/branch costs elevate GAAP	Positive core trend
Liquidity & capital	Liquidity ~$1.5B; leverage ~10%	Liquidity ~$1.4B; leverage ~9.9%	Liquidity ~$915.7M; leverage ~10.13%; BVPS $17.25	Adequate/Stable
Strategic actions	Technology upgrades; branch optimization; buyback considered	Pipeline improving; continued remix to C&I/owner-occupied; buyback option remains	Merger with ConnectOne announced; dividend maintained	Transformational

Management Commentary

CEO Chris Becker: “We are encouraged by a second consecutive linked quarter showing improvements in key financial metrics… the margin increased nine basis points in the third quarter of 2024… We are optimistic the trend will continue during the fourth quarter of this year” .
“Excluding merger and branch consolidation expenses, our noninterest expense remains well controlled and in line with expectations. Finally, our credit quality results remained strong” .
Liquidity and capital: leverage ratio ~10.13%; BVPS $17.25; quarterly dividend $0.21; no buybacks in Q3; Board continues to evaluate dividend to maximize value .

Q&A Highlights

Note: No Q3 transcript found; highlights reflect Q2/Q1 calls as the most recent available.

Margin sensitivity: each 25 bps Fed cut could add 4–5 bps to NIM, underpinning potential earnings recovery when rate cuts commence .
Credit detail: single multifamily loan moved to nonperforming in Q2; net charge-offs just over $400K; proactive borrower outreach to mitigate reset stress (collateral additions, refinancing, combining loans to improve cash flow) .
Funding and repricing: CDs largely at market with minimal upward repricing left; cautious stance on further NIM improvement until funding behaviors stabilize .
Capital returns: ~$13M remaining under buyback authorization; management evaluates buybacks and dividend each quarter, considering earnings trajectory .

Estimates Context

We attempted to retrieve S&P Global consensus EPS and revenue for Q3 2024, but data was unavailable due to a missing Capital IQ mapping for FLIC; as a result, we cannot assess beats/misses versus Street consensus at this time. We will monitor for availability and update comparisons when mapping is resolved [SpgiEstimatesError].

Key Takeaways for Investors

NIM inflected positively for a second consecutive quarter to 1.89%, with management expecting continued improvement in Q4 as wholesale funding costs reset lower and asset yields rise—positive for near-term EPS trajectory .
Core operations are strengthening: noninterest income improved and adjusted expense declined YoY, though GAAP expense was temporarily elevated by merger and branch consolidation charges—focus on adjusted metrics for run-rate .
Credit quality remains resilient despite NYC multifamily headwinds; stable ACL coverage (0.88%), manageable nonaccrual levels, and proactive borrower engagement reduce tail risk—supports medium-term valuation stability .
Liquidity and capital are adequate (liquidity ~$915.7M, leverage ~10.13%), dividend held at $0.21—income investors can expect continuity, with future buybacks contingent on earnings progression .
Strategic merger with ConnectOne (CNOB) is a potential re-rating catalyst (scale to ~$14B assets, enhanced Long Island presence); closing expected mid-2025 subject to approvals—watch regulatory and shareholder milestones .
Without Street estimates, trade setups should focus on qualitative momentum (NIM expansion, adjusted efficiency) and capital return optionality; a dovish Fed path would accelerate margin recovery per disclosed sensitivity .
Monitor Q4 execution on deposit mix, funding costs, and further asset repricing; any unexpected deposit outflows or nonmaturity pricing pressures could temper NIM progress—management remains cautious on funding dynamics .

FIRST OF LONG ISLAND CORP (FLIC)·Q3 2024 Earnings Summary