• Flushing Financial Corporation Reports 1Q22 GAAP EPS of $0.58 and Core EPS of $0.61

    Source: Nasdaq GlobeNewswire / 26 Apr 2022 17:30:01   America/New_York

    Record Net Interest Income and Record Low Cost of Funds

    John R. Buran, President and CEO Commentary

    UNIONDALE, N.Y., April 26, 2022 (GLOBE NEWSWIRE) -- The Company reported first quarter 2022 GAAP EPS of $0.58, down 3.3% YoY, ROAA of 0.91%, and ROAE of 10.83%. For the first quarter, Core EPS of $0.61 increased, 13.0% YoY with ROAA of 0.94% and ROAE of 11.27%.

    “Activity in the New York City area is returning to more normal levels and this is seen in our results: 1Q22 loan closings, excluding SBA Paycheck Protection Program loans (“PPP”), up 65% YoY and average noninterest bearing deposits up 17% YoY. The Company is benefiting from the improved economic activity and merger activity as the loan pipeline is at record levels, up 77% YoY and 55% QoQ. Net loans, excluding PPP loans, were flat QoQ due to prepayment speeds remaining elevated as borrowers sought to lock in low rates before the Fed increased short-term rates. Our pricing discipline translated into pipeline yields that are at peak levels for the past 12 months. The Company is in a better position for rising rates than the previous rising rate cycle with a higher percentage of noninterest bearing deposits, lower balances of CDs and borrowings, over $400 million of funding hedges (that will effectively reprice over the next 2 years), and approximately 25% of loans will reprice within one year or 30% including loan hedges.”
    - John R. Buran, President and CEO

    NIM Expansion QoQ; Pipeline at Record Level; Business Loans Increase. Record net interest income of $63.5 million increased 4.2% YoY and 1.3% QoQ. NIM expanded 18 bps to 3.36% YoY and 7 bps QoQ. Core NIM increased by 25 bps to 3.31% YoY and 10 bps QoQ. The increase in the NIM QoQ was primarily due to a 7 bps improvement in the cost of funds. Period end net loans, excluding PPP, were flat QoQ, with commercial business and other loans increasing 14% annualized. Loan closings, excluding PPP, were up 65% YoY, but repayment speeds remained elevated both QoQ and YoY. With the Federal Reserve increasing short-term rates, we expect refinance volume to slow in 2022. Additionally, we continue to benefit from the merger disruption in our markets as we have hired 30 people, including 12 revenue producers, over the past year from institutions involved with mergers.

    Returned 84% of Earnings in 1Q22; Stable Tangible Book Value Per Share. The Company returned 84% of earning in 1Q22 through dividends and share repurchases of 360,000 shares of common stock at an average price of $23.52. Despite rising rates, book value and tangible book value per share were stable QoQ, while TCE/TA1 was 8.05% at March 31, 2022 compared to 8.22% QoQ.

    Key Financial Metrics2
                
      1Q22  4Q21 3Q21 2Q21 1Q21
    GAAP:           
    EPS $0.58  $0.58 $0.81  $0.61 $0.60
    ROAA (%)  0.91   0.89  1.26   0.93  0.93
    ROAE (%)  10.83   10.77  15.42   11.95  12.29
    NIM FTE3 (%)  3.36   3.29  3.34   3.14  3.18
    Core:           
    EPS $0.61  $0.67 $0.88  $0.73 $0.54
    ROAA (%)  0.94   1.04  1.38   1.11  0.83
    ROAE (%)  11.27   12.49  16.88   14.27  10.96
    Core NIM FTE (%)  3.31   3.21  3.27   3.14  3.06
    Efficiency Ratio (%)  58.9   58.7  52.3   53.4  58.6
    Credit Quality:           
    NPAs/Loans&REO (%)  0.21   0.23  0.31   0.26  0.31
    ACLs/Loans (%)  0.57   0.56  0.55   0.64  0.67
    ACLs/NPLs (%)  266.12   248.66  179.86   242.55  212.87
    NCOs/Avg Loans (%)  0.06   —  (0.04)  0.05  0.17
    Balance Sheet:           
    Avg Loans ($B) $6.6  $6.6 $6.6  $6.7 $6.7
    Avg Dep ($B) $6.4  $6.5 $6.4  $6.5 $6.3
    Book Value/Share $22.26  $22.26 $21.78  $21.16 $20.65
    Tangible BV/Share $21.61  $21.61 $21.13  $20.51 $19.99
    TCE/TA (%)  8.05   8.22  8.04   7.80  7.60
                
    1 Tangible Common Equity (“TCE”)/Total Assets (“TA”) 2 See “Reconciliation of GAAP Earnings and Core Earnings” and “Reconciliation of GAAP Net Interest Margin to Core and Base Net Interest Income and Net Interest Margin.” 3 Net Interest Margin (“NIM”) Fully Taxable Equivalent (“FTE”)


    1Q22 Highlights
    • Net interest income increased 1.3% QoQ (as funding costs declined 7 bps), and 4.2% YoY to a record $63.5 million; core net interest income expanded 2.4% QoQ and 6.8% YoY to a record $62.6 million
    • Net interest margin FTE increased 7 bps QoQ and 18 bps YoY to 3.36%, and core net interest margin FTE increased 10 bps QoQ, and 25 bps YoY to 3.31%; Core NIM expansion QoQ was primarily driven by lower cost of funds
    • Period end net loans, excluding PPP, were flat QoQ and up 1.2% YoY; loan closings were $329.3 million in 1Q22, down 9.2% QoQ, but up 2.0% YoY (up 64.9% excluding PPP)
    • Average deposits, including mortgage escrow, decreased 0.8% QoQ, but increased 2.0% YoY to $6.4 billion, with core deposits comprising 86.1% of total average deposits; record average noninterest bearing deposits, up 17.0% YoY
    • Loan pipeline increased 76.6% YoY to $663.7 million
    • Provision for credit losses was $1.4 million in 1Q22 exceeding net charge-offs of $0.9 million
    • NPAs decreased 5.8% QoQ and 33.7% YoY to $14.1 million; criticized and classified loans were up 3.3% QoQ to $59.5 million, representing 0.90% of loans
    • Tangible Common Equity to Tangible Assets was 8.05% down from 8.22% in 4Q21; the change in AOCI impacted this ratio by 11 bps in 1Q22
    • Repurchased 360,000 shares at an average price of $23.52; dividends and share repurchases were 84% of net income in 1Q22

    Income Statement Highlights
                       
                  YoY QoQ
    ($000s, except EPS)  1Q22  4Q21 3Q21 2Q21 1Q21 Change Change
                       
    Net Interest Income  $63,479  $62,674  $63,364  $61,039  $60,892 4.2 % 1.3 %
    Provision (Benefit) for Credit Losses   1,358   761   (6,927)  (1,598)  2,820 (51.8)  78.4  
    Noninterest Income (Loss)   1,313   (280)  866   (3,210)  6,311 (79.2)  (568.9) 
    Noninterest Expense   38,794   38,807   36,345   34,011   38,159 1.7   (0.0) 
    Income Before Income Taxes   24,640   22,826   34,812   25,416   26,224 (6.0)  7.9  
    Provision for Income Taxes   6,421   4,743   9,399   6,158   7,185 (10.6)  35.4  
    Net Income  $18,219  $18,083  $25,413  $19,258  $19,039 (4.3)  0.8  
    Diluted EPS  $0.58  $0.58  $0.81  $0.61  $0.60 (3.3)  -  
    Avg. Diluted Shares (000s)   31,254   31,353   31,567   31,677   31,604 (1.1)  (0.3) 
                       
    Core Net Income1  $18,969  $20,968  $27,829  $22,994  $16,973 11.8   (9.5) 
    Core EPS1  $0.61  $0.67  $0.88  $0.73  $0.54 13.0   (9.0) 
                                 
    1 See Reconciliation of GAAP Earnings and Core Earnings  

    Net interest income totaled $63.5 million in 1Q22 (an increase of 4.2% YoY, and 1.3% QoQ), compared to $62.7 million in 4Q21, $63.4 million in 3Q21, $61.0 million in 2Q21, and $60.9 million in 1Q21.

    • Net interest margin, FTE (“NIM”) of 3.36% increased 18 bps YoY and 7 bps QoQ; PPP loans caused a 3 bps, 3 bps, and 2 bps positive impact on the NIM in 1Q22, 4Q21, and 3Q21, respectively, neutral impact in 2Q21, and a drag of 4 bps in 1Q21
    • Prepayment penalty income from loans and securities, 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 $2.6 million (14 bps to the NIM) in 1Q22 compared to $3.1 million (16 bps) in 4Q21, $3.4 million (19 bps) in 3Q21, $1.9 million (10 bps) in 2Q21, and $3.3 million (17 bps) in 1Q21
    • Excluding the items in the previous bullet, net interest margin was 3.22% in 1Q22 compared to 3.13% in 4Q21, 3.15% in 3Q21, 3.04% in 2Q21, and 3.01% in 1Q21, or an increase of 21 bps YoY and 9 bps QoQ
    • Net PPP loan fees were $0.9 million in 1Q22, $1.2 million in 4Q21, $1.3 million in 3Q21, $1.2 million in 2Q21, and $0.5 million in 1Q21

    The Company recorded a provision for credit losses of $1.4 million in 1Q22, $0.8 million in 4Q21, and $2.8 million in 1Q21 compared to a benefit for credit losses of $6.9 million in 3Q21 and $1.6 million in 2Q21.

    • 1Q22 provision for credit losses exceed net charge-offs by $0.4 million
    • Net charge-offs (recoveries) were $0.9 million in 1Q22 (6 bps of average loans), $(29) thousand in 4Q21 (negligible as compared to average loans), $(0.6) million in 3Q21 ((4) bps), $0.9 million in 2Q21 (5 bps), and $2.9 million in 1Q21 (17 bps)

    Noninterest income (loss) was $1.3 million in 1Q22, $(0.3) million in 4Q21, $0.9 million in 3Q21, $(3.2) million in 2Q21, and $6.3 million in 1Q21.

    • Noninterest income included net gains (losses) from fair value adjustments of $(1.8) million in 1Q22 or $(0.04) per share, net of tax, $(5.1) million in 4Q21 or $(0.13) per share, net of tax, $(2.3) million in 3Q21 or $(0.05) per share, net of tax, $(6.5) million or $(0.15) per share, net of tax in 2Q21, and $1.0 million or $0.02 per share, net of tax in 1Q21
    • Absent all above items and other immaterial adjustments, core noninterest income was $3.1 million in 1Q22, down 33.7% YoY, and 35.8% QoQ
    • Included in 4Q21 core noninterest income was a one-time $2.0 million ($0.05 per share, net of tax) dividend received on retirement plan investments

    Noninterest expense totaled $38.8 million in 1Q22 (an increase of 1.7% YoY and flat QoQ) compared to $38.8 million in 4Q21, $36.3 million in 3Q21, $34.0 million in 2Q21, and $38.2 million in 1Q21.

    • Noninterest expense includes no pre-tax merger benefits or costs for 1Q22 compared to $17 thousand pre-tax merger benefit (<$0.01 per share, net of tax) in 4Q21, $2.1 million of pre-tax merger charges ($0.05 per share, net of tax) in 3Q21, $0.5 million of pre-tax merger benefits ($(0.01) per share, net of tax) in 2Q21, and $1.0 million of pre-tax merger charges ($0.02 per share, net of tax) in 1Q21
    • Excluding the above items and other immaterial adjustments, core operating expenses were $38.7 million in 1Q22, up 4.3% YoY and flat QoQ
    • 1Q22 includes $4.3 million of seasonal compensation expense compared to $3.3 million a year ago
    • Included in 4Q21 noninterest expense was a one-time $4.3 million ($0.11 per share, net of tax) of increased compensation and benefits for all employees due to record year of earnings in 2021 and employee performance through the pandemic.
    • The efficiency ratio was 58.9% in 1Q22, 58.7% in 4Q21, 52.3% in 3Q21, 53.4% in 2Q21, and 58.6% in 1Q21

    The provision for income taxes was $6.4 million in 1Q22 compared to $4.7 million in 4Q21, $9.4 million in 3Q21, $6.2 million in 2Q21, and $7.2 million in 1Q21.

    • The effective tax rate was 26.1% in 1Q22, 20.8% in 4Q21, 27.0% in 3Q21, 24.2% in 2Q21, and 27.4% in 1Q21
    • The 4Q21 effective tax rate declined due to lower levels of taxable state income and higher percentage of permanent differences
    • The 2Q21 effective tax rate includes $0.8 million benefit from a state tax rate change; absent this benefit the effective tax rate would have been 27.2%

    Balance Sheet, Credit Quality, and Capital Highlights
                      
                 YoY QoQ
      1Q22  4Q21 3Q21 2Q21 1Q21 Change Change
    Average Loans And Deposits ($MM)                 
    Loans $6,579  $6,558 $6,633 $6,687 $6,700 (1.8)% 0.3 %
    Deposits  6,410   6,459  6,408  6,511  6,285 2.0   (0.8) 
                      
    Credit Quality ($000s)                 
    Nonperforming Loans $14,066  $14,934 $20,217 $17,592 $21,186 (33.6)% (5.8)%
    Nonperforming Assets  14,066   14,934  20,217  17,592  21,221 (33.7)  (5.8) 
    Criticized and Classified Loans  59,548   57,650  68,913  69,161  63,095 (5.6)  3.3  
    Criticized and Classified Assets  80,527   78,628  89,889  90,135  63,130 27.6   2.4  
    Allowance for Credit Losses/Loans (%)  0.57   0.56  0.55  0.64  0.67 (10)bps 1 bps
                      
    Capital                 
    Book Value/Share $22.26  $22.26 $21.78 $21.16 $20.65 7.8 % - %
    Tangible Book Value/Share  21.61   21.61  21.13  20.51  19.99 8.1   -  
    Tang. Common Equity/Tang. Assets (%)  8.05   8.22  8.04  7.80  7.60 45 bps (17)bps
    Leverage Ratio (%)  9.05   8.98  8.83  8.50  8.44 61   7  

    Average loans were $6.6 billion, a decrease of 1.8% YoY, but an increase of 0.3% QoQ.

    • Total loan closings were $329.3 million in 1Q22, $362.7 million in 4Q21, $243.9 million in 3Q21, $324.4 million ($308.9 million excluding PPP) in 2Q21, and $322.9 million ($199.7 million excluding PPP) in 1Q21
    • The loan pipeline reached a new record level of $663.7 million at March 31, 2022 was up 76.6% YoY and 54.6% QoQ
    • PPP loans held at the end of each quarter totaled $43.2 million at 1Q22, $77.4 million at 4Q21, $130.8 million at 3Q21, $197.3 million at 2Q21, and $251.0 million at 1Q21; forgiven PPP loans were $34.1 million in 1Q22, $53.4 million in 4Q21, $66.5 million in 3Q21, $69.2 million in 2Q21, and $24.1 million in 1Q21; remaining unamortized net PPP fees were $1.1 million at March 31, 2022; The PPP loan program was created by the CARES Act in response to the COVID-19 pandemic
    • Period end net loans, excluding PPP loans, totaled $6.5 billion, up 1.2% YoY and flat QoQ

    Average Deposits totaled $6.4 billion, increasing 2.0% YoY, but down 0.8% QoQ.

    • Average core deposits (non-CD deposits) increased to 86.1% of total average deposits (including escrow deposits) in 1Q22, compared to 82.5% a year ago
    • Average noninterest bearing deposits increased 17.0% YoY and 2.5% QoQ and comprised 15.6% of total average deposits (including escrow deposits) in 1Q22 compared to 13.6% a year ago

    Credit Quality: Nonperforming loans totaled $14.1 million in 1Q22, $14.9 million in 4Q21, $20.2 million in 3Q21, $17.6 million in 2Q21, and $21.2 million in 1Q21.

    • Nonperforming assets were down 33.7% YoY and 5.8% QoQ
    • Criticized and classified loans totaled $59.5 million in 1Q22 (90 bps of loans), $57.7 million in 4Q21 (87 bps of loans), $68.9 million in 3Q21 (104 bps of loans), $69.2 million at 2Q21 (103 bps), and $63.1 million at 1Q21 (94 bps)
    • Criticized and classified assets are composed of criticized and classified loans, as detailed above, plus one criticized investment security totaling $21.0 million in 1Q22, 4Q21, and 3Q21, which is currently under a principal payment forbearance agreement (interest payments are received)
    • Loans classified as troubled debt restructured (TDR) totaled $15.1 million in 1Q22 compared to $12.7 million in 4Q21 and $15.2 million a year ago
    • Over 87% of gross loans are collateralized by real estate with an average loan-to-value ratio of <38% as of March 31, 2022
    • Allowance for credit losses were 0.57% of loans at 1Q22 compared to 0.56% at 4Q21 and 0.67% a year ago
    • Allowance for credit losses were 266.1% of nonperforming loans at 1Q22 compared to 248.7% at 4Q21 and 212.9% a year ago

    Capital: Book value per common share was $22.26 at 1Q22, stable QoQ and up 7.8% from $20.65 YoY; tangible book value per common share, a non-GAAP measure, was $21.61 in 1Q22, flat with 4Q21 and up 8.1% from $19.99 at 1Q21.

    • The Company paid a dividend of $0.22 per share and repurchased 360,000 shares at an average price of $23.52 in 1Q22
    • As of the end of 1Q22, 488,187 shares remain subject to repurchase under the authorized stock repurchase program, which has no expiration or maximum dollar limit
    • Tangible common equity to tangible assets was 8.05% at 1Q22 compared to 8.22% at 4Q21 and 7.60% at 1Q21
    • The Company and the Bank remain well capitalized under all applicable regulatory requirements
    • The leverage ratio was 9.05% in 1Q22 compared to 8.98% in 4Q21 and 8.44% in 1Q21

    Conference Call Information And Second Quarter Earnings Release Date

    Conference Call Information:

    • John R. Buran, President and Chief Executive Officer, and Susan K. Cullen, Senior Executive Vice President and Chief Financial Officer, will host a conference call on Wednesday, April 27, 2022, at 9:30 AM (ET) to discuss the Company’s first quarter 2022 results and strategy.
    • Dial-in for Live Call: 1-877-509-5836; Canada 855-669-9657
    • Webcast: https://services.choruscall.com/links/ffic220427.html 
    • Dial-in for Replay: 1-877-344-7529; Canada 855-669-9658
    • Replay Access Code: 5300568
    • The conference call will be simultaneously webcast and archived

    Second Quarter 2022 Earnings Release Date:

    The Company plans to release Second Quarter 2022 financial results after the market close on July 26, 2022; followed by a conference call at 9:30 AM (ET) on July 27, 2022.

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

    About Flushing Financial Corporation

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

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

    “Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: Statements in this Press Release relating to plans, strategies, economic performance and trends, projections of results of specific activities or investments and other statements that are not descriptions of historical facts may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking information is inherently subject to risks and uncertainties, and actual results could differ materially from those currently anticipated due to a number of factors, which include, but are not limited to, risk factors discussed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 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.

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

    #FF

    - Statistical Tables Follow -

     
    FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
    FINANCIAL HIGHLIGHTS
    (Unaudited)
                         
      At or for the three months ended
      March31,  December 31, September 30, June 30, March31, 
    (Dollars in thousands, except per share data) 2022 2021 2021 2021 2021
    Performance Ratios(1)                    
    Return on average assets  0.91%  0.89 %  1.26 %  0.93%  0.93%
    Return on average equity  10.83   10.77    15.42    11.95   12.29 
    Yield on average interest-earning assets(2)  3.77   3.77    3.84    3.69   3.77 
    Cost of average interest-bearing liabilities  0.50   0.58    0.61    0.66   0.69 
    Cost of funds  0.43   0.50    0.53    0.57   0.61 
    Net interest rate spread during period(2)  3.27   3.19    3.23    3.03   3.08 
    Net interest margin(2)  3.36   3.29    3.34    3.14   3.18 
    Noninterest expense to average assets  1.93   1.92    1.80    1.65   1.87 
    Efficiency ratio(3)  58.87   58.66    52.28    53.38   58.58 
    Average interest-earning assets to average interest-bearing liabilities  1.22X  1.22 X  1.21 X  1.19X  1.18X
                         
    Average Balances                    
    Total loans, net $6,578,680  $6,558,285   $6,633,301   $6,686,888  $6,700,476 
    Total interest-earning assets  7,570,373   7,627,256    7,608,317    7,790,174   7,667,217 
    Total assets  8,049,470   8,090,701    8,072,918    8,263,553   8,147,714 
    Total due to depositors  5,336,983   5,397,802    5,406,423    5,495,936   5,363,647 
    Total interest-bearing liabilities  6,220,510   6,276,221    6,310,859    6,532,891   6,477,871 
    Stockholders' equity  673,012   671,474    659,288    644,690   619,647 
                         
    Per Share Data                    
    Book value per common share(4) $22.26  $22.26   $21.78   $21.16  $20.65 
    Tangible book value per common share(5) $21.61  $21.61   $21.13   $20.51  $19.99 
                         
    Stockholders' Equity                    
    Stockholders' equity $675,813  $679,628   $668,096   $655,167  $639,201 
    Tangible stockholders' equity  656,085   659,758    648,039    634,959   618,839 
                         
    Consolidated Regulatory Capital Ratios                    
    Tier 1 capital $731,536  $726,174   $711,276   $697,591  $679,343 
    Common equity Tier 1 capital  675,434   671,494    661,340    649,367   636,071 
    Total risk-based capital  892,861   885,469    832,255    823,494   806,922 
    Risk Weighted Assets  6,232,020   6,182,095    6,194,207    6,344,076   6,281,136 
                         
    Tier 1 leverage capital (well capitalized = 5%)  9.05%  8.98 %  8.83 %  8.50%  8.44%
    Common equity Tier 1 risk-based capital
    (well capitalized = 6.5%)    		  10.84   10.86    10.68    10.24   10.13 
    Tier 1 risk-based capital (well capitalized = 8.0%)  11.74   11.75    11.48    11.00   10.82 
    Total risk-based capital (well capitalized = 10.0%)  14.33   14.32    13.44    12.98   12.85 
                         
    Capital Ratios                    
    Average equity to average assets  8.36%  8.30 %  8.17 %  7.80%  7.61%
    Equity to total assets  8.27   8.45    8.27    8.03   7.83 
    Tangible common equity to tangible assets(6)  8.05   8.22    8.04    7.80   7.60 
                         
    Asset Quality                    
    Nonaccrual loans(7) $14,066  $14,933   $18,292   $17,391  $18,604 
    Nonperforming loans  14,066   14,933    20,217    17,592   21,186 
    Nonperforming assets  14,066   14,933    20,217    17,592   21,221 
    Net charge-offs (recoveries)  935   (29)   (619)   902   2,865 
                         
    Asset Quality Ratios                    
    Nonperforming loans to gross loans  0.21%  0.23 %  0.31 %  0.26%  0.31%
    Nonperforming assets to total assets  0.17   0.19    0.25    0.22   0.26 
    Allowance for credit losses to gross loans  0.57   0.56    0.55    0.64   0.67 
    Allowance for credit losses to nonperforming assets  266.12   248.66    179.86    242.55   212.52 
    Allowance for credit losses to nonperforming loans  266.12   248.66    179.86    242.55   212.87 
    Net charge-offs (recoveries) to average loans  0.06   —    (0.04)   0.05   0.17 
                         
    Full-service customer facilities  24   24    24    25   25 
    (See footnotes on next page)                      

    ______________________
    (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 noninterest expense (excluding merger expense, OREO expense, prepayment penalty on borrowings, the net gain/loss from the sale of OREO and net amortization of purchase accounting adjustments) by the total of net interest income (excluding net gains and losses from fair value adjustments on qualifying hedges and net amortization of purchase accounting adjustments) and noninterest income (excluding life insurance proceeds, net gains and losses from the sale or disposition of securities, assets and fair value adjustments).
    (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 (goodwill, net of deferred taxes). See “Calculation of Tangible Stockholders’ Common Equity to Tangible Assets”.
    (6) See “Calculation of Tangible Stockholders’ Common Equity to Tangible Assets”.
    (7) Excludes performing nonaccrual TDR loans.

     
    FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
    CONSOLIDATED STATEMENTS OF INCOME
    (Unaudited)
                   
     For the three months ended
     March 31,  December 31, September 30, June 30, March 31, 
    (In thousands, except per share data)2022
    		 2021
    		 2021
    		 2021
    		 2021
    Interest and Dividend Income              
    Interest and fees on loans$67,516  $68,113  $69,198  $67,999  $69,021 
    Interest and dividends on securities:              
    Interest 3,745   3,536   3,706   3,685   3,072 
    Dividends 8   7   7   7   8 
    Other interest income 51   74   42   51   36 
    Total interest and dividend income 71,320   71,730   72,953   71,742   72,137 
                   
    Interest Expense              
    Deposits 3,408   3,975   4,705   5,539   6,105 
    Other interest expense 4,433   5,081   4,884   5,164   5,140 
    Total interest expense 7,841   9,056   9,589   10,703   11,245 
                   
    Net Interest Income 63,479   62,674   63,364   61,039   60,892 
    Provision (benefit) for credit losses 1,358   761   (6,927)  (1,598)  2,820 
    Net Interest Income After Provision (Benefit)
    for Credit Losses    		 62,121   61,913   70,291   62,637   58,072 
                   
    Noninterest Income (Loss)              
    Banking services fee income 1,374   1,142   865   1,233   2,725 
    Net gain (loss) on sale of securities —   —   (10)  123   — 
    Net gain on sale of loans —   46   131   127   31 
    Net gain on disposition of assets —   —   —   —   621 
    Net gain (loss) from fair value adjustments (1,809)  (5,140)  (2,289)  (6,548)  982 
    Federal Home Loan Bank of New York stock dividends 397   417   491   500   689 
    Bank owned life insurance 1,114   1,023   1,015   1,009   997 
    Other income 237   2,232   663   346   266 
    Total noninterest income (loss) 1,313   (280)  866   (3,210)  6,311 
                   
    Noninterest Expense              
    Salaries and employee benefits 23,649   25,223   20,544   19,879   22,664 
    Occupancy and equipment 3,604   3,579   3,534   3,522   3,367 
    Professional services 2,222   1,152   1,899   1,988   2,400 
    FDIC deposit insurance 420   391   618   729   1,213 
    Data processing 1,424   1,757   1,759   1,419   2,109 
    Depreciation and amortization 1,460   1,521   1,627   1,638   1,639 
    Other real estate owned/foreclosure (recoveries) expense 84   129   182   22   (10)
    Other operating expenses 5,931   5,055   6,182   4,814   4,777 
    Total noninterest expense 38,794   38,807   36,345   34,011   38,159 
                   
    Income Before Provision for Income Taxes 24,640   22,826   34,812   25,416   26,224 
                   
    Provision for Income Taxes 6,421   4,743   9,399   6,158   7,185 
                   
    Net Income$18,219  $18,083  $25,413  $19,258  $19,039 
                   
    Basic earnings per common share$0.58  $0.58  $0.81  $0.61  $0.60 
    Diluted earnings per common share$0.58  $0.58  $0.81  $0.61  $0.60 
    Dividends per common share$0.22  $0.21  $0.21  $0.21  $0.21 
                   
    Basic average shares 31,254   31,353   31,567   31,677   31,604 
    Diluted average shares 31,254   31,353   31,567   31,677   31,604 
                        


    FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
    CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
    (Unaudited)
                    
      March31, December 31, September 30, June 30, March31,
    (Dollars in thousands) 2022 2021 2021 2021 2021
    ASSETS               
    Cash and due from banks $186,407  $81,723  $178,598  $145,971  $174,420 
    Securities held-to-maturity:               
    Mortgage-backed securities  7,890   7,894   7,899   7,904   7,909 
    Other securities  66,327   49,974   49,989   49,986   49,912 
    Securities available for sale:               
    Mortgage-backed securities  553,828   572,184   584,145   596,661   518,781 
    Other securities  286,041   205,052   212,654   224,784   242,440 
    Loans  6,607,264   6,638,105   6,630,354   6,718,806   6,745,316 
    Allowance for credit losses  (37,433)  (37,135)  (36,363)  (42,670)  (45,099)
    Net loans  6,569,831   6,600,970   6,593,991   6,676,136   6,700,217 
    Interest and dividends receivable  37,308   38,698   40,912   43,803   44,941 
    Bank premises and equipment, net  22,752   23,338   24,018   26,438   27,498 
    Federal Home Loan Bank of New York stock  33,891   35,937   36,158   41,630   41,498 
    Bank owned life insurance  211,867   210,754   184,730   183,715   182,707 
    Goodwill  17,636   17,636   17,636   17,636   17,636 
    Core deposit intangibles  2,420   2,562   2,708   2,859   3,013 
    Right of use asset  48,475   50,200   50,155   51,972   53,802 
    Other assets  125,160   148,989   93,741   89,850   94,410 
    Total assets $8,169,833  $8,045,911  $8,077,334  $8,159,345  $8,159,184 
                    
    LIABILITIES               
    Deposits $6,373,400  $6,333,532  $6,421,391  $6,298,790  $6,326,577 
    Mortgagors' escrow deposits  79,495   51,913   67,207   58,230   74,348 
    Borrowed funds  877,122   815,544   752,925   971,827   948,920 
    Operating lease liability  52,292   54,155   54,239   56,151   58,080 
    Other liabilities  111,711   111,139   113,476   119,180   112,058 
    Total liabilities  7,494,020   7,366,283   7,409,238   7,504,178   7,519,983 
                    
    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  261,837   263,375   262,009   260,958   260,019 
    Treasury stock  (79,834)  (75,293)  (71,738)  (65,335)  (65,479)
    Retained earnings  508,973   497,889   486,418   467,620   455,023 
    Accumulated other comprehensive loss, net of taxes  (15,504)  (6,684)  (8,934)  (8,417)  (10,703)
    Total stockholders' equity  675,813   679,628   668,096   655,167   639,201 
                    
    Total liabilities and stockholders' equity $8,169,833  $8,045,911  $8,077,334  $8,159,345  $8,159,184 
                    
    (In thousands)               
    Issued shares  34,088   34,088   34,088   34,088   34,088 
    Outstanding shares  30,367   30,526   30,676   30,962   30,954 
    Treasury shares  3,721   3,561   3,412   3,126   3,133 
                         

      

    FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
    AVERAGE BALANCE SHEETS
    (Unaudited)
                    
      For the three months ended
      March31,  December 31, September 30, June 30, March31, 
    (In thousands) 2022 2021 2021 2021 2021
    Interest-earning Assets:               
    Mortgage loans, net $5,152,070 $5,140,233 $5,158,213 $5,130,400 $5,155,975
    Other loans, net  1,426,610  1,418,052  1,475,088  1,556,488  1,544,501
    Total loans, net  6,578,680  6,558,285  6,633,301  6,686,888  6,700,476
    Taxable securities:               
    Mortgage-backed securities  580,670  595,538  590,732  578,134  433,917
    Other securities  226,744  207,482  217,763  232,020  300,828
    Total taxable securities  807,414  803,020  808,495  810,154  734,745
    Tax-exempt securities:               
    Other securities  57,611  50,834  50,832  50,830  50,828
    Total tax-exempt securities  57,611  50,834  50,832  50,830  50,828
     Interest-earning deposits and federal funds sold  126,668  215,117  115,689  242,302  181,168
    Total interest-earning assets  7,570,373  7,627,256  7,608,317  7,790,174  7,667,217
    Other assets  479,097  463,445  464,601  473,379  480,497
    Total assets $8,049,470 $8,090,701 $8,072,918 $8,263,553 $8,147,714
                    
    Interest-bearing Liabilities:               
    Deposits:               
    Savings accounts $156,592 $154,471 $153,120 $153,113 $170,079
    NOW accounts  2,036,914  2,115,619  2,107,866  2,255,581  2,185,384
    Money market accounts  2,253,630  2,177,928  2,107,473  2,043,257  1,905,543
    Certificate of deposit accounts  889,847  949,784  1,037,964  1,043,985  1,102,641
    Total due to depositors  5,336,983  5,397,802  5,406,423  5,495,936  5,363,647
    Mortgagors' escrow accounts  71,509  84,617  68,562  91,545  65,372
    Total interest-bearing deposits  5,408,492  5,482,419  5,474,985  5,587,481  5,429,019
    Borrowings  812,018  793,802  835,874  945,410  1,048,852
    Total interest-bearing liabilities  6,220,510  6,276,221  6,310,859  6,532,891  6,477,871
    Noninterest-bearing demand deposits  1,001,571  976,803  933,443  923,220  856,052
    Other liabilities  154,377  166,203  169,328  162,752  194,144
    Total liabilities  7,376,458  7,419,227  7,413,630  7,618,863  7,528,067
    Equity  673,012  671,474  659,288  644,690  619,647
    Total liabilities and equity $8,049,470 $8,090,701 $8,072,918 $8,263,553 $8,147,714
                    
    Net interest-earning assets $1,349,863 $1,351,035 $1,297,458 $1,257,283 $1,189,346
                    


    FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
    NET INTEREST INCOME AND NET INTEREST MARGIN
    (Unaudited)
                         
      For the three months ended
      March31, December 31, September 30, June 30, March31,
    (Dollars in thousands) 2022 2021 2021 2021 2021
    Interest Income:                    
    Mortgage loans, net $53,970   $54,260  $55,114  $52,987   $55,219 
    Other loans, net  13,546    13,853   14,084   15,012    13,802 
    Total loans, net  67,516    68,113   69,198   67,999    69,021 
    Taxable securities:                    
    Mortgage-backed securities  2,167    2,125   2,279   2,233    1,698 
    Other securities  1,119    993   1,008   1,037    963 
    Total taxable securities  3,286    3,118   3,287   3,270    2,661 
    Tax-exempt securities:                    
    Other securities  591    538   539   535    530 
    Total tax-exempt securities  591    538   539   535    530 
    Interest-earning deposits and
    federal funds sold    		  51    74   42   51    36 
    Total interest-earning assets  71,444    71,843   73,066   71,855    72,248 
    Interest Expense:                    
    Deposits:                    
    Savings accounts $49   $53  $61  $66   $75 
    NOW accounts  793    1,021   1,227   1,499    1,706 
    Money market accounts  1,275    1,428   1,683   2,060    2,100 
    Certificate of deposit accounts  1,289    1,471   1,734   1,913    2,222 
    Total due to depositors  3,406    3,973   4,705   5,538    6,103 
    Mortgagors' escrow accounts  2    2   —   1    2 
    Total interest-bearing deposits  3,408    3,975   4,705   5,539    6,105 
    Borrowings  4,433    5,081   4,884   5,164    5,140 
    Total interest-bearing liabilities  7,841    9,056   9,589   10,703    11,245 
    Net interest income- tax equivalent $63,603   $62,787  $63,477  $61,152   $61,003 
    Included in net interest income above:                    
    Prepayment penalties received on loans and
    securities and net of reversals and recovered
    interest from nonaccrual loans    		 $1,716   $1,497  $2,136  $2,046   $948 
    Net gains/(losses) from fair value adjustments
    on qualifying hedges included in loan
    interest income    		  (129)   1,122   194   (664)   1,427 
    Purchase accounting adjustments  1,058    462   1,100   565    922 
    Interest-earning Assets Yields:                    
    Mortgage loans, net  4.19 %  4.22%  4.27%  4.13 %  4.28%
    Other loans, net  3.80    3.91   3.82   3.86    3.57 
    Total loans, net  4.11    4.15   4.17   4.07    4.12 
    Taxable securities:                    
    Mortgage-backed securities  1.49    1.43   1.54   1.54    1.57 
    Other securities  1.97    1.91   1.85   1.79    1.28 
    Total taxable securities  1.63    1.55   1.63   1.61    1.45 
    Tax-exempt securities:(1)                    
    Other securities  4.10    4.23   4.24   4.21    4.17 
    Total tax-exempt securities  4.10    4.23   4.24   4.21    4.17 
    Interest-earning deposits and
    federal funds sold    		  0.16    0.14   0.15   0.08    0.08 
    Total interest-earning assets  3.77 %  3.77%  3.84%  3.69 %  3.77%
    Interest-bearing Liabilities Yields:                    
    Deposits:                    
    Savings accounts  0.13 %  0.14%  0.16%  0.17 %  0.18%
    NOW accounts  0.16    0.19   0.23   0.27    0.31 
    Money market accounts  0.23    0.26   0.32   0.40    0.44 
    Certificate of deposit accounts  0.58    0.62   0.67   0.73    0.81 
    Total due to depositors  0.26    0.29   0.35   0.40    0.46 
    Mortgagors' escrow accounts  0.01    0.01   —   —    0.01 
    Total interest-bearing deposits  0.25    0.29   0.34   0.40    0.45 
    Borrowings  2.18    2.56   2.34   2.18    1.96 
    Total interest-bearing liabilities  0.50 %  0.58%  0.61%  0.66 %  0.69%
                         
    Net interest rate spread (tax equivalent)  3.27 %  3.19%  3.23%  3.03 %  3.08%
    Net interest margin (tax equivalent)  3.36 %  3.29%  3.34%  3.14 %  3.18%
    Ratio of interest-earning assets to
    interest-bearing liabilities    		  1.22 X  1.22X  1.21X  1.19 X  1.18X
                           
    ______________________
    (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
                          
                     March 2022 vs. March 2022 vs.
      March31, December 31, September 30, June 30, March31, December 2021 March 2021
    (Dollars in thousands) 2022 2021 2021 2021 2021 % Change % Change
    Noninterest bearing $1,041,027 $967,621 $941,259 $945,491 $917,189 7.6 % 13.5 %
    Interest bearing:                     
    Certificate of deposit accounts  886,317  946,575  1,040,098  1,020,615  1,070,595 (6.4)  (17.2) 
    Savings accounts  158,542  156,554  152,306  152,931  170,272 1.3   (6.9) 
    Money market accounts  2,362,390  2,342,003  2,152,085  2,057,188  1,990,656 0.9   18.7  
    NOW accounts  1,925,124  1,920,779  2,135,643  2,122,565  2,177,865 0.2   (11.6) 
    Total interest-bearing deposits  5,332,373  5,365,911  5,480,132  5,353,299  5,409,388 (0.6)  (1.4) 
    Total deposits $6,373,400 $6,333,532 $6,421,391 $6,298,790 $6,326,577 0.6 % 0.7 %


    Loan Composition                     
                          
                     March 2022 vs. March 2022 vs.
      March31,  December 31, September 30, June 30, March31,  December 2021 March 2021
    (Dollars in thousands) 2022
    		 2021
    		 2021
    		 2021
    		 2021
    		 % Change % Change
    Multifamily residential $2,500,570  $2,517,026  $2,498,980  $2,542,010  $2,525,967  (0.7)% (1.0)%
    Commercial real estate  1,764,927   1,775,629   1,745,855   1,726,895   1,721,702  (0.6)  2.5  
    One-to-four family ― mixed-use property  563,679   571,795   579,100   582,211   595,431  (1.4)  (5.3) 
    One-to-four family ― residential  248,226   268,255   280,343   288,652   239,391  (7.5)  3.7  
    Co-operative apartments  8,248   8,316   7,804   7,883   7,965  (0.8)  3.6  
    Construction  68,488   59,761   71,464   62,802   61,528  14.6   11.3  
    Mortgage Loans  5,154,138   5,200,782   5,183,546   5,210,453   5,151,984  (0.9)  —  
                          
    Small Business Administration(1)  59,331   93,811   148,855   215,158   267,120  (36.8)  (77.8) 
    Commercial business and other  1,387,155   1,339,273   1,294,688   1,291,526   1,326,657  3.6   4.6  
    Nonmortgage loans  1,446,486   1,433,084   1,443,543   1,506,684   1,593,777  0.9   (9.2) 
                          
    Net unamortized premiums and unearned loan fees(2)  6,640   4,239   3,265   1,669   (445) 56.6   (1,592.1) 
    Allowance for credit losses  (37,433)  (37,135)  (36,363)  (42,670)  (45,099) 0.8   (17.0) 
    Net loans $6,569,831  $6,600,970  $6,593,991  $6,676,136  $6,700,217  (0.5)% (1.9)%
                          

    ______________________
    (1) Includes $43.2 million, $77.4 million, $130.8 million, $197.3 million, and $251.0 million of PPP loans at March 31, 2022, December 31, 2021, September 30, 2021, June 30, 2021, and March 31, 2021, respectively.
    (2) Includes $6.9 million, $8.0 million, $8.6 million, $9.7 million, and $10.5 million of purchase accounting unamortized discount resulting from the acquisition of Empire Bancorp at March 31, 2022, December 31, 2021, September 30, 2021, June 30, 2021, and March 31, 2021, respectively.

     
    FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
    LOAN CLOSINGS and RATES
    (Unaudited)
    Loan Closings
                    
      For the three months ended
      March31,  December 31, September 30, June 30, March31, 
    (In thousands) 2022 2021 2021 2021 2021
    Multifamily residential $98,180 $79,648 $41,850 $66,913 $58,553
    Commercial real estate  45,102  64,916  48,447  37,963  17,156
    One-to-four family – mixed-use property  8,498  12,440  12,823  7,135  8,712
    One-to-four family – residential  9,261  5,162  2,761  59,494  3,131
    Co-operative apartments  —  413  —  —  —
    Construction  8,802  17,033  8,687  5,281  7,123
    Mortgage Loans  169,843  179,612  114,568  176,786  94,675
                    
    Small Business Administration(1)  —  270  415  17,585  125,093
    Commercial business and other  159,476  182,858  128,946  130,036  103,118
    Nonmortgage Loans  159,476  183,128  129,361  147,621  228,211
                    
    Total Closings $329,319 $362,740 $243,929 $324,407 $322,886
                    

    ______________________
    (1) Includes $15.5 million and $123.2 million of PPP closings for the three months ended June 30, 2021 and March 31, 2021, respectively.

     
    Weighted Average Rate on Loan Closings
                    
      For the three months ended
         March 31,  December 31, September 30, June 30, March 31, 
    Loan type 2022 2021 2021 2021 2021
    Mortgage loans 3.61%   3.77%   3.80%   3.53%   3.47%  
    Nonmortgage loans 3.27  3.24  3.49  3.23  2.26 
    Total loans 3.44%   3.51%   3.64%   3.39%   2.62%  
                    
    Excluding PPP loans 3.44%   3.51%   3.64%   3.51%   3.62%  


    FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
    ASSET QUALITY
    (Unaudited)
    Allowance for Credit Losses
                         
      For the three months ended
      March31, December 31, September 30, June 30, March31,
    (Dollars in thousands) 2022 2021 2021 2021 2021
    Allowance for credit losses                    
    Beginning balances $37,135   $36,363   $42,670   $45,099   $45,153  
                         
    Net loan charge-off (recoveries):                    
    Multifamily residential  —    —    —    —    33  
    Commercial real estate  —    —    —    —    64  
    One-to-four family – mixed-use property  —    1    (123)   3    19  
    One-to-four family – residential  (2)   (3)   (147)   (2)   (5) 
    Small Business Administration  1,015    (7)   (8)   (9)   (10) 
    Taxi medallion  (12)   —    (1,235)   (222)   2,758  
    Commercial business and other  (66)   (20)   894    1,132    6  
    Total  935    (29)   (619)   902    2,865  
                         
    Provision (benefit) for loan losses  1,233    743    (6,926)   (1,527)   2,811  
                         
    Ending balance $37,433   $37,135   $36,363   $42,670   $45,099  
                         
    Gross charge-offs $1,036   $7   $1,019   $1,186   $2,922  
    Gross recoveries  101    36    1,638    284    57  
                         
    Allowance for credit losses to gross loans  0.57 %  0.56 %  0.55 %  0.64 %  0.67 %
    Net loan charge-offs (recoveries) to average loans  0.06    —    (0.04)   0.05    0.17  


    Nonperforming Assets
                         
      March31,  December 31, September 30, June 30, March31, 
    (Dollars in thousands) 2022 2021 2021 2021 2021
    Loans 90 Days Or More Past Due and Still Accruing:                    
    Multifamily residential $—  $—  $—  $201  $201 
    Construction  —   —   873   —   2,381 
    Commercial business and other  —   —   1,052   —   — 
    Total  —   —   1,925   201   2,582 
                         
    Nonaccrual Loans:                    
    Multifamily residential  3,414   2,431   4,192   4,669   4,338 
    Commercial real estate  5   613   613   8   8 
    One-to-four family - mixed-use property(1)  790   1,309   2,204   2,309   2,355 
    One-to-four family - residential  7,387   7,725   7,807   6,940   7,335 
    Small Business Administration  937   937   976   976   1,151 
    Commercial business and other(1)  1,533   1,918   2,500   2,489   3,417 
    Total  14,066   14,933   18,292   17,391   18,604 
                         
    Total Nonperforming Loans (NPLs)  14,066   14,933   20,217   17,592   21,186 
                         
    Other Nonperforming Assets:                    
    Other asset acquired through foreclosure  —   —   —   —   35 
    Total  —   —   —   —   35 
                         
    Total Nonperforming Assets $14,066  $14,933  $20,217  $17,592  $21,221 
                         
    Nonperforming Assets to Total Assets  0.17%  0.19%  0.25%  0.22%  0.26%
    Allowance for Credit Losses to NPLs  266.1%  248.7%  179.9%  242.6%  212.9%

    ______________________
    (1) Not included in the above analysis are nonaccrual performing TDR one-to-four family - mixed use property loans totaling $0.3 million each in 1Q22, 4Q21, 3Q21, 2Q21, and 1Q21; nonaccrual performing TDR commercial business loans totaling $2.8 million in 1Q22, less than $0.1 million in 4Q21, and $2.2 million each in 2Q21 and 1Q21.


    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 swaps designated to protect against rising rates and borrowing carried at fair value under the fair value option. As the swaps get closer to maturity, the volatility in fair value adjustments will dissipate. In a declining interest rate environment, the movement in the curve exaggerates our mark-to-market loss position. In a rising interest rate environment or a steepening of the yield curve, the loss position would experience an improvement.

    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, Base Net Interest Income FTE, Base Net Interest Margin FTE, Core Interest Income and Yield on Total Loans, Base 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 these are measures 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, March31, December 31, September 30, June 30, March31,
    except per share data) 2022 2021 2021 2021 2021
                         
    GAAP income before income taxes $24,640   $22,826   $34,812   $25,416   $26,224  
                         
    Net (gain) loss from fair value adjustments
    (Noninterest income (loss))    		  1,809    5,140    2,289    6,548    (982) 
    Net (gain) loss on sale of securities
    (Noninterest income (loss))    		  —    —    10    (123)   —  
    Net gain on disposition of assets
    (Noninterest income (loss))    		  —    —    —    —    (621) 
    Net (gain) loss from fair value adjustments on qualifying
    hedges (Interest and fees on loans)    		  129    (1,122)   (194)   664    (1,427) 
    Net amortization of purchase accounting adjustments (Various)  (924)   (324)   (958)   (418)   (789) 
    Merger (benefit) expense (Various)  —    (17)   2,096    (490)   973  
                         
    Core income before taxes  25,654    26,503    38,055    31,597    23,378  
                         
    Provision for income taxes for core income  6,685    5,535    10,226    8,603    6,405  
                         
    Core net income $18,969   $20,968   $27,829   $22,994   $16,973  
                         
    GAAP diluted earnings per common share $0.58   $0.58   $0.81   $0.61   $0.60  
    Net (gain) loss from fair value adjustments, net of tax  0.04    0.13    0.05    0.15    (0.02) 
    Net gain on disposition of assets, net of tax  —    —    —    —    (0.01) 
    Net (gain) loss from fair value adjustments
    on qualifying hedges, net of tax    		  —    (0.03)   —    0.02    (0.03) 
    Net amortization of purchase accounting
    adjustments, net of tax    		  (0.02)   (0.01)   (0.02)   (0.01)   (0.02) 
    Merger (benefit) expense, net of tax  —    —    0.05    (0.01)   0.02  
    NYS tax change  —    —    —    (0.02)   —  
                         
    Core diluted earnings per common share(1) $0.61   $0.67   $0.88   $0.73   $0.54  
                         
                         
    Core net income, as calculated above $18,969   $20,968   $27,829   $22,994   $16,973  
    Average assets  8,049,470    8,090,701    8,072,918    8,263,553    8,147,714  
    Average equity  673,012    671,474    659,288    644,690    619,647  
    Core return on average assets(2)  0.94 %  1.04 %  1.38 %  1.11 %  0.83 %
    Core return on average equity(2)  11.27 %  12.49 %  16.88 %  14.27 %  10.96 %

    ______________________
    (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 
      March31, December 31, September 30, June 30, March31, 
    (Dollars in thousands) 2022
    		 2021
    		 2021
    		 2021
    		 2021
    		 
                     
    GAAP Net interest income $63,479  $62,674  $63,364  $61,039  $60,892  
    Net (gain) loss from fair value adjustments on qualifying hedges  129   (1,122)  (194)  664   (1,427) 
    Net amortization of purchase accounting adjustments  (1,058)  (462)  (1,100)  (565)  (922) 
    Core Net interest income $62,550  $61,090  $62,070  $61,138  $58,543  
                     
    GAAP Noninterest income (loss) $1,313  $(280) $866  $(3,210) $6,311  
    Net (gain) loss from fair value adjustments  1,809   5,140   2,289   6,548   (982) 
    Net gain (loss) on sale of securities  —   —   10   (123)  —  
    Net gain on sale of assets  —   —   —   —   (621) 
    Core Noninterest income $3,122  $4,860  $3,165  $3,215  $4,708  
                     
    GAAP Noninterest expense $38,794  $38,807  $36,345  $34,011  $38,159  
    Net amortization of purchase accounting adjustments  (134)  (138)  (142)  (147)  (133) 
    Merger expense (benefit)  —   17   (2,096)  490   (973) 
    Core Noninterest expense $38,660  $38,686  $34,107  $34,354  $37,053  
                     
    Net interest income $63,479  $62,674  $63,364  $61,039  $60,892  
    Noninterest income (loss)  1,313   (280)  866   (3,210)  6,311  
    Noninterest expense  (38,794)  (38,807)  (36,345)  (34,011)  (38,159) 
    Pre-provision pre-tax net revenue $25,998  $23,587  $27,885  $23,818  $29,044  
                     
    Core:                
    Net interest income $62,550  $61,090  $62,070  $61,138  $58,543  
    Noninterest income  3,122   4,860   3,165   3,215   4,708  
    Noninterest expense  (38,660)  (38,686)  (34,107)  (34,354)  (37,053) 
    Pre-provision pre-tax net revenue $27,012  $27,264  $31,128  $29,999  $26,198  
    Efficiency Ratio  58.9 % 58.7 % 52.3 % 53.4 % 58.6 %
                          


    FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
    RECONCILIATION OF GAAP NET INTEREST INCOME and NET INTEREST MARGIN
    to CORE and BASE NET INTEREST INCOME
    (Unaudited)
                         
      For the three months ended
      March31,  December 31, September 30, June 30, March31, 
    (Dollars in thousands) 2022 2021 2021 2021 2021
    GAAP net interest income $63,479   $62,674   $63,364   $61,039   $60,892  
    Net (gain) loss from fair value adjustments on
    qualifying hedges    		  129    (1,122)   (194)   664    (1,427) 
    Net amortization of purchase accounting
    adjustments    		  (1,058)   (462)   (1,100)   (565)   (922) 
    Tax equivalent adjustment  124    113    113    113    111  
    Core net interest income FTE $62,674   $61,203   $62,183   $61,251   $58,654  
    Prepayment penalties received on loans and
    securities, net of reversals and recoveries of
    interest from nonaccrual loans    		  (1,716)   (1,497)   (2,136)   (2,046)   (948) 
    Base net interest income FTE $60,958   $59,706   $60,047   $59,205   $57,706  
                         
    Total average interest-earning assets(1) $7,577,053   $7,634,601   $7,616,332   $7,799,176   $7,676,833  
    Core net interest margin FTE  3.31 %  3.21 %  3.27 %  3.14 %  3.06 %
    Base net interest margin FTE  3.22 %  3.13 %  3.15 %  3.04 %  3.01 %
                         
    GAAP interest income on total loans, net $67,516   $68,113   $69,198   $67,999   $69,021  
    Net (gain) loss from fair value adjustments on
    qualifying hedges    		  129    (1,122)   (194)   664    (1,427) 
    Net amortization of purchase accounting
    adjustments    		  (1,117)   (535)   (1,126)   (624)   (728) 
    Core interest income on total loans, net $66,528   $66,456   $67,878   $68,039   $66,866  
    Prepayment penalties received on loans,
    net of
    reversals and recoveries of interest from
    nonaccrual loans    		  (1,716)   (1,497)   (2,135)   (2,046)   (947) 
    Base interest income on total loans, net $64,812   $64,959   $65,743   $65,993   $65,919  
                         
    Average total loans, net(1) $6,586,253   $6,566,654   $6,642,434   $6,697,103   $6,711,446  
    Core yield on total loans  4.04 %  4.05 %  4.09 %  4.06 %  3.99 %
    Base yield on total loans  3.94 %  3.96 %  3.96 %  3.94 %  3.93 %

    ______________________
    (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)
                         
      March31,  December 31, September 30, June 30, March31, 
    (Dollars in thousands) 2022 2021 2021 2021 2021
    Total Equity $675,813   $679,628   $668,096   $655,167   $639,201  
    Less:                    
    Goodwill  (17,636)   (17,636)   (17,636)   (17,636)   (17,636) 
    Core deposit Intangibles  (2,420)   (2,562)   (2,708)   (2,859)   (3,013) 
    Intangible deferred tax liabilities  328    328    287    287    287  
    Tangible Stockholders' Common Equity $656,085   $659,758   $648,039   $634,959   $618,839  
                         
    Total Assets $8,169,833   $8,045,911   $8,077,334   $8,159,345   $8,159,184  
    Less:                    
    Goodwill  (17,636)   (17,636)   (17,636)   (17,636)   (17,636) 
    Core deposit Intangibles  (2,420)   (2,562)   (2,708)   (2,859)   (3,013) 
    Intangible deferred tax liabilities  328    328    287    287    287  
    Tangible Assets $8,150,105   $8,026,041   $8,057,277   $8,139,137   $8,138,822  
                         
    Tangible Stockholders' Common Equity to Tangible Assets  8.05 %  8.22 %  8.04 %  7.80 %  7.60 %
                         

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