• Flushing Financial Corporation Reports 2023 and 4Q23 GAAP EPS of $0.96 and $0.27, and Core EPS of $0.83 and $0.25, Respectively; Continues to Successfully Execute On Its Action Plan

    ソース: Nasdaq GlobeNewswire / 25 1 2024 18:00:02   America/New_York

    John R. Buran, President and CEO Commentary  

    “Flushing Financial delivered sequential GAAP and Core NIM expansion in 4Q23 of 7 and 18 basis points, respectively, as our team continued to successfully execute against the previously announced action plan amid this challenging environment. Importantly, during the quarter, total average deposits increased 3.1% YoY and 0.9% QoQ, while average noninterest bearing deposits increased $21.6 million, or 2.5% QoQ. Our loan portfolio remains resilient through the credit cycle with 89% secured by real estate, strong debt service coverage ratios, low average loan to values, and controllable repricing risk. Credit quality continues to be a strength for the Company with less than one basis point of net charge-offs in 4Q23 although there was a slight uptick in NPAs.

    Given our progress to date, we are expanding our areas of focus to include: 1) increasing NIM and reducing volatility; 2) maintaining credit discipline; 3) preserving strong liquidity and capital; and 4) bending the expense curve. Continuing to advance these priorities will enable us to navigate the current environment while positioning the Company for long-term profitable growth.”
    - John R. Buran, President and CEO

    UNIONDALE, N.Y., Jan. 25, 2024 (GLOBE NEWSWIRE) -- GAAP and Core NIM Expand QoQ; Average Total Deposits Increase. The Company reported fourth quarter and full year 2023 GAAP EPS of $0.27 and $0.96, respectively. Core EPS for the fourth quarter and full year of 2023 totaled $0.25 and $0.83, respectively. 4Q23 GAAP NIM was 2.29% while Core NIM amounted to 2.31%. The actions undertaken in 2023 to reduce interest rate risk, including adding interest rate hedges and floating rate loans, assisted in reducing the NIM compression. Absent episodic items, the NIM was 2.14%, an increase of 5 basis points quarter over quarter. Average total deposits increased 3.1% YoY and 0.9% QoQ while importantly, noninterest bearing deposits increased $21.6 million, or 2.5% QoQ.

    Strong Credit Quality; Stable Capital. Nonperforming assets to total assets increased to 54 bps compared to 45 bps in 3Q23, while criticized and classified loans to loans was 1.11% in 4Q23, compared to 1.08% in 3Q23. Net charge-offs were only $60 thousand in 4Q23. Capital continues to be sound with TCE/TA1 of 7.64% at December 31, 2023, compared to 7.56% at September 30, 2023. The Company repurchased 38,815 shares at an average cost $15.08 (33% discount to tangible book value) during 4Q23.

     
    Key Financial Metrics2


                      
      4Q23  3Q23 2Q23 1Q23 4Q22  2023  2022
    GAAP:                 
    EPS $0.27  $0.26 $0.29 $0.13 $0.34  $0.96  $2.50
    ROAA (%)  0.38   0.37  0.41  0.19  0.48   0.34   0.93
    ROAE (%)  4.84   4.64  5.16  2.37  6.06   4.25   11.44
    NIM FTE3(%)  2.29   2.22  2.18  2.27  2.70   2.24   3.11
    Core:                 
    EPS $0.25  $0.25 $0.26 $0.06 $0.57  $0.83  $2.49
    ROAA (%)  0.35   0.36  0.37  0.09  0.82   0.29   0.92
    ROAE (%)  4.51   4.49  4.70  1.11  10.29   3.69   11.42
    Core NIM FTE (%)  2.31   2.13  2.17  2.25  2.63   2.21   3.07
    Credit Quality:                 
    NPAs/Loans & OREO (%)  0.67   0.56  0.58  0.61  0.77   0.67   0.77
    ACLs/Loans (%)  0.58   0.57  0.57  0.56  0.58   0.58   0.58
    ACLs/NPLs (%)  159.55   225.38  207.08  182.89  124.89   159.55   124.89
    NCOs/Avg Loans (%)  -   -  0.09  0.54  0.05   0.16   0.02
    Balance Sheet:                 
    Avg Loans ($B) $6.9  $6.8 $6.8 $6.9 $6.9  $6.8  $6.7
    Avg Dep ($B) $6.9  $6.8 $6.9 $6.8 $6.7  $6.9  $6.5
    Book Value/Share $23.21  $23.06 $23.14 $22.80 $22.97  $23.21  $22.97
    Tangible BV/Share $22.54  $22.39 $22.47 $22.14 $22.31  $22.54  $22.31
    TCE/TA (%)  7.64   7.56  7.70  7.72  7.82   7.64   7.82

    Note: In certain circumstances, reclassifications have been made to prior periods to conform to the current presentation.
    1 Tangible Common Equity (“TCE”)/Total Assets (“TA”) 2 See “Reconciliation of GAAP Earnings and Core Earnings”, “Reconciliation of GAAP Revenue and Pre-Provision Pre-Tax Net Revenue”, and “Reconciliation of GAAP Net Interest Margin to Core Net Interest Income and Net Interest Margin.” 3 Net Interest Margin (“NIM”) Fully Taxable Equivalent (“FTE”).

      
    4Q23 Highlights
    • Net interest margin FTE decreased 41 bps YoY, but increased 7 bps QoQ to 2.29%; Core net interest margin FTE decreased 32 bps YoY but improved 18 bps QoQ to 2.31%; Both GAAP and Core NIM benefited from prepayment penalty income, net reversals and recovered interest from nonaccrual loans, and customer swap termination fees, which totaled $3.4 million or 17 bps in 4Q23
    • Average total deposits increased 3.1% YoY and 0.9% QoQ to $6.9 billion; Average noninterest bearing deposits increased $21.6 million QoQ, totaling 12.7% of average total deposits compared to 14.7% in 4Q22 and 12.5% in 3Q23. Average CDs were $2.3 billion, up 73.3% YoY and 2.2% QoQ
    • Period end net loans decreased 0.4% YoY, but increased 0.1% QoQ; Loan closings were $244.3 million up 8.5% YoY and 1.2% QoQ; The yields on closings increased 159 bps YoY and 21 bps QoQ to 7.69%; Back-to-back swap loan originations were $121.6 million compared to $120.5 million in 3Q23 and generated $1.5 million and $1.6 million of noninterest income, respectively; Loan pipeline decreased 35.3% YoY and 55.1% QoQ to $163.1 million; Approximately 29% of the loan pipeline consists of back-to-back swap loans
    • NPAs decreased to $46.2 million from $53.4 million a year ago but increased from $38.4 million in the prior quarter
    • As separately disclosed, we have not recognized and have restated for employee retention credits formerly recognized during periods of 2023, and have fully reserved for approximately $7.0 million ($0.17/share, after tax) of refunds
    • 4Q23 noninterest expense was impacted by increasing DDA balances and strong loan production
    • Provision for credit losses was $1.0 million in 4Q23 compared to negligible amount in 4Q22 and $0.6 million in 3Q23; Net charge-offs (recoveries) were $60,000 in 4Q23 compared to $0.8 million in 4Q22 and $(42,000) in 3Q23
    • Tangible Common Equity to Tangible Assets increased to 7.64% at 4Q23 compared to 7.56% at 3Q23; Repurchased 38,815 shares at an average price of $15.08 or a 33% discount to December 31, 2023, tangible book value of $22.54
    Areas of Focus
    Increase NIM and Reduce Volatility
    • GAAP and Core NIM improved 7 bps and 18 bps QoQ, respectively, in 4Q23
    • NIM improved 5 bps QoQ to 2.14%, absent episodic items1
    • Largely achieved the goal of becoming interest rate neutral to a 100 bps change in rates
    • Approximately 25% of the loan portfolio consists of floating rate loans (including interest rate hedges)
    • Average noninterest bearing increased 2.5% QoQ and accounted for 12.7% of average total deposits
    Maintain Credit Discipline
    • Approximately 89% of the loan portfolio is collateralized by real estate with an average loan to value of less than 36%
    • Weighted average debt service coverage ratio is approximately 1.8x for multifamily and investor commercial real estate loans
    • NPAs are a low 54 bps of assets and criticized and classified loans are 1.11% of loans
    • Manhattan office buildings exposure is minimal at 0.6% of net loans
    Preserve Strong Liquidity and Capital
    • Maintaining ample liquidity with $4.1 billion of undrawn lines and resources
    • Uninsured and uncollateralized deposits were 17% of total deposits, while uninsured deposits were 30% of total deposits
    • Total average deposits increased 3.1% YoY and 0.9% QoQ
    • Checking account openings declined 6.6% YoY in 4Q23, but were up 5.7% in 2023
    • Tangible Common Equity to Tangible Assets improved to 7.64% QoQ
    • Leverage ratio remains stable at 8.47%
    Bend the Expense Curve
    • GAAP noninterest expense to average assets was 1.90% in 4Q23 compared to 1.58% in 4Q22 and 1.71% in 3Q23
    • 4Q23 noninterest expense was impacted by increasing DDA balances and strong loan production
    • 1Q24 seasonal expenses are expected to be less than half of the $4.1 million recorded in 1Q23

    1 Episodic items include prepayment penalty income, customer swap termination fees, net reversals and recovered interest from nonaccrual loans, net gain/loss from fair value on qualifying hedges, and purchase accounting adjustments

     
    Income Statement Highlights


                       
                  YoY QoQ
    ($000s, except EPS)  4Q23  3Q23 2Q23 1Q23 4Q22 Change Change
                       
    Net Interest Income  $46,085  $44,427 $43,378 $45,262 $54,201  (15.0)% 3.7 %
    Provision (Benefit) for Credit Losses   998   596  1,416  7,508  (12) (8,416.7)  67.4  
    Noninterest Income (Loss)   7,402   3,309  5,020  6,857  (7,652) (196.7)  123.7  
    Noninterest Expense   40,735   36,388  35,110  39,156  33,742  20.7   11.9  
    Income Before Income Taxes   11,754   10,752  11,872  5,455  12,819  (8.3)  9.3  
    Provision for Income Taxes   3,655   2,917  3,186  1,411  2,570  42.2   25.3  
    Net Income  $8,099  $7,835 $8,686 $4,044 $10,249  (21.0)  3.4  
    Diluted EPS  $0.27  $0.26 $0.29 $0.13 $0.34  (20.6)  3.8  
    Avg. Diluted Shares (000s)   29,650   29,703  30,090  30,265  30,420  (2.5)  (0.2) 
                       
    Core Net Income1  $7,546  $7,571 $7,912 $1,889 $17,399  (56.6)  (0.3) 
    Core EPS1  $0.25  $0.25 $0.26 $0.06 $0.57  (56.1)  -  

    1 See Reconciliation of GAAP Earnings and Core Earnings

    Net interest income decreased YoY but increased QoQ.

    • Net Interest Margin FTE of 2.29% decreased 41 bps YoY, but increased 7 bps QoQ
    • Prepayment penalty income, customer swap termination fees, net reversals and recoveries of interest from nonaccrual loans, net gains and losses from fair value adjustments on qualifying hedges, and purchase accounting accretion totaled $3.0 million (15 bps to the NIM) compared to $2.6 million (13 bps to the NIM) in 3Q23, $0.5 million (3 bps) in 2Q23, $1.1 million (6 bps) in 1Q23, and $2.4 million (12 bps) in 4Q22
    • Excluding the items in the previous bullet, net interest margin was 2.14% in 4Q23, 2.09% in 3Q23, 2.15% in 2Q23, 2.21% in 1Q23, and 2.58% in 4Q22

    The provision for credit losses increased YoY and QoQ.

    • Net charge-offs (recoveries) were $60,000 in 4Q23 (less than 1 bp of average loans) compared to $(42,000) in 3Q23 (less than (1) bp of average loans), $1.6 million in 2Q23 (9 bps of average loans), $9.2 million in 1Q23 (54 bps of average loans), and $0.8 million in 4Q22 (5 bps of average loans)
    • 1Q23 net charge-offs were primarily related to a commercial business relationship that was placed on nonaccrual in 2Q22

    Noninterest income (loss) increased YoY and QoQ.

    • Back-to-back swap loan closings of $121.6 million in 4Q23 (compared to $120.5 million in 3Q23 and $11.5 million in 2Q23) contributed to the YoY growth in core noninterest income; the Company earns fee income on back-to-back swap loan closings
    • Net gains (losses) from fair value adjustments were $0.9 million in 4Q23 ($0.02 per share, net of tax), $(1.2) million in 3Q23 ($(0.03) per share, net of tax), $0.3 million in 2Q23 ($0.01 per share, net of tax), $2.6 million in 1Q23 ($0.06 per share, net of tax), and $(0.6) million in 4Q22 ($(0.02) per share, net of tax)
    • Life insurance proceeds were $0.7 million in 4Q23 ($0.02 per share), $23,000 in 3Q23 (less than $0.01 per share), $0.6 million ($0.02 per share) in 2Q23, and $0.3 million ($0.01 per share) in 4Q22
    • Loss on the sale of securities was $10.9 million ($0.27 per share, net of tax) in 4Q22 as the Company sold $84.2 million of mortgage-based securities with an approximate yield of 1.17%; proceeds were primarily reinvested in 1Q23 into floating rate securities that had a yield at that time approximating 6.40%
    • Absent the items in the previous three bullets and other immaterial adjustments, core noninterest income was $5.8 million in 4Q23, up 64.4% YoY and 28.0% QoQ
    • 4Q23 other fee income includes net realized gains on the sale of assets and other dividends from nonqualified plans that are expected to normalize in future periods

    Noninterest expense increased YoY and QoQ.

    • 4Q23 noninterest expense was impacted by increasing DDA balances and strong loan production
    • Seasonal compensation expense was $4.1 million in 1Q23; seasonal expenses are expected to be less than half in 1Q24
    • Excluding the effects of immaterial adjustments, core operating expenses were $40.1 million in 4Q23, up 19.3% YoY, and 10.5% QoQ
    • GAAP noninterest expense to average assets was 1.90% in 4Q23, 1.71% in 3Q23, 1.66% in 2Q23, 1.85% in 1Q23, and 1.58% in 4Q22

    Provision for income taxes increased YoY and QoQ.

    • The effective tax rate was 31.1% in 4Q23, 27.1% in 3Q23, 26.8% in 2Q23, 25.9% in 1Q23, and 20.0% in 4Q22
    • The 4Q23 effective tax rate increased as a result of preferential tax items having a smaller impact due to higher pre-tax income than estimated in 3Q23 and 2Q23; the 4Q22 effective tax rate had preferential tax items that had a larger impact as a result of lower levels of pre-tax income
     
    Balance Sheet, Credit Quality, and Capital Highlights


                      
                 YoY QoQ
      4Q23  3Q23 2Q23 1Q23 4Q22 Change Change
    Averages ($MM)                 
    Loans $6,868  $6,813 $6,830 $6,871 $6,881 (0.2)% 0.8 %
    Total Deposits  6,884   6,819  6,900  6,810  6,678 3.1   1.0  
                      
    Credit Quality ($000s)                 
    Nonperforming Loans $25,172  $17,405 $18,637 $21,176 $32,382 (22.3)% 44.6 %
    Nonperforming Assets  46,153   38,386  39,618  42,157  53,363 (13.5)  20.2  
    Criticized and Classified Loans  76,719   74,169  48,675  58,130  68,093 12.7   3.4  
    Criticized and Classified Assets  97,700   95,150  69,656  79,111  89,073 9.7   2.7  
    Allowance for Credit Losses/Loans (%)  0.58   0.57  0.57  0.56  0.58 - bps 1 bp
                      
    Capital                 
    Book Value/Share $23.21  $23.06 $23.14 $22.80 $22.97 1.0 % 0.7 %
    Tangible Book Value/Share  22.54   22.39  22.47  22.14  22.31 1.0   0.7  
    Tang. Common Equity/Tang. Assets (%)  7.64   7.56  7.70  7.72  7.82 (18)bps 8 bps
    Leverage Ratio (%)  8.47   8.51  8.54  8.56  8.61 (14)  (4) 

    Average loans decreased YoY but increased QoQ.

    • Period end net loans totaled $6.9 billion, down 0.4% YoY, but up 0.1% QoQ
    • Total loan closings were $244.3 million in 4Q23, $241.5 million in 3Q23, $158.8 million in 2Q23, $173.5 million in 1Q23, and $225.2 million in 4Q22; the loan pipeline was $163.1 million at December 31, 2023, down 35.3% YoY and 55.1% QoQ
    • The diversified loan portfolio is approximately 89% collateralized by real estate with an average loan-to-value ratio of less than 36%
    • Manhattan office buildings exposure is minimal at 0.6% of net loans

    Average total deposits increased YoY and QoQ.

    • Average noninterest bearing deposits decreased 10.9% YoY, but increased 2.5% QoQ and comprised 12.7% of average total deposits in 4Q23 compared to 14.7% a year ago
    • Average CDs totaled $2.3 billion, up 73.3% YoY and 2.2% QoQ; approximately $408.6 million of non-swapped CDs are due to mature at a rate of 3.20% in 1Q24

    Credit Quality: Nonperforming loans declined YoY but increased QoQ.

    • Criticized and classified loans were 111 bps of gross loans at 4Q23 compared to 108 bps at 3Q23, 71 bps at 2Q23, 84 bps at 1Q23, and 98 bps at 4Q22
    • Allowance for credit losses were 159.5% of nonperforming loans at 4Q23 compared to 124.9% at 4Q22 and 225.4% at 3Q23

    Capital: Book value per common share and tangible book value per common share, a non-GAAP measure, both increased 1.0% YoY and 0.7% QoQ to $23.21 and $22.54, respectively.

    • The Company paid a dividend of $0.22 per share in 4Q23; repurchased 38,815 shares in 4Q23 at an average price of $15.08, representing a 33% discount to tangible book value; 807,964 shares remaining subject to repurchase under the authorized stock repurchase program, which has no expiration or maximum dollar limit
    • Tangible common equity to tangible assets was 7.64% at December 31, 2023, compared to 7.82% at December 31, 2022, and 7.56% at September 30, 2023
    Conference Call Information and First Quarter Earnings Release Date

    Conference Call Information:

    • John R. Buran, President and Chief Executive Officer, Tom Buonaiuto, Senior Executive Vice President, Chief of Staff, and Deposit Channel Executive, and Susan K. Cullen, Senior Executive Vice President and Chief Financial Officer and Treasurer, will host a conference call on Friday, January 26, 2024, at 11:00 AM (ET) to discuss the Company’s fourth quarter and full year results and strategy.
    • Dial-in for Live Call: 1-877-509-5836; Canada 855-669-9657
    • Webcast: https://event.choruscall.com/mediaframe/webcast.html?webcastid=VQZ8mq4o
    • Dial-in for Replay: 1-877-344-7529; Canada 855-669-9658
    • Replay Access Code: 6289639
    • The conference call will be simultaneously webcast and archived

    First Quarter 2024 Earnings Release Date:

    The Company plans to release First Quarter 2024 financial results after the market close on April 23, 2024; followed by a conference call at 9:30 AM (ET) on April 24, 2024.

    A detailed announcement will be issued prior to the first quarter’s close confirming the date and time of the earnings release.

    About Flushing Financial Corporation

    Flushing Financial Corporation (Nasdaq: FFIC) is the holding company for Flushing Bank®, an FDIC insured, New York State—chartered commercial bank that operates banking offices in Queens, Brooklyn, Manhattan, and on Long Island. The Bank has been building relationships with families, business owners, and communities since 1929. Today, it offers the products, services, and conveniences associated with large commercial banks, including a full complement of deposit, loan, equipment finance, and cash management services. Rewarding customers with personalized attention and bankers that can communicate in the languages prevalent within these multicultural markets is what makes the Bank uniquely different. As an Equal Housing Lender and leader in real estate lending, the Bank’s experienced lending teams create mortgage solutions for real estate owners and property managers both within and outside the New York City metropolitan area. The Bank also fosters relationships with consumers nationwide through its online banking division with the iGObanking® and BankPurely® brands.

    Additional information on Flushing Bank and Flushing Financial Corporation may be obtained by visiting the Company’s website at FlushingBank.com. Flushing Financial Corporation’s earnings release and presentation slides will be available prior to the conference call at www.FlushingBank.com under Investor Relations.

    “Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: Statements in this Press Release relating to plans, strategies, economic performance and trends, projections of results of specific activities or investments and other statements that are not descriptions of historical facts may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking information is inherently subject to risks and uncertainties, and actual results could differ materially from those currently anticipated due to a number of factors, which include, but are not limited to, risk factors discussed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 and in other documents filed by the Company with the Securities and Exchange Commission from time to time. Forward-looking statements may be identified by terms such as “may”, “will”, “should”, “could”, “expects”, “plans”, “intends”, “anticipates”, “believes”, “estimates”, “predicts”, “forecasts”, “goals”, “potential” or “continue” or similar terms or the negative of these terms. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. The Company has no obligation to update these forward-looking statements.

    #FF                                                                                                        - Statistical Tables Follow -

    FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
    FINANCIAL HIGHLIGHTS
    (Unaudited)
                                
     At or for the three months ended  At or for the year ended 
    (Dollars in thousands, exceptDecember 31,  September 30, June 30, March 31, December 31,   December 31,  December 31,  
    per share data)2023 2023 2023 2023 2022  2023    2022    
    Performance Ratios (1)                            
    Return on average assets 0.38%    0.37%   0.41%    0.19%    0.48%     0.34%   0.93%
    Return on average equity 4.84   4.64    5.16   2.37   6.06    4.25  11.44 
    Yield on average interest-earning assets (2) 5.39   5.19    4.84   4.61   4.44    5.01  4.05 
    Cost of average interest-bearing liabilities 3.68   3.52    3.15   2.80   2.11    3.29  1.13 
    Cost of funds 3.26   3.13    2.80   2.47   1.84    2.91  0.98 
    Net interest rate spread during period (2) 1.71   1.67    1.69   1.81   2.33    1.72  2.92 
    Net interest margin (2) 2.29   2.22    2.18   2.27   2.70    2.24  3.11 
    Noninterest expense to average assets 1.90   1.71    1.66   1.85   1.58    1.78  1.73 
    Efficiency ratio (3) 76.69   76.76    73.82   79.52   59.55    76.72  56.46 
    Average interest-earning assets to average interest-bearing liabilities 1.19X  1.18X   1.18X  1.19X  1.21X   1.19X 1.22X
                                
    Average Balances                           
    Total loans, net$6,867,927  $6,813,019   $6,829,648  $6,871,192  $6,881,245   $6,845,349 $6,741,590 
    Total interest-earning assets 8,076,991   8,023,237    7,991,756   8,002,376   8,045,691    8,023,793  7,835,654 
    Total assets 8,569,002   8,505,346    8,462,442   8,468,317   8,518,019    8,501,564  8,307,137 
    Total deposits 6,884,037   6,819,397    6,899,617   6,810,485   6,678,383    6,853,494  6,451,746 
    Total interest-bearing liabilities 6,813,909   6,771,860    6,756,859   6,703,558   6,662,209    6,761,877  6,444,805 
    Stockholders' equity 669,819   675,041    672,835   683,058   676,165    675,151  672,742 
                                
    Per Share Data                                
    Book value per common share (4)$23.21  $23.06   $23.14  $22.80  $22.97   $23.21 $22.97 
    Tangible book value per common share (5)$22.54  $22.39   $22.47  $22.14  $22.31   $22.54 $22.31 
                                
    Stockholders' Equity                                 
    Stockholders' equity$669,837  $666,521   $670,247  $672,345  $677,157   $669,837 $677,157 
    Tangible stockholders' equity 650,664   647,234    650,842   652,818   657,504    650,664  657,504 
                                
    Consolidated Regulatory Capital Ratios                                 
    Tier 1 capital$737,732  $736,744   $734,754  $736,024  $746,880   $737,732 $746,880 
    Common equity Tier 1 capital 691,754   690,294    688,820   689,732   698,258    691,754  698,258 
    Total risk-based capital 967,627   965,532    962,784   964,270   975,709    967,627  975,709 
    Risk Weighted Assets 6,750,301   6,804,478    6,650,222   6,660,145   6,640,542    6,750,301  6,640,542 
                                
    Tier 1 leverage capital (well capitalized = 5%) 8.47%    8.51%   8.54%    8.56%    8.61%     8.47%   8.61%  
    Common equity Tier 1 risk-based capital (well capitalized = 6.5%) 10.25   10.14    10.36   10.36   10.52    10.25  10.52 
    Tier 1 risk-based capital (well capitalized = 8.0%) 10.93   10.83    11.05   11.05   11.25    10.93  11.25 
    Total risk-based capital (well capitalized = 10.0%) 14.33   14.19    14.48   14.48   14.69    14.33  14.69 
                                
    Capital Ratios                                 
    Average equity to average assets 7.82%    7.94%    7.95%    8.07%    7.94%     7.94%   8.10%  
    Equity to total assets 7.85   7.77    7.91   7.93   8.04    7.85  8.04 
    Tangible common equity to tangible assets (6) 7.64   7.56    7.70   7.72   7.82    7.64  7.82 
                                
    Asset Quality                                 
    Nonaccrual loans (7)$23,709  $17,405   $18,637  $21,176  $29,782   $23,709 $29,782 
    Nonperforming loans 25,172   17,405    18,637   21,176   32,382    25,172  32,382 
    Nonperforming assets 46,153   38,386    39,618   42,157   53,363    46,153  53,363 
    Net charge-offs (recoveries) 60   (42)   1,560   9,234   811    10,812  1,535 
                                
    Asset Quality Ratios                                 
    Nonperforming loans to gross loans 0.36%    0.25%   0.27%    0.31%    0.47%     0.36%   0.47%  
    Nonperforming assets to total assets 0.54   0.45    0.47   0.50   0.63    0.54  0.63 
    Allowance for credit losses to gross loans 0.58   0.57    0.57   0.56   0.58    0.58  0.58 
    Allowance for credit losses to nonperforming assets 87.02   102.19    97.41   91.87   75.79    87.02  75.79 
    Allowance for credit losses to nonperforming loans 159.55   225.38    207.08   182.89   124.89    159.55  124.89 
    Net charge-offs (recoveries) to average loans —   —    0.09   0.54   0.05    0.16  0.02 
                                
    Full-service customer facilities 27   27    26   26   25    27  25 


    (1)Ratios are presented on an annualized basis, where appropriate.
    (2)Yields are calculated on the tax equivalent basis using the statutory federal income tax rate of 21% for the periods presented.
    (3)Efficiency ratio, a non-GAAP measure, was calculated by dividing core noninterest expense (excluding OREO expense and the net gain/loss from the sale of OREO) by the total of core net interest income and core noninterest income.
    (4)Calculated by dividing stockholders’ equity by shares outstanding.
    (5)Calculated by dividing tangible stockholders’ common equity, a non-GAAP measure, by shares outstanding. Tangible stockholders’ common equity is stockholders’ equity less intangible assets. See “Calculation of Tangible Stockholders’ Common Equity to Tangible Assets”.
    (6)See “Calculation of Tangible Stockholders’ Common Equity to Tangible Assets”.
    (7)Excludes performing nonaccrual TDR loans in periods prior to 1Q23.

     

    FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
    CONSOLIDATED STATEMENTS OF INCOME
    (Unaudited)
                           
     For the three months ended   For the year ended
     December 31,  September 30, June 30, March 31, December 31,    December 31,  December 31, 
    (In thousands, except per share data)2023 2023
    		 2023 2023 2022
    		   2023 2022
    Interest and Dividend Income                      
    Interest and fees on loans$95,616 $91,466  $85,377 $82,889 $81,033    $355,348 $293,287 
    Interest and dividends on securities:                      
    Interest 10,803  10,383   9,172  7,240  6,511     37,598  20,861 
    Dividends 34  33   30  29  24     126  60 
    Other interest income 2,310  2,154   1,982  1,959  1,702     8,405  2,418 
    Total interest and dividend income 108,763  104,036   96,561  92,117  89,270     401,477  316,626 
                           
    Interest Expense                      
    Deposits 53,284  50,066   46,249  39,056  27,226     188,655  47,285 
    Other interest expense 9,394  9,543   6,934  7,799  7,843     33,670  25,725 
    Total interest expense 62,678  59,609   53,183  46,855  35,069     222,325  73,010 
                           
    Net Interest Income 46,085  44,427   43,378  45,262  54,201     179,152  243,616 
    Provision (benefit) for credit losses 998  596   1,416  7,508  (12)    10,518  5,081 
    NetInterest Income After Provision (Benefit) for Credit Losses 45,087  43,831   41,962  37,754  54,213     168,634  238,535 
                           
    Noninterest Income (Loss)                      
    Banking services fee income 2,824  2,636   1,780  1,411  1,231     8,651  5,122 
    Net loss on sale of securities —  —   —  —  (10,948)    —  (10,948)
    Net gain on sale of loans —  —   54  54  46     108  119 
    Net gain on disposition of assets —  —   —  —  104     —  104 
    Net gain (loss) from fair value adjustments 906  (1,246)  294  2,619  (622)    2,573  5,728 
    Federal Home Loan Bank of New York stock dividends 658  624   534  697  658     2,513  2,000 
    Life insurance proceeds 697  23   561  —  286     1,281  1,822 
    Bank owned life insurance 1,173  1,157   1,134  1,109  1,126     4,573  4,487 
    Other income 1,144  115   663  967  467     2,889  1,575 
    Total noninterest income (loss) 7,402  3,309   5,020  6,857  (7,652)    22,588  10,009 
                           
    Noninterest Expense                      
    Salaries and employee benefits 23,359  20,346   19,690  22,562  18,178     85,957  84,374 
    Occupancy and equipment 3,698  3,371   3,534  3,793  3,701     14,396  14,606 
    Professional services 2,523  2,494   2,291  2,261  2,130     9,569  9,207 
    FDIC deposit insurance 1,162  912   943  977  485     3,994  2,258 
    Data processing 1,646  1,422   1,473  1,435  1,421     5,976  5,595 
    Depreciation and amortization 1,491  1,482   1,482  1,510  1,535     5,965  5,930 
    Other real estate owned/foreclosure expense 105  185   150  165  35     605  294 
    Other operating expenses 6,751  6,176   5,547  6,453  6,257     24,927  21,428 
    Total noninterest expense 40,735  36,388   35,110  39,156  33,742     151,389  143,692 
                           
    Income Before Provision for Income Taxes 11,754  10,752   11,872  5,455  12,819     39,833  104,852 
                           
    Provision for Income Taxes 3,655  2,917   3,186  1,411  2,570     11,169  27,907 
                           
    Net Income$8,099 $7,835  $8,686 $4,044 $10,249    $28,664 $76,945 
                           
    Basic earnings per common share$0.27 $0.26  $0.29 $0.13 $0.34    $0.96 $2.50 
    Diluted earnings per common share$0.27 $0.26  $0.29 $0.13 $0.34    $0.96 $2.50 
    Dividends per common share$0.22 $0.22  $0.22 $0.22 $0.22    $0.88 $0.88 
                           
    Basic average shares 29,650  29,703   30,090  30,265  30,420     29,925  30,823 
    Diluted average shares 29,650  29,703   30,090  30,265  30,420     29,925  30,823 


    FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
    CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
    (Unaudited)
                   
     December 31,  September 30, June 30, March 31, December 31, 
    (Dollars in thousands)2023 2023 2023 2023 2022
    ASSETS              
    Cash and due from banks$172,157  $200,926  $160,053  $176,747  $151,754 
    Securities held-to-maturity:              
    Mortgage-backed securities 7,855   7,860   7,865   7,870   7,875 
    Other securities, net 65,068   65,271   65,469   65,653   65,836 
    Securities available for sale:              
    Mortgage-backed securities 354,344   337,879   365,911   380,110   384,283 
    Other securities 520,409   505,784   503,645   431,818   351,074 
    Loans 6,906,950   6,896,074   6,832,425   6,904,176   6,934,769 
    Allowance for credit losses (40,161)  (39,228)  (38,593)  (38,729)  (40,442)
    Net loans 6,866,789   6,856,846   6,793,832   6,865,447   6,894,327 
    Interest and dividends receivable 59,018   55,660   52,911   46,836   45,048 
    Bank premises and equipment, net 21,273   21,302   22,182   21,567   21,750 
    Federal Home Loan Bank of New York stock 31,066   43,821   36,168   38,779   45,842 
    Bank owned life insurance 213,518   214,321   213,164   214,240   213,131 
    Goodwill 17,636   17,636   17,636   17,636   17,636 
    Core deposit intangibles 1,537   1,651   1,769   1,891   2,017 
    Right of use asset 39,557   41,404   41,526   42,268   43,289 
    Other assets 167,009   209,014   192,721   168,872   179,084 
    Total assets$8,537,236  $8,579,375  $8,474,852  $8,479,734  $8,422,946 
                   
    LIABILITIES              
    Total deposits$6,815,261  $6,681,509  $6,723,690  $6,734,090  $6,485,342 
    Borrowed funds 841,281   1,001,010   857,400   887,509   1,052,973 
    Operating lease liability 40,822   43,067   44,402   45,353   46,125 
    Other liabilities 170,035   187,268   179,113   140,437   161,349 
    Total liabilities 7,867,399   7,912,854   7,804,605   7,807,389   7,745,789 
                   
    STOCKHOLDERS' EQUITY              
    Preferred stock (5,000,000 shares authorized; none issued) —   —   —   —   — 
    Common stock ($0.01 par value; 100,000,000 shares authorized) 341   341   341   341   341 
    Additional paid-in capital 264,534   264,486   263,744   262,876   264,332 
    Treasury stock (106,070)  (105,433)  (104,574)  (97,760)  (98,535)
    Retained earnings 549,683   548,058   546,755   544,672   547,507 
    Accumulated other comprehensive loss, net of taxes (38,651)  (40,931)  (36,019)  (37,784)  (36,488)
    Total stockholders' equity 669,837   666,521   670,247   672,345   677,157 
                   
    Total liabilities and stockholders' equity$8,537,236  $8,579,375  $8,474,852  $8,479,734  $8,422,946 
                   
    (In thousands)              
    Issued shares 34,088   34,088   34,088   34,088   34,088 
    Outstanding shares 28,866   28,905   28,961   29,488   29,476 
    Treasury shares 5,222   5,183   5,127   4,600   4,612 


    FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
    AVERAGE BALANCE SHEETS
    (Unaudited)
                           
     For the three months ended   For the year ended
     December 31,  September 30, June 30, March 31, December 31, 
    		  December 31,  December 31, 
    (In thousands)2023 2023 2023 2023 2022  2023 2022
    Interest-earning Assets:                      
    Mortgage loans, net$5,356,112 $5,314,215 $5,308,567 $5,333,274 $5,338,612   $5,328,067 $5,253,104
    Commercial Business loans, net 1,511,815  1,498,804  1,521,081  1,537,918  1,542,633    1,517,282  1,488,486
    Total loans, net 6,867,927  6,813,019  6,829,648  6,871,192  6,881,245    6,845,349  6,741,590
    Taxable securities:                      
    Mortgage-backed securities 426,612  436,181  448,620  457,911  549,204    442,228  573,314
    Other securities, net 527,316  528,091  471,600  411,723  371,897    485,118  324,112
    Total taxable securities 953,928  964,272  920,220  869,634  921,101    927,346  897,426
    Tax-exempt securities:                      
    Other securities 66,242  66,438  66,632  66,828  67,022    66,533  64,822
    Total tax-exempt securities 66,242  66,438  66,632  66,828  67,022    66,533  64,822
    Interest-earning deposits and federal funds sold 188,894  179,508  175,256  194,722  176,323    184,565  131,816
    Total interest-earning assets 8,076,991  8,023,237  7,991,756  8,002,376  8,045,691    8,023,793  7,835,654
    Other assets 492,011  482,109  470,686  465,941  472,328    477,771  471,483
    Total assets$8,569,002 $8,505,346 $8,462,442 $8,468,317 $8,518,019   $8,501,564 $8,307,137
                           
    Interest-bearing Liabilities:                      
    Deposits:                             
    Savings accounts$110,316 $115,437 $124,041 $134,945 $146,598   $121,102 $153,605
    NOW accounts 1,848,285  1,907,781  2,026,950  1,970,555  1,972,134    1,937,974  1,976,238
    Money market accounts 1,625,453  1,584,308  1,754,574  2,058,523  2,146,649    1,754,059  2,191,768
    Certificate of deposit accounts 2,340,115  2,290,669  2,046,960  1,679,517  1,350,683    2,091,677  1,031,024
    Total due to depositors 5,924,169  5,898,195  5,952,525  5,843,540  5,616,064    5,904,812  5,352,635
    Mortgagors' escrow accounts 86,592  69,525  97,410  70,483  82,483    81,015  80,021
    Total interest-bearing deposits 6,010,761  5,967,720  6,049,935  5,914,023  5,698,547    5,985,827  5,432,656
    Borrowings 803,148  804,140  706,924  789,535  963,662    776,050  1,012,149
    Total interest-bearing liabilities 6,813,909  6,771,860  6,756,859  6,703,558  6,662,209    6,761,877  6,444,805
    Noninterest-bearing demand deposits 873,276  851,677  849,682  896,462  979,836    867,667  1,019,090
    Other liabilities 211,998  206,768  183,066  185,239  199,809    196,869  170,500
    Total liabilities 7,899,183  7,830,305  7,789,607  7,785,259  7,841,854    7,826,413  7,634,395
    Equity 669,819  675,041  672,835  683,058  676,165    675,151  672,742
    Total liabilities and equity$8,569,002 $8,505,346 $8,462,442 $8,468,317 $8,518,019   $8,501,564 $8,307,137
                           
    Net interest-earning assets$1,263,082 $1,251,377 $1,234,897 $1,298,818 $1,383,482   $1,261,916 $1,390,849


    FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
    NET INTEREST INCOME AND NET INTEREST MARGIN
    (Unaudited)
                                 
     For the three months ended  For the year ended
     December 31, September 30, June 30, March 31, December 31,  December 31, December 31,
    (Dollars in thousands)2023 2023 2023 2023 2022  2023 2022
    Interest Income:                            
    Mortgage loans, net$72,505   $68,931  $63,688   $62,054  $60,946   $267,178  $228,065 
    Commercial Business loans, net 23,111    22,535   21,689    20,835   20,087    88,170   65,222 
    Total loans, net 95,616    91,466   85,377    82,889   81,033    355,348   293,287 
    Taxable securities:                            
    Mortgage-backed securities 3,217    3,031   2,976    2,281   2,425    11,505   9,414 
    Other securities 7,239    7,003   5,847    4,611   3,723    24,700   9,771 
    Total taxable securities 10,456    10,034   8,823    6,892   6,148    36,205   19,185 
    Tax-exempt securities:                            
    Other securities 482    484   480    477   489    1,923   2,197 
    Total tax-exempt securities 482    484   480    477   489    1,923   2,197 
    Interest-earning deposits and federal funds sold 2,310    2,154   1,982    1,959   1,702    8,405   2,418 
    Total interest-earning assets 108,864    104,138   96,662    92,217   89,372    401,881   317,087 
    Interest Expense:                            
    Deposits:                            
    Savings accounts$124   $130  $140   $126  $59   $520  $211 
    NOW accounts 17,411    16,843   16,152    13,785   9,515    64,191   15,353 
    Money market accounts 15,785    14,386   14,625    14,102   10,532    58,898   19,039 
    Certificate of deposit accounts 19,917    18,639   15,281    11,007   7,037    64,844   12,547 
    Total due to depositors 53,237    49,998   46,198    39,020   27,143    188,453   47,150 
    Mortgagors' escrow accounts 47    68   51    36   83    202   135 
    Total interest-bearing deposits 53,284    50,066   46,249    39,056   27,226    188,655   47,285 
    Borrowings 9,394    9,543   6,934    7,799   7,843    33,670   25,725 
    Total interest-bearing liabilities 62,678    59,609   53,183    46,855   35,069    222,325   73,010 
    Net interest income- tax equivalent$46,186   $44,529  $43,479   $45,362  $54,303   $179,556  $244,077 
    Included in net interest income above:                            
    Prepayment penalty income, net reversals and recovered interest from nonaccrual loans, and customer swap terminations fees$3,416   $857  $315   $680  $1,080   $5,268  $6,445 
    Net gains/(losses) from fair value adjustments on qualifying hedges included in net interest income (872)   1,348   (205)   100   936    371   775 
    Purchase accounting adjustments 461    347   340    306   342    1,454   2,542 
    Interest-earning Assets Yields:                            
    Mortgage loans, net 5.41%   5.19%  4.80%   4.65%  4.57%   5.01%  4.34%
    Commercial Business loans, net 6.11    6.01   5.70    5.42   5.21    5.81   4.38 
    Total loans, net 5.57    5.37   5.00    4.83   4.71    5.19   4.35 
    Taxable securities:                            
    Mortgage-backed securities 3.02    2.78   2.65    1.99   1.77    2.60   1.64 
    Other securities 5.49    5.30   4.96    4.48   4.00    5.09   3.01 
    Total taxable securities 4.38    4.16   3.84    3.17   2.67    3.90   2.14 
    Tax-exempt securities:(1)                            
    Other securities 2.91    2.91   2.88    2.86   2.92    2.89   3.39 
    Total tax-exempt securities 2.91    2.91   2.88    2.86   2.92    2.89   3.39 
    Interest-earning deposits and federal funds sold 4.89    4.80   4.52    4.02   3.86    4.55   1.83 
    Total interest-earning assets(1) 5.39%   5.19%  4.84%   4.61%  4.44%   5.01%  4.05%
    Interest-bearing Liabilities Yields:                            
    Deposits:                            
    Savings accounts 0.45%   0.45%  0.45%   0.37%  0.16%   0.43%  0.14%
    NOW accounts 3.77    3.53   3.19    2.80   1.93    3.31   0.78 
    Money market accounts 3.88    3.63   3.33    2.74   1.96    3.36   0.87 
    Certificate of deposit accounts 3.40    3.25   2.99    2.62   2.08    3.10   1.22 
    Total due to depositors 3.59    3.39   3.10    2.67   1.93    3.19   0.88 
    Mortgagors' escrow accounts 0.22    0.39   0.21    0.20   0.40    0.25   0.17 
    Total interest-bearing deposits 3.55    3.36   3.06    2.64   1.91    3.15   0.87 
    Borrowings 4.68    4.75   3.92    3.95   3.26    4.34   2.54 
    Total interest-bearing liabilities 3.68%   3.52%  3.15%   2.80%  2.11%   3.29%  1.13%
                                 
    Net interest rate spread (tax equivalent)(1) 1.71%   1.67%  1.69%   1.81%  2.33%   1.72%  2.92%
    Net interest margin (tax equivalent)(1) 2.29%   2.22%  2.18%   2.27%  2.70%   2.24%  3.11%
    Ratio of interest-earning assets to interest-bearing liabilities 1.19X   1.18X  1.18X   1.19X  1.21X   1.19X  1.22X

    ________________________________

    (1)  Yields are calculated on the tax equivalent basis using the statutory federal income tax rate of 21% for the periods presented.

    FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
    DEPOSIT and LOAN COMPOSITION
    (Unaudited)
     
    Deposit Composition
                          
                     4Q23 vs. 4Q23 vs.
      December 31,  September 30, June 30, March 31, December 31,  3Q23 4Q22
    (Dollars in thousands) 2023 2023 2023 2023 2022 % Change % Change
    Noninterest bearing $847,416 $874,420 $827,820 $872,254 $921,238 (3.1)% (8.0)%
    Interest bearing:                     
    Certificate of deposit accounts  2,311,290  2,321,369  2,232,696  1,880,260  1,526,338 (0.4)  51.4  
    Savings accounts  108,605  112,730  118,886  128,245  143,641 (3.7)  (24.4) 
    Money market accounts  1,726,404  1,551,176  1,594,637  1,855,781  2,099,776 11.3   (17.8) 
    NOW accounts  1,771,164  1,749,802  1,891,834  1,918,977  1,746,190 1.2   1.4  
    Total interest-bearing deposits  5,917,463  5,735,077  5,838,053  5,783,263  5,515,945 3.2   7.3  
    Total due to depositors  6,764,879  6,609,497  6,665,873  6,655,517  6,437,183 2.4   5.1  
    Mortgagors' escrow deposits  50,382  72,012  57,817  78,573  48,159 (30.0)  4.6  
    Total deposits $6,815,261 $6,681,509 $6,723,690 $6,734,090 $6,485,342 2.0 % 5.1 %

    Loan Composition

                          
                     4Q23 vs. 4Q23 vs.
      December 31,  September 30, June 30, March 31, December 31,  3Q23 4Q22
    (Dollars in thousands) 2023
    		 2023
    		 2023
    		 2023
    		 2022
    		 % Change % Change
    Multifamily residential $2,658,205  $2,614,219  $2,593,955  $2,601,174  $2,601,384  1.7 % 2.2 %
    Commercial real estate  1,958,252   1,953,243   1,917,749   1,904,293   1,913,040  0.3   2.4  
    One-to-four family ― mixed use property  530,243   537,744   542,368   549,207   554,314  (1.4)  (4.3) 
    One-to-four family ― residential  220,213   222,874   230,055   238,417   241,246  (1.2)  (8.7) 
    Construction  58,673   59,903   57,325   60,486   70,951  (2.1)  (17.3) 
    Mortgage loans  5,425,586   5,387,983   5,341,452   5,353,577   5,380,935  0.7   0.8  
                          
    Small Business Administration  20,205   21,896   22,404   22,860   23,275  (7.7)  (13.2) 
    Commercial business and other  1,452,518   1,487,775   1,466,358   1,518,756   1,521,548  (2.4)  (4.5) 
    Commercial Business loans  1,472,723   1,509,671   1,488,762   1,541,616   1,544,823  (2.4)  (4.7) 
                          
    Gross loans  6,898,309   6,897,654   6,830,214   6,895,193   6,925,758  —   (0.4) 
    Net unamortized (premiums) and unearned loan (cost) fees(1)  8,641   (1,580)  2,211   8,983   9,011  (646.9)  (4.1) 
    Allowance for credit losses  (40,161)  (39,228)  (38,593)  (38,729)  (40,442) 2.4   (0.7) 
    Net loans $6,866,789  $6,856,846  $6,793,832  $6,865,447  $6,894,327  0.1 % (0.4)%

    ______________________________

    (1) Includes $3.9 million, $4.4 million, $4.8 million, $5.1 million, and $5.4 million, of purchase accounting unamortized discount resulting from the acquisition of Empire Bancorp at December 31, 2023, September 30, 2023, June 30, 2023, March 31, 2023, and December 31, 2022, respectively.

    FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
    LOAN CLOSINGS and RATES
    (Unaudited)
     
    Loan Closings
                           
      For the three months ended  For the year ended
      December 31,  September 30, June 30, March 31, December 31,   December 31,  December 31, 
    (In thousands) 2023 2023 2023 2023 2022  2023 2022
    Multifamily residential $82,995 $75,655 $31,901 $42,164 $65,347  $232,715 $474,409
    Commercial real estate  60,092  70,197  38,523  15,570  20,750   184,382  308,455
    One-to-four family – mixed use property  3,319  6,028  5,812  4,938  4,489   20,097  37,598
    One-to-four family – residential  1,454  1,070  63  4,296  7,485   6,883  25,059
    Construction  8,007  6,971  8,811  10,592  7,301   34,381  31,592
    Mortgage loans  155,867  159,921  85,110  77,560  105,372   478,458  877,113
                           
    Small Business Administration  1,162  —  820  318  665   2,300  3,461
    Commercial business and other  87,255  81,549  72,850  95,668  119,191   337,322  641,420
    Commercial Business loans  88,417  81,549  73,670  95,986  119,856   339,622  644,881
                           
    Total Closings $244,284 $241,470 $158,780 $173,546 $225,228  $818,080 $1,521,994

    Weighted Average Rate on Loan Closings

                    
      For the three months ended
      December 31,  September 30, June 30, March 31, December 31, 
    Loan type 2023 2023 2023 2023 2022
    Mortgage loans 7.55% 7.22% 6.62% 6.30% 5.59%
    Commercial Business loans 7.93  8.00  7.76  7.58  6.57 
    Total loans 7.69% 7.48% 7.14% 7.01% 6.10%
                    


    FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
    ASSET QUALITY
    (Unaudited)
    Allowance for Credit Losses
                                   
      For the three months ended  For the year ended
      December 31, September 30, June 30, March 31, December 31,  December 31,  December 31,
    (Dollars in thousands) 2023 2023 2023 2023 2022  2023  2022
    Allowance for credit losses - loans                              
    Beginning balances $39,228   $38,593   $38,729   $40,442   $41,268    $40,442    $37,135  
                                   
    Net loan charge-off (recoveries):                              
    Multifamily residential  (1)   —    —    (1)   132     (2)    131  
    Commercial real estate  —    —    8    —    —     8     —  
    One-to-four family – mixed-use property  (1)   —    —    —    —     (1)    —  
    One-to-four family – residential  9    (6)   4    (36)   17     (29)    15  
    Small Business Administration  (29)   (48)   (158)   (6)   (9)    (241)    1,007  
    Taxi medallion  —    —    —    —    —     —     (447) 
    Commercial business and other  82    12    1,706    9,277    671     11,077     829  
    Total net loan charge-offs (recoveries)  60    (42)   1,560    9,234    811     10,812     1,535  
                                   
    Provision (benefit) for loan losses  993    593    1,424    7,521    (15)    10,531     4,842  
                                   
    Ending balance $40,161   $39,228   $38,593   $38,729   $40,442    $40,161    $40,442  
                                   
    Gross charge-offs $107   $21   $1,731   $9,298   $1,938    $11,157    $3,348  
    Gross recoveries  47    63    171    64    1,127     345     1,813  
                                   
    Allowance for credit losses - loans to gross loans  0.58 %  0.57 %  0.57 %  0.56 %  0.58 %   0.58 %   0.58 %
    Net loan charge-offs (recoveries) to average loans  —    —    0.09    0.54    0.05     0.16     0.02  

    Nonperforming Assets

                         
      December 31,  September 30, June 30, March 31, December 31, 
    (Dollars in thousands) 2023 2023 2023 2023 2022
    Loans 90 Days or More Past Due and Still Accruing:                    
    Multifamily residential $1,463  $—  $—  $—  $— 
    Construction  —   —   —   —   2,600 
    Total Loans 90 Days or more past due and still accruing  1,463   —   —   —   2,600 
                         
    Nonaccrual Loans:                    
    Multifamily residential  3,206   3,206   3,206   3,628   3,206 
    Commercial real estate  —   —   —   —   237 
    One-to-four family - mixed-use property(1)  981   1,075   790   790   790 
    One-to-four family - residential  5,181   4,161   5,218   4,961   4,425 
    Small Business Administration  2,552   1,255   1,119   937   937 
    Commercial business and other(1)  11,789   7,708   8,304   10,860   20,187 
    Total Nonaccrual loans  23,709   17,405   18,637   21,176   29,782 
                         
    Total Nonperforming Loans (NPLs)  25,172   17,405   18,637   21,176   32,382 
                         
    Total Nonaccrual HTM Securities  20,981   20,981   20,981   20,981   20,981 
                         
    Total Nonperforming Assets $46,153  $38,386  $39,618  $42,157  $53,363 
                         
    Nonperforming Assets to Total Assets  0.54%  0.45%  0.47%  0.50%  0.63%
    Allowance for Credit Losses to NPLs  159.5%  225.4%  207.1%  182.9%  124.9%

    ______________________________

    (1) Adopted ASU No. 2022-02 Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures on January 1, 2023; Not included in the above analysis are nonaccrual performing TDR one-to-four family – mixed use property loans totaling $0.2 million in 4Q22; nonaccrual performing TDR commercial business loans totaling less than $0.1 million in 4Q22.

    FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES 
    RECONCILIATION OF GAAP EARNINGS and CORE EARNINGS

    Non-cash Fair Value Adjustments to GAAP Earnings

    The variance in GAAP and core earnings is partly driven by the impact of non-cash net gains and losses from fair value adjustments. These fair value adjustments relate primarily to borrowings carried at fair value under the fair value option.

    Core Net Income, Core Diluted EPS, Core ROAE, Core ROAA, Pre-provision Pre-tax Net Revenue, Core Net Interest Income FTE, Core Net Interest Margin FTE, Core Interest Income and Yield on Total Loans, Core Noninterest Income, Core Noninterest Expense and Tangible Book Value per common share are each non-GAAP measures used in this release. A reconciliation to the most directly comparable GAAP financial measures appears below in tabular form. The Company believes that these measures are useful for both investors and management to understand the effects of certain interest and noninterest items and provide an alternative view of the Company’s performance over time and in comparison, to the Company’s competitors. These measures should not be viewed as a substitute for net income. The Company believes that tangible book value per common share is useful for both investors and management as this measure is commonly used by financial institutions, regulators, and investors to measure the capital adequacy of financial institutions. The Company believes these measures facilitate comparison of the quality and composition of the Company’s capital over time and in comparison, to its competitors. These measures should not be viewed as a substitute for total shareholders’ equity.

    These non-GAAP measures have inherent limitations, are not required to be uniformly applied and are not audited. They should not be considered in isolation or as a substitute for analysis of results reported under GAAP. These non-GAAP measures may not be comparable to similarly titled measures reported by other companies.

    FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
    RECONCILIATION OF GAAP EARNINGS and CORE EARNINGS
    (Unaudited)
                                   
      For the three months ended   For the year ended
    (Dollars in thousands, December 31,  September 30, June 30, March 31, December 31,    December 31,  December 31, 
    except per share data) 2023 2023 2023 2023 2022   2023 2022
                                   
    GAAP income before income taxes $11,754   $10,752   $11,872   $5,455   $12,819     $39,833   $104,852  
                                   
    Net (gain) loss from fair value adjustments (Noninterest income (loss))  (906)   1,246    (294)   (2,619)   622      (2,573)   (5,728) 
    Net loss on sale of securities (Noninterest income (loss))  —    —    —    —    10,948      —    10,948  
    Life insurance proceeds (Noninterest income (loss))  (697)   (23)   (561)   —    (286)     (1,281)   (1,822) 
    Net gain on disposition of assets (Noninterest income (loss))  —    —    —    —    (104)     —    (104) 
    Net (gain) loss from fair value adjustments on qualifying hedges (Net interest income)  872    (1,348)   205    (100)   (936)     (371)   (775) 
    Net amortization of purchase accounting adjustments and intangibles (Various)  (355)   (237)   (227)   (188)   (219)     (1,007)   (2,030) 
    Miscellaneous expense (Professional services)  526    —    —    —    —      526    —  
                                   
    Core income before taxes  11,194    10,390    10,995    2,548    22,844      35,127    105,341  
                                   
    Provision for core income taxes  3,648    2,819    3,083    659    5,445      10,209    28,502  
                                   
    Core net income $7,546   $7,571   $7,912   $1,889   $17,399     $24,918   $76,839  
                                   
    GAAP diluted earnings per common share $0.27   $0.26   $0.29   $0.13   $0.34     $0.96   $2.50  
    Net (gain) loss from fair value adjustments, net of tax  (0.02)   0.03    (0.01)   (0.06)   0.02      (0.06)   (0.14) 
    Net loss on sale of securities, net of tax  —    —    —    —    0.27      —    0.26  
    Life insurance proceeds  (0.02)   —    (0.02)   —    (0.01)     (0.04)   (0.06) 
    Net (gain) loss from fair value adjustments on qualifying hedges, net of tax  0.02    (0.03)   —    —    (0.02)     (0.01)   (0.02) 
    Net amortization of purchase accounting adjustments, net of tax  (0.01)   (0.01)   (0.01)   (0.01)   (0.01)     (0.02)   (0.05) 
    Miscellaneous expense, net of tax  0.01    —    —    —    —      0.01    —  
                                   
    Core diluted earnings per common share(1) $0.25   $0.25   $0.26   $0.06   $0.57     $0.83   $2.49  
                                   
    Core net income, as calculated above $7,546   $7,571   $7,912   $1,889   $17,399     $24,918   $76,839  
    Average assets  8,569,002    8,505,346    8,462,442    8,468,317    8,518,019      8,501,564    8,307,137  
    Average equity  669,819    675,041    672,835    683,058    676,165      675,151    672,742  
    Core return on average assets(2)  0.35 %  0.36 %  0.37 %  0.09 %  0.82 %    0.29 %  0.92 %
    Core return on average equity(2)  4.51 %  4.49 %  4.70 %  1.11 %  10.29 %    3.69 %  11.42 %

    ________________________________

    (1) Core diluted earnings per common share may not foot due to rounding.
    (2) Ratios are calculated on an annualized basis.

    FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
    RECONCILIATION OF GAAP REVENUE and PRE-PROVISION
    PRE-TAX NET REVENUE
    (Unaudited)
                              
      For the three months ended    For the year ended 
      December 31,  September 30, June 30, March 31, December 31,     December 31,  December 31,  
    (Dollars in thousands) 2023 2023 2023 2023 2022    2023 2022 
                              
    GAAP Net interest income $46,085  $44,427  $43,378  $45,262  $54,201     $179,152  $243,616  
    Net (gain) loss from fair value adjustments on qualifying hedges  872   (1,348)  205   (100)  (936)     (371)  (775) 
    Net amortization of purchase accounting adjustments  (461)  (347)  (340)  (306)  (342)     (1,454)  (2,542) 
    Core Net interest income $46,496  $42,732  $43,243  $44,856  $52,923     $177,327  $240,299  
                              
    GAAP Noninterest income (loss) $7,402  $3,309  $5,020  $6,857  $(7,652)    $22,588  $10,009  
    Net (gain) loss from fair value adjustments  (906)  1,246   (294)  (2,619)  622      (2,573)  (5,728) 
    Net loss on sale of securities  —   —   —   —   10,948      —   10,948  
    Life insurance proceeds  (697)  (23)  (561)  —   (286)     (1,281)  (1,822) 
    Net gain on sale of assets  —   —   —   —   (104)     —   (104) 
    Core Noninterest income $5,799  $4,532  $4,165  $4,238  $3,528     $18,734  $13,303  
                              
    GAAP Noninterest expense $40,735  $36,388  $35,110  $39,156  $33,742     $151,389  $143,692  
    Net amortization of purchase accounting adjustments  (106)  (110)  (113)  (118)  (123)     (447)  (512) 
    Miscellaneous expense  (526)  —   —   —   —      (526)  —  
    Core Noninterest expense $40,103  $36,278  $34,997  $39,038  $33,619     $150,416  $143,180  
                              
    Net interest income $46,085  $44,427  $43,378  $45,262  $54,201     $179,152  $243,616  
    Noninterest income (loss)  7,402   3,309   5,020   6,857   (7,652)     22,588   10,009  
    Noninterest expense  (40,735)  (36,388)  (35,110)  (39,156)  (33,742)     (151,389)  (143,692) 
    Pre-provision pre-tax net revenue $12,752  $11,348  $13,288  $12,963  $12,807     $50,351  $109,933  
                              
    Core:                         
    Net interest income $46,496  $42,732  $43,243  $44,856  $52,923     $177,327  $240,299  
    Noninterest income  5,799   4,532   4,165   4,238   3,528      18,734   13,303  
    Noninterest expense  (40,103)  (36,278)  (34,997)  (39,038)  (33,619)     (150,416)  (143,180) 
    Pre-provision pre-tax net revenue $12,192  $10,986  $12,411  $10,056  $22,832     $45,645  $110,422  
    Efficiency Ratio  76.7 % 76.8 % 73.8 % 79.5 % 59.6 %    76.7 % 56.5 %


    FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
    RECONCILIATION OF GAAP NET INTEREST INCOME and NET INTEREST MARGIN
    to CORE NET INTEREST INCOME
    (Unaudited)
                                
     For the three months ended  For the year ended 
     December 31,  September 30, June 30, March 31, December 31,   December 31,  December 31,  
    (Dollars in thousands)2023 2023 2023 2023 2022  2023
    		 2022
    		 
    GAAP net interest income$46,085   $44,427   $43,378   $45,262   $54,201    $179,152  $243,616  
    Net (gain) loss from fair value adjustments on qualifying hedges 872    (1,348)   205    (100)   (936)    (371)  (775) 
    Net amortization of purchase accounting adjustments (461)   (347)   (340)   (306)   (342)    (1,454)  (2,542) 
    Tax equivalent adjustment 101    102    101    100    102     404   461  
    Core net interest income FTE$46,597   $42,834   $43,344   $44,956   $53,025    $177,731  $240,760  
                                
    Total average interest-earning assets(1)$8,080,550   $8,027,201   $7,996,067   $8,006,970   $8,050,601    $8,027,898  $7,841,407  
    Core net interest margin FTE 2.31 %  2.13 %  2.17 %  2.25 %  2.63 %   2.21 % 3.07 %
                                
    GAAP interest income on total loans, net$95,616   $91,466   $85,377   $82,889   $81,033    $355,348  $293,287  
    Net (gain) loss from fair value adjustments on qualifying hedges - loans 978    (1,379)   157    (101)   (936)    (345)  (775) 
    Net amortization of purchase accounting adjustments (484)   (358)   (345)   (316)   (372)    (1,503)  (2,628) 
    Core interest income on total loans, net$96,110   $89,729   $85,189   $82,472   $79,725    $353,500  $289,884  
                                
    Average total loans, net(1)$6,872,115   $6,817,642   $6,834,644   $6,876,495   $6,886,900    $6,850,124  $6,748,165  
    Core yield on total loans 5.59 %  5.26 %  4.99 %  4.80 %  4.63 %   5.16 % 4.30 %

    ________________________________

    (1) Excludes purchase accounting average balances for all periods presented.

    FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
    CALCULATION OF TANGIBLE STOCKHOLDERS’
    COMMON EQUITY to TANGIBLE ASSETS
    (Unaudited)
                         
      December 31,  September 30, June 30, March 31, December 31, 
    (Dollars in thousands) 2023 2023 2023 2023 2022
    Total Equity $669,837   $666,521   $670,247   $672,345   $677,157  
    Less:                    
    Goodwill  (17,636)   (17,636)   (17,636)   (17,636)   (17,636) 
    Core deposit intangibles  (1,537)   (1,651)   (1,769)   (1,891)   (2,017) 
    Tangible Stockholders' Common Equity $650,664   $647,234   $650,842   $652,818   $657,504  
                         
    Total Assets $8,537,236   $8,579,375   $8,474,852   $8,479,734   $8,422,946  
    Less:                    
    Goodwill  (17,636)   (17,636)   (17,636)   (17,636)   (17,636) 
    Core deposit intangibles  (1,537)   (1,651)   (1,769)   (1,891)   (2,017) 
    Tangible Assets $8,518,063   $8,560,088   $8,455,447   $8,460,207   $8,403,293  
                         
    Tangible Stockholders' Common Equity to Tangible Assets  7.64 %  7.56 %  7.70 %  7.72 %  7.82 %
                         

    Investor Contact: Susan K. Cullen, SEVP, CFO and Treasurer, 718-961-5400


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