The First of Long Island
Annual Report 2022

Plain-text annual report

2022 Annual Report Celebrating 95 Years 2022 ANNUAL REPORT Making History As First National Bank LI turns the page on its 95th Anniversary Celebration, we continue our legacy of doing the right thing to help our customers, employees and shareholders succeed while being socially accountable to the communities we serve. A true financial partner, 1N is committed to making a meaningful impact on these stakeholders through our ethical intent and strong business practices. We believe these efforts create long-term, sustainable value for our shareholders, clients and employees. About Us The First of Long Island Corporation (Nasdaq: FLIC) is the parent company of The First National Bank of Long Island, a local bank founded in 1927 in Glen Head, New York. Through our branch network branded as First National Bank LI, the Bank focuses on business and consumer needs on Long Island and in New York City. We offer a broad set of lending, deposit, investment and digital products. First National Bank LI is known for its culture of delivering extraordinary service and a “Customer First” banking experience to small and middle market businesses, professional service firms, not-for- profits, municipalities and consumers. The Bank’s tagline “Go First. Go Far.® “ communicates the benefits of relationship service and our employees’ commitment to helping customers reach their financial goals. For more information about the Bank and Corporation visit fnbli.com. 1 Celebrating 95 Years 2022 Annual Report 1 We had an incredible year! Total Assets ($ in millions) 5.2% YOY Increase Total Loans ($ in millions) 6.7% YOY Increase Total Deposits ($ in millions) 4.5% YOY Increase $4,069 $4,282 2021 2022 $3,105 $3,312 2021 2022 $3,315 $3,465 2021 2022 2 Celebrating 95 Years $2.04 Earnings Per Share $46.9 Million Net Income 12.13% Return on Equity 1.11% Return on Assets $16.24 Book Value Per Share $0.82 Cash Dividends Per Share SELECTED FINANCIAL DATA Income Statement Data 2022 2021 2020 2019 2018 Interest Income Interest Expense $ 134,210 $ 122,959 $ 131,216 $ 143,850 $ 138,237 18,497 16,152 29,188 43,681 35,730 (dollars in thousands, except per share data) Net Interest Income 115,713 106,807 102,028 Provision (Credit) for Credit Losses Net Income Per Share Data Basic Earnings Diluted Earnings Cash Dividends Declared Dividend Payout Ratio 2,331 46,932 (2,573) 43,089 3,006 41,203 $ 2.05 $ 1.82 $ 1.73 $ 2.04 1.81 .82 40.20% .78 43.09% 1.72 .74 100,169 33 41,555 102,507 (1,755) 41,573 $ 1.68 1.67 .70 1.64 1.63 .64 43.02% 41.92% 39.26% Book Value $ 16.24 $ 17.81 $ 17.11 $ 16.26 $ 15.27 Balance Sheet Data at Year End Total Assets Loans $ 4,281,511 $ 4,068,789 $ 4,069,141 $ 4,097,843 $ 4,241,060 3,311,733 3,105,036 3,033,454 3,188,249 3,263,399 Allowance for Credit Losses 31,432 29,831 33,037 29,289 30,838 Deposits Borrowed Funds Stockholders’ Equity Average Balance Sheet Data Total Assets Loans 3,464,634 3,315,245 3,321,588 3,144,016 3,084,972 411,000 364,536 311,322 413,812 306,097 407,118 528,182 389,108 750,950 388,187 $ 4,247,052 $ 4,151,577 $ 4,140,867 $ 4,194,355 $ 4,177,341 3,276,589 2,976,061 3,110,512 3,217,530 3,177,519 Allowance for Credit Losses 30,604 31,300 33,180 30,080 34,960 Deposits Borrowed Funds Stockholders’ Equity Financial Ratios 3,536,709 3,425,976 3,257,317 3,276,699 3,168,348 289,584 281,191 457,939 494,785 623,587 386,839 416,885 393,662 391,613 374,876 Return on Average Assets (ROA) Return on Average Equity (ROE) Average Equity to Average Assets 1.11% 12.13% 9.11% 1.04% 10.34% 10.04% 1.00% 10.47% 9.51% .99% 10.61% 9.34% 1.00% 11.09% 8.97% 2 Celebrating 95 Years 2022 Annual Report 3 A MESSAGE FROM OUR PRESIDENT AND CEO Fellow Shareholders It was a year of celebration. The First National Bank building housing. It was inspirational to see their of Long Island commemorated its 95th year as an enthusiasm. I want to thank the entire First National independent community bank on October 1, 2022. Bank LI team for meeting our mission of continually Throughout the year on the anniversary date of each doing the right things to help our customers, branch opening, we recognized the Bank’s history. employees and shareholders succeed while being We thanked our local markets for their loyalty by socially accountable to the communities we serve. giving back under a “Community First” volunteerism program. Our employees provided over 1,000 hours of their time to aid local charities in fighting food insecurity, helping seniors, caring for animals and It was a year of success. Record setting net income and earnings per share of $46.9 million and $2.04, respectively, led the way. Returns on average assets and average equity were strong at 1.11% and 12.13%, As First National Bank LI turns the page on its 95th Anniversary Celebration, enjoy highlights of client appreciation events across the Branch network. 4 Celebrating 95 Years Bay Terrace respectively. We increased our dividend per share housed in several Glen Head locations throughout by 5.1% and it now stands at $0.21 per quarter. Our our 95 years. In 2022, we sold five buildings in Glen dividend yield at year-end 2022 was 4.7%. Average Head and consolidated our operations, corporate total assets, loans and deposits all had gains with headquarters and Melville Branch at 275 Broad the key category of average noninterest-bearing Hollow Road in Melville to support our growth more checking deposits increasing 7.2%. Checking efficiently. We are forever grateful to the Glen Head deposits averaged over 40% of total deposits during community for being such a gracious host. It is truly a 2022 and ended the year at over 38%. We believe our special community. culture of building relationship business by keeping customers first produces these types of results. It was a year of progress. The Bank opened its doors in 1927 as The First National Bank of Glen Head. Our Main Office Branch has been in its Glen “ ...keeping customers first produces these types of results.” Head location for the Bank’s entire history and It was a year of expansion. Having previously hired remains there today. Most of our operations were talented bankers in our Port Jefferson and Bohemia markets, it was time to expand their branches from tired commercial banking offices to modern full-service branches. We moved into our new Port Jefferson Village location at 450 Main Street ●  Manhattan ●  Brooklyn ●  Queens ●  Nassau County ●  Suffolk County Astoria Babylon Bay Ridge 4 Celebrating 95 Years 2022 Annual Report 5 Bayville Bohemia Cobble Hill East Hampton Net Income ($ in millions) 6.0% Five Year CAGR $41.2 $43.1 $46.9 Cash Dividends (per share) 7.2% Five Year CAGR $0.74 $0.78 $0.82 2020 2021 2022 2020 2021 2022 in November of 2022. Our new Bohemia location hire some of the best bankers in those markets to get at 4110 Veterans Memorial Highway is nearing us off to a quick start. completion. As First National Bank LI, we were missing a presence on the East End of the island. We corrected that oversight by establishing an East Hampton Branch in late 2021 and a Southampton Branch in early 2022. Combined with our Riverhead Branch opened in 2020, we are making a name for ourselves on the East End. We have been fortunate to It was a year of recognition. We are proud of several noteworthy achievements in 2022. The KBW Bank Honor Roll recognizes banks with more than $500 million in total assets that have reported consecutive increases in annual earnings per share in each of the past ten years. Piper Sandler’s Sm-All Star recognizes East Islip East Meadow East Setauket Garden City Howard Beach Huntington Lake Success 6 Celebrating 95 Years “ The First of Long Island Corporation is listed in the top 200 exchange-traded U.S. banks and thrifts.” companies with a market cap below $2.5 billion that out-perform the industry in growth, profitability, credit quality and capital strength. The First of Long Island Corporation made both lists in 2022. The Company also was included among the top 50 performers with total assets between $1 billion and $5 billion by Bank Director Magazine. Finally, The First of Long Island Corporation is listed in the top 200 exchange-traded U.S. banks and thrifts, coming in at number 177. A challenging landscape. The Federal Reserve’s The newly relocated Port Jefferson Branch offers a 24-hour ATM with on-site parking within walking distance of village attractions. increases in interest rates have not been at this pace in over 40-years, putting downward pressure on the Bank’s net interest margin. Tightening monetary policy limits liquidity alternatives and reduces funding flexibility. A political and regulatory message of removing so called “junk fees” is limiting the Bank’s ability to charge for the fundamental services we provide. At the same time, blanketing regulatory ●  Manhattan ●  Brooklyn ●  Queens ●  Nassau County ●  Suffolk County Garden City Glen Head Great Neck Hewlett Hicksville 6 Celebrating 95 Years 2022 Annual Report 7 Lake Success Lindenhurst Locust Valley Madison Avenue oversight continues to pile on operational costs related to third-party management, information security, environmental, social and governance (“ESG”) requirements and climate change, among other areas, no matter an institution’s size. That being said, we have a valuable franchise with dedicated constituents. Our credit quality remains strong as we maintain a culture of conservative underwriting and our leverage capital ratio of 9.8% provides ample support for the future. With the introduction of tap-to-pay technology and removing domestic purchase transaction fees, a new card design is now available to promote debit card utilization. “ We are moving forward while staying true to our history of strong fundamentals that deliver results.” A Look Forward. Our team is dedicated to the endurance of this 95-year-old institution, focusing on strategic evolution to match the demand for a more modern, commercially focused community bank. Our growing banking teams are bringing in relationships, our new branding is being complimented as fresh and inviting, our new website and social media presence continue to grow in terms of visits and impressions, our commitment to technology upgrades and cybersecurity investments are recognized by our employees and customers, and we are being acknowledged in the industry for our successes. We are moving forward while staying true to our history of strong fundamentals that deliver results. Thanks to the customers of First National Bank LI for allowing us to serve you and our communities. I thank our Board of Directors for their support of Manhasset Massapequa Merrick Riverhead Rockville Centre Sayville Smithtown 8 Celebrating 95 Years Earnings Per Share 7.4% Five Year CAGR $1.72 $1.81 Credit Quality ($ in thousands) ●  Nonaccrual ●  Past Due ●  Modified $2.04 $3,359 2020 2021 2022 $1,122 $2,249 $1,422 $815 2020 $1,235 $460 $554 2021 *Nonaccrual loans were $0 in 2022. $1,230* $750 $480 2022 the Company’s strategic initiatives. Their oversight To our shareholders, the Board of Directors and and ongoing strong corporate governance centers Management Team appreciate your investment in the on stockholder returns. Thanks to our staff for all the Company and remain dedicated to doing the right outstanding accomplishments in 2022. They know things for you. when you Go First you Go Far. I am fortunate to be surrounded by tremendous talent and people that Sincerely, make “coming to the office” a pleasure. Christopher Becker President and Chief Executive Officer ●  Manhattan ●  Brooklyn ●  Queens ●  Nassau County ●  Suffolk County Northport Patchogue Port Jefferson 8 Celebrating 95 Years 2022 Annual Report 9 Smithtown Valley Stream Whitestone Woodbury CUSTOMER FIRST Let’s connect and see how far you can go. Relationship business and access to decision-makers are advantages of choosing First National Bank LI as a banking partner. The Bank is focused on strengthening its ability to meet and service clients across the market area through an optimized branch network and enhanced digital presence. New Places. Familiar Faces. 1N celebrated opening two new East End locations in East Hampton and Southampton, bringing First National Bank LI’s network to 41 Branches across Suffolk, Nassau, Brooklyn, Queens and Manhattan. Committed to providing relationship service from expert talent, the Bank continues to engage local banking professionals to grow its commercial and retail teams. Top: Customers joined Bank leadership in East Hampton to cut the ribbon on First National Bank LI’s first South Fork location. Bottom: Elected Village and Town officials cut the ribbon at the Southampton Branch, which is located within walking distance of Town Hall. 10 Celebrating 95 Years Visit the new fnbli.com Website Refresh. User-friendly functionality. A website homepage redesign will offer an intuitive user experience at fnbli.com, featuring streamlined navigation to make it easier for clients to explore the products and services they need. The new functionality will help facilitate lead generation through the enhanced promotion of products and digital features coming in 2023. A new “Meet The Bankers” video series will showcase our #1NTeam, and put a face to the relationship service 1N is known for. A new Professional Services section will cater to professionals by industry, providing information on banking solutions to best fit their needs. Enhancing the Branch Experience Branches across the network continue to receive upgrades to improve brand exposure. Clients can anticipate a more modern experience as they visit our Astoria Cobble Hill branches. We still like tradition, so business by the Howard Beach Huntington fireplace is still evident in many locations. 10 Celebrating 95 Years 2022 Annual Report 11 COMMUNITY FIRST Invested in Our Community Celebrating 95 years of making an impact, the Bank has long held an ethical standard of service and good will. A mix of monetary donations in addition to hands-on volunteerism is at the heart of this commitment, allowing for meaningful connection and equity built between employees and neighbors in the communities we serve. A few of the many Community First initiatives across the branch network. ➊  Queens: Girl Scouts of Bay Terrace Team members spent the day with the Girl Scouts of Bay Terrace, teaching children about savings accounts and educational tips to help the scouts build a financial foundation for growth. Afterward, our team led the troop to our Bay Terrace Branch for a tour and to learn how banks help to keep their money safe. ➋ Brooklyn: City Harvest Food Pantry City Harvest works on a mission of fighting food insecurity in New York City, which remains near historic levels. Team members joined volunteers from across the city, assisting with unloading boxes and cases of food delivered to a local church. Quickly stocking and reorganizing, the team handed out chicken, rice, cereal, peanut butter, beans and fresh fruit, along with paper goods, to over 300 people seeking support. 12022 Data based on lending data, volunteerism efforts and philanthropic contributions 12 Celebrating 95 Years Our Impact 1 1,025+ Hours of Volunteerism Includes hands-on service and professional guidance 144 Organizations touched by 1N Through volunteerism and monetary support 173 Community Development & Reinvestment Loans Issued $33.5 Million Extended in Community Development & Reinvestment Lending ➌ Nassau: Oceanside Senior Center The Town of Hempstead’s Oceanside Senior Center offers weekly enrichment and engagement to dozens of local seniors. Volunteers from the Bank spent time with area residents enjoying an afternoon of food and good company. Our team greeted seniors and listened to stories of their lives, joined the group for exercise classes and enjoyed an afternoon dance party. ➍ Suffolk: 9-1-1 Veterans 9-1-1 Veterans is a small not-for-profit organization making a big impact by providing emergency financial assistance to Long Island’s active and veteran service members. For Thanksgiving, 1N team members volunteered alongside 9-1-1 Veterans in Lindenhurst at the 10th Annual Turkeys for Vets meal giveaway. Five hundred turkeys were donated with all the trimmings, benefiting local Veterans and active service families across Long Island. ➎ Suffolk: Habitat for Humanity Habitat for Humanity of Long Island has been building a future for local families for decades. 1N was proud to sponsor a Build Day in Riverside, helping a mother and her family own their first home. Putting hammers, saws and ladders in motion, the team worked to install vinyl siding, sheets of insulation, soffit and more. ➊ ➋ ➌ ➍ ➎ 12 Celebrating 95 Years 2022 Annual Report 13 Consolidated Balance Sheets December 31 (dollars in thousands) Assets: Cash and cash equivalents Investment securities available-for-sale, at fair value Loans: Commercial and industrial SBA Paycheck Protection Program Secured by real estate: Commercial mortgages Residential mortgages Home equity lines Consumer and other Allowance for credit losses Restricted stock, at cost Bank premises and equipment, net Right-of-use asset - operating leases Bank-owned life insurance Pension plan assets, net Deferred income tax benefit Other assets Liabilities: Deposits: Checking Savings, NOW and money market Time Short-term borrowings Long-term debt Operating lease liability Accrued expenses and other liabilities Stockholders' Equity: Common stock, par value $.10 per share: Authorized, 80,000,000 shares; Issued and outstanding, 22,443,380 and 23,240,596 shares Surplus Retained earnings Accumulated other comprehensive income (loss), net of tax 14 Celebrating 95 Years 2022 2021 $ 74,178 673,413 $ 43,675 734,318 108,493 – 90,386 30,534 1,916,493 1,240,144 45,213 1,390 3,311,733 (31,432) 1,736,612 1,202,374 44,139 991 3,105,036 (29,831) 3,280,301 3,075,205 26,363 31,660 23,952 110,848 11,049 31,124 18,623 21,524 37,523 8,438 107,831 19,097 3,987 17,191 $ 4,281,511 $ 4,068,789 $ 1,324,141 1,661,512 478,981 $ 1,400,998 1,685,410 228,837 3,464,634 – 411,000 25,896 15,445 3,315,245 125,000 186,322 11,259 17,151 3,916,975 3,654,977 2,244 78,462 348,597 429,303 (64,767) 2,324 93,480 320,321 416,125 (2,313) 364,536 413,812 $ 4,281,511 $ 4,068,789 Consolidated Statements of Income Year Ended December 31 (dollars in thousands, except per share data) Interest and dividend income: Loans Investment securities: Taxable Nontaxable Interest expense: Savings, NOW and money market deposits Time deposits Short-term borrowings Long-term debt Net interest income Provision (credit) for credit losses 2022 2021 2020 $ 116,352 $ 106,266 $ 109,492 9,795 8,063 8,162 8,531 11,873 9,851 134,210 122,959 131,216 7,180 5,296 1,207 4,814 4,414 5,712 1,427 4,599 9,097 10,977 1,574 7,540 18,497 16,152 29,188 115,713 2,331 106,807 (2,573) 102,028 3,006 Net interest income after provision (credit) for credit losses 113,382 109,380 99,022 Noninterest income: Bank-owned life insurance Service charges on deposit accounts Net gains on sales of securities Other Noninterest expense: Salaries and employee benefits Occupancy and equipment Loss on disposition of premises and fixed assets Debt extinguishment Other Income before income taxes Income tax expense Net income Earnings per share: Basic Diluted Cash dividends declared per share 3,017 3,157 – 6,242 2,399 2,925 1,104 6,146 2,313 2,962 2,556 6,255 12,416 12,574 14,086 41,096 13,407 553 – 12,523 39,753 15,338 – 1,021 12,535 37,288 12,370 – 2,559 11,364 67,579 68,647 63,581 58,219 11,287 53,307 10,218 49,527 8,324 46,932 $ 43,089 $ 41,203 $ 2.05 2.04 0.82 $ 1.82 1.81 0.78 1.73 1.72 0.74 $ $ 14 Celebrating 95 Years 2022 Annual Report 15 Seamus Doyle South Fork Team Leader – Commercial Lending Brian Emigholz Nassau Team Leader – Commercial Lending John Fitzpatrick Senior CRE Lending Officer Rose Florio-Campanaro Loan Operations Manager Thomas Ford Senior Relationship Manager Robert Grady Director of Middle Market Lending Kelly McCormack Credit Department Manager Richard O’Rourke CRE Team Leader Jane F. Reed Senior Commercial Lending Officer Angela Reese Branch District Manager Kenneth B. Ruland III Middle Market Banking Matthew Ruppert Senior Credit Officer Shannon Shakespeare Chief Human Resources Officer Thomas Sullivan Middle Market Banking Leonardo Tavera Corporate Planning Officer Antoinette Valente Branch District Manager Officers Christopher Becker President & Chief Executive Officer of the Corporation and the Bank Executive Vice Presidents Tanweer S. Ansari, Esq Internal Counsel & Chief Compliance Officer Christopher Hilton Chief Lending Officer Jay P. McConie, CPA Chief Financial Officer, Treasurer of the Corporation and Cashier of the Bank Richard P. Perro Chief Retail Officer Susanne Pheffer Chief Information Officer Michael J. Spolarich Chief Credit Officer Janet T. Verneuille, CPA Chief Risk Officer Senior Vice Presidents William Aprigliano, CPA First Senior Vice President Chief Accounting Officer and Controller Diane Beck Director of Program Management Bruce Bradley Middle Market Banking Jaqueline Brown Branch District Manager Robert Colosa Chief Auditor Margaret M. Curran-Rusch Suffolk Team Leader – Commercial Lending Maria Doyle, CPA Director of Financial Reporting and Controls The First of Long Island Corporation and The First National Bank of Long Island Board of Directors Christopher Becker President & Chief Executive Officer of The First National Bank of Long Island and The First of Long Island Corporation Paul T. Canarick President & Principal of Paul Todd, Inc., (Construction Company) Alexander L. Cover Business & Management Consultant Retired Partner of Ernst & Young LLP John J. Desmond Retired Partner-in-Charge of the Long Island Office Grant Thornton LLP Edward J. Haye Partner of Cullen & Dykman LLP Louisa M. Ives Managing Director of Chilton Trust Stephen V. Murphy President of S.V. Murphy & Co. (Investment Banking) Peter Quick Retired Denise Strain Retired Managing Director of Citigroup, Inc. Milbrey Rennie Taylor Retired Executive Producer of CBS News Walter C. Teagle III Chairman of The First of Long Island Corporation and The First National Bank of Long Island President of Teagle Management, Inc. (Private Investment Firm) Chairman Emeritus and Director of The Teagle Foundation, Inc. Eric J. Tveter Chairman of ETC Ventures LLC Senior Advisor to Arthur D. Little, Communications Equity Associates, and The Roda Group 16 Celebrating 95 Years Business Advisory Board Vincent A. Albanese Partner Albanese & Albanese LLP Barry Berg, CPA Managing Partner Nussbaum, Yates, Berg, Klein & Wolpow LLP Frank J. DellaFera President & CEO Fera Pharmaceuticals, LLC Bernard Esquenet CEO The Ruhof Corporation Kevin J. Harding Partner Harding and Burke, PLLC Our Branches Manhattan 232 Madison Avenue Brooklyn Bay Ridge Cobble Hill Queens Astoria Bay Terrace College Point Howard Beach Whitestone Carmine Inserra Executive Director Cushman & Wakefield James D. Kiley Partner Kiley, Kiley & Kiley, PLLC John Martinelli Principal Owen Petersen & Co., LLP Susan Hirschfeld Mohr President J.W. Hirschfeld Agency, Inc. John G. Passarelli, M.D. Managing Partner Sight Medical Doctors, PLLC Arthur C. Schupbach Partner Schupbach, Williams & Pavone LLP Frank Shahery Director of Marketing Convermat Corporation H. Craig Treiber CEO Treiber Family Enterprises Sal J. Turano President Abstracts Incorporated Candy Udell President London Jewelers Mark Udell CEO London Jewelers Mark Wurzel President Calico Cottage Inc. Nassau County Suffolk County Bayville East Meadow Garden City Glen Head Great Neck Greenvale Hewlett Hicksville Lake Success Locust Valley Manhasset Massapequa Merrick Rockville Centre Roslyn Heights Valley Stream Woodbury Babylon Bohemia East Hampton East Islip East Setauket Hauppauge Huntington Lindenhurst Melville Northport Patchogue Port Jefferson Riverhead Sayville Smithtown Southampton Corporate Office The First of Long Island Corporation 275 Broad Hollow Road Suite 200 Melville, NY 11747 (516) 671-4900 www.fnbli.com Transfer Agent and Registrar Continental Stock Transfer & Trust Company 1 State Street, 30th Floor New York, New York 10004 (212) 509-4000 www.continentalstock.com 

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