Flushing Financial Corp. in Lake Success, N.Y., said late Tuesday that its third-quarter net income fell 63% from a year earlier, to $2.1 million.
The $3.6 billion-asset company attributed the drop partly to a $3 million loan-loss provision. It had no provision for the third quarter of last year.
Nonperforming loans jumped 285% from a year earlier and 134% from the second quarter, to $18.5 million.
John R. Buran, Flushing's president and chief executive officer, said in a press release that the nonperforming loan ratio remains a "very manageable" 0.64%.
The increase in nonperforming loans came mostly in mortgages for multifamily residential and one- to four-family mixed-use properties, Mr. Buran said. All but two of the nonperformers have an outstanding principal balance under $1 million, he said.
Two large one-time items also affected Flushing's earnings. It reported a $14.7 million other-than-temporary impairment charge on Freddie Mac and Fannie Mae preferred securities. But widening spreads on other financial instruments produced an $11.5 million after-tax gain; Flushing marked trust-preferred securities and related junior subordinated debentures to fair value.
Mr. Buran said his company has not decided whether to participate in the Treasury Department's Capital Purchase Plan; it is eligible to apply for $23 million to $69 million of capital.