Flushing Financial Corporation Reports 2Q24 GAAP and Core EPS of $0.18; Net Interest Income Up QoQ

Jul 29, 2024 4:30 PM

"Our long-term success is derived from executing against the four focus areas we outlined in 2023. For the quarter, GAAP and Core NIM declined 1 and 3 bps, respectively. As loan originations were less than paydowns, we purchased adjustable-rate securities, which led to net interest income increasing 0.9% QoQ. We anticipate the loan pipeline, which increased approximately 88% QoQ, will help to stabilize NIM, which is our first area of focus. Our second area of focus is credit quality, which remains quite strong. At the end of the quarter, we had NPAs to total assets of 61 bps, criticized and classified loans to total loans of 113 bps, and net recoveries of 1 bp. We remain confident that our strong underwriting will continue to drive toward low loss content. The third area of focus is preserving strong liquidity and capital. The Company has over $3 billion of unused lines of credit available as of June 30, 2024, and notwithstanding the normal flows of certain deposit portfolios, average deposits increased 4% YoY and 2% QoQ. Capital ratios remained strong with a leverage ratio of 8.18%. Our last area of focus is bending the expense curve. GAAP and core noninterest expense each increased 6% in the first half of the year compared to the same period a year ago. We are making investments in the business in new lending staff and branches to improve profitability over the long term and expect expense growth in 2024 will be more in line with our historical growth rate of mid-single digits. While progress will not always be in a straight line, we remain confident that adherence to these four areas of focus will favorably impact the long-term profitability of the Company."

- John R. Buran, President and CEO

UNIONDALE, NY / ACCESSWIRE / July 29, 2024 / Growth in Average Deposits; Solid Credit Quality Metrics. Second quarter 2024 GAAP and Core EPS were both $0.18 compared to $0.29, and $0.26, respectively, a year ago. 2Q24 GAAP and Core NIM were 2.05% and 2.03%, down 1 bp and 3 bps QoQ, respectively. Absent episodic items¹, NIM was 2.02% in 2Q24 compared to 2.01% in the prior quarter. Average total deposits increased 4.3% YoY and 1.6% QoQ, notwithstanding normal flows of certain portfolios.

Strong Credit Quality; Capital Remains Solid. Credit quality metrics were at low levels with criticized and classified loans to gross loans of 113 bps, nonperforming assets to total assets of 61 bps, and net recoveries of 1 bp in 2Q24. Capital continues to be sound with TCE/TA² of 7.12% at 2Q24 compared to 7.40% at 1Q24.

Key Financial Metrics³

		2Q24			1Q24		4Q23		3Q23		2Q23		1H24		1H23
GAAP:
EPS	$	0.18		$	0.12	$	0.27	$	0.26	$	0.29	$	0.30	$	0.42
ROAA (%)		0.24			0.17		0.38		0.37		0.41		0.21		0.30
ROAE (%)		3.19			2.20		4.84		4.64		5.16		2.69		3.76
NIM FTE⁴ (%)		2.05			2.06		2.29		2.22		2.18		2.06		2.22
Core:
EPS	$	0.18		$	0.14	$	0.25	$	0.25	$	0.26	$	0.33	$	0.32
ROAA (%)		0.25			0.20		0.35		0.36		0.37		0.22		0.23
ROAE (%)		3.27			2.58		4.51		4.49		4.70		2.92		2.89
Core NIM FTE (%)		2.03			2.06		2.31		2.13		2.17		2.05		2.21
Credit Quality:
NPAs/Loans & OREO (%)		0.82			0.68		0.67		0.56		0.58		0.82		0.58
ACLs/Loans (%)		0.61			0.60		0.58		0.57		0.57		0.61		0.57
ACLs/NPLs (%)		120.58			164.13		159.55		225.38		207.08		120.58		207.08
NCOs/Avg Loans (%)		(0.01	)		-		-		-		0.09		-		0.32
Balance Sheet:
Avg Loans ($B)	$	6.7		$	6.8	$	6.9	$	6.8	$	6.8	$	6.8	$	6.9
Avg Dep ($B)	$	7.2		$	7.1	$	6.9	$	6.8	$	6.9	$	7.1	$	6.9
Book Value/Share	$	22.89		$	23.04	$	23.21	$	23.06	$	23.14	$	22.89	$	23.14
Tangible BV/Share	$	22.24		$	22.39	$	22.54	$	22.39	$	22.47	$	22.24	$	22.47
TCE/TA (%)		7.12			7.40		7.64		7.56		7.70		7.12		7.70

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").

2Q24 Highlights

Net interest margin FTE decreased 13 bps YoY, but only 1 bp QoQ to 2.05%; Core net interest margin FTE decreased 14 bps YoY and 3 bps QoQ to 2.03%; absent episodic items¹, NIM was 2.02% in 2Q24 compared to 2.15% in 2Q23 and 2.01% in 1Q24
Average total deposits increased 4.3% YoY and 1.6% QoQ to $7.2 billion; Average noninterest bearing deposits were 11.4% of total average deposits compared to 12.3% in 2Q23 and 11.8% in 1Q24. Average CDs were $2.4 billion, up 19.4% YoY and 1.5% QoQ
Period end net loans decreased 0.9% YoY and 0.7% QoQ to $6.7 billion; Loan closings were $126.0 million, down 20.7% YoY and 3.1% QoQ; The yields on closings increased 63 bps YoY and 57 bps QoQ to 7.77%; Back-to-back swap loan originations were $27.4 million compared to $15.3 million in 1Q24 and generated $0.5 million and $0.2 million of noninterest income, respectively; Loan pipeline decreased 21.1% YoY, but increased 88.4% QoQ to $327.7 million; Approximately 9% of the loan pipeline consists of back-to-back swap loans
NPAs increased from a very low base of $39.6 million a year ago and $46.3 million in the prior quarter to $55.8 million equating to only 61 bps of assets compared to 47 bps in 2Q23 and 53 bps in 1Q24
Year to date noninterest expense growth was 6.3%, while core noninterest expense growth was 5.7%; The Company remains on target to have core expense growth of mid-single digits for 2024
Year to date noninterest expense growth was 6.3%, while core noninterest expense growth was 5.7%; The Company remains on target to have core expense growth of mid-single digits for 2024
Provision for credit losses was $0.8 million in 2Q24 compared to $1.4 million in 2Q23 and $0.6 million in 1Q24; Net charge-offs (recoveries) were $(92,000) in 2Q24 compared to $1.6 million in 2Q23 and $4,000 in 1Q24
Tangible Common Equity to Tangible Assets was 7.12% at June 30, 2024, compared to 7.40% at March 31, 2024; Tangible book value per share was $22.24 compared to $22.47 a year ago

Areas of Focus

Increase NIM and Reduce Volatility	GAAP and Core NIM decreased slightly by 1 bp and 3 bps QoQ, respectively, in 2Q24 Absent episodic items¹, NIM improved slightly to 2.02% in 2Q24 compared to 2.01% in 1Q24 Remain largely interest rate neutral to a 100 bps change in rates Approximately 26% of the loan portfolio consists of floating rate loans (including hedges) Average noninterest bearing deposits decreased 1.4% QoQ and accounted for 11.4% of average total deposits
Maintain Credit Discipline	Approximately 90% 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 Criticized and classified loans are 1.13% of gross loans Manhattan office buildings exposure is minimal at 0.5% of gross loans, none of which are nonperforming
Preserve Strong Liquidity and Capital	Maintaining ample liquidity with $3.1 billion of undrawn lines and resources as of June 30, 2024 Uninsured and uncollateralized deposits were 17% of total deposits, while uninsured deposits were 32% of total deposits Total average deposits increased 4.3% YoY and 1.6% QoQ Tangible Common Equity to Tangible Assets was 7.12% at June 30, 2024, down 28 bps QoQ; Leverage ratio was 8.18% at June 30, 2024, compared to 8.32% at March 31, 2024
Bend the Expense Curve	GAAP noninterest expense to average assets was 1.77% in 2Q24 compared to 1.66% in 2Q23 and 1.83% in 1Q24 GAAP and Core noninterest expense growth was 11.2% and 9.9% YoY in 2Q24, respectively, and 6.3% and 5.7% year to date, respectively, as investments are made to improve long term profitability

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 $0.7 million or 3 bps in 2Q24 compared to $0.5 million or 3 bps in 2Q23 and $1.0 million or 5 bps in 1Q24

Income Statement Highlights

											YoY			QoQ
($000s, except EPS)		2Q24		1Q24		4Q23		3Q23		2Q23	Change			Change

Net Interest Income	$	42,776	$	42,397	$	46,085	$	44,427	$	43,378		(1.4	)%		0.9	%
Provision for Credit Losses		809		592		998		596		1,416		(42.9	)		36.7
Noninterest Income		4,216		3,084		7,402		3,309		5,020		(16.0	)		36.7
Noninterest Expense		39,047		39,892		40,735		36,388		35,110		11.2			(2.1	)
Income Before Income Taxes		7,136		4,997		11,754		10,752		11,872		(39.9	)		42.8
Provision for Income Taxes		1,814		1,313		3,655		2,917		3,186		(43.1	)		38.2
Net Income	$	5,322	$	3,684	$	8,099	$	7,835	$	8,686		(38.7	)		44.5
Diluted EPS	$	0.18	$	0.12	$	0.27	$	0.26	$	0.29		(37.9	)		50.0
Avg. Diluted Shares (000s)		29,789		29,742		29,650		29,703		30,090		(1.0	)		0.2

Core Net Income¹	$	5,456	$	4,312	$	7,546	$	7,571	$	7,912		(31.0	)		26.5
Core EPS¹	$	0.18	$	0.14	$	0.25	$	0.25	$	0.26		(30.8	)		28.6

¹ See Reconciliation of GAAP Earnings and Core Earnings

Net interest income decreased YoY but increased QoQ.

Net Interest Margin FTE of 2.05% decreased 13 bps YoY and 1 bp QoQ
Episodic items of 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 $0.7 million (3 bps to NIM) in 2Q24, compared to $1.0 million (5 bps to NIM) in 1Q24, $3.0 million (15 bps to NIM) in 4Q23, $2.6 million (13 bps to NIM) in 3Q23, and $0.5 million (3 bps to NIM) in 2Q23
Excluding the items in the previous bullet, net interest margin was 2.02% compared to in 2Q24, 2.01% in 1Q24, 2.14% in 4Q23, 2.09% in 3Q23, and 2.15% in 2Q23

The provision for credit losses decreased YoY but increased QoQ.

Net charge-offs (recoveries) were $(92,000) ((1) bp of average loans) in 2Q24 compared to $4,000 (less than 1 bp of average loans) in 1Q24, $60,000 in 4Q23 (less than 1 bp of average loans), $(42,000) in 3Q23 (less than (1) bp of average loans), and $1.6 million in 2Q23 (9 bps of average loans)

Noninterest income decreased YoY but increased QoQ.

Back-to-back swap loan closings of $27.4 million in 2Q24 (compared to $11.5 million in 2Q23 and $15.3 million in 1Q24) generated $0.5 million of fee income (compared to $0.2 million of fee income in both 2Q23 and 1Q24)
Net gains (losses) from fair value adjustments were $0.1 million in 2Q24 (less than $0.01 per share, net of tax), $(0.8) million in 1Q24 ($(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), and $0.3 million in 2Q23 ($0.01 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 $4.2 million in 2Q24, down 0.1% YoY, but up 6.2% QoQ

Noninterest expense increased YoY but declined QoQ.

Seasonal compensation expense was $1.6 million in 1Q24 and did not repeat in 2Q24
Excluding the effects of immaterial adjustments, core operating expenses were $38.5 million in 2Q24, up 9.9% YoY, but down 3.4% QoQ; year over year increases primarily relate to business investments in people, and higher deposit insurance premiums and data processing costs
GAAP noninterest expense to average assets was 1.77% in 2Q24, 1.83% in 1Q24, 1.90% in 4Q23, 1.71% in 3Q23, and 1.66% in 2Q23

Provision for income taxes decreased YoY but increased QoQ.

The effective tax rate was 25.4% in 2Q24, 26.3% in 1Q24, 31.1% in 4Q23, 27.1% in 3Q23, and 26.8% in 2Q23
The 4Q23 effective tax rate increased because 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
	2Q24		1Q24		4Q23		3Q23		2Q23		Change			Change
Averages ($MM)
Loans	$	6,748	$	6,804	$	6,868	$	6,813	$	6,830		(1.2	)%	(0.8	)%
Total Deposits		7,196		7,081		6,884		6,819		6,900		4.3		1.6

Credit Quality ($000s)
Nonperforming Loans	$	34,540	$	24,829	$	25,172	$	17,405	$	18,637		85.3	%	39.1	%
Nonperforming Assets		55,832		46,254		46,153		38,386		39,618		40.9		20.7
Criticized and Classified Loans		76,485		59,021		76,719		74,169		48,675		57.1		29.6
Criticized and Classified Assets		97,777		80,446		97,700		95,150		69,656		40.4		21.5
Allowance for Credit Losses/Loans (%)		0.61		0.60		0.58		0.57		0.57		4	bps	1	bp

Capital
Book Value/Share	$	22.89	$	23.04	$	23.21	$	23.06	$	23.14		(1.1	)%	(0.7	)%
Tangible Book Value/Share		22.24		22.39		22.54		22.39		22.47		(1.0	)	(0.7	)
Tang. Common Equity/Tang. Assets (%)		7.12		7.40		7.64		7.56		7.70		(58	)bps	(28	)bps
Leverage Ratio (%)		8.18		8.32		8.47		8.51		8.54		(36	)	(14	)

Average loans decreased slightly YoY and QoQ.

Period end net loans totaled $6.7 billion, down 0.9% YoY and 0.7% QoQ
Total loan closings were $126.0 million in 2Q24, $130.0 million in 1Q24, $244.3 million in 4Q23, $241.5 million in 3Q23, and $158.8 million in 2Q23; the loan pipeline was $327.7 million at June 30, 2024, down 21.1% YoY, but up 88.4% QoQ
The diversified loan portfolio is approximately 90% collateralized by real estate with an average loan-to-value ratio of <36%
Manhattan office buildings exposure is minimal at 0.5% of gross loans with all loans performing

Average total deposits increased YoY and QoQ.

Average noninterest bearing deposits decreased 3.2% YoY and 1.4% QoQ and comprised 11.4% of average total deposits in 2Q24 compared to 12.3% a year ago
Average CDs totaled $2.4 billion, up 19.4% YoY and 1.5% QoQ; approximately $587.5 million of retail CDs are due to mature at an average rate of 4.89% in 3Q24

Credit Quality: Nonperforming loans increased YoY and QoQ.

Nonperforming loans were 51 bps of loans in 2Q24 compared to 27 bps in 2Q23 and 36 bps in 1Q24; the increase from 1Q24 in NPLs was primarily driven by 4 credits totaling $9.1 million and we expect minimal, if any losses
Criticized and classified loans were 113 bps of gross loans in 2Q24 compared to 87 bps of gross loans at 1Q24, 111 bps at 4Q23, 108 bps at 3Q23, and 71 bps at 2Q23
Allowance for credit losses were 120.6% of nonperforming loans at 2Q24 compared to 207.1% at 2Q23 and 164.1% at 1Q24

Capital: Book value per common share and tangible book value per common share, a non-GAAP measure, both decreased 1.1% and 1.0% YoY to $22.89 and $22.24, respectively.

The Company paid a dividend of $0.22 per share in 2Q24; 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 7.12% at June 30, 2024, compared to 7.70% at June 30, 2023, and 7.40% at March 31, 2024

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 Tuesday, July 30, 2024, at 9:00 AM (ET) to discuss the Company's second 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=rhmdjtQw
Dial-in for Replay: 1-877-344-7529; Canada 855-669-9658
Replay Access Code: 8422874
The conference call will be simultaneously webcast and archived

Third Quarter 2024 Earnings Release Date:

The Company plans to release Third Quarter 2024 financial results after the market close on October 24, 2024, followed by a conference call at 11:00 AM (ET) on October 25, 2024.

A detailed announcement will be issued prior to the third quarter's close confirming the date and the time of the earning 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, 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															At or for the six months ended
	June 30,			March 31,			December 31,			September 30,			June 30,			June 30,			June 30,
(Dollars in thousands, except per share data)	2024			2024			2023			2023			2023			2024			2023
Performance Ratios ⁽¹⁾
Return on average assets		0.24	%		0.17	%		0.38	%		0.37	%		0.41	%		0.21	%		0.30	%
Return on average equity		3.19			2.20			4.84			4.64			5.16			2.69			3.76
Yield on average interest-earning assets ⁽²⁾		5.43			5.32			5.39			5.19			4.84			5.37			4.72
Cost of average interest-bearing liabilities		3.95			3.83			3.68			3.52			3.15			3.89			2.97
Cost of funds		3.54			3.42			3.26			3.13			2.80			3.48			2.63
Net interest rate spread during period⁽²⁾		1.48			1.49			1.71			1.67			1.69			1.48			1.75
Net interest margin ⁽²⁾		2.05			2.06			2.29			2.22			2.18			2.06			2.22
Noninterest expense to average assets		1.77			1.83			1.90			1.71			1.66			1.80			1.75
Efficiency ratio ⁽³⁾		82.57			86.07			76.69			76.76			73.82			84.31			76.72
Average interest-earning assets to average interest-bearing liabilities		1.17	X		1.17	X		1.19	X		1.18	X		1.18	X		1.17	X		1.19	X

Average Balances
Total loans, net	$	6,748,140		$	6,804,117		$	6,867,927		$	6,813,019		$	6,829,648		$	6,776,128		$	6,850,305
Total interest-earning assets		8,354,994			8,235,160			8,076,991			8,023,237			7,991,756			8,295,076			7,997,037
Total assets		8,830,665			8,707,505			8,569,002			8,505,346			8,462,442			8,769,085			8,465,363
Total deposits		7,195,940			7,081,498			6,884,037			6,819,397			6,899,617			7,138,720			6,855,299
Total interest-bearing liabilities		7,140,068			7,014,927			6,813,909			6,771,860			6,756,859			7,077,498			6,730,357
Stockholders' equity		667,557			669,185			669,819			675,041			672,835			668,371			677,917

Per Share Data
Book value per common share ⁽⁴⁾	$	22.89		$	23.04		$	23.21		$	23.06		$	23.14		$	22.89		$	23.14
Tangible book value per common share ⁽⁵⁾	$	22.24		$	22.39		$	22.54		$	22.39		$	22.47		$	22.24		$	22.47

Stockholders' Equity
Stockholders' equity	$	665,322		$	669,827		$	669,837		$	666,521		$	670,247		$	665,322		$	670,247
Tangible stockholders' equity		646,364			650,763			650,664			647,234			650,842			646,364			650,842

Consolidated Regulatory Capital Ratios
Tier 1 capital	$	733,308		$	734,192		$	737,732		$	736,744		$	734,754		$	733,308		$	734,754
Common equity Tier 1 capital		686,630			687,458			691,754			690,294			688,820			686,630			688,820
Total risk-based capital		965,819			965,796			967,627			965,532			962,784			965,819			962,784
Risk Weighted Assets		6,718,568			6,664,496			6,750,301			6,804,478			6,650,222			6,718,568			6,650,222

Tier 1 leverage capital (well capitalized = 5%)		8.18	%		8.32	%		8.47	%		8.51	%		8.54	%		8.18	%		8.54	%
Common equity Tier 1 risk-based capital (well capitalized = 6.5%)		10.22			10.32			10.25			10.14			10.36			10.22			10.36
Tier 1 risk-based capital (well capitalized = 8.0%)		10.91			11.02			10.93			10.83			11.05			10.91			11.05
Total risk-based capital (well capitalized = 10.0%)		14.38			14.49			14.33			14.19			14.48			14.38			14.48

Capital Ratios
Average equity to average assets		7.56	%		7.69	%		7.82	%		7.94	%		7.95	%		7.62	%		8.01	%
Equity to total assets		7.31			7.61			7.85			7.77			7.91			7.31			7.91
Tangible common equity to tangible assets ⁽⁶⁾		7.12			7.40			7.64			7.56			7.70			7.12			7.70

Asset Quality
Nonaccrual loans	$	34,540		$	24,829		$	23,709		$	17,405		$	18,637		$	34,540		$	18,637
Nonperforming loans		34,540			24,829			25,172			17,405			18,637			34,540			18,637
Nonperforming assets		55,832			46,254			46,153			38,386			39,618			55,832			39,618
Net charge-offs (recoveries)		(92	)		4			60			(42	)		1,560			(88	)		10,794

Asset Quality Ratios
Nonperforming loans to gross loans		0.51	%		0.36	%		0.36	%		0.25	%		0.27	%		0.51	%		0.27	%
Nonperforming assets to total assets		0.61			0.53			0.54			0.45			0.47			0.61			0.47
Allowance for credit losses to gross loans		0.61			0.60			0.58			0.57			0.57			0.61			0.57
Allowance for credit losses to nonperforming assets		74.60			88.10			87.02			102.19			97.41			74.60			97.41
Allowance for credit losses to nonperforming loans		120.58			164.13			159.55			225.38			207.08			120.58			207.08
Net charge-offs (recoveries) to average loans		(0.01	)		-			-			-			0.09			-			0.32

Full-service customer facilities		27			27			27			27			26			27			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 SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

	For the three months ended												For the six months ended
	June 30,		March 31,			December 31,		September 30,			June 30,		June 30,			June 30,
(In thousands, except per share data)	2024		2024			2023		2023			2023		2024			2023
Interest and Dividend Income
Interest and fees on loans	$	92,728	$	92,959		$	95,616	$	91,466		$	85,377	$	185,687		$	168,266
Interest and dividends on securities:
Interest		18,209		12,541			10,803		10,383			9,172		30,750			16,412
Dividends		33		33			34		33			30		66			59
Other interest income		2,260		3,966			2,310		2,154			1,982		6,226			3,941
Total interest and dividend income		113,230		109,499			108,763		104,036			96,561		222,729			188,678

Interest Expense
Deposits		60,893		57,865			53,284		50,066			46,249		118,758			85,305
Other interest expense		9,561		9,237			9,394		9,543			6,934		18,798			14,733
Total interest expense		70,454		67,102			62,678		59,609			53,183		137,556			100,038

Net Interest Income		42,776		42,397			46,085		44,427			43,378		85,173			88,640
Provision for credit losses		809		592			998		596			1,416		1,401			8,924
Net Interest Income After Provision for Credit Losses		41,967		41,805			45,087		43,831			41,962		83,772			79,716

Noninterest Income
Banking services fee income		1,583		1,394			2,824		2,636			1,780		2,977			3,191
Net gain on sale of loans		26		110			-		-			54		136			108
Net gain (loss) from fair value adjustments		57		(834	)		906		(1,246	)		294		(777	)		2,913
Federal Home Loan Bank of New York stock dividends		669		743			658		624			534		1,412			1,231
Life insurance proceeds		-		-			697		23			561		-			561
Bank owned life insurance		1,223		1,200			1,173		1,157			1,134		2,423			2,243
Other income		658		471			1,144		115			663		1,129			1,630
Total noninterest income		4,216		3,084			7,402		3,309			5,020		7,300			11,877

Noninterest Expense
Salaries and employee benefits		21,723		22,113			23,359		20,346			19,690		43,836			42,252
Occupancy and equipment		3,713		3,779			3,698		3,371			3,534		7,492			7,327
Professional services		2,786		2,792			2,523		2,494			2,291		5,578			4,552
FDIC deposit insurance		1,322		1,652			1,162		912			943		2,974			1,920
Data processing		1,785		1,727			1,646		1,422			1,473		3,512			2,908
Depreciation and amortization		1,425		1,457			1,491		1,482			1,482		2,882			2,992
Other real estate owned/foreclosure expense		125		145			105		185			150		270			315
Other operating expenses		6,168		6,227			6,751		6,176			5,547		12,395			12,000
Total noninterest expense		39,047		39,892			40,735		36,388			35,110		78,939			74,266

Income Before Provision for Income Taxes		7,136		4,997			11,754		10,752			11,872		12,133			17,327

Provision for income taxes		1,814		1,313			3,655		2,917			3,186		3,127			4,597

Net Income	$	5,322	$	3,684		$	8,099	$	7,835		$	8,686	$	9,006		$	12,730

Basic earnings per common share	$	0.18	$	0.12		$	0.27	$	0.26		$	0.29	$	0.30		$	0.42
Diluted earnings per common share	$	0.18	$	0.12		$	0.27	$	0.26		$	0.29	$	0.30		$	0.42
Dividends per common share	$	0.22	$	0.22		$	0.22	$	0.22		$	0.22	$	0.44		$	0.44

Basic average shares		29,789		29,742			29,650		29,703			30,090		29,766			30,177
Diluted average shares		29,789		29,742			29,650		29,703			30,090		29,766			30,177

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

	June 30,			March 31,			December 31,			September 30,			June 30,
(Dollars in thousands)	2024			2024			2023			2023			2023
ASSETS
Cash and due from banks	$	156,913		$	210,723		$	172,157		$	200,926		$	160,053
Securities held-to-maturity:
Mortgage-backed securities		7,846			7,850			7,855			7,860			7,865
Other securities, net		64,166			64,612			65,068			65,271			65,469
Securities available for sale:
Mortgage-backed securities		869,494			509,527			354,344			337,879			365,911
Other securities		679,117			667,156			520,409			505,784			503,645
Loans		6,777,026			6,821,943			6,906,950			6,896,074			6,832,425
Allowance for credit losses		(41,648	)		(40,752	)		(40,161	)		(39,228	)		(38,593	)
Net loans		6,735,378			6,781,191			6,866,789			6,856,846			6,793,832
Interest and dividends receivable		62,752			61,449			59,018			55,660			52,911
Bank premises and equipment, net		19,426			20,102			21,273			21,302			22,182
Federal Home Loan Bank of New York stock		46,331			24,845			31,066			43,821			36,168
Bank owned life insurance		215,940			214,718			213,518			214,321			213,164
Goodwill		17,636			17,636			17,636			17,636			17,636
Core deposit intangibles		1,322			1,428			1,537			1,651			1,769
Right of use asset		46,636			37,631			39,557			41,404			41,526
Other assets		174,283			188,457			167,009			209,014			192,721
Total assets	$	9,097,240		$	8,807,325		$	8,537,236		$	8,579,375		$	8,474,852

LIABILITIES
Total deposits	$	6,906,863		$	7,253,207		$	6,815,261		$	6,681,509		$	6,723,690
Borrowed funds		1,316,565			671,474			841,281			1,001,010			857,400
Operating lease liability		47,485			38,674			40,822			43,067			44,402
Other liabilities		161,005			174,143			170,035			187,268			179,113
Total liabilities		8,431,918			8,137,498			7,867,399			7,912,854			7,804,605

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		260,585			260,413			264,534			264,486			263,744
Treasury stock		(101,633	)		(101,641	)		(106,070	)		(105,433	)		(104,574	)
Retained earnings		545,345			546,530			549,683			548,058			546,755
Accumulated other comprehensive loss, net of taxes		(39,316	)		(35,816	)		(38,651	)		(40,931	)		(36,019	)
Total stockholders' equity		665,322			669,827			669,837			666,521			670,247

Total liabilities and stockholders' equity	$	9,097,240		$	8,807,325		$	8,537,236		$	8,579,375		$	8,474,852

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

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
AVERAGE BALANCE SHEETS
(Unaudited)

	For the three months ended										For the six months ended
	June 30,		March 31,		December 31,		September 30,		June 30,		June 30,		June 30,
(In thousands)	2024		2024		2023		2023		2023		2024		2023
Interest-earning Assets:
Mortgage loans, net	$	5,338,614	$	5,353,606	$	5,356,112	$	5,314,215	$	5,308,567	$	5,346,110	$	5,320,852
Commercial Business loans, net		1,409,526		1,450,511		1,511,815		1,498,804		1,521,081		1,430,018		1,529,453
Total loans, net		6,748,140		6,804,117		6,867,927		6,813,019		6,829,648		6,776,128		6,850,305
Taxable securities:
Mortgage-backed securities		691,802		462,934		426,612		436,181		448,620		577,368		453,240
Other securities, net		663,975		590,204		527,316		528,091		471,600		627,089		441,827
Total taxable securities		1,355,777		1,053,138		953,928		964,272		920,220		1,204,457		895,067
Tax-exempt securities:
Other securities		65,451		65,939		66,242		66,438		66,632		65,695		66,730
Total tax-exempt securities		65,451		65,939		66,242		66,438		66,632		65,695		66,730
Interest-earning deposits and federal funds sold		185,626		311,966		188,894		179,508		175,256		248,796		184,935
Total interest-earning assets		8,354,994		8,235,160		8,076,991		8,023,237		7,991,756		8,295,076		7,997,037
Other assets		475,671		472,345		492,011		482,109		470,686		474,009		468,326
Total assets	$	8,830,665	$	8,707,505	$	8,569,002	$	8,505,346	$	8,462,442	$	8,769,085	$	8,465,363

Interest-bearing Liabilities:
Deposits:
Savings accounts	$	103,335	$	106,212	$	110,316	$	115,437	$	124,041	$	104,774	$	129,463
NOW accounts		2,017,085		1,935,250		1,848,285		1,907,781		2,026,950		1,976,168		1,998,909
Money market accounts		1,714,085		1,725,714		1,625,453		1,584,308		1,754,574		1,719,899		1,905,709
Certificate of deposit accounts		2,443,047		2,406,283		2,340,115		2,290,669		2,046,960		2,424,665		1,864,254
Total due to depositors		6,277,552		6,173,459		5,924,169		5,898,195		5,952,525		6,225,506		5,898,335
Mortgagors' escrow accounts		95,532		73,822		86,592		69,525		97,410		84,677		84,021
Total interest-bearing deposits		6,373,084		6,247,281		6,010,761		5,967,720		6,049,935		6,310,183		5,982,356
Borrowings		766,984		767,646		803,148		804,140		706,924		767,315		748,001
Total interest-bearing liabilities		7,140,068		7,014,927		6,813,909		6,771,860		6,756,859		7,077,498		6,730,357
Noninterest-bearing demand deposits		822,856		834,217		873,276		851,677		849,682		828,537		872,943
Other liabilities		200,184		189,176		211,998		206,768		183,066		194,679		184,146
Total liabilities		8,163,108		8,038,320		7,899,183		7,830,305		7,789,607		8,100,714		7,787,446
Equity		667,557		669,185		669,819		675,041		672,835		668,371		677,917
Total liabilities and equity	$	8,830,665	$	8,707,505	$	8,569,002	$	8,505,346	$	8,462,442	$	8,769,085	$	8,465,363

Net interest-earning assets	$	1,214,926	$	1,220,233	$	1,263,082	$	1,251,377	$	1,234,897	$	1,217,578	$	1,266,680

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

	For the three months ended															For the six months ended
	June 30,			March 31,			December 31,			September 30,			June 30,			June 30,			June 30
(Dollars in thousands)	2024			2024			2023			2023			2023			2024			2023
Interest Income:
Mortgage loans, net	$	71,968		$	71,572		$	72,505		$	68,931		$	63,688		$	143,540		$	125,742
Commercial Business loans, net		20,760			21,387			23,111			22,535			21,689			42,147			42,524
Total loans, net		92,728			92,959			95,616			91,466			85,377			185,687			168,266
Taxable securities:
Mortgage-backed securities		7,462			3,696			3,217			3,031			2,976			11,158			5,257
Other securities		10,408			8,504			7,239			7,003			5,847			18,912			10,458
Total taxable securities		17,870			12,200			10,456			10,034			8,823			30,070			15,715
Tax-exempt securities:
Other securities		470			474			482			484			480			944			957
Total tax-exempt securities		470			474			482			484			480			944			957
Interest-earning deposits and federal funds sold		2,260			3,966			2,310			2,154			1,982			6,226			3,941
Total interest-earning assets		113,328			109,599			108,864			104,138			96,662			222,927			188,879
Interest Expense:
Deposits:
Savings accounts	$	115		$	122		$	124		$	130		$	140		$	237		$	266
NOW accounts		20,007			18,491			17,411			16,843			16,152			38,498			29,937
Money market accounts		17,326			17,272			15,785			14,386			14,625			34,598			28,727
Certificate of deposit accounts		23,383			21,918			19,917			18,639			15,281			45,301			26,288
Total due to depositors		60,831			57,803			53,237			49,998			46,198			118,634			85,218
Mortgagors' escrow accounts		62			62			47			68			51			124			87
Total interest-bearing deposits		60,893			57,865			53,284			50,066			46,249			118,758			85,305
Borrowings		9,561			9,237			9,394			9,543			6,934			18,798			14,733
Total interest-bearing liabilities		70,454			67,102			62,678			59,609			53,183			137,556			100,038
Net interest income- tax equivalent	$	42,874		$	42,497		$	46,186		$	44,529		$	43,479		$	85,371		$	88,841
Included in net interest income above:
Prepayment penalty income, net reversals and recovered interest from nonaccrual loans, and customer swap terminations fees	$	369		$	928		$	3,416		$	857		$	315		$	1,297		$	995
Net gains/(losses) from fair value adjustments on qualifying hedges included in net interest income		177			(187	)		(872	)		1,348			(205	)		(10	)		(105	)
Purchase accounting adjustments		182			271			461			347			340			453			646
Interest-earning Assets Yields:
Mortgage loans, net		5.39	%		5.35	%		5.41	%		5.19	%		4.80	%		5.37	%		4.73	%
Commercial Business loans, net		5.89			5.90			6.11			6.01			5.70			5.89			5.56
Total loans, net		5.50			5.46			5.57			5.37			5.00			5.48			4.91
Taxable securities:
Mortgage-backed securities		4.31			3.19			3.02			2.78			2.65			3.87			2.32
Other securities		6.27			5.76			5.49			5.30			4.96			6.03			4.73
Total taxable securities		5.27			4.63			4.38			4.16			3.84			4.99			3.51
Tax-exempt securities: ⁽¹⁾
Other securities		2.87			2.88			2.91			2.91			2.88			2.87			2.87
Total tax-exempt securities		2.87			2.88			2.91			2.91			2.88			2.87			2.87
Interest-earning deposits and federal funds sold		4.87			5.09			4.89			4.80			4.52			5.00			4.26
Total interest-earning assets⁽¹⁾		5.43	%		5.32	%		5.39	%		5.19	%		4.84	%		5.37	%		4.72	%
Interest-bearing Liabilities Yields:
Deposits:
Savings accounts		0.45	%		0.46	%		0.45	%		0.45	%		0.45	%		0.45	%		0.41	%
NOW accounts		3.97			3.82			3.77			3.53			3.19			3.90			3.00
Money market accounts		4.04			4.00			3.88			3.63			3.33			4.02			3.01
Certificate of deposit accounts		3.83			3.64			3.40			3.25			2.99			3.74			2.82
Total due to depositors		3.88			3.75			3.59			3.39			3.10			3.81			2.89
Mortgagors' escrow accounts		0.26			0.34			0.22			0.39			0.21			0.29			0.21
Total interest-bearing deposits		3.82			3.70			3.55			3.36			3.06			3.76			2.85
Borrowings		4.99			4.81			4.68			4.75			3.92			4.90			3.94
Total interest-bearing liabilities		3.95	%		3.83	%		3.68	%		3.52	%		3.15	%		3.89	%		2.97	%

Net interest rate spread (tax equivalent)⁽¹⁾		1.48	%		1.49	%		1.71	%		1.67	%		1.69	%		1.48	%		1.75	%
Net interest margin (tax equivalent)⁽¹⁾		2.05	%		2.06	%		2.29	%		2.22	%		2.18	%		2.06	%		2.22	%
Ratio of interest-earning assets to interest-bearing liabilities		1.17	X		1.17	X		1.19	X		1.18	X		1.18	X		1.17	X		1.19	X

⁽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

											2Q24 vs.			2Q24 vs.
	June 30,		March 31,		December 31,		September 30,		June 30,		1Q24			2Q23
(Dollars in thousands)	2024		2024		2023		2023		2023		% Change			% Change
Noninterest bearing	$	825,327	$	815,937	$	847,416	$	874,420	$	827,820		1.2	%		(0.3	)%
Interest bearing:
Certificate of deposit accounts		2,435,894		2,529,095		2,311,290		2,321,369		2,232,696		(3.7	)		9.1
Savings accounts		103,296		105,147		108,605		112,730		118,886		(1.8	)		(13.1	)
Money market accounts		1,710,376		1,717,298		1,726,404		1,551,176		1,594,637		(0.4	)		7.3
NOW accounts		1,774,268		2,003,649		1,771,164		1,749,802		1,891,834		(11.4	)		(6.2	)
Total interest-bearing deposits		6,023,834		6,355,189		5,917,463		5,735,077		5,838,053		(5.2	)		3.2
Total due to depositors		6,849,161		7,171,126		6,764,879		6,609,497		6,665,873		(4.5	)		2.7
Mortgagors' escrow deposits		57,702		82,081		50,382		72,012		57,817		(29.7	)		(0.2	)
Total deposits	$	6,906,863	$	7,253,207	$	6,815,261	$	6,681,509	$	6,723,690		(4.8	)%		2.7	%

Loan Composition

																2Q24 vs.			2Q24 vs.
	June 30,			March 31,			December 31,			September 30,			June 30			1Q24			2Q23
(Dollars in thousands)	2024			2024			2023			2023			2023			% Change			% Change
Multifamily residential	$	2,631,751		$	2,622,737		$	2,658,205		$	2,614,219		$	2,593,955			0.3	%		1.5	%
Commercial real estate		1,894,509			1,925,312			1,958,252			1,953,243			1,917,749			(1.6	)		(1.2	)
One-to-four family --- mixed use property		518,510			516,198			530,243			537,744			542,368			0.4			(4.4	)
One-to-four family --- residential		261,716			267,156			220,213			222,874			230,055			(2.0	)		13.8
Construction		65,161			60,568			58,673			59,903			57,325			7.6			13.7
Mortgage loans		5,371,647			5,391,971			5,425,586			5,387,983			5,341,452			(0.4	)		0.6

Small Business Administration		13,957			16,244			20,205			21,896			22,404			(14.1	)		(37.7	)
Commercial business and other		1,389,711			1,411,725			1,452,518			1,487,775			1,466,358			(1.6	)		(5.2	)
Commercial Business loans		1,403,668			1,427,969			1,472,723			1,509,671			1,488,762			(1.7	)		(5.7	)

Gross loans		6,775,315			6,819,940			6,898,309			6,897,654			6,830,214			(0.7	)		(0.8	)
Net unamortized (premiums) and unearned loan (cost) fees ⁽¹⁾		1,711			2,003			8,641			(1,580	)		2,211			(14.6	)		(22.6	)
Allowance for credit losses		(41,648	)		(40,752	)		(40,161	)		(39,228	)		(38,593	)		2.2			7.9
Net loans	$	6,735,378		$	6,781,191		$	6,866,789		$	6,856,846		$	6,793,832			(0.7	)%		(0.9	)%

⁽¹⁾ Includes $3.4 million, $3.6 million, $3.9 million, $4.4 million, and $4.8 million of purchase accounting unamortized discount resulting from the acquisition of Empire Bancorp at June 30, 2024, March 31, 2024, December 31, 2023, September 30, 2023, and June 30, 2023, respectively.

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

Loan Closings

	For the three months ended										For the six months ended
	June 30,		March 31,		December 31,		September 30,		June 30,		June 30,		June 30,
(In thousands)	2024		2024		2023		2023		2023		2024		2023
Multifamily residential	$	27,966	$	11,805	$	82,995	$	75,655	$	31,901	$	39,771	$	74,065
Commercial real estate		20,573		10,040		60,092		70,197		38,523		30,613		54,093
One-to-four family - mixed use property		3,980		750		3,319		6,028		5,812		4,730		10,750
One-to-four family - residential		689		52,539		1,454		1,070		63		53,228		4,359
Construction		4,594		1,895		8,007		6,971		8,811		6,489		19,403
Mortgage loans		57,802		77,029		155,867		159,921		85,110		134,831		162,670

Small Business Administration		-		-		1,162		-		820		-		1,138
Commercial business and other		68,162		52,955		87,255		81,549		72,850		121,117		168,518
Commercial Business loans		68,162		52,955		88,417		81,549		73,670		121,117		169,656

Total Closings	$	125,964	$	129,984	$	244,284	$	241,470	$	158,780	$	255,948	$	332,326

Weighted Average Rate on Loan Closings

	For the three months ended
	June 30,			March 31,			December 31,			September 30,			June 30,
Loan type	2024			2024			2023			2023			2023
Mortgage loans		7.58	%		6.36	%		7.55	%		7.22	%		6.62	%
Commercial Business loans		7.94			8.29			7.93			8.00			7.76
Total loans		7.77	%		7.13	%		7.69	%		7.48	%		7.14	%

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
ASSET QUALITY
(Unaudited)

Allowance for Credit Losses

	For the three months ended															For the six months ended
	June 30,			March 31,			December 31,			September 30,			June 30,			June 30,			June 30,
(Dollars in thousands)	2024			2024			2023			2023			2023			2024			2023
Allowance for credit losses - loans
Beginning balances	$	40,752		$	40,161		$	39,228		$	38,593		$	38,729		$	40,161		$	40,442

Net loan charge-off (recoveries):
Multifamily residential		(1	)		-			(1	)		-			-			(1	)		(1	)
Commercial real estate		-			-			-			-			8			-			8
One-to-four family - mixed-use property		(2	)		-			(1	)		-			-			(2	)		-
One-to-four family - residential		(2	)		13			9			(6	)		4			11			(32	)
Small Business Administration		(91	)		(5	)		(29	)		(48	)		(158	)		(96	)		(164	)
Commercial business and other		4			(4	)		82			12			1,706			-			10,983
Total net loan charge-offs (recoveries)		(92	)		4			60			(42	)		1,560			(88	)		10,794

Provision (benefit) for loan losses		804			595			993			593			1,424			1,399			8,945

Ending balance	$	41,648		$	40,752		$	40,161		$	39,228		$	38,593		$	41,648		$	38,593

Gross charge-offs	$	11		$	58		$	107		$	21		$	1,731		$	69		$	11,029
Gross recoveries		103			54			47			63			171			157			235

Allowance for credit losses - loans to gross loans		0.61	%		0.60	%		0.58	%		0.57	%		0.57	%		0.61	%		0.57	%
Net loan charge-offs (recoveries) to average loans		(0.01	)		-			-			-			0.09			-			0.32

Nonperforming Assets

	June 30,			March 31,			December 31,			September 30,			June 30,
(Dollars in thousands)	2024			2024			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		13,774			4,669			3,206			3,206			3,206
One-to-four family - mixed-use property		909			911			981			1,075			790
One-to-four family - residential		3,633			3,768			5,181			4,161			5,218
Small Business Administration		2,552			2,552			2,552			1,255			1,119
Commercial business and other		13,672			12,929			11,789			7,708			8,304
Total Nonaccrual loans		34,540			24,829			23,709			17,405			18,637

Total Nonperforming Loans (NPLs)		34,540			24,829			25,172			17,405			18,637

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

Total Nonaccrual HTM Securities		20,627			20,760			20,981			20,981			20,981

Total Nonperforming Assets	$	55,832		$	46,254		$	46,153		$	38,386		$	39,618

Nonperforming Assets to Total Assets		0.61	%		0.53	%		0.54	%		0.45	%		0.47	%
Allowance for Credit Losses to NPLs		120.6	%		164.1	%		159.5	%		225.4	%		207.1	%

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

GAAP income before income taxes	$	7,136		$	4,997		$	11,754		$	10,752		$	11,872		$	12,133		$	17,327

Net (gain) loss from fair value adjustments (Noninterest income (loss))		(57	)		834			(906	)		1,246			(294	)		777			(2,913	)
Life insurance proceeds (Noninterest income (loss))		-			-			(697	)		(23	)		(561	)		-			(561	)
Net (gain) loss from fair value adjustments on qualifying hedges (Net interest income)		(177	)		187			872			(1,348	)		205			10			105
Net amortization of purchase accounting adjustments and intangibles (Various)		(85	)		(169	)		(355	)		(237	)		(227	)		(254	)		(415	)
Miscellaneous expense (Professional services)		494			-			526			-			-			494			-

Core income before taxes		7,311			5,849			11,194			10,390			10,995			13,160			13,543

Provision for core income taxes		1,855			1,537			3,648			2,819			3,083			3,392			3,742

Core net income	$	5,456		$	4,312		$	7,546		$	7,571		$	7,912		$	9,768		$	9,801

GAAP diluted earnings per common share	$	0.18		$	0.12		$	0.27		$	0.26		$	0.29		$	0.30		$	0.42
Net (gain) loss from fair value adjustments, net of tax		(0.01	)		0.02			(0.02	)		0.03			(0.01	)		0.02			(0.07	)
Life insurance proceeds		-			-			(0.02	)		-			(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			-			0.01			-			-			0.01			-

Core diluted earnings per common share⁽¹⁾	$	0.18		$	0.14		$	0.25		$	0.25		$	0.26		$	0.33		$	0.32

Core net income, as calculated above	$	5,456		$	4,312		$	7,546		$	7,571		$	7,912		$	9,768		$	9,801
Average assets		8,830,665			8,707,505			8,569,002			8,505,346			8,462,442			8,769,085			8,465,363
Average equity		667,557			669,185			669,819			675,041			672,835			668,371			677,917
Core return on average assets⁽²⁾		0.25	%		0.20	%		0.35	%		0.36	%		0.37	%		0.22	%		0.23	%
Core return on average equity⁽²⁾		3.27	%		2.58	%		4.51	%		4.49	%		4.70	%		2.92	%		2.89	%

^{(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 six months ended
	June 30,			March 31,			December 31,			September 30,			June 30,			June 30,			June 30,
(Dollars in thousands)	2024			2024			2023			2023			2023			2024			2023

GAAP Net interest income	$	42,776		$	42,397		$	46,085		$	44,427		$	43,378		$	85,173		$	88,640
Net (gain) loss from fair value adjustments on qualifying hedges		(177	)		187			872			(1,348	)		205			10			105
Net amortization of purchase accounting adjustments		(182	)		(271	)		(461	)		(347	)		(340	)		(453	)		(646	)
Core Net interest income	$	42,417		$	42,313		$	46,496		$	42,732		$	43,243		$	84,730		$	88,099

GAAP Noninterest income	$	4,216		$	3,084		$	7,402		$	3,309		$	5,020		$	7,300		$	11,877
Net (gain) loss from fair value adjustments		(57	)		834			(906	)		1,246			(294	)		777			(2,913	)
Life insurance proceeds		-			-			(697	)		(23	)		(561	)		-			(561	)
Core Noninterest income	$	4,159		$	3,918		$	5,799		$	4,532		$	4,165		$	8,077		$	8,403

GAAP Noninterest expense	$	39,047		$	39,892		$	40,735		$	36,388		$	35,110		$	78,939		$	74,266
Net amortization of purchase accounting adjustments		(97	)		(102	)		(106	)		(110	)		(113	)		(199	)		(231	)
Miscellaneous expense		(494	)		-			(526	)		-			-			(494	)		-
Core Noninterest expense	$	38,456		$	39,790		$	40,103		$	36,278		$	34,997		$	78,246		$	74,035

Net interest income	$	42,776		$	42,397		$	46,085		$	44,427		$	43,378		$	85,173		$	88,640
Noninterest income		4,216			3,084			7,402			3,309			5,020			7,300			11,877
Noninterest expense		(39,047	)		(39,892	)		(40,735	)		(36,388	)		(35,110	)		(78,939	)		(74,266	)
Pre-provision pre-tax net revenue	$	7,945		$	5,589		$	12,752		$	11,348		$	13,288		$	13,534		$	26,251

Core:
Net interest income	$	42,417		$	42,313		$	46,496		$	42,732		$	43,243		$	84,730		$	88,099
Noninterest income		4,159			3,918			5,799			4,532			4,165			8,077			8,403
Noninterest expense		(38,456	)		(39,790	)		(40,103	)		(36,278	)		(34,997	)		(78,246	)		(74,035	)
Pre-provision pre-tax net revenue	$	8,120		$	6,441		$	12,192		$	10,986		$	12,411		$	14,561		$	22,467
Efficiency Ratio		82.6	%		86.1	%		76.7	%		76.8	%		73.8	%		84.3	%		76.7	%

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 six months ended
	June 30,			March 31,			December 31,			September 30,			June 30,			June 30,			June 30,
(Dollars in thousands)	2024			2024			2023			2023			2023			2024			2023
GAAP net interest income	$	42,776		$	42,397		$	46,085		$	44,427		$	43,378		$	85,173		$	88,640
Net (gain) loss from fair value adjustments on qualifying hedges		(177	)		187			872			(1,348	)		205			10			105
Net amortization of purchase accounting adjustments		(182	)		(271	)		(461	)		(347	)		(340	)		(453	)		(646	)
Tax equivalent adjustment		98			100			101			102			101			198			201
Core net interest income FTE	$	42,515		$	42,413		$	46,597		$	42,834		$	43,344		$	84,928		$	88,300
Prepayment penalties received on loans and securities, net of reversals and recoveries of interest from nonaccrual loans		(369	)		(928	)		(3,416	)		(857	)		(315	)		(1,297	)		(995	)
Net interest income FTE excluding episodic items	$	42,146		$	41,485		$	43,181		$	41,977		$	43,029		$	83,631		$	87,305

Total average interest-earning assets ⁽¹⁾	$	8,358,006		$	8,238,395		$	8,080,550		$	8,027,201		$	7,996,067		$	8,298,199		$	8,001,489
Core net interest margin FTE		2.03	%		2.06	%		2.31	%		2.13	%		2.17	%		2.05	%		2.21	%
Net interest margin FTE excluding episodic items		2.02	%		2.01	%		2.14	%		2.09	%		2.15	%		2.02	%		2.18	%

GAAP interest income on total loans, net	$	92,728		$	92,959		$	95,616		$	91,466		$	85,377		$	185,687		$	168,266
Net (gain) loss from fair value adjustments on qualifying hedges - loans		(137	)		123			978			(1,379	)		157			(14	)		56
Net amortization of purchase accounting adjustments		(198	)		(295	)		(484	)		(358	)		(345	)		(493	)		(661	)
Core interest income on total loans, net	$	92,393		$	92,787		$	96,110		$	89,729		$	85,189		$	185,180		$	167,661

Average total loans, net ⁽¹⁾	$	6,751,715		$	6,807,944		$	6,872,115		$	6,817,642		$	6,834,644		$	6,779,829		$	6,855,454
Core yield on total loans		5.47	%		5.45	%		5.59	%		5.26	%		4.99	%		5.46	%		4.89	%

⁽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)

	June 30,			March 31,			December 31,			September 30,			June 30,
(Dollars in thousands)	2024			2024			2023			2023			2023
Total Equity	$	665,322		$	669,827		$	669,837		$	666,521		$	670,247
Less:
Goodwill		(17,636	)		(17,636	)		(17,636	)		(17,636	)		(17,636	)
Core deposit intangibles		(1,322	)		(1,428	)		(1,537	)		(1,651	)		(1,769	)
Tangible Stockholders' Common Equity	$	646,364		$	650,763		$	650,664		$	647,234		$	650,842

Total Assets	$	9,097,240		$	8,807,325		$	8,537,236		$	8,579,375		$	8,474,852
Less:
Goodwill		(17,636	)		(17,636	)		(17,636	)		(17,636	)		(17,636	)
Core deposit intangibles		(1,322	)		(1,428	)		(1,537	)		(1,651	)		(1,769	)
Tangible Assets	$	9,078,282		$	8,788,261		$	8,518,063		$	8,560,088		$	8,455,447

Tangible Stockholders' Common Equity to Tangible Assets		7.12	%		7.40	%		7.64	%		7.56	%		7.70	%

SOURCE: Flushing Financial Corporation

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Flushing Financial Corporation Reports 2Q24 GAAP and Core EPS of $0.18; Net Interest Income Up QoQ

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