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

Rhea-AI Summary

The Company reported its first quarter 2022 results with a GAAP EPS of $0.58, down 3.3% YoY, while Core EPS rose 13.0% YoY to $0.61. Net interest income reached a record $63.5 million, increasing 4.2% YoY, with a NIM of 3.36%, up 18 bps YoY. Loan closings surged 65% YoY, attributed to economic recovery in New York City. The Company returned 84% of earnings through dividends and share repurchases. Nonperforming loans decreased 5.8% QoQ. However, average loans declined 1.8% YoY, and noninterest income fell 79.2% YoY.

Positive

• Core EPS up 13.0% YoY to $0.61.
• Record net interest income of $63.5 million, up 4.2% YoY.
• Loan closings increased 65% YoY.
• Noninterest bearing deposits rose 17.0% YoY.

Negative

• GAAP EPS decreased 3.3% YoY.
• Average loans down 1.8% YoY.
• Noninterest income fell 79.2% YoY.

Record Net Interest Income and Record Low Cost of Funds

John R. Buran, President and CEO Commentary

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

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

- John R. Buran, President and CEO

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

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

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

1Q22 Highlights

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Conference Call Information And Second Quarter Earnings Release Date

Conference Call Information:

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

Second Quarter 2022 Earnings Release Date:

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

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

About Flushing Financial Corporation

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

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

“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: Statements in this Press Release relating to plans, strategies, economic performance and trends, projections of results of specific activities or investments and other statements that are not descriptions of historical facts may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking information is inherently subject to risks and uncertainties, and actual results could differ materially from those currently anticipated due to a number of factors, which include, but are not limited to, risk factors discussed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 and in other documents filed by the Company with the Securities and Exchange Commission from time to time. Forward-looking statements may be identified by terms such as “may”, “will”, “should”, “could”, “expects”, “plans”, “intends”, “anticipates”, “believes”, “estimates”, “predicts”, “forecasts”, “goals”, “potential” or “continue” or similar terms or the negative of these terms. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. The Company has no obligation to update these forward-looking statements.

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

#FF

- Statistical Tables Follow -

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

^{______________________
(1)} Ratios are presented on an annualized basis, where appropriate.
⁽²⁾ Yields are calculated on the tax equivalent basis using the statutory federal income tax rate of 21% for the periods presented.
⁽³⁾ Efficiency ratio, a non-GAAP measure, was calculated by dividing noninterest expense (excluding merger expense, OREO expense, prepayment penalty on borrowings, the net gain/loss from the sale of OREO and net amortization of purchase accounting adjustments) by the total of net interest income (excluding net gains and losses from fair value adjustments on qualifying hedges and net amortization of purchase accounting adjustments) and noninterest income (excluding life insurance proceeds, net gains and losses from the sale or disposition of securities, assets and fair value adjustments).
⁽⁴⁾ Calculated by dividing stockholders’ equity by shares outstanding.
⁽⁵⁾ Calculated by dividing tangible stockholders’ common equity, a non-GAAP measure, by shares outstanding. Tangible stockholders’ common equity is stockholders’ equity less intangible assets (goodwill, net of deferred taxes). See “Calculation of Tangible Stockholders’ Common Equity to Tangible Assets”.
⁽⁶⁾ See “Calculation of Tangible Stockholders’ Common Equity to Tangible Assets”.
⁽⁷⁾ Excludes performing nonaccrual TDR loans.

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

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Unaudited)
		March31,				December 31,				September 30,				June 30,				March31,
(Dollars in thousands)		2022				2021				2021				2021				2021
ASSETS
Cash and due from banks		$	186,407			$	81,723			$	178,598			$	145,971			$	174,420
Securities held-to-maturity:
Mortgage-backed securities			7,890				7,894				7,899				7,904				7,909
Other securities			66,327				49,974				49,989				49,986				49,912
Securities available for sale:
Mortgage-backed securities			553,828				572,184				584,145				596,661				518,781
Other securities			286,041				205,052				212,654				224,784				242,440
Loans			6,607,264				6,638,105				6,630,354				6,718,806				6,745,316
Allowance for credit losses			(37,433	)			(37,135	)			(36,363	)			(42,670	)			(45,099	)
Net loans			6,569,831				6,600,970				6,593,991				6,676,136				6,700,217
Interest and dividends receivable			37,308				38,698				40,912				43,803				44,941
Bank premises and equipment, net			22,752				23,338				24,018				26,438				27,498
Federal Home Loan Bank of New York stock			33,891				35,937				36,158				41,630				41,498
Bank owned life insurance			211,867				210,754				184,730				183,715				182,707
Goodwill			17,636				17,636				17,636				17,636				17,636
Core deposit intangibles			2,420				2,562				2,708				2,859				3,013
Right of use asset			48,475				50,200				50,155				51,972				53,802
Other assets			125,160				148,989				93,741				89,850				94,410
Total assets		$	8,169,833			$	8,045,911			$	8,077,334			$	8,159,345			$	8,159,184
LIABILITIES
Deposits		$	6,373,400			$	6,333,532			$	6,421,391			$	6,298,790			$	6,326,577
Mortgagors' escrow deposits			79,495				51,913				67,207				58,230				74,348
Borrowed funds			877,122				815,544				752,925				971,827				948,920
Operating lease liability			52,292				54,155				54,239				56,151				58,080
Other liabilities			111,711				111,139				113,476				119,180				112,058
Total liabilities			7,494,020				7,366,283				7,409,238				7,504,178				7,519,983
STOCKHOLDERS' EQUITY
Preferred stock (5,000,000 shares authorized; none issued)			—				—				—				—				—
Common stock ($0.01 par value; 100,000,000 shares authorized)			341				341				341				341				341
Additional paid-in capital			261,837				263,375				262,009				260,958				260,019
Treasury stock			(79,834	)			(75,293	)			(71,738	)			(65,335	)			(65,479	)
Retained earnings			508,973				497,889				486,418				467,620				455,023
Accumulated other comprehensive loss, net of taxes			(15,504	)			(6,684	)			(8,934	)			(8,417	)			(10,703	)
Total stockholders' equity			675,813				679,628				668,096				655,167				639,201
Total liabilities and stockholders' equity		$	8,169,833			$	8,045,911			$	8,077,334			$	8,159,345			$	8,159,184
(In thousands)
Issued shares			34,088				34,088				34,088				34,088				34,088
Outstanding shares			30,367				30,526				30,676				30,962				30,954
Treasury shares			3,721				3,561				3,412				3,126				3,133

  

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

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

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

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

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

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

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

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

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

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

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

Non-cash Fair Value Adjustments to GAAP Earnings

The variance in GAAP and core earnings is partly driven by the impact of non-cash net gains and losses from fair value adjustments. These fair value adjustments relate primarily to swaps designated to protect against rising rates and borrowing carried at fair value under the fair value option. As the swaps get closer to maturity, the volatility in fair value adjustments will dissipate. In a declining interest rate environment, the movement in the curve exaggerates our mark-to-market loss position. In a rising interest rate environment or a steepening of the yield curve, the loss position would experience an improvement.

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

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

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

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

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

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

^{______________________
(1)} Excludes purchase accounting average balances for all periods presented.

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

FAQ

What was the GAAP EPS for FFIC in Q1 2022?

The GAAP EPS for FFIC in Q1 2022 was $0.58.

How much did net interest income increase for FFIC in Q1 2022?

Net interest income increased by 4.2% YoY to $63.5 million in Q1 2022.

What is the loan closing increase for FFIC in Q1 2022 compared to last year?

Loan closings for FFIC increased by 65% YoY in Q1 2022.

How did average loans perform for FFIC in Q1 2022?

Average loans for FFIC decreased by 1.8% YoY in Q1 2022.

What percentage of earnings did FFIC return to shareholders in Q1 2022?

FFIC returned 84% of its earnings to shareholders in Q1 2022.