DA Davidson holds Flushing Financial stock at $13 target

Tuesday, Flushing Financial Corp (NASDAQ:FFIC), a $429 million market cap financial institution, maintained its Neutral rating and $13.00 price target from DA Davidson, following the company’s recent financial performance review. The firm’s analyst pointed out that Flushing Financial’s pre-provision net revenue (PPNR) surpassed expectations due to improved net interest income (NII) and operational expenditures, which helped to balance weaker fee income. According to InvestingPro analysis, the stock appears undervalued based on its Fair Value calculation, with analysts maintaining a consensus Hold recommendation.

The analysis highlighted several key aspects of Flushing Financial’s quarterly report. The company experienced a significant goodwill impairment that impacted earnings per share by $0.51. Nevertheless, Flushing Financial saw a net interest margin (NIM) expansion of 12 basis points and a substantial 30% quarter-over-quarter increase in deposit inflows. Loan volumes remained relatively stable with a slight 0.5% decrease, and net charge-offs (NCOs) were unchanged at 27 basis points. InvestingPro data reveals the company maintains a notable 6.91% dividend yield and has consistently paid dividends for 30 consecutive years, though its overall financial health score currently indicates some weakness.

Despite these positive aspects, Flushing Financial’s shares have fallen approximately 4% in comparison to the Keefe Bruyette & Woods Bank Index (KRX) since the earnings report was released. This decline is attributed to a larger than anticipated loan loss provision, which resulted in a core earnings per share (EPS) that did not meet expectations. DA Davidson has adjusted its 2026 earnings estimate upwards due to an anticipated improvement in NIM as loan rates rise. However, the firm notes that Flushing Financial remains cautious about the potential for margin improvement without a steeper yield curve.

The company’s strategic investments, such as those in the Small Business Administration (SBA (LON:SBA)) lending and the expansion of new branches in Asian markets, are expected to contribute positively. While analysts at DA Davidson have expressed concerns regarding overall profitability within their forecast period, seeing limited potential for the stock to outperform the given price target, InvestingPro data shows that net income is expected to grow this year, with analysts projecting a return to profitability. Consequently, they have reaffirmed their Neutral stance on Flushing Financial’s shares, with price targets ranging from $13 to $16.

In other recent news, Flushing Financial Corporation reported its first-quarter 2025 earnings, exceeding analysts’ projections with an earnings per share (EPS) of $0.23, compared to the forecast of $0.21. The company’s revenue also surpassed expectations, reaching $58.06 million against a projected $55.38 million. Despite these positive results, the company reported a non-cash goodwill impairment charge of $17.6 million, which impacted overall profitability. Additionally, Raymond (NSE:RYMD) James adjusted its price target for Flushing Financial, lowering it from $19.00 to $16.00, while maintaining an Outperform rating, citing alignment with lower industry valuations.

Flushing Financial’s net interest margin showed improvement, supporting a positive earnings outlook, but concerns were noted regarding credit migration and net charge-offs. The company’s loan portfolio demonstrated resilience, with a loan-to-value ratio of 43% on a multi-family property loan and active borrower collaboration to resolve credit issues. Furthermore, Flushing Financial is expanding into Asian markets with new branch openings planned, highlighting its strategic initiatives aimed at long-term growth. The company’s stock is trading at 58% of tangible book value, suggesting a discounted valuation relative to its net asset value.

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