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

Rhea-AI Summary

Flushing Financial Corporation (FFIC) reported sequential GAAP and Core NIM expansion in 4Q23, with total average deposits increasing 3.1% YoY and 0.9% QoQ. The company's loan portfolio remains resilient, and credit quality continues to be a strength with less than one basis point of net charge-offs in 4Q23. However, nonperforming assets to total assets increased to 54 bps compared to 45 bps in 3Q23, and criticized and classified loans to loans was 1.11% in 4Q23, compared to 1.08% in 3Q23. The company reported fourth quarter and full year 2023 GAAP EPS of $0.27 and $0.96, respectively, with Core EPS for the fourth quarter and full year of 2023 totaling $0.25 and $0.83, respectively.

Positive

• Sequential GAAP and Core NIM expansion in 4Q23
• Total average deposits increased 3.1% YoY and 0.9% QoQ
• Loan portfolio remains resilient with strong credit quality
• Fourth quarter and full year 2023 GAAP EPS of $0.27 and $0.96, respectively
• Core EPS for the fourth quarter and full year of 2023 totaled $0.25 and $0.83, respectively

Negative

• Nonperforming assets to total assets increased to 54 bps compared to 45 bps in 3Q23
• Criticized and classified loans to loans was 1.11% in 4Q23, compared to 1.08% in 3Q23

Insights

Financial Analyst

The reported sequential expansion of GAAP and Core Net Interest Margin (NIM) for Flushing Financial in the fourth quarter of 2023 suggests a positive performance in managing interest income relative to interest expenses. A focus on NIM is crucial as it directly impacts a bank's profitability. The increase in average total and noninterest bearing deposits indicates a healthy liquidity position, which is essential for a bank's operations and can be seen as a positive sign by investors. However, the slight uptick in Nonperforming Assets (NPAs) could be a point of concern, potentially indicating a rise in default risks which may require close monitoring going forward.

From a stock market perspective, the share repurchase at a significant discount to tangible book value signals management's confidence in the intrinsic value of the company. This could be interpreted as a bullish sign by the market, potentially leading to positive sentiment among investors. The increase in average total deposits year-over-year (YoY) and quarter-over-quarter (QoQ) demonstrates growth in the customer base and deposit stability, which are key indicators of a bank's health and can influence investor confidence.

Credit Risk Analyst

The slight increase in NPAs and criticized and classified loans as a percentage of total loans suggests a marginal deterioration in credit quality, which could have implications for future earnings if the trend continues. The low net charge-offs in 4Q23 indicate that, despite the increase in NPAs, the bank is not experiencing significant losses from bad debts, which is a positive sign for credit risk management. The bank's allowance for credit losses (ACLs) as a percentage of nonperforming loans (NPLs) remains robust, which provides a buffer against potential future losses and is a critical metric for assessing the bank's preparedness for loan defaults.

It is important to note the bank's focus on maintaining strong debt service coverage ratios and low average loan-to-value ratios, which are indicative of conservative lending practices. These measures are designed to mitigate the risk of loan defaults and are particularly relevant in a challenging economic environment. The bank's exposure to Manhattan office buildings is minimal, which could be seen as a risk-averse strategy given the current uncertainties in commercial real estate markets.

Market Research Analyst

The reported results provide insights into the competitive landscape of regional banking and Flushing Financial's strategic positioning. The company's focus on increasing NIM and reducing volatility, maintaining credit discipline, preserving liquidity and capital and controlling expenses reflects a strategic approach to enhance shareholder value. These areas of focus are particularly relevant in a rising interest rate environment, where managing interest rate risk and credit quality becomes increasingly challenging.

Analysts may consider the bank's strategic initiatives in the context of broader industry trends, such as digital transformation and customer experience enhancement, which are reshaping the banking sector. The bank's ability to navigate these trends while maintaining strong financial performance could have implications for its competitive position and market share. The strategic focus on loan portfolio diversification and disciplined credit underwriting are key factors that can influence the bank's resilience against economic headwinds and its ability to capitalize on growth opportunities.

John R. Buran, President and CEO Commentary  

“Flushing Financial delivered sequential GAAP and Core NIM expansion in 4Q23 of 7 and 18 basis points, respectively, as our team continued to successfully execute against the previously announced action plan amid this challenging environment. Importantly, during the quarter, total average deposits increased 3.1% YoY and 0.9% QoQ, while average noninterest bearing deposits increased $21.6 million, or 2.5% QoQ. Our loan portfolio remains resilient through the credit cycle with 89% secured by real estate, strong debt service coverage ratios, low average loan to values, and controllable repricing risk. Credit quality continues to be a strength for the Company with less than one basis point of net charge-offs in 4Q23 although there was a slight uptick in NPAs. Given our progress to date, we are expanding our areas of focus to include: 1) increasing NIM and reducing volatility; 2) maintaining credit discipline; 3) preserving strong liquidity and capital; and 4) bending the expense curve. Continuing to advance these priorities will enable us to navigate the current environment while positioning the Company for long-term profitable growth.”

- John R. Buran, President and CEO

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

Strong Credit Quality; Stable Capital. Nonperforming assets to total assets increased to 54 bps compared to 45 bps in 3Q23, while criticized and classified loans to loans was 1.11% in 4Q23, compared to 1.08% in 3Q23. Net charge-offs were only $60 thousand in 4Q23. Capital continues to be sound with TCE/TA¹ of 7.64% at December 31, 2023, compared to 7.56% at September 30, 2023. The Company repurchased 38,815 shares at an average cost $15.08 (33% discount to tangible book value) during 4Q23.

Key Financial Metrics2

		4Q23				3Q23			2Q23			1Q23			4Q22				2023				2022
GAAP:
EPS		$	0.27			$	0.26		$	0.29		$	0.13		$	0.34			$	0.96			$	2.50
ROAA (%)			0.38				0.37			0.41			0.19			0.48				0.34				0.93
ROAE (%)			4.84				4.64			5.16			2.37			6.06				4.25				11.44
NIM FTE3(%)			2.29				2.22			2.18			2.27			2.70				2.24				3.11
Core:
EPS		$	0.25			$	0.25		$	0.26		$	0.06		$	0.57			$	0.83			$	2.49
ROAA (%)			0.35				0.36			0.37			0.09			0.82				0.29				0.92
ROAE (%)			4.51				4.49			4.70			1.11			10.29				3.69				11.42
Core NIM FTE (%)			2.31				2.13			2.17			2.25			2.63				2.21				3.07
Credit Quality:
NPAs/Loans & OREO (%)			0.67				0.56			0.58			0.61			0.77				0.67				0.77
ACLs/Loans (%)			0.58				0.57			0.57			0.56			0.58				0.58				0.58
ACLs/NPLs (%)			159.55				225.38			207.08			182.89			124.89				159.55				124.89
NCOs/Avg Loans (%)			-				-			0.09			0.54			0.05				0.16				0.02
Balance Sheet:
Avg Loans ($B)		$	6.9			$	6.8		$	6.8		$	6.9		$	6.9			$	6.8			$	6.7
Avg Dep ($B)		$	6.9			$	6.8		$	6.9		$	6.8		$	6.7			$	6.9			$	6.5
Book Value/Share		$	23.21			$	23.06		$	23.14		$	22.80		$	22.97			$	23.21			$	22.97
Tangible BV/Share		$	22.54			$	22.39		$	22.47		$	22.14		$	22.31			$	22.54			$	22.31
TCE/TA (%)			7.64				7.56			7.70			7.72			7.82				7.64				7.82

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

4Q23 Highlights
Net interest margin FTE decreased 41 bps YoY, but increased 7 bps QoQ to 2.29%; Core net interest margin FTE decreased 32 bps YoY but improved 18 bps QoQ to 2.31%; Both GAAP and Core NIM benefited from prepayment penalty income, net reversals and recovered interest from nonaccrual loans, and customer swap termination fees, which totaled $3.4 million or 17 bps in 4Q23 Average total deposits increased 3.1% YoY and 0.9% QoQ to $6.9 billion; Average noninterest bearing deposits increased $21.6 million QoQ, totaling 12.7% of average total deposits compared to 14.7% in 4Q22 and 12.5% in 3Q23. Average CDs were $2.3 billion, up 73.3% YoY and 2.2% QoQ Period end net loans decreased 0.4% YoY, but increased 0.1% QoQ; Loan closings were $244.3 million up 8.5% YoY and 1.2% QoQ; The yields on closings increased 159 bps YoY and 21 bps QoQ to 7.69%; Back-to-back swap loan originations were $121.6 million compared to $120.5 million in 3Q23 and generated $1.5 million and $1.6 million of noninterest income, respectively; Loan pipeline decreased 35.3% YoY and 55.1% QoQ to $163.1 million; Approximately 29% of the loan pipeline consists of back-to-back swap loans NPAs decreased to $46.2 million from $53.4 million a year ago but increased from $38.4 million in the prior quarter As separately disclosed, we have not recognized and have restated for employee retention credits formerly recognized during periods of 2023, and have fully reserved for approximately $7.0 million ($0.17/share, after tax) of refunds 4Q23 noninterest expense was impacted by increasing DDA balances and strong loan production Provision for credit losses was $1.0 million in 4Q23 compared to negligible amount in 4Q22 and $0.6 million in 3Q23; Net charge-offs (recoveries) were $60,000 in 4Q23 compared to $0.8 million in 4Q22 and $(42,000) in 3Q23 Tangible Common Equity to Tangible Assets increased to 7.64% at 4Q23 compared to 7.56% at 3Q23; Repurchased 38,815 shares at an average price of $15.08 or a 33% discount to December 31, 2023, tangible book value of $22.54
Areas of Focus
Increase NIM and Reduce Volatility	GAAP and Core NIM improved 7 bps and 18 bps QoQ, respectively, in 4Q23 NIM improved 5 bps QoQ to 2.14%, absent episodic items1 Largely achieved the goal of becoming interest rate neutral to a 100 bps change in rates Approximately 25% of the loan portfolio consists of floating rate loans (including interest rate hedges) Average noninterest bearing increased 2.5% QoQ and accounted for 12.7% of average total deposits
Maintain Credit Discipline	Approximately 89% of the loan portfolio is collateralized by real estate with an average loan to value of less than 36% Weighted average debt service coverage ratio is approximately 1.8x for multifamily and investor commercial real estate loans NPAs are a low 54 bps of assets and criticized and classified loans are 1.11% of loans Manhattan office buildings exposure is minimal at 0.6% of net loans
Preserve Strong Liquidity and Capital	Maintaining ample liquidity with $4.1 billion of undrawn lines and resources Uninsured and uncollateralized deposits were 17% of total deposits, while uninsured deposits were 30% of total deposits Total average deposits increased 3.1% YoY and 0.9% QoQ Checking account openings declined 6.6% YoY in 4Q23, but were up 5.7% in 2023 Tangible Common Equity to Tangible Assets improved to 7.64% QoQ Leverage ratio remains stable at 8.47%
Bend the Expense Curve	GAAP noninterest expense to average assets was 1.90% in 4Q23 compared to 1.58% in 4Q22 and 1.71% in 3Q23 4Q23 noninterest expense was impacted by increasing DDA balances and strong loan production 1Q24 seasonal expenses are expected to be less than half of the $4.1 million recorded in 1Q23

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

Income Statement Highlights

																				YoY				QoQ
($000s, except EPS)			4Q23				3Q23			2Q23			1Q23			4Q22				Change				Change
Net Interest Income			$	46,085			$	44,427		$	43,378		$	45,262		$	54,201			(15.0	)	%		3.7		%
Provision (Benefit) for Credit Losses				998				596			1,416			7,508			(12	)		(8,416.7	)			67.4
Noninterest Income (Loss)				7,402				3,309			5,020			6,857			(7,652	)		(196.7	)			123.7
Noninterest Expense				40,735				36,388			35,110			39,156			33,742			20.7				11.9
Income Before Income Taxes				11,754				10,752			11,872			5,455			12,819			(8.3	)			9.3
Provision for Income Taxes				3,655				2,917			3,186			1,411			2,570			42.2				25.3
Net Income			$	8,099			$	7,835		$	8,686		$	4,044		$	10,249			(21.0	)			3.4
Diluted EPS			$	0.27			$	0.26		$	0.29		$	0.13		$	0.34			(20.6	)			3.8
Avg. Diluted Shares (000s)				29,650				29,703			30,090			30,265			30,420			(2.5	)			(0.2	)
Core Net Income1			$	7,546			$	7,571		$	7,912		$	1,889		$	17,399			(56.6	)			(0.3	)
Core EPS1			$	0.25			$	0.25		$	0.26		$	0.06		$	0.57			(56.1	)			-

¹ See Reconciliation of GAAP Earnings and Core Earnings

Net interest income decreased YoY but increased QoQ.

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

The provision for credit losses increased YoY and QoQ.

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

Noninterest income (loss) increased YoY and QoQ.

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

Noninterest expense increased YoY and QoQ.

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

Provision for income taxes increased YoY and QoQ.

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

Balance Sheet, Credit Quality, and Capital Highlights

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

Average loans decreased YoY but increased QoQ.

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

Average total deposits increased YoY and QoQ.

• Average noninterest bearing deposits decreased 10.9% YoY, but increased 2.5% QoQ and comprised 12.7% of average total deposits in 4Q23 compared to 14.7% a year ago

• Average CDs totaled $2.3 billion, up 73.3% YoY and 2.2% QoQ; approximately $408.6 million of non-swapped CDs are due to mature at a rate of 3.20% in 1Q24

Credit Quality: Nonperforming loans declined YoY but increased QoQ.

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

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

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

Conference Call Information and First Quarter Earnings Release Date

Conference Call Information:

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

First Quarter 2024 Earnings Release Date:

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

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

About Flushing Financial Corporation

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

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

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

#FF                                                                                                        - Statistical Tables Follow -

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

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

 

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

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

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

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

________________________________

⁽¹⁾  Yields are calculated on the tax equivalent basis using the statutory federal income tax rate of 21% for the periods presented.

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
DEPOSIT and LOAN COMPOSITION
(Unaudited)
Deposit Composition
																	4Q23 vs.				4Q23 vs.
		December 31,			September 30,			June 30,			March 31,			December 31,			3Q23				4Q22
(Dollars in thousands)		2023			2023			2023			2023			2022			% Change				% Change
Noninterest bearing		$	847,416		$	874,420		$	827,820		$	872,254		$	921,238		(3.1	)	%		(8.0	)	%
Interest bearing:
Certificate of deposit accounts			2,311,290			2,321,369			2,232,696			1,880,260			1,526,338		(0.4	)			51.4
Savings accounts			108,605			112,730			118,886			128,245			143,641		(3.7	)			(24.4	)
Money market accounts			1,726,404			1,551,176			1,594,637			1,855,781			2,099,776		11.3				(17.8	)
NOW accounts			1,771,164			1,749,802			1,891,834			1,918,977			1,746,190		1.2				1.4
Total interest-bearing deposits			5,917,463			5,735,077			5,838,053			5,783,263			5,515,945		3.2				7.3
Total due to depositors			6,764,879			6,609,497			6,665,873			6,655,517			6,437,183		2.4				5.1
Mortgagors' escrow deposits			50,382			72,012			57,817			78,573			48,159		(30.0	)			4.6
Total deposits		$	6,815,261		$	6,681,509		$	6,723,690		$	6,734,090		$	6,485,342		2.0		%		5.1		%

Loan Composition

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

______________________________

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

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

Weighted Average Rate on Loan Closings

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

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

Nonperforming Assets

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

______________________________

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

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

Non-cash Fair Value Adjustments to GAAP Earnings

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

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

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

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

________________________________

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

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

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

________________________________

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

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

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

FAQ

What is the ticker symbol for Flushing Financial Corporation?

The ticker symbol for Flushing Financial Corporation is 'FFIC'.

What were the reported GAAP EPS for the fourth quarter and full year of 2023?

The reported GAAP EPS for the fourth quarter and full year of 2023 were $0.27 and $0.96, respectively.

What were the Core EPS for the fourth quarter and full year of 2023?

The Core EPS for the fourth quarter and full year of 2023 totaled $0.25 and $0.83, respectively.

How much did total average deposits increase in 4Q23?

Total average deposits increased 3.1% YoY and 0.9% QoQ in 4Q23.

What was the percentage change in nonperforming assets to total assets from 3Q23 to 4Q23?

Nonperforming assets to total assets increased to 54 bps compared to 45 bps in 3Q23.