/x/ ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended December 31, 2002
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ---------------- to -----------------
Commission File Number: 000-24272
A. Full title of the plan and address of the plan, if different from that of the issuer named below:
FLUSHING SAVINGS BANK, FSB 401(k) SAVINGS PLAN IN RSI RETIREMENT TRUST
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office:
FLUSHING FINANCIAL CORPORATION
144-51 NORTHERN BLVD
FLUSHING, NY 11354
FLUSHING SAVINGS BANK, FSB
401(k) SAVINGS PLAN
in RSI RETIREMENT TRUST
FINANCIAL STATEMENTS
As of December 31, 2002 and 2001 and
for the year ended December 31, 2002
and Supplemental Schedule
FLUSHING SAVINGS BANK, FSB 401(k) SAVINGS PLAN
in RSI RETIREMENT TRUST
Index
|
Page(s) |
Report of Independent Auditors |
2 |
Financial statements: |
| Statements of net assets available for plan benefits |
| as of December 31, 2002 and 2001 |
3 |
Statement of changes in net assets available for plan benefits |
| for the year ended December 31, 2002 |
4 |
Notes to financial statements |
5-9 |
Supplemental schedule*: |
| Schedule H, Line 4i - Schedule of Assets Held for Investment Purposes |
| as of December 31, 2002 |
10 |
* Other schedules required by 29 CFR 2520.103-9 of the Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974 ("ERISA") have been omitted because they are not applicable.
FLUSHING SAVINGS BANK, FSB 401(k) SAVINGS PLAN
in RSI RETIREMENT TRUST
Report of Independent Auditors
To the Directors' Examining Committee and
Benefits Committee of Flushing Financial Corporation
In our opinion, the accompanying statements of net assets available for plan benefits and the related statement of changes in net
assets available for plan benefits present fairly, in all material respects, the net assets available for benefits of Flushing
Savings Bank, FSB 401(k) Savings Plan in RSI Retirement Trust (the "Plan") at December 31, 2002 and 2001, and the changes in net
assets available for benefits for the year ended December 31, 2002 in conformity with accounting principles generally accepted in the
United States of America. These financial statements are the responsibility of the Plan's management; our responsibility is to
express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with
auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental
schedule of assets held for investment purposes is presented for the purpose of additional analysis and is not a required part of the
basic financial statements but is supplementary information required by the Department of Labor's Rules and Regulations for Reporting
and Disclosure under the Employee Retirement Income Security Act of 1974. This supplemental schedule is the responsibility of the
Plan's management. The supplemental schedule has been subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements
taken as a whole.
/S/ PricewaterhouseCoopers LLP
October 8, 2003
FLUSHING SAVINGS BANK, FSB 401(k) SAVINGS PLAN
in RSI RETIREMENT TRUST
Statements of Net Assets Available for Plan Benefits
As of December 31, 2002 and 2001
|
December 31, |
December 31, |
|
2002
|
2001
|
| Assets: |
|
|
| |
|
| |
|
Investments at fair value (Note 3) | | |
$ | 4,962,614 |
|
$ | 5,751,582 |
|
| Participant loans | | |
| 115,832 |
|
| 166,499 |
|
|
| |
| |
| | | |
| 5,078,446 |
|
| 5,918,081 |
|
| Receivables: | | |
| Employer Contributions Receivable | | |
| 4,953 |
|
| -- |
|
| Other Receivable | | |
| 93 |
|
| -- |
|
|
| |
| |
| Total Receivables | | |
| 5,046 |
|
| -- |
|
Cash | | |
| 15,975 |
|
| -- |
|
|
| |
| |
| Total assets | | |
| 5,099,467 |
|
| 5,918,081 |
|
|
| |
| |
| Liability: | | |
Benefits payable | | |
| -- |
|
| 327 |
|
|
| |
| |
| Net Assets Available | | |
| for Plan Benefits | | |
$ | 5,099,467 |
|
$ | 5,917,754 |
|
|
| |
| |
The accompanying notes are an integral part of these financial statements.
FLUSHING SAVINGS BANK, FSB 401(k) SAVINGS PLAN
in RSI RETIREMENT TRUST
Statement of Changes in Net Assets Available for Plan Benefits
For the year ended December 31, 2002
|
|
| Additions to net assets attributed to: |
|
|
| |
|
Investment income: | | |
| Dividends and interest | | |
$ | 61,679 |
|
Contributions: | | |
| Employer, net of forfeitures | | |
| 157,843 |
|
| Participants | | |
| 381,882 |
|
|
| |
| Total contributions | | |
| 539,725 |
|
|
| |
| Total additions | | |
| 601,404 |
|
|
| |
| Deductions from net assets attributed to: | | |
Net depreciation in fair value of investments | | |
| 841,965 |
|
| Benefits paid to participants | | |
| 577,726 |
|
|
| |
| Total deductions | | |
| 1,419,691 |
|
|
| |
| Net decrease | | |
| 818,287 |
|
Net Assets Available for Plan Benefits - December 31, 2001 | | |
| 5,917,754 |
|
|
| |
| Net Assets Available for Plan Benefits - December 31, 2002 | | |
$ | 5,099,467 |
|
|
| |
The accompanying notes are an integral part of these financial statements.
FLUSHING SAVINGS BANK, FSB 401(k) SAVINGS PLAN
in RSI RETIREMENT TRUST
Notes to Financial Statements
1. Description of Plan:
-
The following description of Flushing Savings Bank, FSB 401(k) Savings Plan in RSI Retirement Trust (the "Plan") provides
only general information. Participants should refer to the Plan agreement for a more complete description of the Plan's
provisions.
-
a. General:
The Plan is a tax-deferred savings plan which began on September 1, 1987, and covers
all salaried employees of Flushing Savings Bank, FSB
(the "Bank") who have completed one year of service and are twenty-one years of age or
older. The Plan is subject to the provisions of the
Employee Retirement Income Security Act of 1974 ("ERISA").
-
b. Contributions:
Participant contributions can be no less than 2% nor greater than 10% of their base compensation for each plan year and
cannot exceed $11,000 annually for the plan year ended December 31, 2002 adjusted as prescribed under the Internal
Revenue Code. The Bank will match 50% of each participant's basic contributions up to a maximum of 3% of the
participant's base compensation. Of the 50% match, one half of the match will be invested into the Flushing Financial
Corporation Common Stock Fund. The remaining half of the match will be invested into corresponding participant directed
investment accounts. Currently, contributions to the Plan are not subject to Federal, state, or local income taxes until
withdrawn from the Plan. Participant forfeitures serve to reduce the contribution due from the Bank. Participant's may
also contribute amounts representing distributions from other qualified defined benefit or defined contribution plans.
-
c. Participant accounts:
Each participant's account is credited with the participant's contributions and the Bank's matching contributions. The
plan assets are segregated into eight investment accounts: Core Equity Fund, Emerging Growth Equity Fund, Value Equity
Fund, Intermediate-Term Bond Fund, Actively Managed Bond Fund, Short-Term Investment Fund, Retirement System Group
Common Stock and Flushing Financial Corporation Common Stock Fund. The assets of the Flushing Financial Corporation
Common Stock Fund are held by HSBC Bank USA. The other plan assets are held by the RSI Retirement Trust.
-
Certain assets are not allocated to the above investment accounts. Those unallocated amounts represent contributions
pending allocation to the designed investment accounts. In accordance with the provisions of the Plan, net assets are to
be valued from time to time, but not less often than monthly, and the increase or decrease in such value since the last
valuation date is allocated among the participants' accounts so as to preserve each participant's beneficial interest in
the Plan.
-
d. Vesting:
Participants are immediately 100 percent vested in their salary deferral contributions plus earnings thereon. Vesting of
employer contributions on behalf of each participant is based on continuous years of service. A participant is 100
percent vested after six years of credited service. At December 31, 2002, forfeited nonvested accounts totaled $124,
which will be used to reduce future employer contributions.
Continued
FLUSHING SAVINGS BANK, FSB 401(k) SAVINGS PLAN
in RSI RETIREMENT TRUST
Notes to Financial Statements, continued
-
e. Investment options:
Upon enrollment in the Plan, a participant may direct employee contributions in one percent increments into the eight
investment accounts. Thereafter, a participant may direct investment changes in their accounts not more than once per
calendar quarter. However, participants are not permitted to redirect the Bank's matching contribution that is made to
the Flushing Financial Corporation Common Stock Fund.
-
f. Payment of benefits:
Upon termination of service, a participant is entitled to receive a lump sum or, in certain circumstances, quarterly,
semi-annual, or annual installments, equal to the value of his or her account to the extent such funds are vested.
-
g. Voting rights:
With respect to the Flushing Financial Corporation Common Stock Fund, each participant is entitled to exercise voting
rights attributable to the shares allocated to his or her account and is notified by the Trustee prior to the time that
such rights are to be exercised. With respect to shares of stock credited to participant accounts as to which the
Trustee did not receive timely voting instructions and shares of stock not credited to participant's account, the
Trustee shall vote all such shares of stock in the same proportion as were voted shares as to which participants
provided timely instructions. The shares held in the Retirement System Group Common Stock Fund are voted at the
discretion of the Plan Sponsor. For the other stock funds, the shares are voted at the discretion of the Plan Trustee.
-
h. Loans to participants:
Loans are made available to all participants on a uniform and nondiscriminatory basis. All loans must be adequately
collateralized and amortized over a period not to exceed five years unless the loan is to purchase the principle
residence of a participant, in which case, the term cannot exceed ten years. Loans must bear a reasonable rate of
interest (currently prime rounded to the nearest one quarter of one percent). Loans are limited by the Internal Revenue
Code Section 72(p) and may not exceed the lesser of (i) 50% of the net value of a participant's vested account balance
or (ii) $50,000 reduced by the largest outstanding loan balance in the Plan during the preceding 12 months. At December
31, 2002, outstanding loans bore interest rates in the range of 4.75% to 9.5%.
2. Summary of Significant Accounting Policies:
-
a. Basis of presentation
The accompanying financial statements have been prepared using the accrual method of accounting.
-
b. Investment Valuation and Income Recognition:
The Plan's investments are stated at fair value. Shares of registered investment companies are valued at quoted market
prices which represent the net asset value of shares held by the Plan at year-end. Loan receivable from participants are
valued at cost, which approximates fair value.
Continued
FLUSHING SAVINGS BANK, FSB 401(k) SAVINGS PLAN
in RSI RETIREMENT TRUST
Notes to Financial Statements, continued
-
The Plan presents interest and dividend income and net appreciation (depreciation) in the fair value of its investments in
the statement of changes in net assets available for plan benefits. Net appreciation (depreciation) in the fair value of
its funds and common stock consists of the realized gains or losses and the unrealized appreciation (depreciation) on
those investments. Interest and dividends consist of interest payments received on interest bearing securities such as
money market securities and dividends payments received from individual securities such as common and preferred stock.
Dividend and interest income on investments held by the funds are reinvested by each fund.
-
c. Expenses:
The ordinary administrative expenses of the Plan, including compensation of the Trustee and other administrative expenses
of the Trustee, are paid from the Plan unless paid by the Bank at its discretion. For the year ended December 31, 2002,
the Bank elected to pay the expenses of the Plan.
-
d. Other:
Interest income on loans is recorded as earned on an accrual basis.
-
e. Payment of benefits:
Benefit payments to participants are recorded upon distribution.
-
f. Estimates:
The preparation of the Plan's financial statements in conformity with accounting principles generally accepted in the
United States of America requires the Plan Administrator to make estimates and assumptions that affect the reported
amounts of net assets available for benefits at the date of the financial statements, the changes in net assets available
for benefits during the period, and the disclosure of contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ
from those estimates.
-
g. Risks and uncertainties:
The Plan invests in six RSI Retirement Trust Funds, one equity fund, which contains an HSBC Bank short-term investment
fund, and one equity security. These investments are exposed to various risks, such as interest rate, market and credit
risk. Due to the level of risk associated with certain investment securities in which these funds may invest, and the
level of uncertainty related to changes in the value of investment securities, it is at least reasonably possible that
changes in risks in the near term could materially affect the amounts reported in the Statement of Net Assets Available
for Plan Benefits and the Statement of Changes in Net Assets Available for Plan Benefits.
Continued
FLUSHING SAVINGS BANK, FSB 401(k) SAVINGS PLAN
in RSI RETIREMENT TRUST
Notes to Financial Statements, continued
3. Investments
-
The following presents investments that represent five percent or more of the Plan's net assets.
|
December 31, |
December 31, |
|
2002
|
2001
|
Core Equity Fund, 13,936.627 and 14,182.822
shares, respectively |
|
|
$ | 871,039 |
|
$ | 1,260,711 |
|
Emerging Growth Equity Fund, 5,924.838 and
5,898.374 shares, respectively | | |
| 300,863 |
|
| 525,191 |
|
Value Equity Fund, 7,644.794 and 7,509.716
shares, respectively | | |
| 523,439 |
|
| 633,895 |
|
Short Term Investment Fund, 25,653.011
and 14,816.939 shares,respectively | | |
| 678,266 |
|
| 385,389 |
|
Actively Managed Bond Fund, 5,339.116
and 4,164.031 shares,respectively | | |
| 263,699 |
|
| 189,172 |
|
Flushing Financial Corporation Common
Stock, 129,721 and 144,065 shares, respectively | | |
| 2,124,571 |
* |
| 2,564,357 |
* |
|
|
|
| * Nonparticipant-directed | | |
- During 2002, the Plan's investments (including gains and losses on investments bought and sold, as well as held during the
year) depreciated in value by $841,965 as follows:
|
|
| Flushing Financial Corporation Common Stock Fund |
|
|
$ | (164,597 |
) |
| Value Equity Fund | | |
| (120,532 |
) |
| Short-term Investment Fund | | |
| 7,702 |
|
| Actively Managed Bond Fund | | |
| 18,060 |
|
| Intermediate-term Bond Fund | | |
| 4,541 |
|
| Retirement System Group Inc. Common Stock | | |
| (531 |
) |
| Emerging Growth Equity Fund | | |
| (223,407 |
) |
| Core Equity Fund | | |
| (363,201 |
) |
|
| |
| Net depreciation | | |
$ | (841,965 |
) |
|
| |
4. Nonparticipant-Directed Investments
-
Information about the net assets and the significant components of the changes in net assets relating to the
nonparticipant-directed investments is as follows:
|
December 31, |
December 31, |
|
2002
|
2001
|
| Flushing Financial Corporation Common Stock Fund |
|
|
$ | 2,202,334 |
|
$ | 2,656,101 |
|
Continued
FLUSHING SAVINGS BANK, FSB 401(k) SAVINGS PLAN
in RSI RETIREMENT TRUST
Notes to Financial Statements, continued
|
Year Ended |
|
December 31, |
|
2002
|
| Changes in Net Assets: |
|
|
| |
|
| Contributions | | |
$ | 187,489 |
|
| Dividends and interest | | |
| 50,927 |
|
| Net depreciation | | |
| (164,597 |
) |
| Benefits paid to participants | | |
| (241,525 |
) |
| Net transfers to/from participant-directed investments | | |
| (286,061 |
) |
|
| |
| | | |
$ | (453,767 |
) |
|
| |
5. Plan Termination:
-
Although it has not expressed any intent to do so, the Bank specifically reserves the right, at any time, to terminate the
Plan or to amend, in whole or in part, any or all of the provisions of the Plan, subject to the provisions of ERISA and
approval of the Directors. In the event of termination or partial termination of the Plan or upon complete discontinuance of
contributions under the Plan, the accounts of each affected participant shall become 100% vested and fully distributable, in
accordance with the Internal Revenue Code and all income tax regulations promulgated thereunder.
6. Federal Tax Status:
-
The Internal Revenue Service has determined and informed the Company by a signed letter dated April 12, 2002 that the Plan
and related trust are designed in accordance with applicable sections of the Internal Revenue Code. The Plan has not been
amended since receiving the determination letter.
7. Related-Party Transactions
-
Plan investments are shares of mutual funds managed by RSI Retirement Trust, which is also the Trustee of the Plan.
FLUSHING SAVINGS BANK, FSB 401(k) SAVINGS PLAN
in RSI RETIREMENT TRUST
Schedule H, Line 4i - Schedule of Assets Held for Investment Purposes
As of December 31, 2002
| Identity of issue, |
Description of investment including |
|
|
| borrower, lessor |
maturity date, rate of interest, |
|
Current |
or similar party
|
collateral, par, or maturity value
|
Cost*
|
value
|
RSI Retirement Trust |
|
|
Core Equity |
|
|
$ | 718,818 |
|
$ | 871,039 |
|
RSI Retirement Trust | | |
Emerging Growth Equity | | |
| 459,592 |
|
| 300,863 |
|
RSI Retirement Trust | | |
Value Equity | | |
| 576,312 |
|
| 523,439 |
|
RSI Retirement Trust | | |
Short-Term Investment | | |
| 670,390 |
|
| 678,266 |
|
RSI Retirement Trust | | |
Actively Managed Bond | | |
| 241,504 |
|
| 263,699 |
|
RSI Retirement Trust | | |
Intermediate-Term Bond | | |
| 114,991 |
|
| 121,150 |
|
Retirement System Group Inc. | | |
Retirement System Group Stock | | |
| 2,347 |
|
| 1,824 |
|
Flushing Financial Corp. | | |
Common Stock** | | |
| 1,080,165 |
|
| 2,124,571 |
|
HSBC Bank USA | | |
Common Collective Trust** | | |
| 77,763 |
|
| 77,763 |
|
Participant Loans | | |
Loans to participants*** | | |
| 115,832 |
|
| 115,832 |
|
|
|
| |
| |
| Total | | |
| | |
$ | 4,057,714 |
|
$ | 5,078,446 |
|
|
|
| |
| |
* Represents the Plan's percentage of each fund's historical cost.
** Flushing Financial Corporation Common Stock Fund consists of Flushing Financial Corporation Common Stock and
HSBC Bank USA Common Collective Trust.
*** Loans bear a rate of interest of prime rounded to the nearest one quarter of one percent.
Interest rate range of 4.25% to 9.5% for all outstanding loans to participants as of December 31, 2002.
All of the funds shown above are managed by RSI Retirement Trust and the common stock represents
ownership in Retirement System Group Inc. and Flushing Financial Corporation.
FLUSHING SAVINGS BANK, FSB 401(k) SAVINGS PLAN
in RSI RETIREMENT TRUST
SIGNATURE
The Plan.
Pursuant
to the requirements of the Securities Exchange Act of 1934, the trustees for the plan
have duly caused this annual report to be signed by the undersigned
hereunto duly authorized.
|
|
|
| |
|
Flushing Savings Bank, FSB
401(k) Savings Plan In RSI Retirement Trust, |
| |
| |
By: |
/s/ Anna M. Piacentini |
| |
|
|
| |
|
Anna M. Piacentini |
| |
|
Plan Administrator |
FLUSHING SAVINGS BANK, FSB 401(k) SAVINGS PLAN
in RSI RETIREMENT TRUST
INDEX TO EXHIBITS
|
|
|
| Exhibit |
|
|
23 |
Consent of Independent Accountants |
|
| |
|
|