 GLEN HEAD, N.Y., July 30, 2020 GLOBE NEWSWIRE -- The First of Long Island Corporation Nasdaq: FLIC, the parent company of The First National Bank of Long Island, reported net income and earnings per share for the three and six months ended June 30, 2020. In the highlights that follow, all comparisons are of the current three or six-month period to the same period last year unless otherwise indicated.SECOND QUARTER HIGHLIGHTS Net Income and EPS were 10.8 million and .45, respectively, compared to 10.7 million and .43 ROA and ROE were 1.02 and 11.30, respectively, compared to 1.02 and 11.00 Net interest margin was 2.64 versus 2.58 Cost of interest-bearing deposits declined 51 basis points to .96 and cost of interest-bearing liabilities declined 43 basis points to 1.14 Cash Dividends Per Share increased 5.9 to .18 from .17 Provided 621 million in loan modifications and originated 171 million in SBA Paycheck Protection Program PPP loans in support of customers during the pandemic Effective Tax Rate was 16.8 versus 16.0SIX MONTH HIGHLIGHTS Net Income and EPS were 19.9 million and .83, respectively, compared to 21.6 million and .86 ROA and ROE were .96 and 10.34, respectively, compared to 1.03 and 11.15 Net interest margin was 2.63 versus 2.57 Effective Tax Rate was 16.1 versus 16.9Analysis of Earnings Six Months Ended June 30, 2020Net income for the first six months of 2020 was 19.9 million, a decrease of 1.7 million, or 7.8, versus the same period last year. The decrease is due to increases in the provision for credit losses of 2.5 million and noninterest expense of 607,000, or 2.0. These items were partially offset by increases in net interest income of 405,000, or .8, and noninterest income of 428,000, or 8.3, and a decrease in income tax expense of 581,000.The increase in net interest income is mainly attributable to a reduction in deposit rates in response to decreases in the Federal Funds Target Rate and a very low interest rate environment. The cost of savings, NOW and money market deposits declined 28 basis points to .78 and the cost of interest-bearing liabilities declined 26 basis points to 1.30. These decreases far outpaced the 10 basis point decline in yield on securities and loans which are generally not subject to immediate repricing with changes in market interest rates. The increase in net interest income was also attributable to income from SBA PPP loans of 896,000 and a favorable shift in the mix of funding as an increase in average checking deposits of 81.9 million and a decline in average interest-bearing liabilities of 158.1 million resulted in average checking deposits comprising a larger portion of total funding. The increase in average checking deposits is mainly attributable to the SBA PPP. The decline in yield on securities and loans was mainly attributable to an increase in prepayment speeds and lower yields available on securities purchases and loan originations. The economic impact of the COVID-19 pandemic pandemic has slowed loan and overall balance sheet growth. The average balance of loans decreased 77.8 million, or 2.4, and the average balance of investment securities declined 64.3 million, or 8.2. The average balance of loans includes 62.7 million of SBA PPP loans at a weighted average yield of 2.9 for the current six-month period. The pandemic and measures taken to contain it significantly disrupted economic activity in our area, causing businesses and schools to close and an increase in unemployment. These disruptions made it difficult to solicit new business, analyze the financial impact on new and existing customers and grow our loan pipeline. The pandemic was largely responsible for a mortgage loan pipeline at quarter end of 39 million and an increase in average interest-earning bank balances of 66.6 million. Net interest margin for the second quarter and first six months of 2020 was 2.64 and 2.63, respectively, each increasing 6 basis points over the comparable periods of 2019. The increases were mainly attributable to our ability to reduce the rates paid on interest-bearing deposits faster than our interest-earning assets repriced downward as a significant portion of our municipal bond and mortgage loan portfolios have fixed rates. The provision for credit losses was 2.5 million for the first six months of 2020 on a current expected credit loss CECL basis as compared to a credit provision of 35,000 for the 2019 period on an incurred loss basis. The 2.5 million provision for the current six-month period was largely attributable to the pandemic and includes 4.2 million to reflect current and forecasted economic conditions and 576,000 for net chargeoffs, partially offset by a decline in outstanding residential and commercial mortgage loans and lower historical loss rates. The credit provision of 35,000 for the 2019 period was driven mainly by declines in outstanding loans and historical loss rates partially offset by net chargeoffs.The increase in noninterest income of 428,000 is primarily attributable to an increase in the non-service components of the Banks defined benefit pension plan of 523,000. Management remains focused on revenue enhancement initiatives; however, the pandemic is negatively affecting most categories of noninterest income. The increase in noninterest expense of 607,000 includes approximately 300,000 of expense attributable to the pandemic and 128,000 of severance charges related to the pending closure and consolidation of three branches. Pandemic expenses include branch and office sanitizing expenses, cleaning and safety equipment, IT-related expenditures and special staff bonuses in recognition of COVID-19 work-related challenges and the SBA PPP. Other factors which increased noninterest expense include higher salaries, employee benefits and equity compensation expense mainly related to hiring a middle market lending team, salary adjustments and the immediate vesting of stock awards granted to directors in the second quarter of 2020. These expenses were partially offset by decreases in FDIC insurance expense of 413,000 and marketing expense of 210,000. The decrease in FDIC insurance expense was due to assessment credits received by the Bank which are now fully utilized.The decrease in income tax expense of 581,000 is primarily attributable to lower pretax earnings in the current six-month period as compared to the 2019 period and a decline in the effective tax rate to 16.1.Analysis of Earnings Second Quarter 2020 Versus Second Quarter 2019Net income for the second quarter of 2020 of 10.8 million was relatively unchanged from the comparable period of 2019. Earnings for the second quarter include an increase in net interest income of 829,000 and a decrease in the provision for credit losses of 330,000. Substantially offsetting these items were increases in noninterest expense and income tax expense of 884,000 and 114,000, respectively, and a decline in service charges on deposit accounts of 161,000 due to the pandemic. The increase in net interest income occurred for substantially the same reasons discussed above with respect to the six-month periods. The provision for credit losses was 92,000 for the current quarter on a CECL basis. The 92,000 provision was mainly attributable to the pandemic and includes 1.5 million to reflect current and forecasted economic conditions and 146,000 for net chargeoffs, partially offset by a decline in outstanding residential and commercial mortgage loans and lower historical loss rates. The increase in noninterest expense was primarily attributable to the items discussed above with respect to the six-month periods. The increase in income tax expense reflects higher pretax earnings in the current quarter and an increase in the effective tax rate to 16.8.Analysis of Earnings Second Quarter Versus First Quarter 2020Net income for the second quarter of 2020 increased 1.6 million from 9.1 million earned in the first quarter. The increase is primarily attributable to an increase in net interest income of 1.1 million and a decrease in the provision for credit losses of 2.3 million. Partially offsetting these items were a decrease in service charges on deposit accounts of 368,000 due to the pandemic and increases in salaries, employee benefits and equity compensation expense of 912,000 and income tax expense of 528,000. The increase in net interest income occurred for substantially the same reasons discussed above with respect to the six-month periods. The decrease in the provision for credit losses reflects lower charges for current and forecasted economic conditions in the second quarter as a substantial portion of the estimated negative impact of the pandemic was recorded in the first quarter, a larger decline in outstanding residential and commercial mortgage loans in the second quarter and higher net chargeoffs in the first quarter. The increase in salaries, employee benefits and equity compensation expense includes the aforementioned special staff bonuses, severance charges and a charge for stock awards granted to directors. The increase in income tax expense reflects higher pretax earnings in the current quarter and an increase in the effective tax rate.Asset QualityThe Banks allowance for credit losses to total loans reserve coverage ratio was 1.01 at January 1, 2020 on a CECL basis, 1.09 at March 31, 2020 and 1.08 at June 30, 2020. The reserve coverage ratio increased 8 basis points during the first quarter and, excluding Federally-guaranteed SBA PPP loans, increased 4 basis points during the second quarter to 1.13 at June 30, 2020. 