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home / news releases / FFIC - Flushing Financial Corporation Reports 3Q23 GAAP EPS of $0.32 and Core EPS of $0.31; Delivered Sequential EPS and GAAP NIM Expansion as Action Plan Continues to Progress; Opened 27th Branch Expanding Asian Market Presence

FFIC - Flushing Financial Corporation Reports 3Q23 GAAP EPS of $0.32 and Core EPS of $0.31; Delivered Sequential EPS and GAAP NIM Expansion as Action Plan Continues to Progress; Opened 27th Branch Expanding Asian Market Presence

Flushing Financial Corporation

John R. Buran, President and CEO Commentary

“We delivered sequential EPS and GAAP NIM expansion through the continued execution of our action plan to drive long-term profitability while advancing our near-term areas of focus amid persisting challenges in the operating environment. In 3Q23, we made significant progress on delivering against all pillars of our action plan, including: 1) reduced interest rate risk and moved closer to our goal of interest rate neutrality, including the addition of $100 million of interest rate hedges; 2) increased yields on new loans 288 bps YoY and 34 bps QoQ, with an emphasis on floating rate loans and back-to-back swaps; 3) increased noninterest bearing deposits $46.6 million QoQ; 4) saw strength in debt service coverage for our multifamily and investor commercial real estate portfolios repricing through 2025, with our stress testing (200 bps increase in rates and 10% rise in operating expenses) indicating a resilient borrower base; Manhattan office buildings are minimal at 0.6% of net loans; 5) maintained stability in available liquidity and capital ratios; and 6) emphasized noninterest expenses. We’re confident that our ability to execute will guide us through the near-term challenges and enable the Bank to emerge as a strong and more profitable institution.”
- John R. Buran, President and CEO

UNIONDALE, N.Y., Oct. 31, 2023 (GLOBE NEWSWIRE) -- QoQ, EPS Increases; GAAP NIM Expands; Minimal Core NIM Compression. The Company reported third quarter 2023 GAAP EPS of $0.32, up 10.3% QoQ, but down 57.9% YoY. Core EPS totaled $0.31, an increase of 19.2% QoQ, but a decrease of 50.0% YoY. The improvement in core EPS QoQ was primarily driven by lower credit costs, higher noninterest income, and lower operating expenses, partially offset by slight NIM compression. GAAP NIM of 2.22% increased 4 bps QoQ but declined 85 bps YoY; while Core NIM of 2.14% compressed 3 bps QoQ and 89 bps YoY. Our actions to reduce interest rate risk, including adding interest rate hedges and floating rate loans, assisted in reducing the NIM compression and are beneficial in a “higher-for-longer” rate environment.

Strong Credit Quality; Stable Capital. Nonperforming assets decreased 23.2% YoY and 3.1% QoQ while net recoveries were $42,000 in 3Q23. Capital continues to be sound with TCE/TA 1 of 7.59% at September 30, 2023, compared to 7.71% at June 30, 2023.

Key Financial Metrics 2


3Q23
2Q23
1Q23
4Q22
3Q22
9M23
9M22
GAAP:
EPS
$
0.32
$
0.29
$
0.17
$
0.34
$
0.76
$
0.77
$
2.15
ROAA (%)
0.44
0.41
0.24
0.48
1.11
0.36
1.08
ROAE (%)
5.57
5.12
3.02
6.06
13.91
4.56
13.24
NIM FTE 3 (%)
2.22
2.18
2.27
2.70
3.07
2.22
3.26
Core:
EPS
$
0.31
$
0.26
$
0.10
$
0.57
$
0.62
$
0.67
$
1.92
ROAA (%)
0.43
0.37
0.14
0.82
0.90
0.31
0.96
ROAE (%)
5.41
4.66
1.76
10.29
11.24
3.93
11.80
Core NIM FTE (%)
2.14
2.17
2.25
2.63
3.03
2.18
3.22
Credit Quality:
NPAs/Loans & OREO (%)
0.56
0.58
0.61
0.77
0.72
0.56
0.72
ACLs/Loans (%)
0.57
0.57
0.56
0.58
0.59
0.57
0.59
ACLs/NPLs (%)
225.38
207.08
182.89
124.89
142.29
225.38
142.29
NCOs/Avg Loans (%)
-
0.09
0.54
0.05
0.02
0.21
0.01
Balance Sheet:
Avg Loans ()
$
6.8
$
6.8
$
6.9
$
6.9
$
6.9
$
6.8
$
6.7
Avg Dep ()
$
6.8
$
6.9
$
6.8
$
6.7
$
6.3
$
6.8
$
6.4
Book Value/Share
$
23.15
$
23.18
$
22.84
$
22.97
$
22.47
$
23.15
$
22.47
Tangible BV/Share
$
22.48
$
22.51
$
22.18
$
22.31
$
21.81
$
22.48
$
21.81
TCE/TA (%)
7.59
7.71
7.73
7.82
7.62
7.59
7.62

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”)

3Q23 Highlights
  • Net interest margin FTE increased 4 bps QoQ, but decreased 85 bps YoY to 2.22%; Core net interest margin FTE decreased 3 bps QoQ and 89 bps YoY to 2.14%; Both GAAP and Core NIMs benefited from $100 million of new interest rate hedges added during the quarter and the closing of $120.5 million of back-to-back swap loans that generate noninterest income immediately and interest income over the life of the loan while adding floating rate assets to provide additional interest rate risk neutralization
  • Average total deposits increased 8.6% YoY, but declined 1.2% QoQ to $6.8 billion; Noninterest bearing deposits increased $46.6 million QoQ despite new checking account openings declining 5% YoY in 3Q23; average CDs totaled $2.3 billion, up 116.6% YoY and 11.9% QoQ; growth in CDs generally lengthens the duration of customer deposits and helps reduce rate sensitivity
  • Bensonhurst branch opened on September 29, 2023, which expands our Asian market presence
  • Period end net loans decreased 0.8% YoY, but increased 0.9% QoQ; loan closings were $241.5 million down 47.9% YoY, but up 52.1% QoQ; the yield on closings increased 288 bps YoY and 34 bps QoQ to 7.48%
  • Loan pipeline increased 17.5% YoY, but decreased 12.6% QoQ to $363.3 million; approximately 60% of the loan pipeline consists of floating rate loans including back-to-back swap loans
  • NPAs declined to $38.4 million from $50.0 million a year ago and $39.6 million in the prior quarter
  • Provision for credit losses was $0.6 million in 3Q23 compared to $2.1 million in 3Q22 and $1.4 million in 2Q23; net recoveries were $42,000 in 3Q23 compared to net charge-offs of $0.3 million in 3Q22 and $1.6 million in 2Q23
  • Tangible Common Equity to Tangible Assets declined to 7.59% at 3Q23 compared to 7.71% at 2Q23
  • Repurchased 59,352 shares at an average price of $15.88 or a 29.4% discount to September 30, 2023, tangible book value of $22.48
Areas of Focus
Interest
Rate
Risk
  • Continued to take actions to position the Company’s balance sheet more towards interest rate risk neutral
  • During 3Q23, the Company added $100 million of interest rate hedges
  • Approximately 60% of the loan pipeline consists of floating rate loans including back-to-back loan swaps
  • Rate sensitivity to a +100 bps shock has been reduced by 66% over the past year
  • Increased noninterest bearing deposits by $46.6 million QoQ
Credit
Quality
  • Manhattan office buildings are minimal at 0.6% of net loans
  • Over 88% of the loan portfolio is collateralized by real estate with an average loan to value less than 36%
  • Debt service coverage ratio is 1.8x for multifamily and investor commercial real estate loans that reprice through 2025
Liquidity
  • The Company maintains ample liquidity with $3.7 billion of undrawn lines and resources
  • Uninsured and uncollateralized deposits were 16% of total deposits
  • Total deposits increased 9.1% YoY
  • Checking account openings were down 5.0% YoY in 3Q23
Customer Experience
  • Approximately 33% of our branches are in Asian communities
  • Bensonhurst, our 27 th branch, opened on September 29, 2023
  • Digital banking usage continues to increase with double digit growth in monthly mobile deposit active users and digital banking enrollment in September 2023 versus a year ago


Income Statement Highlights


YoY
QoQ
($000s, except EPS)
3Q23
2Q23
1Q23
4Q22
3Q22
Change
Change
Net Interest Income
$
44,427
$
43,378
$
45,262
$
54,201
$
61,206
(27.4
)%
2.4
%
Provision (Benefit) for Credit Losses
596
1,416
7,508
(12
)
2,145
(72.2
)
(57.9
)
Noninterest Income (Loss)
3,476
5,122
6,908
(7,652
)
8,995
(61.4
)
(32.1
)
Noninterest Expense
34,415
35,279
37,703
33,742
35,634
(3.4
)
(2.4
)
Income Before Income Taxes
12,892
11,805
6,959
12,819
32,422
(60.2
)
9.2
Provision for Income Taxes
3,493
3,177
1,801
2,570
8,980
(61.1
)
9.9
Net Income
$
9,399
$
8,628
$
5,158
$
10,249
$
23,442
(59.9
)
8.9
Diluted EPS
$
0.32
$
0.29
$
0.17
$
0.34
$
0.76
(57.9
)
10.3
Avg. Diluted Shares (000s)
29,703
30,090
30,265
30,420
30,695
(3.2
)
(1.3
)
Core Net Income 1
$
9,135
$
7,854
$
3,003
$
17,399
$
18,953
(51.8
)
16.3
Core EPS 1
$
0.31
$
0.26
$
0.10
$
0.57
$
0.62
(50.0
)
19.2

1 See Reconciliation of GAAP Earnings and Core Earnings

Net interest income decreased YoY but increased QoQ.

  • Net interest margin, FTE of 2.22% decreased 85 bps YoY, but increased 4 bps QoQ
  • 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 (13 bps to the NIM) compared to $0.5 million (3 bps) in 2Q23, $1.1 million (6 bps) in 1Q23, $2.4 million (12 bps) in 4Q22, and $2.2 million (11 bps) in 3Q22
  • Excluding the items in the previous bullet, net interest margin was 2.09% in 3Q23, 2.15% in 2Q23, 2.21% in 1Q23, 2.58% in 4Q22, and 2.96% in 3Q22

The provision for credit losses declined YoY and QoQ.

  • Net charge-offs (recoveries) were $(42,000) in 3Q23 (less than (1) bp of average loans) compared to $1.6 million in 2Q23 (9 bps), $9.2 million in 1Q23 (54 bps of average loans), $0.8 million in 4Q22 (5 bps of average loans), and $0.3 million in 3Q22 (2 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) declined YoY and QoQ.

  • Noninterest income included net gains (losses) from fair value adjustments of $(1.2) million in 3Q23 ($(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), $(0.6) million in 4Q22 ($(0.02) per share, net of tax), and $5.6 million in 3Q22 ($0.13 per share, net of tax)
  • 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 that approximated 6.40%
  • Life insurance proceeds were $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
  • Absent all above items and other immaterial adjustments, core noninterest income was $4.7 million in 3Q23, up 39.5% YoY and 10.1% QoQ
  • Back-to-back swap loan closings of $120.5 million in 3Q23 (compared to $11.5 million in 2Q23) contributed to the growth in core noninterest income; the Company earns fee income on back-to-back swap loan closings

Noninterest expense decreased YoY and QoQ.

  • Other operating expenses include $0.6 million reduction in reserves for unfunded commitments in 3Q22; Seasonal compensation expense was $4.1 million in 1Q23
  • Excluding the effects of other immaterial adjustments, core operating expenses were $34.3 million in 3Q23, down 3.4% YoY, and 2.4% QoQ
  • GAAP noninterest expense to average assets was 1.62% in 3Q23, 1.67% in 2Q23, 1.78% in 1Q23, 1.58% in 4Q22, and 1.69% in 3Q22
  • Noninterest expense largely includes $3.3 million benefit from Employee Retention Tax Credit refunds in 3Q23 and $7.0 million year to date; these refunds are not expected to be repeated in 2024

Provision for income tax es declined YoY and increased QoQ.

  • The effective tax rate was 27.1% in 3Q23, 26.9% in 2Q23, 25.9% in 1Q23, 20.0% in 4Q22, and 27.7% in 3Q22
  • The 4Q22 effective tax rate declined due to preferential tax items having a larger impact due to lower levels of pre-tax income
Balance Sheet, Credit Quality, and Capital Highlights


YoY
QoQ
3Q23
2Q23
1Q23
4Q22
3Q22
Change
Change
Averages ()
Loans
$
6,813
$
6,830
$
6,871
$
6,881
$
6,861
(0.7
)%
(0.2
)%
Total Deposits
6,819
6,900
6,810
6,678
6,277
8.6
(1.2
)
Credit Quality ($000s)
Nonperforming Loans
$
17,405
$
18,637
$
21,176
$
32,382
$
29,003
(40.0
)%
(6.6
)%
Nonperforming Assets
38,386
39,618
42,157
53,363
49,984
(23.2
)
(3.1
)
Criticized and Classified Loans
74,169
48,675
58,130
68,093
61,684
20.2
52.4
Criticized and Classified Assets
95,150
69,656
79,111
89,073
82,665
15.1
36.6
Allowance for Credit Losses/Loans (%)
0.57
0.57
0.56
0.58
0.59
(2
) bps
-
bps
Capital
Book Value/Share
$
23.15
$
23.18
$
22.84
$
22.97
$
22.47
3.0
%
(0.1
)%
Tangible Book Value/Share
22.48
22.51
22.18
22.31
21.81
3.1
(0.1
)
Tang. Common Equity/Tang. Assets (%)
7.59
7.71
7.73
7.82
7.62
(3
) bps
(12
) bps
Leverage Ratio (%)
8.54
8.56
8.58
8.61
8.74
(20
)
(2
)

Average loans decreased YoY and QoQ.

  • Period end net loans totaled $6.9 billion, down 0.8% YoY, but up 0.9% QoQ
  • Total loan closings were $241.5 million in 3Q23, $158.8 million in 2Q23, $173.5 million in 1Q23, $225.2 million in 4Q22, and $463.7 million in 3Q22; the loan pipeline was $363.3 million at September 30, 2023, up 17.5% YoY, but down 12.6% QoQ
  • The diversified loan portfolio is over 88% collateralized by real estate with an average loan-to-value ratio of less than 36%
  • Manhattan office buildings are approximately 0.6% of net loans

Average total deposits increased YoY but declined QoQ.

  • Average CDs totaled $2.3 billion, up 116.6% YoY and 11.9% QoQ; CDs generally lengthen the duration of customer deposits and reduce sensitivity to rising rates
  • Average noninterest bearing deposits decreased 18.9% YoY, but increased 0.2% QoQ in 3Q23 and comprised 12.5% of average total deposits in 3Q23 compared to 16.7% a year ago
  • Period end noninterest bearing deposits decreased 11.9% YoY, but increased 5.6% QoQ

Credit Quality: Nonperforming loans declined YoY and QoQ.

  • Criticized and classified loans were 108 bps of gross loans at 3Q23 compared to 71 bps at 2Q23, 84 bps at 1Q23, 98 bps at 4Q22, and 89 bps at 3Q22
  • Allowance for credit losses were 225.4% of nonperforming loans at 3Q23 compared to 207.1 % at 2Q23, and 142.3% at 3Q22

Capital: Book value per common share and tangible book value per common share, a non-GAAP measure, increased YoY but declined slightly QoQ to $23.15 and $22.48, respectively.

  • The Company paid a dividend of $0.22 per share in 3Q23 and has ample available liquidity to meet its obligations
  • The Company repurchased 59,352 shares in 3Q23 at an average price of $15.88, representing a 29.4% discount to tangible book value, with 846,779 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 7.59% at 3Q23 compared to 7.71% at 2Q23 and 7.62% at 3Q22
Conference Call Information and Fourth 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 and Treasurer, will host a conference call on Wednesday, November 1, 2023, at 9:30 AM (ET) to discuss the Company’s third quarter results and strategy.
  • Dial-in for Live Call: 1-877-509-5836; Canada 855-669-9657
  • Webcast: https://event.choruscall.com/mediaframe/webcast.html?webcastid=trpzpC32
  • Dial-in for Replay: 1-877-344-7529; Canada 855-669-9658
  • Replay Access Code: 2779651
  • The conference call will be simultaneously webcast and archived

Fourth Quarter 2023 Earnings Release Date:

The Company plans to release Fourth Quarter 2023 financial results after the market close on January 25, 2024; followed by a conference call at 11:00 AM (ET) on January 26, 2024.

A detailed announcement will be issued prior to the third 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.

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
At or for the nine months ended
September 30,
June 30,
March 31,
December 31,
September 30,
September 30,
September 30,
(Dollars in thousands, except per share data)
2023
2023
2023
2022
2022
2023
2022
Performance Ratios (1)
Return on average assets
0.44
%
0.41
%
0.24
%
0.48
%
1.11
%
0.36
%
1.08
%
Return on average equity
5.57
5.12
3.02
6.06
13.91
4.56
13.24
Yield on average interest-earning assets (2)
5.20
4.84
4.61
4.44
4.10
4.88
3.91
Cost of average interest-bearing liabilities
3.52
3.15
2.80
2.11
1.25
3.16
0.79
Cost of funds
3.13
2.80
2.47
1.84
1.08
2.80
0.68
Net interest rate spread during period (2)
1.68
1.69
1.81
2.33
2.85
1.72
3.12
Net interest margin (2)
2.22
2.18
2.27
2.70
3.07
2.22
3.26
Noninterest expense to average assets
1.62
1.67
1.78
1.58
1.69
1.69
1.78
Efficiency ratio (3)
72.33
74.02
76.48
59.55
55.68
74.30
55.57
Average interest-earning assets to average interest bearing liabilities
1.18
X
1.18
X
1.19
X
1.21
X
1.22
X
1.19
X
1.22
X
Average Balances
Total loans, net
$
6,813,019
$
6,829,648
$
6,871,192
$
6,881,245
$
6,861,463
$
6,837,740
$
6,694,528
Total interest-earning assets
8,017,460
7,986,020
7,996,677
8,045,691
7,979,070
8,000,129
7,764,873
Total assets
8,504,364
8,461,827
8,468,311
8,518,019
8,442,657
8,478,299
8,236,070
Total deposits
6,819,397
6,899,617
6,810,485
6,678,383
6,276,613
6,843,200
6,375,372
Total interest-bearing liabilities
6,771,860
6,756,859
6,703,558
6,662,209
6,553,087
6,744,342
6,371,542
Stockholders' equity
675,513
673,943
683,071
676,165
674,282
677,481
671,588
Per Share Data
Book value per common share (4)
$
23.15
$
23.18
$
22.84
$
22.97
$
22.47
$
23.15
$
22.47
Tangible book value per common share (5)
$
22.48
$
22.51
$
22.18
$
22.31
$
21.81
$
22.48
$
21.81
Stockholders' Equity
Stockholders' equity
$
669,141
$
671,303
$
673,459
$
677,157
$
670,719
$
669,141
$
670,719
Tangible stockholders' equity
649,854
651,898
653,932
657,504
650,936
649,854
650,936
Consolidated Regulatory Capital Ratios
Tier 1 capital
$
739,364
$
735,810
$
737,138
$
746,880
$
749,526
$
739,364
$
749,526
Common equity Tier 1 capital
692,914
689,876
690,846
698,258
701,532
692,914
701,532
Total risk-based capital
968,152
963,840
965,384
975,709
979,021
968,152
979,021
Risk Weighted Assets
6,802,385
6,649,252
6,659,532
6,640,542
6,689,284
6,802,385
6,689,284
Tier 1 leverage capital (well capitalized = 5%)
8.54
%
8.56
%
8.58
%
8.61
%
8.74
%
8.54
%
8.74
%
Common equity Tier 1 risk-based capital (well capitalized = 6.5%)
10.19
10.38
10.37
10.52
10.49
10.19
10.49
Tier 1 risk-based capital (well capitalized = 8.0%)
10.87
11.07
11.07
11.25
11.20
10.87
11.20
Total risk-based capital (well capitalized = 10.0%)
14.23
14.50
14.50
14.69
14.64
14.23
14.64
Capital Ratios
Average equity to average assets
7.94
%
7.96
%
8.07
%
7.94
%
7.99
%
7.99
%
8.15
%
Equity to total assets
7.80
7.92
7.94
8.04
7.84
7.80
7.84
Tangible common equity to tangible assets (6)
7.59
7.71
7.73
7.82
7.62
7.59
7.62
Asset Quality
Nonaccrual loans (7)
$
17,405
$
18,637
$
21,176
$
29,782
$
27,003
$
17,405
$
27,003
Nonperforming loans
17,405
18,637
21,176
32,382
29,003
17,405
29,003
Nonperforming assets
38,386
39,618
42,157
53,363
49,984
38,386
49,984
Net charge-offs (recoveries)
(42
)
1,560
9,234
811
290
10,752
724
Asset Quality Ratios
Nonperforming loans to gross loans
0.25
%
0.27
%
0.31
%
0.47
%
0.42
%
0.25
%
0.42
%
Nonperforming assets to total assets
0.45
0.47
0.50
0.63
0.58
0.45
0.58
Allowance for credit losses to gross loans
0.57
0.57
0.56
0.58
0.59
0.57
0.59
Allowance for credit losses to nonperforming assets
102.19
97.41
91.87
75.79
82.56
102.19
82.56
Allowance for credit losses to nonperforming loans
225.38
207.08
182.89
124.89
142.29
225.38
142.29
Net charge-offs (recoveries) to average loans
—
0.09
0.54
0.05
0.02
0.21
0.01
Full-service customer facilities
27
26
26
25
25
27
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 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 nine months ended
September 30,
June 30,
March 31,
December 31,
September 30,
September 30,
September 30,
(In thousands, except per share data)
2023
2023
2023
2022
2022
2023
2022
Interest and Dividend Income
Interest and fees on loans
$
91,466
$
85,377
$
82,889
$
81,033
$
75,546
$
259,732
$
212,254
Interest and dividends on securities:
Interest
10,383
9,172
7,240
6,511
5,676
26,795
14,350
Dividends
33
30
29
24
17
92
36
Other interest income
2,154
1,982
1,959
1,702
506
6,095
716
Total interest and dividend income
104,036
96,561
92,117
89,270
81,745
292,714
227,356
Interest Expense
Deposits
50,066
46,249
39,056
27,226
11,965
135,371
20,059
Other interest expense
9,543
6,934
7,799
7,843
8,574
24,276
17,882
Total interest expense
59,609
53,183
46,855
35,069
20,539
159,647
37,941
Net Interest Income
44,427
43,378
45,262
54,201
61,206
133,067
189,415
Provision (benefit) for credit losses
596
1,416
7,508
(12
)
2,145
9,520
5,093
Net Interest Income After Provision (Benefit) for Credit Losses
43,831
41,962
37,754
54,213
59,061
123,547
184,322
Noninterest Income (Loss)
Banking services fee income
2,636
1,780
1,411
1,231
1,351
5,827
3,891
Net loss on sale of securities
—
—
—
(10,948
)
—
—
—
Net gain on sale of loans
—
54
54
46
—
108
73
Net gain on disposition of assets
—
—
—
104
—
—
—
Net gain (loss) from fair value adjustments
(1,246
)
294
2,619
(622
)
5,626
1,667
6,350
Federal Home Loan Bank of New York stock dividends
624
534
697
658
538
1,855
1,342
Life insurance proceeds
23
561
—
286
—
584
1,536
Bank owned life insurance
1,157
1,134
1,109
1,126
1,132
3,400
3,361
Other income
282
765
1,018
467
348
2,065
1,108
Total noninterest income (loss)
3,476
5,122
6,908
(7,652
)
8,995
15,506
17,661
Noninterest Expense
Salaries and employee benefits
17,825
19,493
20,887
18,178
21,438
58,205
66,196
Occupancy and equipment
3,371
3,534
3,793
3,701
3,541
10,698
10,905
Professional services
3,042
2,657
2,483
2,130
2,570
8,182
7,077
FDIC deposit insurance
912
943
977
485
738
2,832
1,773
Data processing
1,422
1,473
1,435
1,421
1,367
4,330
4,174
Depreciation and amortization
1,482
1,482
1,510
1,535
1,488
4,474
4,395
Other real estate owned/foreclosure expense
185
150
165
35
143
500
259
Other operating expenses
6,176
5,547
6,453
6,257
4,349
18,176
15,171
Total noninterest expense
34,415
35,279
37,703
33,742
35,634
107,397
109,950
Income Before Provision for Income Taxes
12,892
11,805
6,959
12,819
32,422
31,656
92,033
Provision for Income Taxes
3,493
3,177
1,801
2,570
8,980
8,471
25,337
Net Income
$
9,399
$
8,628
$
5,158
$
10,249
$
23,442
$
23,185
$
66,696
Basic earnings per common share
$
0.32
$
0.29
$
0.17
$
0.34
$
0.76
$
0.77
$
2.15
Diluted earnings per common share
$
0.32
$
0.29
$
0.17
$
0.34
$
0.76
$
0.77
$
2.15
Dividends per common share
$
0.22
$
0.22
$
0.22
$
0.22
$
0.22
$
0.66
$
0.66
Basic average shares
29,703
30,090
30,265
30,420
30,695
30,017
30,960
Diluted average shares
29,703
30,090
30,265
30,420
30,695
30,017
30,960

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

September 30,
June 30,
March 31,
December 31,
September 30,
(Dollars in thousands)
2023
2023
2023
2022
2022
ASSETS
Cash and due from banks
$
200,926
$
160,053
$
176,747
$
151,754
$
164,693
Securities held-to-maturity:
Mortgage-backed securities
7,860
7,865
7,870
7,875
7,880
Other securities, net
65,271
65,469
65,653
65,836
66,032
Securities available for sale:
Mortgage-backed securities
337,879
365,911
380,110
384,283
468,366
Other securities
505,784
503,645
431,818
351,074
351,495
Loans
6,896,074
6,832,425
6,904,176
6,934,769
6,956,674
Allowance for credit losses
(39,228
)
(38,593
)
(38,729
)
(40,442
)
(41,268
)
Net loans
6,856,846
6,793,832
6,865,447
6,894,327
6,915,406
Interest and dividends receivable
55,660
52,911
46,836
45,048
42,571
Bank premises and equipment, net
21,302
22,182
21,567
21,750
22,376
Federal Home Loan Bank of New York stock
43,821
36,168
38,779
45,842
62,489
Bank owned life insurance
214,321
213,164
214,240
213,131
212,353
Goodwill
17,636
17,636
17,636
17,636
17,636
Core deposit intangibles
1,651
1,769
1,891
2,017
2,147
Right of use asset
41,404
41,526
42,268
43,289
44,885
Other assets
206,922
191,752
168,259
179,084
179,090
Total assets
$
8,577,283
$
8,473,883
$
8,479,121
$
8,422,946
$
8,557,419
LIABILITIES
Total deposits
$
6,681,509
$
6,723,690
$
6,734,090
$
6,485,342
$
6,125,305
Borrowed funds
1,001,010
857,400
887,509
1,052,973
1,572,830
Operating lease liability
43,067
44,402
45,353
46,125
48,330
Other liabilities
182,556
177,088
138,710
161,349
140,235
Total liabilities
7,908,142
7,802,580
7,805,662
7,745,789
7,886,700
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
264,486
263,744
262,876
264,332
263,755
Treasury stock
(105,433
)
(104,574
)
(97,760
)
(98,535
)
(90,977
)
Retained earnings
550,678
547,811
545,786
547,507
543,894
Accumulated other comprehensive loss, net of taxes
(40,931
)
(36,019
)
(37,784
)
(36,488
)
(46,294
)
Total stockholders' equity
669,141
671,303
673,459
677,157
670,719
Total liabilities and stockholders' equity
$
8,577,283
$
8,473,883
$
8,479,121
$
8,422,946
$
8,557,419
(In thousands)
Issued shares
34,088
34,088
34,088
34,088
34,088
Outstanding shares
28,905
28,961
29,488
29,476
29,851
Treasury shares
5,183
5,127
4,600
4,612
4,237

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
AVERAGE BALANCE SHEETS
(Unaudited)

For the three months ended
For the nine months ended
September 30,
June 30,
March 31,
December 31,
September 30,
September 30,
September 30,
(In thousands)
2023
2023
2023
2022
2022
2023
2022
Interest-earning Assets:
Mortgage loans, net
$
5,314,215
$
5,308,567
$
5,333,274
$
5,338,612
$
5,340,694
$
5,318,616
$
5,224,289
Other loans, net
1,498,804
1,521,081
1,537,918
1,542,633
1,520,769
1,519,124
1,470,239
Total loans, net
6,813,019
6,829,648
6,871,192
6,881,245
6,861,463
6,837,740
6,694,528
Taxable securities:
Mortgage-backed securities
436,181
448,620
457,911
549,204
568,854
447,491
581,439
Other securities, net
528,091
471,600
411,723
371,897
362,629
470,898
308,008
Total taxable securities
964,272
920,220
869,634
921,101
931,483
918,389
889,447
Tax-exempt securities:
Other securities
66,438
66,632
66,828
67,022
67,211
66,631
64,081
Total tax-exempt securities
66,438
66,632
66,828
67,022
67,211
66,631
64,081
Interest-earning deposits and federal funds sold
173,731
169,520
189,023
176,323
118,913
177,369
116,817
Total interest-earning assets
8,017,460
7,986,020
7,996,677
8,045,691
7,979,070
8,000,129
7,764,873
Other assets
486,904
475,807
471,634
472,328
463,587
478,170
471,197
Total assets
$
8,504,364
$
8,461,827
$
8,468,311
$
8,518,019
$
8,442,657
$
8,478,299
$
8,236,070
Interest-bearing Liabilities:
Deposits:
Savings accounts
$
115,437
$
124,041
$
134,945
$
146,598
$
154,545
$
124,736
$
155,966
NOW accounts
1,907,781
2,026,950
1,970,555
1,972,134
1,808,608
1,968,199
1,977,621
Money market accounts
1,584,308
1,754,574
2,058,523
2,146,649
2,136,829
1,797,398
2,206,973
Certificate of deposit accounts
2,290,669
2,046,960
1,679,517
1,350,683
1,057,733
2,007,954
923,301
Total due to depositors
5,898,195
5,952,525
5,843,540
5,616,064
5,157,715
5,898,287
5,263,861
Mortgagors' escrow accounts
69,525
97,410
70,483
82,483
68,602
79,136
79,192
Total interest-bearing deposits
5,967,720
6,049,935
5,914,023
5,698,547
5,226,317
5,977,423
5,343,053
Borrowings
804,140
706,924
789,535
963,662
1,326,770
766,919
1,028,489
Total interest-bearing liabilities
6,771,860
6,756,859
6,703,558
6,662,209
6,553,087
6,744,342
6,371,542
Noninterest-bearing demand deposits
851,677
849,682
896,462
979,836
1,050,296
865,777
1,032,319
Other liabilities
205,314
181,343
185,220
199,809
164,992
190,699
160,621
Total liabilities
7,828,851
7,787,884
7,785,240
7,841,854
7,768,375
7,800,818
7,564,482
Equity
675,513
673,943
683,071
676,165
674,282
677,481
671,588
Total liabilities and equity
$
8,504,364
$
8,461,827
$
8,468,311
$
8,518,019
$
8,442,657
$
8,478,299
$
8,236,070
Net interest-earning assets
$
1,245,600
$
1,229,161
$
1,293,119
$
1,383,482
$
1,425,983
$
1,255,787
$
1,393,331

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

For the three months ended
For the nine months ended
September 30,
June 30,
March 31,
December 31,
September 30,
September 30,
September 30,
(Dollars in thousands)
2023
2023
2023
2022
2022
2023
2022
Interest Income:
Mortgage loans, net
$
68,931
$
63,688
$
62,054
$
60,946
$
58,374
$
194,673
$
167,119
Other loans, net
22,535
21,689
20,835
20,087
17,172
65,059
45,135
Total loans, net
91,466
85,377
82,889
81,033
75,546
259,732
212,254
Taxable securities:
Mortgage-backed securities
3,031
2,976
2,281
2,425
2,466
8,288
6,989
Other securities
7,003
5,847
4,611
3,723
2,839
17,461
6,048
Total taxable securities
10,034
8,823
6,892
6,148
5,305
25,749
13,037
Tax-exempt securities:
Other securities
484
480
477
489
492
1,441
1,708
Total tax-exempt securities
484
480
477
489
492
1,441
1,708
Interest-earning deposits and federal funds sold
2,154
1,982
1,959
1,702
506
6,095
716
Total interest-earning assets
104,138
96,662
92,217
89,372
81,849
293,017
227,715
Interest Expense:
Deposits:
Savings accounts
$
130
$
140
$
126
$
59
$
53
$
396
$
152
NOW accounts
16,843
16,152
13,785
9,515
3,640
46,780
5,838
Money market accounts
14,386
14,625
14,102
10,532
5,280
43,113
8,507
Certificate of deposit accounts
18,639
15,281
11,007
7,037
2,948
44,927
5,510
Total due to depositors
49,998
46,198
39,020
27,143
11,921
135,216
20,007
Mortgagors' escrow accounts
68
51
36
83
44
155
52
Total interest-bearing deposits
50,066
46,249
39,056
27,226
11,965
135,371
20,059
Borrowings
9,543
6,934
7,799
7,843
8,574
24,276
17,882
Total interest-bearing liabilities
59,609
53,183
46,855
35,069
20,539
159,647
37,941
Net interest income- tax equivalent
$
44,529
$
43,479
$
45,362
$
54,303
$
61,310
$
133,370
$
189,774
Included in net interest income above:
Prepayment penalties received on loans and securities and net of reversals and recovered interest from nonaccrual loans
$
857
$
315
$
680
$
1,080
$
1,368
$
1,852
$
5,365
Net gains/(losses) from fair value adjustments on qualifying hedges included in interest income
1,348
(205
)
100
936
28
1,243
(161
)
Purchase accounting adjustments
347
340
306
342
775
993
2,200
Interest-earning Assets Yields:
Mortgage loans, net
5.19
%
4.80
%
4.65
%
4.57
%
4.37
%
4.88
%
4.27
%
Other loans, net
6.01
5.70
5.42
5.21
4.52
5.71
4.09
Total loans, net
5.37
5.00
4.83
4.71
4.40
5.06
4.23
Taxable securities:
Mortgage-backed securities
2.78
2.65
1.99
1.77
1.73
2.47
1.60
Other securities
5.30
4.96
4.48
4.00
3.13
4.94
2.62
Total taxable securities
4.16
3.84
3.17
2.67
2.28
3.74
1.95
Tax-exempt securities: (1)
Other securities
2.91
2.88
2.86
2.92
2.93
2.88
3.55
Total tax-exempt securities
2.91
2.88
2.86
2.92
2.93
2.88
3.55
Interest-earning deposits and federal funds sold
4.96
4.68
4.15
3.86
1.70
4.58
0.82
Total interest-earning assets (1)
5.20
%
4.84
%
4.61
%
4.44
%
4.10
%
4.88
%
3.91
%
Interest-bearing Liabilities Yields:
Deposits:
Savings accounts
0.45
%
0.45
%
0.37
%
0.16
%
0.14
%
0.42
%
0.13
%
NOW accounts
3.53
3.19
2.80
1.93
0.81
3.17
0.39
Money market accounts
3.63
3.33
2.74
1.96
0.99
3.20
0.51
Certificate of deposit accounts
3.25
2.99
2.62
2.08
1.11
2.98
0.80
Total due to depositors
3.39
3.10
2.67
1.93
0.92
3.06
0.51
Mortgagors' escrow accounts
0.39
0.21
0.20
0.40
0.26
0.26
0.09
Total interest-bearing deposits
3.36
3.06
2.64
1.91
0.92
3.02
0.50
Borrowings
4.75
3.92
3.95
3.26
2.58
4.22
2.32
Total interest-bearing liabilities
3.52
%
3.15
%
2.80
%
2.11
%
1.25
%
3.16
%
0.79
%
Net interest rate spread (tax equivalent) (1)
1.68
%
1.69
%
1.81
%
2.33
%
2.85
%
1.72
%
3.12
%
Net interest margin (tax equivalent) (1)
2.22
%
2.18
%
2.27
%
2.70
%
3.07
%
2.22
%
3.26
%
Ratio of interest-earning assets to interest-bearing liabilities
1.18
X
1.18
X
1.19
X
1.21
X
1.22
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

3Q23 vs.
3Q23 vs.
September 30,
June 30,
March 31,
December 31,
September 30,
2Q23
3Q22
(Dollars in thousands)
2023
2023
2023
2022
2022
% Change
% Change
Noninterest bearing
$
874,420
$
827,820
$
872,254
$
921,238
$
992,378
5.6
%
(11.9
)%
Interest bearing:
Certificate of deposit accounts
2,321,369
2,232,696
1,880,260
1,526,338
1,036,107
4.0
124.0
Savings accounts
112,730
118,886
128,245
143,641
150,552
(5.2
)
(25.1
)
Money market accounts
1,551,176
1,594,637
1,855,781
2,099,776
2,113,256
(2.7
)
(26.6
)
NOW accounts
1,749,802
1,891,834
1,918,977
1,746,190
1,762,468
(7.5
)
(0.7
)
Total interest-bearing deposits
5,735,077
5,838,053
5,783,263
5,515,945
5,062,383
(1.8
)
13.3
Total due to depositors
6,609,497
6,665,873
6,655,517
6,437,183
6,054,761
(0.8
)
9.2
Mortgagors' escrow deposits
72,012
57,817
78,573
48,159
70,544
24.6
2.1
Total deposits
$
6,681,509
$
6,723,690
$
6,734,090
$
6,485,342
$
6,125,305
(0.6
)%
9.1
%

Loan Composition

3Q23 vs.
3Q23 vs.
September 30,
June 30,
March 31,
December 31,
September 30,
2Q23
3Q22
(Dollars in thousands)
2023
2023
2023
2022
2022
% Change
% Change
Multifamily residential
$
2,614,219
$
2,593,955
$
2,601,174
$
2,601,384
$
2,608,192
0.8
%
0.2
%
Commercial real estate
1,953,243
1,917,749
1,904,293
1,913,040
1,914,326
1.9
2.0
One-to-four family ? mixed-use property
537,744
542,368
549,207
554,314
560,885
(0.9
)
(4.1
)
One-to-four family ? residential
222,874
230,055
238,417
241,246
240,484
(3.1
)
(7.3
)
Construction
59,903
57,325
60,486
70,951
63,651
4.5
(5.9
)
Mortgage Loans
5,387,983
5,341,452
5,353,577
5,380,935
5,387,538
0.9
—
Small Business Administration
21,896
22,404
22,860
23,275
27,712
(2.3
)
(21.0
)
Commercial business and other
1,487,775
1,466,358
1,518,756
1,521,548
1,532,497
1.5
(2.9
)
Nonmortgage loans
1,509,671
1,488,762
1,541,616
1,544,823
1,560,209
1.4
(3.2
)
Gross loans
6,897,654
6,830,214
6,895,193
6,925,758
6,947,747
1.0
(0.7
)
Net unamortized (premiums) and unearned loan (cost) fees (1)
(1,580
)
2,211
8,983
9,011
8,927
(171.5
)
(117.7
)
Allowance for credit losses
(39,228
)
(38,593
)
(38,729
)
(40,442
)
(41,268
)
1.6
(4.9
)
Net loans
$
6,856,846
$
6,793,832
$
6,865,447
$
6,894,327
$
6,915,406
0.9
%
(0.8
)%

_______________
( 1) Includes $4.4 million, $4.8 million, $5.1 million, $5.4 million, and $5.8 million of purchase accounting unamortized discount resulting from the acquisition of Empire Bancorp at September 30, 2023, June 30, 2023, March 31, 2023, December 31, 2022, and September 30, 2022, respectively.

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

Loan Closings

For the three months ended
For the nine months ended
September 30,
June 30,
March 31,
December 31,
September 30,
September 30,
September 30,
(In thousands)
2023
2023
2023
2022
2022
2023
2022
Multifamily residential
$
75,655
$
31,901
$
42,164
$
65,347
$
173,980
$
149,720
$
409,062
Commercial real estate
70,197
38,523
15,570
20,750
77,777
124,290
287,705
One-to-four family – mixed-use property
6,028
5,812
4,938
4,489
12,383
16,778
33,109
One-to-four family – residential
1,070
63
4,296
7,485
4,102
5,429
17,574
Construction
6,971
8,811
10,592
7,301
7,170
26,374
24,291
Mortgage Loans
159,921
85,110
77,560
105,372
275,412
322,591
771,741
Small Business Administration
—
820
318
665
46
1,138
2,796
Commercial business and other
81,549
72,850
95,668
119,191
188,202
250,067
522,229
Nonmortgage Loans
81,549
73,670
95,986
119,856
188,248
251,205
525,025
Total Closings
$
241,470
$
158,780
$
173,546
$
225,228
$
463,660
$
573,796
$
1,296,766

Weighted Average Rate on Loan Closings

For the three months ended
September 30,
June 30,
March 31,
December 31,
September 30,
Loan type
2023
2023
2023
2022
2022
Mortgage loans
7.22
%
6.62
%
6.30
%
5.59
%
4.37
%
Nonmortgage loans
8.00
7.76
7.58
6.57
4.93
Total loans
7.48
%
7.14
%
7.01
%
6.10
%
4.60
%

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
ASSET QUALITY
(Unaudited)

Allowance for Credit Losses

For the three months ended
For the nine months ended
September 30,
June 30,
March 31,
December 31,
September 30,
September 30,
September 30,
(Dollars in thousands)
2023
2023
2023
2022
2022
2023
2022
Allowance for credit losses - loans
Beginning balances
$
38,593
$
38,729
$
40,442
$
41,268
$
39,424
$
40,442
$
37,135
Net loan charge-off (recoveries):
Multifamily residential
—
—
(1
)
132
—
(1
)
(1
)
Commercial real estate
—
8
—
—
—
8
—
One-to-four family – residential
(6
)
4
(36
)
17
2
(38
)
(2
)
Small Business Administration
(48
)
(158
)
(6
)
(9
)
(12
)
(212
)
1,016
Taxi medallion
—
—
—
—
—
—
(447
)
Commercial business and other
12
1,706
9,277
671
300
10,995
158
Total
(42
)
1,560
9,234
811
290
10,752
724
Provision (benefit) for loan losses
593
1,424
7,521
(15
)
2,134
9,538
4,857
Ending balance
$
39,228
$
38,593
$
38,729
$
40,442
$
41,268
$
39,228
$
41,268
Gross charge-offs
$
21
$
1,731
$
9,298
$
1,938
$
324
$
11,050
$
1,410
Gross recoveries
63
171
64
1,127
34
298
686
Allowance for credit losses - loans to gross loans
0.57
%
0.57
%
0.56
%
0.58
%
0.59
%
0.57
%
0.59
%
Net loan charge-offs (recoveries) to average loans
—
0.09
0.54
0.05
0.02
0.21
0.01

Nonperforming Assets

September 30,
June 30,
March 31,
December 31,
September 30,
(Dollars in thousands)
2023
2023
2023
2022
2022
Loans 90 Days Or More Past Due and Still Accruing:
Commercial real estate
$
—
$
—
$
—
$
—
$
2,000
Construction
—
—
—
2,600
—
Commercial business and other
—
—
—
—
—
Total
—
—
—
2,600
2,000
Nonaccrual Loans:
Multifamily residential
3,206
3,206
3,628
3,206
3,414
Commercial real estate
—
—
—
237
1,851
One-to-four family - mixed-use property (1)
1,075
790
790
790
790
One-to-four family - residential
4,161
5,218
4,961
4,425
4,655
Small Business Administration
1,255
1,119
937
937
937
Commercial business and other (1)
7,708
8,304
10,860
20,187
15,356
Total
17,405
18,637
21,176
29,782
27,003
Total Nonperforming Loans (NPLs)
17,405
18,637
21,176
32,382
29,003
Total Nonaccrual HTM Securities
20,981
20,981
20,981
20,981
20,981
Total Nonperforming Assets
$
38,386
$
39,618
$
42,157
$
53,363
$
49,984
Nonperforming Assets to Total Assets
0.45
%
0.47
%
0.50
%
0.63
%
0.58
%
Allowance for Credit Losses to NPLs
225.4
%
207.1
%
182.9
%
124.9
%
142.3
%

_______________
(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 and in 3Q22; nonaccrual performing TDR commercial business loans totaling less than $0.1 million in 4Q22 and $2.9 million in 3Q22.

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 nine months ended
(Dollars in thousands,
September 30,
June 30,
March 31,
December 31,
September 30,
September 30,
September 30,
except per share data)
2023
2023
2023
2022
2022
2023
2022
GAAP income before income taxes
$
12,892
$
11,805
$
6,959
$
12,819
$
32,422
$
31,656
$
92,033
Net (gain) loss from fair value adjustments (Noninterest income (loss))
1,246
(294
)
(2,619
)
622
(5,626
)
(1,667
)
(6,350
)
Net loss on sale of securities (Noninterest income (loss))
—
—
—
10,948
—
—
—
Life insurance proceeds (Noninterest income (loss))
(23
)
(561
)
—
(286
)
—
(584
)
(1,536
)
Net gain on disposition of assets (Noninterest income (loss))
—
—
—
(104
)
—
—
—
Net (gain) loss from fair value adjustments on qualifying hedges (Net interest income)
(1,348
)
205
(100
)
(936
)
(28
)
(1,243
)
161
Net amortization of purchase accounting adjustments and intangibles (Various)
(237
)
(227
)
(188
)
(219
)
(650
)
(652
)
(1,811
)
Core income before taxes
12,530
10,928
4,052
22,844
26,118
27,510
82,497
Provision for core income taxes
3,395
3,074
1,049
5,445
7,165
7,518
23,057
Core net income
$
9,135
$
7,854
$
3,003
$
17,399
$
18,953
$
19,992
$
59,440
GAAP diluted earnings per common share
$
0.32
$
0.29
$
0.17
$
0.34
$
0.76
$
0.77
$
2.15
Net (gain) loss from fair value adjustments, net of tax
0.03
(0.01
)
(0.06
)
0.02
(0.13
)
(0.04
)
(0.15
)
Net loss on sale of securities, net of tax
—
—
—
0.27
—
—
—
Life insurance proceeds
—
(0.02
)
—
(0.01
)
—
(0.01
)
(0.05
)
Net gain on disposition of assets, net of tax
—
—
—
—
—
—
—
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
(0.01
)
(0.01
)
(0.01
)
(0.01
)
(0.02
)
(0.02
)
(0.04
)
Core diluted earnings per common share (1)
$
0.31
$
0.26
$
0.10
$
0.57
$
0.62
$
0.67
$
1.92
Core net income, as calculated above
$
9,135
$
7,854
$
3,003
$
17,399
$
18,953
$
19,992
$
59,440
Average assets
8,504,364
8,461,827
8,468,311
8,518,019
8,442,657
8,478,299
8,236,070
Average equity
675,513
673,943
683,071
676,165
674,282
677,481
671,588
Core return on average assets (2)
0.43
%
0.37
%
0.14
%
0.82
%
0.90
%
0.31
%
0.96
%
Core return on average equity (2)
5.41
%
4.66
%
1.76
%
10.29
%
11.24
%
3.93
%
11.80
%

_______________
(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 nine months ended
September 30,
June 30,
March 31,
December 31,
September 30,
September 30,
September 30,
(Dollars in thousands)
2023
2023
2023
2022
2022
2023
2022
GAAP Net interest income
$
44,427
$
43,378
$
45,262
$
54,201
$
61,206
$
133,067
$
189,415
Net (gain) loss from fair value adjustments on qualifying hedges
(1,348
)
205
(100
)
(936
)
(28
)
(1,243
)
161
Net amortization of purchase accounting adjustments
(347
)
(340
)
(306
)
(342
)
(775
)
(993
)
(2,200
)
Core Net interest income
$
42,732
$
43,243
$
44,856
$
52,923
$
60,403
$
130,831
$
187,376
GAAP Noninterest income (loss)
$
3,476
$
5,122
$
6,908
$
(7,652
)
$
8,995
$
15,506
$
17,661
Net (gain) loss from fair value adjustments
1,246
(294
)
(2,619
)
622
(5,626
)
(1,667
)
(6,350
)
Net loss on sale of securities
—
—
—
10,948
—
—
—
Life insurance proceeds
(23
)
(561
)
—
(286
)
—
(584
)
(1,536
)
Net gain on sale of assets
—
—
—
(104
)
—
—
—
Core Noninterest income
$
4,699
$
4,267
$
4,289
$
3,528
$
3,369
$
13,255
$
9,775
GAAP Noninterest expense
$
34,415
$
35,279
$
37,703
$
33,742
$
35,634
$
107,397
$
109,950
Net amortization of purchase accounting adjustments
(110
)
(113
)
(118
)
(123
)
(125
)
(341
)
(389
)
Core Noninterest expense
$
34,305
$
35,166
$
37,585
$
33,619
$
35,509
$
107,056
$
109,561
Net interest income
$
44,427
$
43,378
$
45,262
$
54,201
$
61,206
$
133,067
$
189,415
Noninterest income (loss)
3,476
5,122
6,908
(7,652
)
8,995
15,506
17,661
Noninterest expense
(34,415
)
(35,279
)
(37,703
)
(33,742
)
(35,634
)
(107,397
)
(109,950
)
Pre-provision pre-tax net revenue
$
13,488
$
13,221
$
14,467
$
12,807
$
34,567
$
41,176
$
97,126
Core:
Net interest income
$
42,732
$
43,243
$
44,856
$
52,923
$
60,403
$
130,831
$
187,376
Noninterest income
4,699
4,267
4,289
3,528
3,369
13,255
9,775
Noninterest expense
(34,305
)
(35,166
)
(37,585
)
(33,619
)
(35,509
)
(107,056
)
(109,561
)
Pre-provision pre-tax net revenue
$
13,126
$
12,344
$
11,560
$
22,832
$
28,263
$
37,030
$
87,590
Efficiency Ratio
72.3
%
74.0
%
76.5
%
59.6
%
55.7
%
74.3
%
55.6
%

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 nine months ended
September 30,
June 30,
March 31,
December 31,
September 30,
September 30,
September 30,
(Dollars in thousands)
2023
2023
2023
2022
2022
2023
2022
GAAP net interest income
$
44,427
$
43,378
$
45,262
$
54,201
$
61,206
$
133,067
$
189,415
Net (gain) loss from fair value adjustments on qualifying hedges
(1,348
)
205
(100
)
(936
)
(28
)
(1,243
)
161
Net amortization of purchase accounting adjustments
(347
)
(340
)
(306
)
(342
)
(775
)
(993
)
(2,200
)
Tax equivalent adjustment
102
101
100
102
104
303
359
Core net interest income FTE
$
42,834
$
43,344
$
44,956
$
53,025
$
60,507
$
131,134
$
187,735
Total average interest-earning assets (1)
$
8,021,424
$
7,990,331
$
8,001,271
$
8,050,601
$
7,984,558
$
8,004,417
$
7,770,910
Core net interest margin FTE
2.14
%
2.17
%
2.25
%
2.63
%
3.03
%
2.18
%
3.22
%
GAAP interest income on total loans, net
$
91,466
$
85,377
$
82,889
$
81,033
$
75,546
$
259,732
$
212,254
Net (gain) loss from fair value adjustments on qualifying hedges - loans
(1,379
)
157
(101
)
(936
)
(28
)
(1,323
)
161
Net amortization of purchase accounting adjustments
(358
)
(345
)
(316
)
(372
)
(783
)
(1,019
)
(2,256
)
Core interest income on total loans, net
$
89,729
$
85,189
$
82,472
$
79,725
$
74,735
$
257,390
$
210,159
Average total loans, net (1)
$
6,817,642
$
6,834,644
$
6,876,495
$
6,886,900
$
6,867,758
$
6,842,712
$
6,701,413
Core yield on total loans
5.26
%
4.99
%
4.80
%
4.63
%
4.35
%
5.02
%
4.18
%

_______________
(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)

September 30,
June 30,
March 31,
December 31,
September 30,
(Dollars in thousands)
2023
2023
2023
2022
2022
Total Equity
$
669,141
$
671,303
$
673,459
$
677,157
$
670,719
Less:
Goodwill
(17,636
)
(17,636
)
(17,636
)
(17,636
)
(17,636
)
Core deposit intangibles
(1,651
)
(1,769
)
(1,891
)
(2,017
)
(2,147
)
Tangible Stockholders' Common Equity
$
649,854
$
651,898
$
653,932
$
657,504
$
650,936
Total Assets
$
8,577,283
$
8,473,883
$
8,479,121
$
8,422,946
$
8,557,419
Less:
Goodwill
(17,636
)
(17,636
)
(17,636
)
(17,636
)
(17,636
)
Core deposit intangibles
(1,651
)
(1,769
)
(1,891
)
(2,017
)
(2,147
)
Tangible Assets
$
8,557,996
$
8,454,478
$
8,459,594
$
8,403,293
$
8,537,636
Tangible Stockholders' Common Equity to Tangible Assets
7.59
%
7.71
%
7.73
%
7.82
%
7.62
%

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