"Our third quarter had several positive trends that demonstrate our commitment to improve profitability over the long term. GAAP and Core EPS were $0.30 and $0.26, respectively, the best quarter in the past seven, including non-recurring items. GAAP and Core NIM increased by 5 and 4 bps QoQ to 2.10% and 2.07%, respectively, as the cost of funds peaked in July decreasing in August and September. As a result, NIM bottomed in July then increased in August and September. Credit quality remains solid with a sequential decline in NPAs and criticized and classified assets. Our underwriting remains very strong with a weighted average DCR of 1.9x for our multifamily and CRE portfolios and only 0.5% of exposure to Manhattan office buildings. The Company has $3.9 billion of unused lines of credit available as of September 30, 2024. Average total deposits increased 9% YoY and 4% QoQ. The Company and the Bank remain well capitalized under regulatory standards. Year to date, GAAP and Core noninterest expense growth was approximately 6%, which includes investments in the business including new employees and branches that should enhance our long term profitability over time. While there is more work to do, we are pleased with the direction and execution on our areas of focus."

- John R. Buran, President and CEO

UNIONDALE, NY / ACCESSWIRE / October 24, 2024 / Period End Loans and Average Total Deposits Increase QoQ. Third quarter 2024 GAAP and Core EPS were $0.30 and $0.26, compared to $0.26, and $0.25, respectively, a year ago. Insurance recoveries, discrete income tax items, and other events added $0.05 per share to 3Q24 EPS, while net interest recoveries on delinquent loans added another $0.03 per share. 3Q24 GAAP and Core NIM were 2.10% and 2.07%, up 5 bps and 4 bps QoQ, respectively. Average total deposits increased 9.4% YoY and 3.7% QoQ, while period end net loans increased 0.6% QoQ, but declined 1.2% YoY. This was the first QoQ increase in net loans since 4Q23 (0.1%).

Strong Credit Quality: Capital Remains Solid. Credit quality metrics were at favorable levels with criticized and classified loans to gross loans of 100 bps (down 13 bps QoQ), nonperforming assets to total assets of 59 bps (down 2 bps QoQ), and year to date net charge-offs of 6 bps. Capital continues to be sound with TCE/TA¹ of 7.00% at 3Q24.

Key Financial Metrics²

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

3Q24 Highlights

• Net interest margin FTE decreased 12 bps YoY and increased 5 bps QoQ to 2.10%; Core net interest margin FTE decreased 6 bps YoY, but increased 4 bps QoQ to 2.07%; Net reversals and recovered interest from delinquent loans totaled $1.1 million and added 5 bps to the GAAP and Core NIM in 3Q24; After bottoming in July, the NIM expanded in both August and September

• Average total deposits increased 9.4% YoY and 3.7% QoQ to $7.5 billion; Average noninterest bearing deposits declined 0.7% YoY but increased 2.7% QoQ and totaled 11.3% of total average deposits compared to 12.5% in 3Q23 and 11.4% in 2Q24. Average CDs were $2.9 billion, up 25.9% YoY and 18.1% QoQ

• Period end net loans decreased 1.2% YoY, but increased 0.6% QoQ to $6.8 billion; Loan closings were $217.1 million, down 10.1% YoY, but up 72.3% QoQ; The yields on closings increased 3 bps YoY, but decreased 26 bps QoQ to 7.51%; Back-to-back swap loan originations were $38.5 million compared to $27.4 million in 2Q24 and generated $0.6 million and $0.5 million of noninterest income, respectively; Loan pipeline decreased 19.4% YoY and 10.6% QoQ to $293.0 million; Approximately 20% of the loan pipeline consists of back-to-back swap loans

• NPAs totaled $54.9 million (59 bps of assets) in 3Q24 compared to $38.4 million (45 bps) a year ago and $55.8 million (61 bps) in the prior quarter

• Year to date noninterest expense growth was 6.3%, while core noninterest expense growth was 5.9%; The Company remains on target to have core noninterest expense growth of mid-single digits for 2024

• Provision for credit losses was $1.7 million in 3Q24 compared to $0.6 million in 3Q23 and $0.8 million in 2Q24; Net charge-offs (recoveries) were $3.0 million in 3Q24 compared to $(42,000) in 3Q23 and $(92,000) in 2Q24

• Tangible Common Equity to Tangible Assets was 7.00% at September 30, 2024, compared to 7.12% at June 30, 2024; Tangible book value per share was $22.29 compared to $22.39 a year ago

Areas of Focus

Income Statement Highlights

¹ See Reconciliation of GAAP Earnings and Core Earnings

Net interest income increased YoY and QoQ.

• Net Interest Margin FTE of 2.10% decreased 12 bps YoY, but increased 5 bps QoQ

• Prepayment penalty income, customer swap termination fees, net reversals and recoveries of interest from delinquent loans, net gains and losses from fair value adjustments on qualifying hedges, and purchase accounting accretion totaled $2.4 million (11 bps to NIM), in 3Q24, compared to $0.7 million (3 bps to NIM) in 2Q24, $1.0 million (5 bps to NIM) in 1Q24, $3.0 million (15 bps to NIM) in 4Q23, and $2.6 million (13 bps to NIM) in 3Q23

• Excluding the items in the previous bullet, the net interest margin was 1.99% in 3Q24, compared to 2.02% in 2Q24, 2.01% in 1Q24, 2.14% in 4Q23, and 2.09% in 3Q23

The provision for credit losses increased YoY and QoQ.

• Net charge-offs (recoveries) were $3.0 million (18 bps of average loans) in 3Q24 compared to $(92,000) ((1) bp of average loans) in 2Q24, $4,000 (less than 1 bp of average loans) in 1Q24, $60,000 in 4Q23 (less than 1 bp of average loans), and $(42,000) in 3Q23 (less than (1) bp of average loans)

Noninterest income increased YoY and QoQ.

• Back-to-back swap loan closings of $38.5 million in 3Q24 (compared to $120.5 million in 3Q23 and $27.4 million in 2Q24) generated $0.6 million of fee income (compared to $1.6 million of fee income in 3Q23 and $0.5 million in 2Q24)

• Net gains (losses) from fair value adjustments were $1.0 million ($0.03 per share, net of tax) in 3Q24, $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), and $(1.2) million in 3Q23 ($(0.03) per share, net of tax)

• Gain on life insurance proceeds were $1,000 in 3Q24 (less than $0.01 per share), $0.7 million in 4Q23 ($0.02 per share) and $23,000 in 3Q23 (less than $0.01 per share)

• Absent the items in the previous two bullets and other immaterial adjustments, core noninterest income was $5.3 million in 3Q24, up 17.0% YoY and 27.5% QoQ, and includes approximately $0.8 million of insurance recoveries and other items that are not expected to recur (included in other income)

Noninterest expense increased YoY but declined QoQ.

• Excluding the effects of immaterial adjustments, core noninterest expenses were $38.6 million in 3Q24, up 6.4% YoY and 0.4% QoQ; YoY increases primarily relate to business investments in staff and branches and deposit insurance premiums

• GAAP noninterest expense to average assets was 1.68% in 3Q24, 1.77% in 2Q24, 1.83% in 1Q24, 1.90% in 4Q23, and 1.71% in 3Q23

Provision for income taxes decreased YoY but increased QoQ.

• The effective tax rate was 22.3% in 3Q24, 25.4% in 2Q24, 26.3% in 1Q24, 31.1% in 4Q23, and 27.1% in 3Q23

• The effective tax rate in 3Q24 includes approximately $0.5 million of discrete tax benefits that are not expected to repeat

Balance Sheet, Credit Quality, and Capital Highlights

Average loans decreased slightly YoY and QoQ.

• Period end net loans totaled $6.8 billion, down 1.2% YoY, but up 0.6% QoQ

• Total loan closings were $217.1 million in 3Q24, $126.0 million in 2Q24, $130.0 million in 1Q24, $244.3 million in 4Q23, and $241.5 million in 3Q23; the loan pipeline was $293.0 million at September 30, 2024, down 19.4% YoY and 10.6% 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

Average total deposits increased YoY and QoQ.

• Average noninterest bearing deposits decreased 0.7% YoY, but increased 2.7% QoQ and comprised 11.3% of average total deposits in 3Q24 compared to 12.5% a year ago

• Average CDs totaled $2.9 billion, up 25.9% YoY and 18.1% QoQ; approximately $647.2 million of retail CDs are due to mature at an average rate of 4.96% in 4Q24

Credit Quality: Nonperforming loans increased YoY but decreased QoQ.

• Nonperforming loans were 50 bps of loans in 3Q24 compared to 25 bps in 3Q23 and 51 bps in 2Q24

• Criticized and classified loans were 100 bps of gross loans at 3Q24 compared to 113 bps at 2Q24, 87 bps at 1Q24, 111 bps at 4Q23, and 108 bps at 3Q23

• Allowance for credit losses were 117.7% of nonperforming loans at 3Q24 compared to 225.4% at 3Q23 and 120.6% at 2Q24

Capital: Book value per common share and tangible book value per common share, a non-GAAP measure, decreased 0.5% and 0.4% YoY to $22.94 and $22.29, respectively.

• The Company paid a dividend of $0.22 per share in 3Q24; 807,964shares 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 7.00% at September 30, 2024 compared to 7.56% at September 30, 2023, and 7.12% at June 30, 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 Friday, October 25, 2024, at 11:00 AM (ET) to discuss the Company's third 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=DyENTTHR

• Dial-in for Replay: 1-877-344-7529; Canada 855-669-9658

• Replay Access Code: 3119962

• The conference call will be simultaneously webcast and archived

Fourth Quarter and Full Year 2024 Earnings Release Date:

The Company plans to release Fourth Quarter and Full Year 2024 financial results after the market close on January 28, 2025, followed by a conference call at 9:30 AM (ET) on January 29, 2025.

A detailed announcement will be issued prior to the fourth 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

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FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
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FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
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