Note 11 - Income Taxes

3 Months Ended

Mar. 31, 2012

Income Tax Disclosure [Text Block]

11.           Income Taxes

Flushing Financial Corporation files consolidated Federal and combined New York State and New York City income tax returns with its subsidiaries, with the exception of Flushing Financial Capital Trust II, Flushing Financial Capital Trust III, and Flushing Financial Capital Trust IV, which file separate Federal income tax returns as trusts, and Flushing Preferred Funding Corporation, which files a separate Federal and New York State income tax return as a real estate investment trust.

Income tax provisions are summarized as follows:

	For the three months ended March 31,
(In thousands)	2012		2011
Federal:
Current	$	3,132	$	3,826
Deferred		492		86
Total federal tax provision		3,624		3,912
State and Local:
Current		713		1,107
Deferred		221		39
Total state and local tax provision		934		1,146
Total income tax provision	$	4,558	$	5,058

The income tax provision in the Consolidated Statements of Income has been provided at effective rates of 39.0% and 38.9% for the three months ended March 31, 2012 and 2011, respectively.

The effective rates differ from the statutory federal income tax rate as follows:

	For the three months ended March 31,
(dollars in thousands)	2012					2011
Taxes at federal statutory rate	$	4,090		35.0	%	$	4,554		35.0	%
Increase (reduction) in taxes resulting from:
State and local income tax, net of Federal income tax benefit		607		5.2			745		5.7
Other		(139	)	(1.2	)		(241	)	(1.8	)
Taxes at effective rate	$	4,558		39.0	%	$	5,058		38.9	%

The Company has recorded a deferred tax asset of $33.2 million at March 31, 2012, which is included in “Other assets” in the Consolidated Statements of Financial Condition. This represents the anticipated net federal, state and local tax benefits expected to be realized in future years upon the utilization of the underlying tax attributes comprising this balance. The Company has reported taxable income for federal, state, and local tax purposes in each of the past three fiscal years. In management’s opinion, in view of the Company’s previous, current and projected future earnings trend, the probability that some of the Company’s $30.9 million deferred tax liability can be used to offset a portion of the deferred tax asset, as well as certain tax planning strategies, it is more likely than not that the deferred tax asset will be fully realized. Accordingly, no valuation allowance was deemed necessary for the deferred tax asset at March 31, 2012.