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Flushing Financial Corporation Reports 1Q24 GAAP and Core EPS of $0.12 and $0.14, Respectively; Excellent Quality Driven by Low Risk Credit Profile

Apr 23, 2024 5:30 PM

"We take pride in what we believe is our low risk credit profile that has performed well over our 95-year history. While there have been increased concerns about commercial real estate loans, especially New York City office and rent regulated multifamily exposure, hallmarks of our risk averse credit culture are demonstrated by only $4,000 of net charge-offs, 24 bps of 30-89 day delinquencies to gross loans, and decreased criticized and classified loans of 23% and flat NPAs during 1Q24. The drivers of this excellent credit performance are centered in our conservative underwriting with 89% of the portfolio secured by real estate, average LTV ratios of less than 36%, multifamily and investor commercial real estate weighted average DCRs of 1.8x, and strong sponsor support. Our exposure to New York City office buildings is very low - approximately 0.5% of total loans, all of which are performing. Our multifamily portfolio has only 18 bps of NPLs, 41 bps of 30-89 day delinquencies, and 54 bps of criticized and classified loans. Additionally, over 99% of our real estate loans that repriced in 1Q24 are current. Our conservative lending profile has served us well. We believe the foundation for our long-term success is pillared by our four areas of focus, which include 1) increasing NIM and reducing volatility; 2) maintaining credit discipline; 3) preserving strong liquidity and capital; and 4) bending the expense curve. While there is more work to do, we continue to make progress and are committed to achieving these goals."

- John R. Buran, President and CEO

UNIONDALE, NY / ACCESSWIRE / April 23, 2024 / Growth in Average Deposits; GAAP and Core NIM Compress. The Company reported first quarter 2024 GAAP and Core EPS of $0.12 and $0.14, respectively, compared to $0.13, and $0.06, respectively, a year ago. 1Q24 GAAP and Core NIM were both 2.06%, down 21 bps and 19 bps YoY, and 23 bps and 25 bps QoQ, respectively. Absent episodic items1, the NIM was 2.01% in 1Q24 compared to 2.21% a year ago and 2.14% in the prior quarter. The expected NIM compression was driven by CD repricing, the absence of loan originations that met both our underwriting and pricing criteria, and increased cash from deposit growth. Average total deposits increased 4.0% YoY and 2.9% QoQ,

Credit Quality Improves; Capital Remains Solid. Criticized and classified loans to loans declined to 0.87% in 1Q24, compared to 1.11% in 4Q23, while nonperforming assets to total assets decreased to 53 bps compared to 54 bps in 4Q23. Net charge-offs were only $4,000 in 1Q24. Capital continues to be sound with TCE/TA2 of 7.40% at 1Q24 compared to 7.64% at 4Q23.

Key Financial Metrics3


 1Q24 4Q23 3Q23 2Q23 1Q23
GAAP:
EPS
 $0.12 $0.27 $0.26 $0.29 $0.13
ROAA (%)
 0.17 0.38 0.37 0.41 0.19
ROAE (%)
 2.20 4.84 4.64 5.16 2.37
NIM FTE4 (%)
 2.06 2.29 2.22 2.18 2.27
Core:
EPS
 $0.14 $0.25 $0.25 $0.26 $0.06
ROAA (%)
 0.20 0.35 0.36 0.37 0.09
ROAE (%)
 2.58 4.51 4.49 4.70 1.11
Core NIM FTE (%)
 2.06 2.31 2.13 2.17 2.25
Credit Quality:
NPAs/Loans & OREO (%)
 0.68 0.67 0.56 0.58 0.61
ACLs/Loans (%)
 0.60 0.58 0.57 0.57 0.56
ACLs/NPLs (%)
 164.13 159.55 225.38 207.08 182.89
NCOs/Avg Loans (%)
 - - - 0.09 0.54
Balance Sheet:
Avg Loans ($B)
 $6.8 $6.9 $6.8 $6.8 $6.9
Avg Dep ($B)
 $7.1 $6.9 $6.8 $6.9 $6.8
Book Value/Share
 $23.04 $23.21 $23.06 $23.14 $22.80
Tangible BV/Share
 $22.39 $22.54 $22.39 $22.47 $22.14
TCE/TA (%)
 7.40 7.64 7.56 7.70 7.72

Note: In certain circumstances, reclassifications have been made to prior periods to conform to the current presentation.

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 2 Tangible Common Equity ("TCE")/Total Assets ("TA") 3 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." 4 Net Interest Margin ("NIM") Fully Taxable Equivalent ("FTE").

1Q24 Highlights

  • Net interest margin FTE decreased 21 bps YoY and 23 bps QoQ to 2.06%; Core net interest margin FTE decreased 19 bps YoY and 25 bps QoQ to 2.06%; absent 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 the NIM was 2.01% in 1Q24 compared to 2.21% in 1Q23 and 2.14% in 4Q23.
  • Average total deposits increased 4.0% YoY and 2.9% QoQ to $7.1 billion; Average noninterest bearing deposits were 11.8% of total average deposits compared to 13.2% in 1Q23 and 12.7% in 4Q23. Average CDs were $2.4 billion, up 43.3% YoY and 2.8% QoQ; During March and April, new CD rates were lowered across most products.
  • Period end net loans decreased 1.2% YoY and QoQ to $6.8 billion; Loan closings were $130.0 million down 25.1% YoY and 46.8% QoQ; The yields on closings increased 19 bps YoY, but decreased 49 bps QoQ to 7.20%; Back-to-back swap loan originations were $15.3 million compared to $121.6 million in 4Q23 and generated $0.2 million and $1.5 million of noninterest income, respectively; Loan pipeline decreased 34.6% YoY, but increased 6.7% QoQ to $173.9 million; Approximately 22% of the loan pipeline consists of back-to-back swap loans
  • NPAs increased slightly to $46.3 million from $42.2 million a year ago and from $46.2 million in the prior quarter
  • 1Q24 noninterest expense includes $1.6 million of seasonal compensation expense that are not expected to repeat in 2Q24
  • Provision for credit losses was $0.6 million in 1Q24 compared to $7.5 million in 1Q23 and $1.0 million in 4Q23; Net charge-offs were $4,000 in 1Q24 compared to $9.2 million in 1Q23 and $60,000 in 4Q23
  • Tangible Common Equity to Tangible Assets was 7.40% at March 31, 2024, compared to 7.64% at December 31, 2023; Tangible book value was $22.39 compared to $22.14 a year ago

Areas of Focus

Increase NIM and Reduce Volatility

  • GAAP and Core NIM decreased as anticipated by 23 bps and 25 bps QoQ, respectively, in 1Q24
  • Absent episodic items1, the NIM was 2.01% in 1Q24 compared to 2.14% in 4Q23
  • Remain largely 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 decreased 4.5% QoQ and accounted for 11.8% 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 53 bps of assets and criticized and classified loans are 0.87% of loans
  • Manhattan office buildings exposure is minimal at 0.5% of net loans, none of which are nonperforming

Preserve Strong Liquidity and Capital

  • Maintaining ample liquidity with $2.9 billion of undrawn lines and resources as of March 31, 2024; this increased to $3.3 billion as of April 15, 2024
  • Uninsured and uncollateralized deposits were 17% of total deposits, while uninsured deposits were 34% of total deposits
  • Total average deposits increased 4.0% YoY and 2.9% QoQ
  • Checking account openings declined 20.6% YoY in 1Q24, but remain above 1Q22 levels
  • Tangible Common Equity to Tangible Assets was 7.40% at March 31, 2024, down 24 bps QoQ Leverage ratio was 8.32% at March 31, 2024 compared to 8.47% at December 31, 2023

Bend the Expense Curve

  • GAAP noninterest expense to average assets was 1.83% in 1Q24 compared to 1.85% in 1Q23 and 1.90% in 4Q23
  • GAAP and Core noninterest expense growth was 1.9% YoY
  • 1Q24 seasonal compensation expense was $1.6 million compared to $4.1 million a year ago

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, which totaled $1.0 million or 5 bps in 1Q24 compared to $3.0 million or 15 bps in 4Q23

Income Statemen

YoY QoQ
($000s, except EPS)
 1Q24 4Q23 3Q23 2Q23 1Q23 Change Change
Net Interest Income
 $42,397 $46,085 $44,427 $43,378 $45,262 (6.3)% (8.0)%
Provision for Credit Losses
 592 998 596 1,416 7,508 (92.1) (40.7)
Noninterest Income
 3,084 7,402 3,309 5,020 6,857 (55.0) (58.3)
Noninterest Expense
 39,892 40,735 36,388 35,110 39,156 1.9 (2.1)
Income Before Income Taxes
 4,997 11,754 10,752 11,872 5,455 (8.4) (57.5)
Provision for Income Taxes
 1,313 3,655 2,917 3,186 1,411 (6.9) (64.1)
Net Income
 $3,684 $8,099 $7,835 $8,686 $4,044 (8.9) (54.5)
Diluted EPS
 $0.12 $0.27 $0.26 $0.29 $0.13 (7.7) (55.6)
Avg. Diluted Shares (000s)
 29,742 29,650 29,703 30,090 30,265 (1.7) 0.3

Core Net Income1
 $4,312 $7,546 $7,571 $7,912 $1,889 128.3 (42.9)
Core EPS1
 $0.14 $0.25 $0.25 $0.26 $0.06 133.3 (44.0)

1 See Reconciliation of GAAP Earnings and Core Earnings

Net interest income decreased YoY and QoQ.

  • Net Interest Margin FTE of 2.06% decreased 21 bps YoY and 23 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 $1.0 million (5 bps to the NIM) compared to $3.0 million (15 bps) in 4Q23, $2.6 million (13 bps to the NIM) in 3Q23, $0.5 million (3 bps) in 2Q23, and $1.1 million (6 bps) in 1Q23
  • Excluding the items in the previous bullet, net interest margin was 2.01% in 1Q24, 2.14% in 4Q23, 2.09% in 3Q23, 2.15% in 2Q23, and 2.21% in 1Q23

The provision for credit losses decreased YoY and QoQ.

  • Net charge-offs (recoveries) were $4,000 (less than 1 bp of average loans) in 1Q24 compared to $60,000 in 4Q23 (less than 1 bp of average loans), $(42,000) in 3Q23 (less than (1) bp of average loans), $1.6 million in 2Q23 (9 bps of average loans), and $9.2 million in 1Q23 (54 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 decreased YoY and QoQ.

  • Back-to-back swap loan closings of $15.3 million in 1Q24 (compared to $121.6 million in 4Q23 and none in 1Q23) and generated $0.2 million of fee income compared to $1.5 million in 4Q23
  • Net gains (losses) from fair value adjustments were $(0.8) million in 1Q24 ($(0.02) per share, net of tax), $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), and $2.6 million in 1Q23 ($0.06 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), and $0.6 million ($0.02 per share) in 2Q23
  • Absent the items in the previous two bullets and other immaterial adjustments, core noninterest income was $3.9 million in 1Q24, down 7.6% YoY and 32.4% 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 slightly YoY but declined QoQ.

  • Seasonal compensation expense was $1.6 million in 1Q24 compared to $4.1 million in 1Q23
  • Excluding the effects of immaterial adjustments, core operating expenses were $39.8 million in 1Q24, up 1.9% YoY, but down 0.8% QoQ
  • GAAP noninterest expense to average assets was 1.83% in 1Q24, 1.90% in 4Q23, 1.71% in 3Q23, 1.66% in 2Q23, and 1.85% in 1Q23

Provision for income taxes decreased YoY and QoQ.

  • The effective tax rate was 26.3% in 1Q24, 31.1% in 4Q23, 27.1% in 3Q23, 26.8% in 2Q23, and 25.9% in 1Q23
  • 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

Balance Sheet, Credit Quality, and Capital Highlights

YoY QoQ
1Q24 4Q23 3Q23 2Q23 1Q23 Change Change
Averages ($MM)
Loans
 $6,804 $6,868 $6,813 $6,830 $6,871 (1.0)% (0.9)%
Total Deposits
 7,081 6,884 6,819 6,900 6,810 4.0 2.9

Credit Quality ($000s)
Nonperforming Loans
 $24,829 $25,172 $17,405 $18,637 $21,176 17.3% (1.4)%
Nonperforming Assets
 46,254 46,153 38,386 39,618 42,157 9.7 0.2
Criticized and Classified Loans
 59,021 76,719 74,169 48,675 58,130 1.5 (23.1)
Criticized and Classified Assets
 80,446 97,700 95,150 69,656 79,111 1.7 (17.7)
Allowance for Credit Losses/Loans (%)
 0.60 0.58 0.57 0.57 0.56 4bps 2bps
Capital
Book Value/Share
 $23.04 $23.21 $23.06 $23.14 $22.80 1.1% (0.7)%
Tangible Book Value/Share
 22.39 22.54 22.39 22.47 22.14 1.1 (0.7)
Tang. Common Equity/Tang. Assets (%)
 7.40 7.64 7.56 7.70 7.72 (32)bps (24)bps
Leverage Ratio (%)
 8.32 8.47 8.51 8.54 8.56 (24) (15)

Average loans decreased slightly YoY and QoQ.

  • Period end net loans totaled $6.8 billion, down 1.2% YoY and QoQ
  • Total loan closings were $130.0 million in 1Q24, $244.3 million in 4Q23, $241.5 million in 3Q23, $158.8 million in 2Q23, and $173.5 million in 1Q23; the loan pipeline was $173.9 million at March 31, 2024, down 34.6% YoY, but up 6.7% QoQ
  • The diversified loan portfolio is approximately 89% collateralized by real estate with an average loan-to-value ratio of <36%
  • Manhattan office buildings exposure is minimal at 0.5% of net loans with all loans performing

Average total deposits increased YoY and QoQ.

  • Average noninterest bearing deposits decreased 6.9% YoY and 4.5% QoQ and comprised 11.8% of average total deposits in 1Q24 compared to 13.2% a year ago
  • Average CDs totaled $2.4 billion, up 43.3% YoY and 2.8% QoQ; approximately $450 million of non-swapped CDs are due to mature at a rate of 4.15% in 2Q24

Credit Quality: Nonperforming loans increased YoY but declined QoQ.

  • Criticized and classified loans were 87 bps of gross loans at 1Q24 compared to 111 bps at 4Q23, 108 bps at 3Q23, 71 bps at 2Q23, and 84 bps at 1Q23
  • Allowance for credit losses were 164.1% of nonperforming loans at 1Q24 compared to 182.9% at 1Q23 and 159.5% at 4Q23

Capital: Book value per common share and tangible book value per common share, a non-GAAP measure, both increased 1.1% YoY to $23.04 and $22.39, respectively.

  • The Company paid a dividend of $0.22 per share in 1Q24; 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 7.40% at March 31, 2024, compared to 7.72% at March 31, 2023, and 7.64% at December 31, 2023

Conference Call Information

Conference Call Information:

  • John R. Buran, President and Chief Executive Officer, and Susan K. Cullen, Senior Executive Vice President and Chief Financial Officer and Treasurer, will host a conference call on Wednesday, April 24, 2024, at 9:30 AM (ET) to discuss the Company's first quarter 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=DCkbMHoc
  • Dial-in for Replay: 1-877-344-7529; Canada 855-669-9658
  • Replay Access Code: 7388314
  • The conference call will be simultaneously webcast and archived

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, 2023 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

March 31, December 31, September 30, June 30, March 31,
(Dollars in thousands, except per share data)
 2024 2023 2023 2023 2023
Performance Ratios (1)
Return on average assets
 0.17% 0.38% 0.37% 0.41% 0.19%
Return on average equity
 2.20 4.84 4.64 5.16 2.37
Yield on average interest-earning assets (2)
 5.32 5.39 5.19 4.84 4.61
Cost of average interest-bearing liabilities
 3.83 3.68 3.52 3.15 2.80
Cost of funds
 3.42 3.26 3.13 2.80 2.47
Net interest rate spread during period (2)
 1.49 1.71 1.67 1.69 1.81
Net interest margin (2)
 2.06 2.29 2.22 2.18 2.27
Noninterest expense to average assets
 1.83 1.90 1.71 1.66 1.85
Efficiency ratio (3)
 86.07 76.69 76.76 73.82 79.52
Average interest-earning assets to average interest-bearing liabilities
 1.17X 1.19X 1.18X 1.18X 1.19X
Average Balances
Total loans, net
 $6,804,117 $6,867,927 $6,813,019 $6,829,648 $6,871,192
Total interest-earning assets
 8,235,160 8,076,991 8,023,237 7,991,756 8,002,376
Total assets
 8,707,505 8,569,002 8,505,346 8,462,442 8,468,317
Total deposits
 7,081,498 6,884,037 6,819,397 6,899,617 6,810,485
Total interest-bearing liabilities
 7,014,927 6,813,909 6,771,860 6,756,859 6,703,558
Stockholders' equity
 669,185 669,819 675,041 672,835 683,058

Per Share Data
Book value per common share (4)
 $23.04 $23.21 $23.06 $23.14 $22.80
Tangible book value per common share (5)
 $22.39 $22.54 $22.39 $22.47 $22.14

Stockholders' Equity
Stockholders' equity
 $669,827 $669,837 $666,521 $670,247 $672,345
Tangible stockholders' equity
 650,763 650,664 647,234 650,842 652,818

Consolidated Regulatory Capital Ratios
Tier 1 capital
 $734,192 $737,732 $736,744 $734,754 $736,024
Common equity Tier 1 capital
 687,458 691,754 690,294 688,820 689,732
Total risk-based capital
 965,796 967,627 965,532 962,784 964,270
Risk Weighted Assets
 6,664,496 6,750,301 6,804,478 6,650,222 6,660,145

Tier 1 leverage capital (well capitalized = 5%)
 8.32% 8.47% 8.51% 8.54% 8.56%
Common equity Tier 1 risk-based capital (well capitalized = 6.5%)
 10.32 10.25 10.14 10.36 10.36
Tier 1 risk-based capital (well capitalized = 8.0%)
 11.02 10.93 10.83 11.05 11.05
Total risk-based capital (well capitalized = 10.0%)
 14.49 14.33 14.19 14.48 14.48
Capital Ratios
Average equity to average assets
 7.69% 7.82% 7.94% 7.95% 8.07%
Equity to total assets
 7.61 7.85 7.77 7.91 7.93
Tangible common equity to tangible assets (6)
 7.40 7.64 7.56 7.70 7.72

Asset Quality
Nonaccrual loans
 $24,829 $23,709 $17,405 $18,637 $21,176
Nonperforming loans
 24,829 25,172 17,405 18,637 21,176
Nonperforming assets
 46,254 46,153 38,386 39,618 42,157
Net charge-offs (recoveries)
 4 60 (42) 1,560 9,234

Asset Quality Ratios
Nonperforming loans to gross loans
 0.36% 0.36% 0.25% 0.27% 0.31%
Nonperforming assets to total assets
 0.53 0.54 0.45 0.47 0.50
Allowance for credit losses to gross loans
 0.60 0.58 0.57 0.57 0.56
Allowance for credit losses to nonperforming assets
 88.10 87.02 102.19 97.41 91.87
Allowance for credit losses to nonperforming loans
 164.13 159.55 225.38 207.08 182.89
Net charge-offs (recoveries) to average loans
 - - - 0.09 0.54

Full-service customer facilities
 27 27 27 26 26

(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".

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIE
CONSOLIDATED STATEMENTS OF INCOM
(Unaudited)

For the three months ended

March 31, December 31, September 30, June 30, March 31,
(In thousands, except per share data)
 2024 2023 2023 2023 2023
Interest and Dividend Income
Interest and fees on loans
 $92,959 $95,616 $91,466 $85,377 $82,889
Interest and dividends on securities:
Interest
 12,541 10,803 10,383 9,172 7,240
Dividends
 33 34 33 30 29
Other interest income
 3,966 2,310 2,154 1,982 1,959
Total interest and dividend income
 109,499 108,763 104,036 96,561 92,117

Interest Expense
Deposits
 57,865 53,284 50,066 46,249 39,056
Other interest expense
 9,237 9,394 9,543 6,934 7,799
Total interest expense
 67,102 62,678 59,609 53,183 46,855

Net Interest Income
 42,397 46,085 44,427 43,378 45,262
Provision for credit losses
 592 998 596 1,416 7,508
Net Interest Income After Provision for Credit Losses
 41,805 45,087 43,831 41,962 37,754

Noninterest Income
Banking services fee income
 1,394 2,824 2,636 1,780 1,411
Net gain on sale of loans
 110 - - 54 54
Net gain (loss) from fair value adjustments
 (834) 906 (1,246) 294 2,619
Federal Home Loan Bank of New York stock dividends
 743 658 624 534 697
Life insurance proceeds
 - 697 23 561 -
Bank owned life insurance
 1,200 1,173 1,157 1,134 1,109
Other income
 471 1,144 115 663 967
Total noninterest income
 3,084 7,402 3,309 5,020 6,857

Noninterest Expense
Salaries and employee benefits
 22,113 23,359 20,346 19,690 22,562
Occupancy and equipment
 3,779 3,698 3,371 3,534 3,793
Professional services
 2,792 2,523 2,494 2,291 2,261
FDIC deposit insurance
 1,652 1,162 912 943 977
Data processing
 1,727 1,646 1,422 1,473 1,435
Depreciation and amortization
 1,457 1,491 1,482 1,482 1,510
Other real estate owned/foreclosure expense
 145 105 185 150 165
Other operating expenses
 6,227 6,751 6,176 5,547 6,453
Total noninterest expense
 39,892 40,735 36,388 35,110 39,156

Income Before Provision for Income Taxes
 4,997 11,754 10,752 11,872 5,455

Provision for income taxes
 1,313 3,655 2,917 3,186 1,411

Net Income
 $3,684 $8,099 $7,835 $8,686 $4,044

Basic earnings per common share
 $0.12 $0.27 $0.26 $0.29 $0.13
Diluted earnings per common share
 $0.12 $0.27 $0.26 $0.29 $0.13
Dividends per common share
 $0.22 $0.22 $0.22 $0.22 $0.22

Basic average shares
 29,742 29,650 29,703 30,090 30,265
Diluted average shares
 29,742 29,650 29,703 30,090 30,265

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Unaudited)

March 31, December 31, September 30, June 30, March 31,
(Dollars in thousands)
 2024 2023 2023 2023 2023
ASSETS
Cash and due from banks
 $210,723 $172,157 $200,926 $160,053 $176,747
Securities held-to-maturity:
Mortgage-backed securities
 7,850 7,855 7,860 7,865 7,870
Other securities, net
 64,612 65,068 65,271 65,469 65,653
Securities available for sale:
Mortgage-backed securities
 509,527 354,344 337,879 365,911 380,110
Other securities
 667,156 520,409 505,784 503,645 431,818
Loans
 6,821,943 6,906,950 6,896,074 6,832,425 6,904,176
Allowance for credit losses
 (40,752) (40,161) (39,228) (38,593) (38,729)
Net loans
 6,781,191 6,866,789 6,856,846 6,793,832 6,865,447
Interest and dividends receivable
 61,449 59,018 55,660 52,911 46,836
Bank premises and equipment, net
 20,102 21,273 21,302 22,182 21,567
Federal Home Loan Bank of New York stock
 24,845 31,066 43,821 36,168 38,779
Bank owned life insurance
 214,718 213,518 214,321 213,164 214,240
Goodwill
 17,636 17,636 17,636 17,636 17,636
Core deposit intangibles
 1,428 1,537 1,651 1,769 1,891
Right of use asset
 37,631 39,557 41,404 41,526 42,268
Other assets
 188,457 167,009 209,014 192,721 168,872
Total assets
 $8,807,325 $8,537,236 $8,579,375 $8,474,852 $8,479,734

LIABILITIES
Total deposits
 $7,253,207 $6,815,261 $6,681,509 $6,723,690 $6,734,090
Borrowed funds
 671,474 841,281 1,001,010 857,400 887,509
Operating lease liability
 38,674 40,822 43,067 44,402 45,353
Other liabilities
 174,143 170,035 187,268 179,113 140,437
Total liabilities
 8,137,498 7,867,399 7,912,854 7,804,605 7,807,389

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
 260,413 264,534 264,486 263,744 262,876
Treasury stock
 (101,641) (106,070) (105,433) (104,574) (97,760)
Retained earnings
 546,530 549,683 548,058 546,755 544,672
Accumulated other comprehensive loss, net of taxes
 (35,816) (38,651) (40,931) (36,019) (37,784)
Total stockholders' equity
 669,827 669,837 666,521 670,247 672,345

Total liabilities and stockholders' equity
 $8,807,325 $8,537,236 $8,579,375 $8,474,852 $8,479,734

(In thousands)
Issued shares
 34,088 34,088 34,088 34,088 34,088
Outstanding shares
 29,069 28,866 28,905 28,961 29,488
Treasury shares
 5,019 5,222 5,183 5,127 4,600

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
AVERAGE BALANCE SHEETS
(Unaudited)

For the three months ended
March 31, December 31, September 30, June 30, March 31,
(In thousands)
 2024 2023 2023 2023 2023
Interest-earning Assets:
Mortgage loans, net
 $5,353,606 $5,356,112 $5,314,215 $5,308,567 $5,333,274
Commercial Business loans, net
 1,450,511 1,511,815 1,498,804 1,521,081 1,537,918
Total loans, net
 6,804,117 6,867,927 6,813,019 6,829,648 6,871,192
Taxable securities:
Mortgage-backed securities
 462,934 426,612 436,181 448,620 457,911
Other securities, net
 590,204 527,316 528,091 471,600 411,723
Total taxable securities
 1,053,138 953,928 964,272 920,220 869,634
Tax-exempt securities:
Other securities
 65,939 66,242 66,438 66,632 66,828
Total tax-exempt securities
 65,939 66,242 66,438 66,632 66,828
Interest-earning deposits and federal funds sold
 311,966 188,894 179,508 175,256 194,722
Total interest-earning assets
 8,235,160 8,076,991 8,023,237 7,991,756 8,002,376
Other assets
 472,345 492,011 482,109 470,686 465,941
Total assets
 $8,707,505 $8,569,002 $8,505,346 $8,462,442 $8,468,317

Interest-bearing Liabilities:
Deposits:
Savings accounts
 $106,212 $110,316 $115,437 $124,041 $134,945
NOW accounts
 1,935,250 1,848,285 1,907,781 2,026,950 1,970,555
Money market accounts
 1,725,714 1,625,453 1,584,308 1,754,574 2,058,523
Certificate of deposit accounts
 2,406,283 2,340,115 2,290,669 2,046,960 1,679,517
Total due to depositors
 6,173,459 5,924,169 5,898,195 5,952,525 5,843,540
Mortgagors' escrow accounts
 73,822 86,592 69,525 97,410 70,483
Total interest-bearing deposits
 6,247,281 6,010,761 5,967,720 6,049,935 5,914,023
Borrowings
 767,646 803,148 804,140 706,924 789,535
Total interest-bearing liabilities
 7,014,927 6,813,909 6,771,860 6,756,859 6,703,558
Noninterest-bearing demand deposits
 834,217 873,276 851,677 849,682 896,462
Other liabilities
 189,176 211,998 206,768 183,066 185,239
Total liabilities
 8,038,320 7,899,183 7,830,305 7,789,607 7,785,259
Equity
 669,185 669,819 675,041 672,835 683,058
Total liabilities and equity
 $8,707,505 $8,569,002 $8,505,346 $8,462,442 $8,468,317

Net interest-earning assets
 $1,220,233 $1,263,082 $1,251,377 $1,234,897 $1,298,818

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
NET INTEREST INCOME AND NET INTEREST MARGIN
(Unaudited)

For the three months ended
March 31, December 31, September 30, June 30, March 31,
(Dollars in thousands)
 2024 2023 2023 2023 2023
Interest Income:
Mortgage loans, net
 $71,572 $72,505 $68,931 $63,688 $62,054
Commercial Business loans, net
 21,387 23,111 22,535 21,689 20,835
Total loans, net
 92,959 95,616 91,466 85,377 82,889
Taxable securities:
Mortgage-backed securities
 3,696 3,217 3,031 2,976 2,281
Other securities
 8,504 7,239 7,003 5,847 4,611
Total taxable securities
 12,200 10,456 10,034 8,823 6,892
Tax-exempt securities:
Other securities
 474 482 484 480 477
Total tax-exempt securities
 474 482 484 480 477
Interest-earning deposits and federal funds sold
 3,966 2,310 2,154 1,982 1,959
Total interest-earning assets
 109,599 108,864 104,138 96,662 92,217
Interest Expense:
Deposits:
Savings accounts
 $122 $124 $130 $140 $126
NOW accounts
 18,491 17,411 16,843 16,152 13,785
Money market accounts
 17,272 15,785 14,386 14,625 14,102
Certificate of deposit accounts
 21,918 19,917 18,639 15,281 11,007
Total due to depositors
 57,803 53,237 49,998 46,198 39,020
Mortgagors' escrow accounts
 62 47 68 51 36
Total interest-bearing deposits
 57,865 53,284 50,066 46,249 39,056
Borrowings
 9,237 9,394 9,543 6,934 7,799
Total interest-bearing liabilities
 67,102 62,678 59,609 53,183 46,855
Net interest income- tax equivalent
 $42,497 $46,186 $44,529 $43,479 $45,362
Included in net interest income above:
Prepayment penalty income, net reversals and recovered interest from nonaccrual loans, and customer swap terminations fees
 $928 $3,416 $857 $315 $680
Net gains/(losses) from fair value adjustments on qualifying hedges included in net interest income
 (187) (872) 1,348 (205) 100
Purchase accounting adjustments
 271 461 347 340 306
Interest-earning Assets Yields:
Mortgage loans, net
 5.35% 5.41% 5.19% 4.80% 4.65%
Commercial Business loans, net
 5.90 6.11 6.01 5.70 5.42
Total loans, net
 5.46 5.57 5.37 5.00 4.83
Taxable securities:
Mortgage-backed securities
 3.19 3.02 2.78 2.65 1.99
Other securities
 5.76 5.49 5.30 4.96 4.48
Total taxable securities
 4.63 4.38 4.16 3.84 3.17
Tax-exempt securities: (1)
Other securities
 2.88 2.91 2.91 2.88 2.86
Total tax-exempt securities
 2.88 2.91 2.91 2.88 2.86
Interest-earning deposits and federal funds sold
 5.09 4.89 4.80 4.52 4.02
Total interest-earning assets (1)
 5.32% 5.39% 5.19% 4.84% 4.61%
Interest-bearing Liabilities Yields:
Deposits:
Savings accounts
 0.46% 0.45% 0.45% 0.45% 0.37%
NOW accounts
 3.82 3.77 3.53 3.19 2.80
Money market accounts
 4.00 3.88 3.63 3.33 2.74
Certificate of deposit accounts
 3.64 3.40 3.25 2.99 2.62
Total due to depositors
 3.75 3.59 3.39 3.10 2.67
Mortgagors' escrow accounts
 0.34 0.22 0.39 0.21 0.20
Total interest-bearing deposits
 3.70 3.55 3.36 3.06 2.64
Borrowings
 4.81 4.68 4.75 3.92 3.95
Total interest-bearing liabilities
 3.83% 3.68% 3.52% 3.15% 2.80%
Net interest rate spread (tax equivalent) (1)
 1.49% 1.71% 1.67% 1.69% 1.81%
Net interest margin (tax equivalent) (1)
 2.06% 2.29% 2.22% 2.18% 2.27%
Ratio of interest-earning assets to interest-bearing liabilities
 1.17X 1.19X 1.18X 1.18X 1.19X

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
DEPOSIT and LOAN COMPOSITION
(Unaudited)

Deposit Composition

1Q24 vs. 1Q24 vs.
March 31, December 31, September 30, June 30, March 31, 4Q23 1Q23
(Dollars in thousands)
 2024 2023 2023 2023 2023 % Change % Change
Noninterest bearing
 $815,937 $847,416 $874,420 $827,820 $872,254 (3.7)% (6.5)%
Interest bearing:
Certificate of deposit accounts
 2,529,095 2,311,290 2,321,369 2,232,696 1,880,260 9.4 34.5
Savings accounts
 105,147 108,605 112,730 118,886 128,245 (3.2) (18.0)
Money market accounts
 1,717,298 1,726,404 1,551,176 1,594,637 1,855,781 (0.5) (7.5)
NOW accounts
 2,003,649 1,771,164 1,749,802 1,891,834 1,918,977 13.1 4.4
Total interest-bearing deposits
 6,355,189 5,917,463 5,735,077 5,838,053 5,783,263 7.4 9.9
Total due to depositors
 7,171,126 6,764,879 6,609,497 6,665,873 6,655,517 6.0 7.7
Mortgagors' escrow deposits
 82,081 50,382 72,012 57,817 78,573 62.9 4.5
Total deposits
 $7,253,207 $6,815,261 $6,681,509 $6,723,690 $6,734,090 6.4% 7.7%

Loan Composition

1Q24 vs. 1Q24 vs.
 March 31, December 31, September 30, June 30, March 31, 4Q23 1Q23
(Dollars in thousands)
 2024 2023 2023 2023 2023 % Change % Change
Multifamily residential
 $2,622,737 $2,658,205 $2,614,219 $2,593,955 $2,601,174 (1.3)% 0.8%
Commercial real estate
 1,925,312 1,958,252 1,953,243 1,917,749 1,904,293 (1.7) 1.1
One-to-four family - mixed use property
 516,198 530,243 537,744 542,368 549,207 (2.6) (6.0)
One-to-four family - residential
 267,156 220,213 222,874 230,055 238,417 21.3 12.1
Construction
 60,568 58,673 59,903 57,325 60,486 3.2 0.1
Mortgage loans
 5,391,971 5,425,586 5,387,983 5,341,452 5,353,577 (0.6) 0.7

Small Business Administration
 16,244 20,205 21,896 22,404 22,860 (19.6) (28.9)
Commercial business and other
 1,411,725 1,452,518 1,487,775 1,466,358 1,518,756 (2.8) (7.0)
Commercial Business loans
 1,427,969 1,472,723 1,509,671 1,488,762 1,541,616 (3.0) (7.4)
Gross loans
 6,819,940 6,898,309 6,897,654 6,830,214 6,895,193 (1.1) (1.1)
Net unamortized (premiums) and unearned loan (cost) fees (1)
 2,003 8,641 (1,580) 2,211 8,983 (76.8) (77.7)
Allowance for credit losses
 (40,752) (40,161) (39,228) (38,593) (38,729) 1.5 5.2
Net loans
 $6,781,191 $6,866,789 $6,856,846 $6,793,832 $6,865,447 (1.2)% (1.2)%

(1) Includes $3.6 million, $3.9 million, $4.4 million, $4.8 million, and $5.1 million of purchase accounting unamortized discount resulting from the acquisition of Empire Bancorp at March 31, 2024, December 31, 2023, September 30, 2023, June 30, 2023, and March 31, 2023, respectively.

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
LOAN CLOSINGS and RATES
(Unaudited)

Loan Closings

For the three months ended
March 31, December 31, September 30, June 30, March 31,
(In thousands)
 2024 2023 2023 2023 2023
Multifamily residential
 $11,805 $82,995 $75,655 $31,901 $42,164
Commercial real estate
 10,040 60,092 70,197 38,523 15,570
One-to-four family - mixed use property
 750 3,319 6,028 5,812 4,938
One-to-four family - residential
 52,539 1,454 1,070 63 4,296
Construction
 1,895 8,007 6,971 8,811 10,592
Mortgage loans
 77,029 155,867 159,921 85,110 77,560

Small Business Administration
 - 1,162 - 820 318
Commercial business and other
 52,955 87,255 81,549 72,850 95,668
Commercial Business loans
 52,955 88,417 81,549 73,670 95,986

Total Closings
 $129,984 $244,284 $241,470 $158,780 $173,546

Weighted Average Rate on Loan Closings

For the three months ended
March 31, December 31, September 30, June 30, March 31,
Loan type
 2024 2023 2023 2023 2023
Mortgage loans
 6.46% 7.55% 7.22% 6.62% 6.30%
Commercial Business loans
 8.29 7.93 8.00 7.76 7.58
Total loans
 7.20% 7.69% 7.48% 7.14% 7.01%

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
ASSET QUALITY
(Unaudited)

Allowance for Credit Losses

For the three months ended
March 31, December 31, September 30, June 30, March 31,
(Dollars in thousands)
 2024 2023 2023 2023 2023
Allowance for credit losses - loans
Beginning balances
 $40,161 $39,228 $38,593 $38,729 $40,442

Net loan charge-off (recoveries):
Multifamily residential
 - (1) - - (1)
Commercial real estate
 - - - 8 -
One-to-four family - mixed-use property
 - (1) - - -
One-to-four family - residential
 13 9 (6) 4 (36)
Small Business Administration
 (5) (29) (48) (158) (6)
Commercial business and other
 (4) 82 12 1,706 9,277
Total net loan charge-offs (recoveries)
 4 60 (42) 1,560 9,234
Provision (benefit) for loan losses
 595 993 593 1,424 7,521
Ending balance
 $40,752 $40,161 $39,228 $38,593 $38,729

Gross charge-offs
 $58 $107 $21 $1,731 $9,298
Gross recoveries
 54 47 63 171 64

Allowance for credit losses - loans to gross loans
 0.60% 0.58% 0.57% 0.57% 0.56%
Net loan charge-offs (recoveries) to average loans
 - - - 0.09 0.54

Nonperforming Assets


 March 31, December 31, September 30, June 30, March 31,
(Dollars in thousands)
 2024 2023 2023 2023 2023
Loans 90 Days or More Past Due and Still Accruing:
Multifamily residential
 $- $1,463 $- $- $-
Total Loans 90 Days or more past due and still accruing
 - 1,463 - - -

Nonaccrual Loans:
Multifamily residential
 4,669 3,206 3,206 3,206 3,628
One-to-four family - mixed-use property
 911 981 1,075 790 790
One-to-four family - residential
 3,768 5,181 4,161 5,218 4,961
Small Business Administration
 2,552 2,552 1,255 1,119 937
Commercial business and other
 12,929 11,789 7,708 8,304 10,860
Total Nonaccrual loans
 24,829 23,709 17,405 18,637 21,176

Total Nonperforming Loans (NPLs)
 24,829 25,172 17,405 18,637 21,176

Other Nonperforming Assets:
Real estate acquired through foreclosure
 665 - - - -
Total Other nonperforming assets
 665 - - - -

Total Nonaccrual HTM Securities
 20,760 20,981 20,981 20,981 20,981

Total Nonperforming Assets
 $46,254 $46,153 $38,386 $39,618 $42,157

Nonperforming Assets to Total Assets
 0.53% 0.54% 0.45% 0.47% 0.50%
Allowance for Credit Losses to NPLs
 164.1% 159.5% 225.4% 207.1% 182.9%

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
(Dollars in thousands,
 March 31, December 31, September 30, June 30, March 31,
except per share data)
 2024 2023 2023 2023 2023

GAAP income before income taxes
 $4,997 $11,754 $10,752 $11,872 $5,455

Net (gain) loss from fair value adjustments (Noninterest income (loss))
 834 (906) 1,246 (294) (2,619)
Life insurance proceeds (Noninterest income (loss))
 - (697) (23) (561) -
Net (gain) loss from fair value adjustments on qualifying hedges (Net interest income)
 187 872 (1,348) 205 (100)
Net amortization of purchase accounting adjustments and intangibles (Various)
 (169) (355) (237) (227) (188)
Miscellaneous expense (Professional services)
 - 526 - - -

Core income before taxes
 5,849 11,194 10,390 10,995 2,548

Provision for core income taxes
 1,537 3,648 2,819 3,083 659

Core net income
 $4,312 $7,546 $7,571 $7,912 $1,889

GAAP diluted earnings per common share
 $0.12 $0.27 $0.26 $0.29 $0.13
Net (gain) loss from fair value adjustments, net of tax
 0.02 (0.02) 0.03 (0.01) (0.06)
Life insurance proceeds
 - (0.02) - (0.02) -
Net (gain) loss from fair value adjustments on qualifying hedges, net of tax
 - 0.02 (0.03) - -
Net amortization of purchase accounting adjustments, net of tax
 - (0.01) (0.01) (0.01) (0.01)
Miscellaneous expense, net of tax
 - 0.01 - - -

Core diluted earnings per common share(1)
 $0.14 $0.25 $0.25 $0.26 $0.06

Core net income, as calculated above
 $4,312 $7,546 $7,571 $7,912 $1,889
Average assets
 8,707,505 8,569,002 8,505,346 8,462,442 8,468,317
Average equity
 669,185 669,819 675,041 672,835 683,058
Core return on average assets(2)
 0.20% 0.35% 0.36% 0.37% 0.09%
Core return on average equity(2)
 2.58% 4.51% 4.49% 4.70% 1.11%

(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
March 31, December 31, September 30, June 30, March 31,
(Dollars in thousands)
 2024 2023 2023 2023 2023
GAAP Net interest income
 $42,397 $46,085 $44,427 $43,378 $45,262
Net (gain) loss from fair value adjustments on qualifying hedges
 187 872 (1,348) 205 (100)
Net amortization of purchase accounting adjustments
 (271) (461) (347) (340) (306)
Core Net interest income
 $42,313 $46,496 $42,732 $43,243 $44,856

GAAP Noninterest income
 $3,084 $7,402 $3,309 $5,020 $6,857
Net (gain) loss from fair value adjustments
 834 (906) 1,246 (294) (2,619)
Life insurance proceeds
 - (697) (23) (561) -
Core Noninterest income
 $3,918 $5,799 $4,532 $4,165 $4,238

GAAP Noninterest expense
 $39,892 $40,735 $36,388 $35,110 $39,156
Net amortization of purchase accounting adjustments
 (102) (106) (110) (113) (118)
Miscellaneous expense
 - (526) - - -
Core Noninterest expense
 $39,790 $40,103 $36,278 $34,997 $39,038

Net interest income
 $42,397 $46,085 $44,427 $43,378 $45,262
Noninterest income
 3,084 7,402 3,309 5,020 6,857
Noninterest expense
 (39,892) (40,735) (36,388) (35,110) (39,156)
Pre-provision pre-tax net revenue
 $5,589 $12,752 $11,348 $13,288 $12,963

Core:
Net interest income
 $42,313 $46,496 $42,732 $43,243 $44,856
Noninterest income
 3,918 5,799 4,532 4,165 4,238
Noninterest expense
 (39,790) (40,103) (36,278) (34,997) (39,038)
Pre-provision pre-tax net revenue
 $6,441 $12,192 $10,986 $12,411 $10,056
Efficiency Ratio
 86.1% 76.7% 76.8% 73.8% 79.5%

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
March 31, December 31, September 30, June 30, March 31,
(Dollars in thousands)
 2024 2023 2023 2023 2023
GAAP net interest income
 $42,397 $46,085 $44,427 $43,378 $45,262
Net (gain) loss from fair value adjustments on qualifying hedges
 187 872 (1,348) 205 (100)
Net amortization of purchase accounting adjustments
 (271) (461) (347) (340) (306)
Tax equivalent adjustment
 100 101 102 101 100
Core net interest income FTE
 $42,413 $46,597 $42,834 $43,344 $44,956
Prepayment penalties received on loans and securities, net of reversals and recoveries of interest from nonaccrual loans
 (928) (3,416) (857) (315) (680)
Net interest income FTE excluding episodic items
 $41,485 $43,181 $41,977 $43,029 $44,276

Total average interest-earning assets (1)
 $8,238,395 $8,080,550 $8,027,201 $7,996,067 $8,006,970
Core net interest margin FTE
 2.06% 2.31% 2.13% 2.17% 2.25%
Net interest margin FTE excluding episodic items
 2.01% 2.14% 2.09% 2.15% 2.21%
GAAP interest income on total loans, net
 $92,959 $95,616 $91,466 $85,377 $82,889
Net (gain) loss from fair value adjustments on qualifying hedges - loans
 123 978 (1,379) 157 (101)
Net amortization of purchase accounting adjustments
 (295) (484) (358) (345) (316)
Core interest income on total loans, net
 $92,787 $96,110 $89,729 $85,189 $82,472

Average total loans, net (1)
 $6,807,944 $6,872,115 $6,817,642 $6,834,644 $6,876,495
Core yield on total loans
 5.45% 5.59% 5.26% 4.99% 4.80%

(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)


 March 31, December 31, September 30, June 30, March 31,
(Dollars in thousands)
 2024 2023 2023 2023 2023
Total Equity
 $669,827 $669,837 $666,521 $670,247 $672,345
Less:
Goodwill
 (17,636) (17,636) (17,636) (17,636) (17,636)
Core deposit intangibles
 (1,428) (1,537) (1,651) (1,769) (1,891)
Tangible Stockholders' Common Equity
 $650,763 $650,664 $647,234 $650,842 $652,818

Total Assets
 $8,807,325 $8,537,236 $8,579,375 $8,474,852 $8,479,734
Less:
Goodwill
 (17,636) (17,636) (17,636) (17,636) (17,636)
Core deposit intangibles
 (1,428) (1,537) (1,651) (1,769) (1,891)
Tangible Assets
 $8,788,261 $8,518,063 $8,560,088 $8,455,447 $8,460,207

Tangible Stockholders' Common Equity to Tangible Assets
 7.40% 7.64% 7.56% 7.70% 7.72%

SOURCE: Flushing Financial Corporation



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