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Well-known bank investor Larry Seidman is pushing Flushing Financial Corp. in Uniondale, New York, to sell itself to a larger bank that focuses on the Asian-American market.
Flushing, the parent company of Flushing Bank, has assets of $9.1 billion and has built a large portfolio of business with Asian American businesses and consumers in the New York metropolitan area. In a presentation released on July 29 alongside its second-quarter financial results, Flushing reported deposits with Asian American customers totaling $1.3 billion and loans totaling $745.5 million.
Expanding the Asian American customer base is central to Flushing’s success, President and CEO John Buran said last month on a conference call with analysts to discuss the company’s second-quarter financial results. “This market, with its high population density and large number of small businesses, continues to be an important opportunity for us and one that we believe will drive our success going forward,” Buran said on the July 30 conference call.
Flushing estimates that Asian American deposits make up about 3% of total deposits in the region and 19% of the bank’s $6.9 billion in total deposits. Seidman said in an interview Friday that “the only way for shareholders to get a return on their investment is to sell the bank.” Flushing’s performance “has been terrible over the last two years,” Seidman said. Seidman, a veteran bank investor, said he outlined his concerns in a recent letter to the company. “I’m a concerned shareholder. I’ve voiced my opinion. That’s what I do,” Seidman said.
Seidman did not name any potential partners for Flushing.
Flushing reported net income totaling $5.3 million for the quarter ended June 30. The total increased more than 40% from the previous quarter, but decreased about 40% from the same three-month period in 2023. While credit quality remained solid — Flushing reported net recoveries for the quarter ended June 30 — the loan portfolio of $6.8 billion remained essentially unchanged from June 30, 2023 levels. At the same time, securities, which totaled $1.6 billion, rose 30% from March 31 and more than 70% from a year ago. Seidman criticized the increase in securities in particular. “Are they a securities firm or a bank?” Seidman asked.
Buran declined to comment on Seidman’s letter. In the July 30 conference call, Buran said Flushing’s performance had been hurt by high interest rates, weak loan demand and what he called “aggressive deposit pricing” by larger rivals.
Flushing’s second-quarter results prompted at least one analyst, Piper Sandler’s Mark Fitzgibbon, to cut his rating to neutral from overweight. “We believe (Flushing) should trade below peers as we continue to expect below-average profitability levels,” Fitzgibbon wrote in a July 30 research note.
