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home / news releases / FFIC - Flushing Financial Corporation Reports 2023 and 4Q23 GAAP EPS of $0.96 and $0.27 and Core EPS of $0.83 and $0.25 Respectively; Continues to Successfully Execute On Its Action Plan

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

Flushing Financial Corporation

John R. Buran, President and CEO Commentary

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

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

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

Strong Credit Quality; Stable Capital. Nonperforming assets to total assets increased to 54 bps compared to 45 bps in 3Q23, while criticized and classified loans to loans was 1.11% in 4Q23, compared to 1.08% in 3Q23. Net charge-offs were only $60 thousand in 4Q23. Capital continues to be sound with TCE/TA 1 of 7.64% at December 31, 2023, compared to 7.56% at September 30, 2023. The Company repurchased 38,815 shares at an average cost $15.08 (33% discount to tangible book value) during 4Q23.

Key Financial Metrics 2


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

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

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

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

Income Statement Highlights


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

1 See Reconciliation of GAAP Earnings and Core Earnings

Net interest income decreased YoY but increased QoQ.

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

The provision for credit losses increased YoY and QoQ.

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

Noninterest income (loss) increased YoY and QoQ.

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

Noninterest expense increased YoY and QoQ.

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

Provision for income tax es increased YoY and QoQ.

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


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

Average loans decreased YoY but increased QoQ.

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

Average total deposits increased YoY and QoQ.

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

Credit Quality: Nonperforming loans declined YoY but increased QoQ.

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

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

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

Conference Call Information:

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

First Quarter 2024 Earnings Release Date:

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

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

About Flushing Financial Corporation

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

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

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

#FF                                                                                                        - Statistical Tables Follow -

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


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


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


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


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


FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
NET INTEREST INCOME AND NET INTEREST MARGIN
(Unaudited)
For the three months ended
For the year ended
December 31,
September 30,
June 30,
March 31,
December 31,
December 31,
December 31,
(Dollars in thousands)
2023
2023
2023
2023
2022
2023
2022
Interest Income:
Mortgage loans, net
$
72,505
$
68,931
$
63,688
$
62,054
$
60,946
$
267,178
$
228,065
Commercial Business loans, net
23,111
22,535
21,689
20,835
20,087
88,170
65,222
Total loans, net
95,616
91,466
85,377
82,889
81,033
355,348
293,287
Taxable securities:
Mortgage-backed securities
3,217
3,031
2,976
2,281
2,425
11,505
9,414
Other securities
7,239
7,003
5,847
4,611
3,723
24,700
9,771
Total taxable securities
10,456
10,034
8,823
6,892
6,148
36,205
19,185
Tax-exempt securities:
Other securities
482
484
480
477
489
1,923
2,197
Total tax-exempt securities
482
484
480
477
489
1,923
2,197
Interest-earning deposits and federal funds sold
2,310
2,154
1,982
1,959
1,702
8,405
2,418
Total interest-earning assets
108,864
104,138
96,662
92,217
89,372
401,881
317,087
Interest Expense:
Deposits:
Savings accounts
$
124
$
130
$
140
$
126
$
59
$
520
$
211
NOW accounts
17,411
16,843
16,152
13,785
9,515
64,191
15,353
Money market accounts
15,785
14,386
14,625
14,102
10,532
58,898
19,039
Certificate of deposit accounts
19,917
18,639
15,281
11,007
7,037
64,844
12,547
Total due to depositors
53,237
49,998
46,198
39,020
27,143
188,453
47,150
Mortgagors' escrow accounts
47
68
51
36
83
202
135
Total interest-bearing deposits
53,284
50,066
46,249
39,056
27,226
188,655
47,285
Borrowings
9,394
9,543
6,934
7,799
7,843
33,670
25,725
Total interest-bearing liabilities
62,678
59,609
53,183
46,855
35,069
222,325
73,010
Net interest income- tax equivalent
$
46,186
$
44,529
$
43,479
$
45,362
$
54,303
$
179,556
$
244,077
Included in net interest income above:
Prepayment penalty income, net reversals and recovered interest from nonaccrual loans, and customer swap terminations fees
$
3,416
$
857
$
315
$
680
$
1,080
$
5,268
$
6,445
Net gains/(losses) from fair value adjustments on qualifying hedges included in net interest income
(872
)
1,348
(205
)
100
936
371
775
Purchase accounting adjustments
461
347
340
306
342
1,454
2,542
Interest-earning Assets Yields:
Mortgage loans, net
5.41
%
5.19
%
4.80
%
4.65
%
4.57
%
5.01
%
4.34
%
Commercial Business loans, net
6.11
6.01
5.70
5.42
5.21
5.81
4.38
Total loans, net
5.57
5.37
5.00
4.83
4.71
5.19
4.35
Taxable securities:
Mortgage-backed securities
3.02
2.78
2.65
1.99
1.77
2.60
1.64
Other securities
5.49
5.30
4.96
4.48
4.00
5.09
3.01
Total taxable securities
4.38
4.16
3.84
3.17
2.67
3.90
2.14
Tax-exempt securities: (1)
Other securities
2.91
2.91
2.88
2.86
2.92
2.89
3.39
Total tax-exempt securities
2.91
2.91
2.88
2.86
2.92
2.89
3.39
Interest-earning deposits and federal funds sold
4.89
4.80
4.52
4.02
3.86
4.55
1.83
Total interest-earning assets (1)
5.39
%
5.19
%
4.84
%
4.61
%
4.44
%
5.01
%
4.05
%
Interest-bearing Liabilities Yields:
Deposits:
Savings accounts
0.45
%
0.45
%
0.45
%
0.37
%
0.16
%
0.43
%
0.14
%
NOW accounts
3.77
3.53
3.19
2.80
1.93
3.31
0.78
Money market accounts
3.88
3.63
3.33
2.74
1.96
3.36
0.87
Certificate of deposit accounts
3.40
3.25
2.99
2.62
2.08
3.10
1.22
Total due to depositors
3.59
3.39
3.10
2.67
1.93
3.19
0.88
Mortgagors' escrow accounts
0.22
0.39
0.21
0.20
0.40
0.25
0.17
Total interest-bearing deposits
3.55
3.36
3.06
2.64
1.91
3.15
0.87
Borrowings
4.68
4.75
3.92
3.95
3.26
4.34
2.54
Total interest-bearing liabilities
3.68
%
3.52
%
3.15
%
2.80
%
2.11
%
3.29
%
1.13
%
Net interest rate spread (tax equivalent) (1)
1.71
%
1.67
%
1.69
%
1.81
%
2.33
%
1.72
%
2.92
%
Net interest margin (tax equivalent) (1)
2.29
%
2.22
%
2.18
%
2.27
%
2.70
%
2.24
%
3.11
%
Ratio of interest-earning assets to interest-bearing liabilities
1.19
X
1.18
X
1.18
X
1.19
X
1.21
X
1.19
X
1.22
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
4Q23 vs.
4Q23 vs.
December 31,
September 30,
June 30,
March 31,
December 31,
3Q23
4Q22
(Dollars in thousands)
2023
2023
2023
2023
2022
% Change
% Change
Noninterest bearing
$
847,416
$
874,420
$
827,820
$
872,254
$
921,238
(3.1
)
%
(8.0
)
%
Interest bearing:
Certificate of deposit accounts
2,311,290
2,321,369
2,232,696
1,880,260
1,526,338
(0.4
)
51.4
Savings accounts
108,605
112,730
118,886
128,245
143,641
(3.7
)
(24.4
)
Money market accounts
1,726,404
1,551,176
1,594,637
1,855,781
2,099,776
11.3
(17.8
)
NOW accounts
1,771,164
1,749,802
1,891,834
1,918,977
1,746,190
1.2
1.4
Total interest-bearing deposits
5,917,463
5,735,077
5,838,053
5,783,263
5,515,945
3.2
7.3
Total due to depositors
6,764,879
6,609,497
6,665,873
6,655,517
6,437,183
2.4
5.1
Mortgagors' escrow deposits
50,382
72,012
57,817
78,573
48,159
(30.0
)
4.6
Total deposits
$
6,815,261
$
6,681,509
$
6,723,690
$
6,734,090
$
6,485,342
2.0
%
5.1
%

Loan Composition

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

______________________________

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

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

Weighted Average Rate on Loan Closings

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


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

Nonperforming Assets

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

______________________________

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

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

Non-cash Fair Value Adjustments to GAAP Earnings

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

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

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

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

________________________________

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

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


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

________________________________

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

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

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


Stock Information
Company Name: Flushing Financial Corporation
Stock Symbol: FFIC
Market: NASDAQ
Website: flushingbank.com
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