Flushing Financial Corporation Reports 3Q21 GAAP EPS of $0.81 and Record Core EPS of $0.88

Rhea-AI Summary

Flushing Bank reported strong financial results for Q3 2021, with GAAP EPS reaching $0.81, a 62% increase YoY. Core EPS also rose 57.1% YoY to $0.88. The bank achieved a record net interest income of $63.4 million, up 27% YoY, alongside a net interest margin (NIM) of 3.34%. The loan pipeline increased by 35% YoY to a historic $530.7 million. Notably, the company's TCE ratio reached 8.04%, and share repurchase activities resumed with 285,643 shares repurchased at an average price of $22.42.

Positive

• GAAP EPS increased by 62% YoY to $0.81.
• Core EPS rose 57.1% YoY to $0.88.
• Record net interest income of $63.4 million, up 27% YoY.
• Loan pipeline hit $530.7 million, a 35% YoY increase.
• NIM expanded by 20 bps to 3.34%.
• TCE ratio improved to 8.04%.
• Share repurchases totaled 285,643 shares at $22.42 each.

Negative

• Non-performing assets rose 14.9% QoQ to $20.2 million.
• Loan closings decreased by 24.8% QoQ.

Record Net Interest Income, Loan Pipeline, and Core EPS

John R. Buran, President and CEO Commentary

UNIONDALE, N.Y., Oct. 26, 2021 (GLOBE NEWSWIRE) -- The Company reported third quarter 2021 GAAP EPS of $0.81, up 62.0% YoY, ROAA of 1.26% and ROAE of 15.42%. For the period, Core EPS of $0.88 increased 57.1% YoY with ROAA of 1.38% and ROAE of 16.88%. The strong results were from the successful implementation of our business strategy resulting in the sixth consecutive quarter of record net interest income, a record loan pipeline, and the second consecutive quarter of record core earnings.

“Loans, excluding SBA Payment Protection Program (“PPP”), were flat QoQ but increased 12% YoY. The Company’s loan pipeline increased 35% YoY and 23% QoQ to record levels as the metro New York City economy continues to normalize. Additionally, there have been eight announced or recently closed bank mergers in the Long Island market. The market has $328 billion of deposits and 18% or $60 billion involve a merger participant. As a leading community bank in this market, Flushing Bank is poised to benefit from merger disruption. The combination of an improving economy, broad based and record loan pipelines, and merger disruption should lead to positive loan growth into 2022.” - John R. Buran, President and CEO

Sixth Consecutive Quarter of Record Net Interest Income; Favorable Outlook. Net interest income of $63.4 million increased 27% YoY and 4% QoQ. NIM expanded 20 bps to 3.34% from 3.14% in 2Q21, while Core NIM increased by 13 bps to 3.27% during the same period. NIM expansion was the result of cost of funds declining 4 bps, while asset yields increased 15 bps, with 8 bps due to the change in hedge fair values, increased purchase accounting accretion, and net prepayment penalty income. The funding mix improved with core deposits totaling 84% of average deposits and average borrowings declined 37% YoY. Weighted average rate on loan closings (ex PPP) rose 13 bps QoQ and the steeper yield curve should have a positive impact on net interest income over time.

Capital Target Achieved; Share Repurchase Activity Resumes. Following the closing of the Empire acquisition approximately one year ago, the Company announced the goal of a TCE ratio of 8% or better by the end of 2021. This target was achieved during 3Q21 even as the Company repurchased 285,643 shares of common stock at an average price of $22.42 per share. Our capital priorities remain to 1) profitabily grow the balance sheet, 2) return dividends to shareholders, and 3) opportunistically repurchase shares.

Key Financial Metrics1
		3Q21					2Q21			1Q21			4Q20			3Q20
GAAP:
EPS		$	0.81				$	0.61		$	0.60		$	0.11		$	0.50
ROAA (%)			1.26					0.93			0.93			0.18			0.81
ROAE (%)			15.42					11.95			12.29			2.27			9.94
NIM FTE (%)			3.34					3.14			3.18			3.08			3.00
Core:
EPS		$	0.88				$	0.73		$	0.54		$	0.58		$	0.56
ROAA (%)			1.38					1.11			0.83			0.92			0.91
ROAE (%)			16.88					14.27			10.96			11.67			11.22
Core NIM FTE (%)			3.27					3.14			3.06			3.03			2.98
Efficiency Ratio (%)			52.3					53.4			58.6			57.6			55.4
Credit Quality:
NPAs/Loans&REO (%)			0.31					0.26			0.31			0.31			0.42
LLRs/Loans (%)			0.55					0.64			0.67			0.67			0.65
LLRs/NPLs (%)			179.86					242.55			212.87			214.27			154.66
NCOs/Avg Loans (%)			(0.04	)				0.05			0.17			0.04			0.06
Balance Sheet:
Avg Loans ($B)		$	6.6				$	6.7		$	6.7		$	6.4		$	5.9
Avg Dep ($B)		$	6.4				$	6.5		$	6.3		$	5.5		$	5.0
Book Value/Share		$	21.78				$	21.16		$	20.65		$	20.11		$	20.78
Tangible BV/Share		$	21.13				$	20.51		$	19.99		$	19.45		$	20.22
TCE/TA (%)			8.04					7.80			7.60			7.52			8.10

¹ 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.”

3Q21 Highlights

• Record net interest income up 3.8% QoQ and 26.9% YoY to $63.4 million, due to a decrease in funding costs and an increase in asset yields from an increase in hedge fair values, purchase accounting accretion, and net prepayment penalty income; core net interest income was up 1.5% QoQ and 24.9% YoY to $62.1 million
• Net interest margin FTE increased 20 bps QoQ and 34 bps YoY to 3.34%, and core net interest margin FTE was up 13 bps QoQ and 29 bps YoY to 3.27%; Core NIM expansion QoQ primarily was due to an improvement in funding costs and a change in balance sheet mix
• Period end loans, excluding PPP, were flat QoQ but increased 11.6% YoY; loan closings were $243.9 million in 3Q21, down 24.8% QoQ but up 56.8% YoY  
• Average deposits declined 1.6% QoQ, but increased 28.2% YoY to $6.4 billion, with core deposits 84% of total average deposits
• Loan pipeline increased 34.7% YoY to a record $530.7 million
• Benefit for credit losses was $6.9 million due to a better economic outlook, strong LTVs, and improving credit metrics; net recoveries were $0.6 million or 4 bps of average loans in 3Q21
• NPAs increased 14.9% QoQ to $20.2 million, but down 18.6% YoY; criticized and classified assets were down 0.4% QoQ to $68.9 million (representing 1.04% of loans)
• Tangible Common Equity to Tangible Assets improved to 8.04% from 7.80% in 2Q21
• Repurchased 285,643 shares at an average price of $22.42; dividends and share repurchases were 51.2% of net income in 3Q21

Income Statement Highlights
																						Y/Y			Q/Q
($000s, except EPS)			3Q21					2Q21				1Q21			4Q20				3Q20			Change			Change
Net Interest Income			$	63,364				$	61,039			$	60,892		$	55,732			$	49,924		26.9	%		3.8	%
(Benefit) Provision for Credit Losses				(6,927	)				(1,598	)			2,820			3,862				2,470		(380.4	)		333.5
Non-interest Income (Loss)				866					(3,210	)			6,311			(1,181	)			1,351		(35.9	)		(127.0	)
Non-interest Expense				36,345					34,011				38,159			46,811				29,985		21.2			6.9
Income Before Income Taxes				34,812					25,416				26,224			3,878				18,820		85.0			37.0
Provision for Income Taxes				9,399					6,158				7,185			417				4,489		109.4			52.6
Net Income			$	25,413				$	19,258			$	19,039		$	3,461			$	14,331		77.3			32.0
Diluted EPS			$	0.81				$	0.61			$	0.60		$	0.11			$	0.50		62.0			32.8
Avg. Diluted Shares (000s)				31,567					31,677				31,604			30,603				28,874		9.3			(0.3	)
Core Net Income1			$	27,829				$	22,994			$	16,973		$	17,784			$	16,168		72.1			21.0
Core EPS1			$	0.88				$	0.73			$	0.54		$	0.58			$	0.56		57.1			20.5

¹ See Reconciliation of GAAP Earnings and Core Earnings

Net interest income totaled $63.4 million in 3Q21 (an increase of 26.9% YoY and 3.8% QoQ), $61.0 million in 2Q21, $60.9 million in 1Q21, $55.7 million in 4Q20, and $49.9 million in 3Q20.

• Net interest margin, FTE (“NIM”) of 3.34%, increased 34 bps YoY and 20 bps QoQ; PPP loans caused a 2 bps positive impact on the NIM in 3Q21, neutral impact in 2Q21, and a drag of 4 bps in 1Q21, 3 bps in 4Q20, and 2 bps in 3Q20
• Prepayment penalty income from loans and securities, net reversals and recoveries of interest from non-accrual loans, net gains and losses from fair value adjustments on qualifying hedges, and purchase accounting accretion totaled $3.4 million or 19 bps to the NIM compared to $1.9 million (10 bps) in 2Q21, $3.3 million (17 bps) in 1Q21, $2.1 million (11 bps) in 4Q20, and $1.7 million (11 bps) in 3Q20, respectively
• Excluding the items in the previous bullet, net interest margin was 3.15% in 3Q21 compared to 3.04% in 2Q21, 3.01% in 1Q21, 2.97% in 4Q20, and 2.89% in 3Q20, or an increase of 26 bps YoY and 11 bps QoQ
• Net PPP loan fees were $1.3 million in 3Q21, $1.2 million in 2Q21, $0.5 million in 1Q21, $0.4 million in 4Q20, and $0.2 million in 3Q20

The Company recorded a benefit for credit losses of $6.9 million in 3Q21 compared to $1.6 million in 2Q21, and provisions for credit losses of $2.8 million in 1Q21, $3.9 million in 4Q20, and $2.5 million in 3Q20.

• 3Q21 benefit for credit losses ($0.16 per share, net of tax) was driven by the improving economic outlook supported by the low LTVs in the real estate portfolio and low inherent risk in the total portfolio
• Net charge-offs (recoveries) were $(0.6) million in 3Q21 ((4) bps of average loans), $0.9 million in 2Q21 (5 bps), $2.9 million in 1Q21 (17 bps), $0.6 million in 4Q20 (4 bps), and $0.8 million in 3Q20 (6 bps)

Non-interest income (loss) was $0.9 million in 3Q21, $(3.2) million in 2Q21, $6.3 million in 1Q21, $(1.2) million in 4Q20 and $1.4 million in in 3Q20.

• Non-interest income included net gains (losses) from fair value adjustments of $(2.3) million in 3Q21 $(0.05) per share, net of tax, $(6.5) million $(0.15) per share, net of tax in 2Q21, $1.0 million $0.02 per share, net of tax in 1Q21, $(4.1) million $(0.11) per share, net of tax in 4Q20, and $(2.2) million $(0.06) per share, net of tax in 3Q20
• Absent all above items and other immaterial adjustments, core non-interest income was $3.2 million in 3Q21, down 11.5% YoY, and 1.6% QoQ

Non-interest expense totaled $36.3 million in 3Q21 (an increase of 21.2% YoY and 6.9% QoQ), compared to $34.0 million in 2Q21, $38.2 million in 1Q21, $46.8 million in 4Q20, and $30.0 million in 3Q20.

• 3Q21 non-interest expense includes $2.1 million of pre-tax merger charges ($0.05 per share, net of tax)
• 2Q21 non-interest expense includes $0.5 million of pre-tax merger benefits primarily related to a refund received from a data processing vendor ($(0.01) per share, net of tax)
• 1Q21 non-interest expense includes $1.0 million of pre-tax merger charges ($0.02 per share, net of tax); 1Q21 includes $3.3 million of seasonal compensation expense
• 4Q20 non-interest expense includes $5.3 million pre-tax merger charges ($0.14 per share, net of tax) and $7.8 million pre-tax debt prepayment penalties ($0.20 per share, net of tax)
• 3Q20 non-interest expense includes merger charges of $0.4 million ($0.01 per share, net of tax)
• Excluding the above items and other immaterial adjustments, core operating expenses were $34.1 million in 3Q21, up 15.4% YoY, but down 0.7% QoQ
• The efficiency ratio was 52.3% in 3Q21, 53.4% in 2Q21, 58.6% in 1Q21, 57.6% in 4Q20, and 55.4% in 3Q20
  

The provision for income taxes was $9.4 million in 3Q21, compared to $6.2 million in 2Q21, $7.2 million in 1Q21, $0.4 million in 4Q20, and $4.5 million in 3Q20.

• The effective tax rate was 27.0% in 3Q21, 24.2% in 2Q21, 27.4% in 1Q21, 10.8% in 4Q20, and 23.9% in 3Q20
• 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
																		Y/Y			Q/Q
($000s, except per share data)		3Q21				2Q21			1Q21			4Q20			3Q20			Change			Change
Average Loans And Deposits
Loans		$	6,633			$	6,687		$	6,700		$	6,376		$	5,904		12.3	%		(0.8	)%
Deposits			6,408				6,511			6,285			5,515			4,999		28.2			(1.6	)
Credit Quality
Nonperforming Loans		$	20,217			$	17,592		$	21,186		$	21,073		$	24,792		(18.5	)%		14.9	%
Nonperforming Assets			20,217				17,592			21,221			21,108			24,827		(18.6	)		14.9
Criticized and Classified Assets			68,913				69,161			63,130			71,691			42,181		63.4			(0.4	)
Allowance for Credit Losses/Loans (%)			0.55				0.64			0.67			0.67			0.65		(10	)bps		(9	)bps
Capital
Book Value/Share		$	21.78			$	21.16		$	20.65		$	20.11		$	20.78		4.8	%		2.9	%
Tangible Book Value/Share			21.13				20.51			19.99			19.45			20.22		4.5			3.0
Tang. Common Equity/Tang. Assets (%)			8.04				7.80			7.60			7.52			8.10		(6	)bps		24	bps
Leverage Ratio (%)			8.83				8.50			8.44			8.38			9.03		(20	)		33

Average loans were $6.6 billion, an increase of 12.4% YoY, but a decline of 0.8% QoQ.

• Total loan closings were $243.9 million in 3Q21, $324.4 million in 2Q21, $322.9 million in 1Q21, $316.0 million in 4Q20, and $155.6 million in 3Q20
• The loan pipeline increased to a record $530.7 million at September 30, 2021, up 34.7% YoY and 22.7% QoQ
• PPP loans were $130.8 million at 3Q21, $197.3 million at 2Q21, $251.0 million at 1Q21, $151.9 million at 4Q20, and $111.6 million at 3Q20; forgiven PPP loans were $66.5 million in 3Q21, $69.2 million in 2Q21 and $24.1 million in 1Q21; unamortized net PPP fees were $3.2 million at September 30, 2021
• Period end loans, excluding PPP loans, totaled $6.5 billion, up 11.6% YoY and flat QoQ

Average Deposits totaled $6.4 billion, increasing 28.2% YoY, but down 1.6% QoQ.

• Average core deposits (non-CD deposits) increased to 83.8% of total average deposits (including escrow deposits) in 3Q21, compared to 77.9% a year ago
• Average non-interest bearing deposits increased 58.3% YoY and 1.1% QoQ and comprised 14.6% of total average deposits (including escrow deposits) in 3Q21 compared to 11.8% a year ago

Credit Quality; Non-performing loans totaled $20.2 million in 3Q21, $17.6 million in 2Q21, $21.2 million in 1Q21, $21.1 million in 4Q20 and $24.8 million in 3Q20.

• Non-performing assets totaled $20.2 million, down 18.6% YoY, but up 14.9% QoQ
• Criticized and classified assets totaled $68.9 million in 3Q21 (104 bps of loans), $69.2 million at 2Q21 (103 bps), $63.1 million at 1Q21 (94 bps), $71.7 million at 4Q20 (107 bps), and $42.2 million at 3Q20 (71 bps)
• Loans classified as troubled debt restructured (TDR) totaled $13.1 million compared to $15.5 million in 2Q21 and $5.1 million a year ago
• Active COVID-19 forbearances totaled 38 loans with a principal balance of $162.0 million at September 30, 2021, with $121.8 million making interest payments and only $40.2 million (0.6% of loans) with full payment deferrals; over 57% of the forbearances are scheduled to exit forbearance by year end 2021
• Over 87% of gross loans are collateralized by real estate and these loans have an average loan-to-value ratio of <38% as of September 30, 2021
• Allowance for credit losses were 0.55% of loans at 3Q21 compared to 0.64% at 2Q21 and 0.65% a year ago
• Allowance for credit losses were 179.9% of nonperforming loans at 3Q21 compared to 154.7% a year ago
  

Capital; Book value per common share increased to $21.78 at 3Q21 compared to $21.16 at 2Q21, $20.65 at 1Q21, $20.11 at 4Q20, and $20.78 at 3Q20; tangible book value per common share, a non-GAAP measure, was $21.13 at 3Q21, $20.51 at 2Q21, $19.99 at 1Q21, $19.45 in 4Q20, and $20.22 in 3Q20.

• The Company paid a dividend of $0.21 per share in 3Q21
• 285,643 shares were repurchased at an average price of $22.42 in 3Q21
• As of the end of 3Q21, 999,163 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 8.04% at 3Q21 compared to 8.10% a year ago
• The Company and the Bank remain well capitalized under all applicable regulatory requirements
• The leverage ratio was 8.83% in 3Q21 versus 9.03% in 3Q20

Conference Call Information And Fourth Quarter Earnings Release Date

Conference Call Information:

• John R. Buran, President and Chief Executive Officer, and Susan K. Cullen, Senior Executive Vice President and Chief Financial Officer, will host a conference call on Wednesday, October 27, 2021, at 9:30 AM (ET) to discuss the Company’s third quarter 2021 results and strategy.
• Dial-in for Live Call: 1-877-509-5836; Canada 855-669-9657
• Webcast: https://services.choruscall.com/links/ffic211027.html
• Dial-in for Replay: 1-877-344-7529; Canada 855-669-9658
• Replay Access Code: 10151674
• The conference call will be simultaneously webcast and archived through October 27, 2022

Fourth Quarter 2021 Earnings Release Date:

The Company plans to release Fourth Quarter 2021 and full year 2021 financial results after the market close on January 27, 2022; followed by a conference call at 9:30 AM (ET) on January 28, 2022.

A detailed announcement will be issued prior to the fourth 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®, a New York State-chartered commercial bank insured by the Federal Deposit Insurance Corporation. The Bank serves consumers, businesses, professionals, corporate clients, and public entities by offering a full complement of deposit, loan, equipment finance, and cash management services through its banking offices located in Queens, Brooklyn, Manhattan, and on Long Island. As a leader in real estate lending, the Bank’s experienced lending team creates mortgage solutions for real estate owners and property managers both within and outside the New York City metropolitan area. Flushing Bank is an Equal Housing Lender. The Bank also operates an online banking division consisting of iGObanking.com®, which offers competitively priced deposit products to consumers nationwide, and BankPurely®, an eco-friendly, healthier lifestyle community brand.

Additional information on Flushing Bank and Flushing Financial Corporation may be obtained by visiting the Company’s website at http://www.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, 2020 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

Tag: FF

- Statistical Tables Follow -

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
FINANCIAL HIGHLIGHTS
(Unaudited)

		At or for the three months ended																					At or for the nine months ended
		September 30,				June 30,				March 31,				December 31,				September 30,					September 30,			September 30,
(Dollars in thousands, except per share data)		2021				2021				2021				2020				2020					2021			2020
Performance Ratios (1)
Return on average assets			1.26	%			0.93	%			0.93	%			0.18	%			0.81	%				1.04	%		0.58	%
Return on average equity			15.42				11.95				12.29				2.27				9.94					13.24			7.30
Yield on average interest-earning assets (2)			3.84				3.69				3.77				3.82				3.84					3.77			3.88
Cost of average interest-bearing liabilities			0.61				0.66				0.69				0.86				0.98					0.65			1.27
Cost of funds			0.53				0.57				0.61				0.77				0.89					0.57			1.16
Net interest rate spread during period (2)			3.23				3.03				3.08				2.96				2.86					3.12			2.61
Net interest margin (2)			3.34				3.14				3.18				3.08				3.00					3.22			2.77
Non-interest expense to average assets			1.80				1.65				1.87				2.43				1.69					1.77			1.70
Efficiency ratio (3)			52.28				53.38				58.58				57.56				55.37					54.72			59.12
Average interest-earning assets to average interest-bearing liabilities			1.21	X			1.19	X			1.18	X			1.17	X			1.16	X				1.19	X		1.15	X
Average Balances
Total loans, net		$	6,633,301			$	6,686,888			$	6,700,476			$	6,375,516			$	5,904,051				$	6,673,309		$	5,881,858
Total interest-earning assets			7,608,317				7,790,174				7,667,217				7,243,472				6,675,896					7,688,354			6,734,979
Total assets			8,072,918				8,263,553				8,147,714				7,705,407				7,083,028					8,161,121			7,131,850
Total due to depositors			5,406,423				5,495,936				5,363,647				4,708,760				4,353,560					5,422,158			4,442,202
Total interest-bearing liabilities			6,310,859				6,532,891				6,477,871				6,169,574				5,731,899					6,439,928			5,865,045
Stockholders' equity			659,288				644,690				619,647				609,463				576,512					641,354			570,198
Per Share Data
Book value per common share (4)		$	21.78			$	21.16			$	20.65			$	20.11			$	20.78				$	21.78		$	20.78
Tangible book value per common share (5)		$	21.13			$	20.51			$	19.99			$	19.45			$	20.22				$	21.13		$	20.22
Stockholders' Equity
Stockholders' equity		$	668,096			$	655,167			$	639,201			$	618,997			$	586,406				$	668,096		$	586,406
Tangible stockholders' equity			648,039				634,959				618,839				598,476				570,571					648,039			570,571
Consolidated Regulatory Capital Ratios
Tier 1 capital		$	711,276			$	697,591			$	679,343			$	662,987			$	630,380				$	711,276		$	630,380
Common equity Tier 1 capital			661,340				649,367				636,071				621,247				593,344					661,340			593,344
Total risk-based capital			832,255				823,494				806,922				794,034				740,499					832,255			740,499
Risk Weighted Assets			6,194,207				6,344,076				6,281,136				6,287,598				5,381,938					6,194,207			5,381,938
Tier 1 leverage capital (well capitalized = 5%)			8.83	%			8.50	%			8.44	%			8.38	%			9.03	%				8.83	%		9.03	%
Common equity Tier 1 risk-based capital (well capitalized = 6.5%)			10.68				10.24				10.13				9.88				11.02					10.68			11.02
Tier 1 risk-based capital (well capitalized = 8.0%)			11.48				11.00				10.82				10.54				11.71					11.48			11.71
Total risk-based capital (well capitalized = 10.0%)			13.44				12.98				12.85				12.63				13.76					13.44			13.76
Capital Ratios
Average equity to average assets			8.17	%			7.80	%			7.61	%			7.91	%			8.14	%				7.86	%		8.00	%
Equity to total assets			8.27				8.03				7.83				7.76				8.30					8.27			8.30
Tangible common equity to tangible assets (6)			8.04				7.80				7.60				7.52				8.10					8.04			8.10
Asset Quality
Non-accrual loans (7)		$	18,292			$	17,391			$	18,604			$	18,325			$	24,792				$	18,292		$	24,792
Non-performing loans			20,217				17,592				21,186				21,073				24,792					20,217			24,792
Non-performing assets			20,217				17,592				21,221				21,108				24,827					20,217			24,827
Net charge-offs (recoveries)			(619	)			902				2,865				646				837					3,148			2,993
Asset Quality Ratios
Non-performing loans to gross loans			0.31	%			0.26	%			0.31	%			0.31	%			0.42	%				0.31	%		0.42	%
Non-performing assets to total assets			0.25				0.22				0.26				0.26				0.35					0.25			0.35
Allowance for loan losses to gross loans			0.55				0.64				0.67				0.67				0.65					0.55			0.65
Allowance for loan losses to non-performing assets			179.86				242.55				212.52				213.91				154.44					179.86			154.44
Allowance for loan losses to non-performing loans			179.86				242.55				212.87				214.27				154.66					179.86			154.66
Net charge-offs (recoveries) to average loans			(0.04	)			0.05				0.17				0.04				0.06					0.06			0.07
Full-service customer facilities			24				25				25				25				20					24			20

(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 non-interest 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 non-interest 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 non-accrual TDR loans.

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

	For the three months ended																					For the nine months ended
	September 30,				June 30,				March 31,				December 31,				September 30,					September 30,				September 30,
(In thousands, except per share data)	2021				2021				2021				2020				2020					2021				2020
Interest and Dividend Income
Interest and fees on loans	$	69,198			$	67,999			$	69,021			$	66,120			$	60,367				$	206,218			$	182,033
Interest and dividends on securities:
Interest		3,706				3,685				3,072				2,813				3,525					10,463				12,963
Dividends		7				7				8				8				9					22				35
Other interest income		42				51				36				30				13					129				325
Total interest and dividend income		72,953				71,742				72,137				68,971				63,914					216,832				195,356
Interest Expense
Deposits		4,705				5,539				6,105				6,470				7,093					16,349				35,842
Other interest expense		4,884				5,164				5,140				6,769				6,897					15,188				20,047
Total interest expense		9,589				10,703				11,245				13,239				13,990					31,537				55,889
Net Interest Income		63,364				61,039				60,892				55,732				49,924					185,295				139,467
(Benefit) provision for credit losses		(6,927	)			(1,598	)			2,820				3,862				2,470					(5,705	)			19,267
Net Interest Income After (Benefit) Provision for Credit Losses		70,291				62,637				58,072				51,870				47,454					191,000				120,200
Non-interest Income (Loss)
Banking services fee income		865				1,233				2,725				1,442				1,316					4,823				3,058
Net gain (loss) on sale of securities		(10	)			123				—				(610	)			—					113				(91	)
Net gain on sale of loans		131				127				31				6				—					289				42
Net gain on disposition of assets		—				—				621				—				—					621				—
Net gain (loss) from fair value adjustments		(2,289	)			(6,548	)			982				(4,129	)			(2,225	)				(7,855	)			1,987
Federal Home Loan Bank of New York stock dividends		491				500				689				734				874					1,680				2,719
Life insurance proceeds		—				—				—				—				—					—				659
Bank owned life insurance		1,015				1,009				997				1,016				923					3,021				2,798
Other income		663				346				266				360				463					1,275				1,052
Total non-interest income (loss)		866				(3,210	)			6,311				(1,181	)			1,351					3,967				12,224
Non-interest Expense
Salaries and employee benefits		20,544				19,879				22,664				22,089				17,335					63,087				52,139
Occupancy and equipment		3,534				3,522				3,367				3,446				3,021					10,423				8,688
Professional services		1,899				1,988				2,400				2,463				2,064					6,287				6,911
FDIC deposit insurance		618				729				1,213				562				727					2,560				2,114
Data processing		1,759				1,419				2,109				3,411				1,668					5,287				5,175
Depreciation and amortization		1,627				1,638				1,639				1,579				1,542					4,904				4,633
Other real estate owned/foreclosure (recoveries) expense		182				22				(10	)			95				240					194				121
Prepayment penalty on borrowings		—				—				—				7,834				—					—				—
Other operating expenses		6,182				4,814				4,777				5,332				3,388					15,773				11,339
Total non-interest expense		36,345				34,011				38,159				46,811				29,985					108,515				91,120
Income Before Income Taxes		34,812				25,416				26,224				3,878				18,820					86,452				41,304
Provision (benefit) for Income Taxes
Federal		6,410				4,857				5,071				533				3,359					16,338				8,655
State and local		2,989				1,301				2,114				(116	)			1,130					6,404				1,436
Total taxes		9,399				6,158				7,185				417				4,489					22,742				10,091
Net Income	$	25,413			$	19,258			$	19,039			$	3,461			$	14,331				$	63,710			$	31,213
Basic earnings per common share	$	0.81			$	0.61			$	0.60			$	0.11			$	0.50				$	2.02			$	1.08
Diluted earnings per common share	$	0.81			$	0.61			$	0.60			$	0.11			$	0.50				$	2.02			$	1.08
Dividends per common share	$	0.21			$	0.21			$	0.21			$	0.21			$	0.21				$	0.63			$	0.63
Basic average shares		31,567				31,677				31,604				30,603				28,874					31,616				28,865
Diluted average shares		31,567				31,677				31,604				30,603				28,874					31,616				28,865

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

		September 30,				June 30,				March 31,				December 31,				September 30,
(Dollars in thousands)		2021				2021				2021				2020				2020
ASSETS
Cash and due from banks		$	178,598			$	145,971			$	174,420			$	157,388			$	75,560
Securities held-to-maturity:
Mortgage-backed securities			7,899				7,904				7,909				7,914				7,919
Other securities			49,989				49,986				49,912				49,918				50,252
Securities available for sale:
Mortgage-backed securities			584,145				596,661				518,781				404,460				386,235
Other securities			212,654				224,784				242,440				243,514				234,721
Loans			6,630,354				6,718,806				6,745,316				6,704,674				5,941,398
Allowance for loan losses			(36,363	)			(42,670	)			(45,099	)			(45,153	)			(38,343	)
Net loans			6,593,991				6,676,136				6,700,217				6,659,521				5,903,055
Interest and dividends receivable			40,912				43,803				44,941				44,041				36,068
Bank premises and equipment, net			24,018				26,438				27,498				28,179				25,766
Federal Home Loan Bank of New York stock			36,158				41,630				41,498				43,439				57,119
Bank owned life insurance			184,730				183,715				182,707				181,710				158,701
Goodwill			17,636				17,636				17,636				17,636				16,127
Core deposit intangibles			2,708				2,859				3,013				3,172				—
Right of use asset			50,155				51,972				53,802				50,743				42,326
Other assets			93,741				89,850				94,410				84,759				69,207
Total assets		$	8,077,334			$	8,159,345			$	8,159,184			$	7,976,394			$	7,063,056
LIABILITIES
Deposits		$	6,421,391			$	6,298,790			$	6,326,577			$	6,090,733			$	4,906,359
Mortgagors' escrow deposits			67,207				58,230				74,348				45,622				57,136
Borrowed funds			752,925				971,827				948,920				1,020,895				1,323,975
Operating lease liability			54,239				56,151				58,080				59,100				49,737
Other liabilities			113,476				119,180				112,058				141,047				139,443
Total liabilities			7,409,238				7,504,178				7,519,983				7,357,397				6,476,650
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				315
Additional paid-in capital			262,009				260,958				260,019				261,533				227,877
Treasury stock			(71,738	)			(65,335	)			(65,479	)			(69,400	)			(69,409	)
Retained earnings			486,418				467,620				455,023				442,789				445,931
Accumulated other comprehensive loss, net of taxes			(8,934	)			(8,417	)			(10,703	)			(16,266	)			(18,308	)
Total stockholders' equity			668,096				655,167				639,201				618,997				586,406
Total liabilities and stockholders' equity		$	8,077,334			$	8,159,345			$	8,159,184			$	7,976,394			$	7,063,056
(In thousands)
Issued shares			34,088				34,088				34,088				34,088				31,531
Outstanding shares			30,676				30,962				30,954				30,776				28,218
Treasury shares			3,412				3,126				3,133				3,312				3,312

  

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
AVERAGE BALANCE SHEETS
(Unaudited)

		For the three months ended																For the nine months ended
		September 30,			June 30,			March 31,			December 31,			September 30,				September 30,			September 30,
(In thousands)		2021			2021			2021			2020			2020				2021			2020
Interest-earning Assets:
Mortgage loans, net		$	5,158,213		$	5,130,400		$	5,155,975		$	5,010,097		$	4,721,742			$	5,148,204		$	4,727,094
Other loans, net			1,475,088			1,556,488			1,544,501			1,365,419			1,182,309				1,525,105			1,154,764
Total loans, net			6,633,301			6,686,888			6,700,476			6,375,516			5,904,051				6,673,309			5,881,858
Taxable securities:
Mortgage-backed securities			590,732			578,134			433,917			413,875			413,902				534,836			462,216
Other securities			217,763			232,020			300,828			266,663			243,754				249,899			243,782
Total taxable securities			808,495			810,154			734,745			680,538			657,656				784,735			705,998
Tax-exempt securities:
Other securities			50,832			50,830			50,828			50,768			51,652				50,830			58,464
Total tax-exempt securities			50,832			50,830			50,828			50,768			51,652				50,830			58,464
Interest-earning deposits and federal funds sold			115,689			242,302			181,168			136,650			62,537				179,480			88,659
Total interest-earning assets			7,608,317			7,790,174			7,667,217			7,243,472			6,675,896				7,688,354			6,734,979
Other assets			464,601			473,379			480,497			461,935			407,132				472,767			396,871
Total assets		$	8,072,918		$	8,263,553		$	8,147,714		$	7,705,407		$	7,083,028			$	8,161,121		$	7,131,850
Interest-bearing Liabilities:
Deposits:
Savings accounts		$	153,120		$	153,113		$	170,079		$	163,382		$	160,100			$	158,708		$	180,829
NOW accounts			2,107,866			2,255,581			2,185,384			1,924,840			1,625,109				2,182,660			1,495,473
Money market accounts			2,107,473			2,043,257			1,905,543			1,507,245			1,461,996				2,019,497			1,579,712
Certificate of deposit accounts			1,037,964			1,043,985			1,102,641			1,113,293			1,106,355				1,061,293			1,186,188
Total due to depositors			5,406,423			5,495,936			5,363,647			4,708,760			4,353,560				5,422,158			4,442,202
Mortgagors' escrow accounts			68,562			91,545			65,372			75,005			55,868				75,171			69,427
Total interest-bearing deposits			5,474,985			5,587,481			5,429,019			4,783,765			4,409,428				5,497,329			4,511,629
Borrowings			835,874			945,410			1,048,852			1,385,809			1,322,471				942,599			1,353,416
Total interest-bearing liabilities			6,310,859			6,532,891			6,477,871			6,169,574			5,731,899				6,439,928			5,865,045
Non interest-bearing demand deposits			933,443			923,220			856,052			731,170			589,674				904,522			533,563
Other liabilities			169,328			162,752			194,144			195,200			184,943				175,317			163,044
Total liabilities			7,413,630			7,618,863			7,528,067			7,095,944			6,506,516				7,519,767			6,561,652
Equity			659,288			644,690			619,647			609,463			576,512				641,354			570,198
Total liabilities and equity		$	8,072,918		$	8,263,553		$	8,147,714		$	7,705,407		$	7,083,028			$	8,161,121		$	7,131,850
Net interest-earning assets		$	1,297,458		$	1,257,283		$	1,189,346		$	1,073,898		$	943,997			$	1,248,426		$	869,934

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

		For the three months ended																					For the nine months ended
		September 30,				June 30,				March 31,				December 31,				September 30,					September 30,				September 30,
(Dollars in thousands)		2021				2021				2021				2020				2020					2021				2020
Interest Income:
Mortgage loans, net		$	55,114			$	52,987			$	55,219			$	53,777			$	49,814				$	163,320			$	148,945
Other loans, net			14,084				15,012				13,802				12,343				10,553					42,898				33,088
Total loans, net			69,198				67,999				69,021				66,120				60,367					206,218				182,033
Taxable securities:
Mortgage-backed securities			2,279				2,233				1,698				1,435				1,928					6,210				7,295
Other securities			1,008				1,037				963				957				1,166					3,008				4,221
Total taxable securities			3,287				3,270				2,661				2,392				3,094					9,218				11,516
Tax-exempt securities:
Other securities			539				535				530				543				557					1,604				1,876
Total tax-exempt securities			539				535				530				543				557					1,604				1,876
Interest-earning deposits and federal funds sold			42				51				36				30				13					129				325
Total interest-earning assets			73,066				71,855				72,248				69,085				64,031					217,169				195,750
Interest Expense:
Deposits:
Savings accounts		$	61			$	66			$	75			$	75			$	65				$	202			$	420
NOW accounts			1,227				1,499				1,706				1,320				1,242					4,432				7,989
Money market accounts			1,683				2,060				2,100				2,010				2,108					5,843				12,358
Certificate of deposit accounts			1,734				1,913				2,222				3,065				3,700					5,869				15,031
Total due to depositors			4,705				5,538				6,103				6,470				7,115					16,346				35,798
Mortgagors' escrow accounts			—				1				2				—				(22	)				3				44
Total interest-bearing deposits			4,705				5,539				6,105				6,470				7,093					16,349				35,842
Borrowings			4,884				5,164				5,140				6,769				6,897					15,188				20,047
Total interest-bearing liabilities			9,589				10,703				11,245				13,239				13,990					31,537				55,889
Net interest income- tax equivalent		$	63,477			$	61,152			$	61,003			$	55,846			$	50,041				$	185,632			$	139,861
Included in net interest income above:
Prepayment penalties received on loans and securities and net of reversals and recovered interest from non-accrual loans		$	2,136			$	2,046			$	948			$	1,093			$	1,518				$	5,130			$	3,483
Net gains/(losses) from fair value adjustments on qualifying hedges included in loan interest income			194				(664	)			1,427				1,023				230					957				(2,208	)
Purchase accounting adjustments			1,100				565				922				11				—					2,587				—
Interest-earning Assets Yields:
Mortgage loans, net			4.27	%			4.13	%			4.28	%			4.29	%			4.22	%				4.23	%			4.20	%
Other loans, net			3.82				3.86				3.57				3.62				3.57					3.75				3.82
Total loans, net			4.17				4.07				4.12				4.15				4.09					4.12				4.13
Taxable securities:
Mortgage-backed securities			1.54				1.54				1.57				1.39				1.86					1.55				2.10
Other securities			1.85				1.79				1.28				1.44				1.91					1.60				2.31
Total taxable securities			1.63				1.61				1.45				1.41				1.88					1.57				2.17
Tax-exempt securities: (1)
Other securities			4.24				4.21				4.17				4.28				4.31					4.21				4.28
Total tax-exempt securities			4.24				4.21				4.17				4.28				4.31					4.21				4.28
Interest-earning deposits and federal funds sold			0.15				0.08				0.08				0.09				0.08					0.10				0.49
Total interest-earning assets			3.84	%			3.69	%			3.77	%			3.82	%			3.84	%				3.77	%			3.88	%
Interest-bearing Liabilities Yields:
Deposits:
Savings accounts			0.16	%			0.17	%			0.18	%			0.18	%			0.16	%				0.17	%			0.31	%
NOW accounts			0.23				0.27				0.31				0.27				0.31					0.27				0.71
Money market accounts			0.32				0.40				0.44				0.53				0.58					0.39				1.04
Certificate of deposit accounts			0.67				0.73				0.81				1.10				1.34					0.74				1.69
Total due to depositors			0.35				0.40				0.46				0.55				0.65					0.40				1.07
Mortgagors' escrow accounts			—				—				0.01				—				(0.16	)				0.01				0.08
Total interest-bearing deposits			0.34				0.40				0.45				0.54				0.64					0.40				1.06
Borrowings			2.34				2.18				1.96				1.95				2.09					2.15				1.97
Total interest-bearing liabilities			0.61	%			0.66	%			0.69	%			0.86	%			0.98	%				0.65	%			1.27	%
Net interest rate spread (tax equivalent)			3.23	%			3.03	%			3.08	%			2.96	%			2.86	%				3.12	%			2.61	%
Net interest margin (tax equivalent)			3.34	%			3.14	%			3.18	%			3.08	%			3.00	%				3.22	%			2.77	%
Ratio of interest-earning assets to interest-bearing liabilities			1.21	X			1.19	X			1.18	X			1.17	X			1.16	X				1.19	X			1.15	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

																	September 2021 vs.			September 2021 vs.
		September 30,			June 30,			March 31,			December 31,			September 30,			June 2021			September 2020
(Dollars in thousands)		2021			2021			2021			2020			2020			% Change			% Change
Non-interest bearing		$	941,259		$	945,491		$	917,189		$	778,672		$	607,954		(0.4	)%		54.8	%
Interest bearing:
Certificate of deposit accounts			1,040,098			1,020,615			1,070,595			1,138,361			1,051,644		1.9			(1.1	)
Savings accounts			152,306			152,931			170,272			168,183			160,294		(0.4	)		(5.0	)
Money market accounts			2,152,085			2,057,188			1,990,656			1,682,345			1,381,552		4.6			55.8
NOW accounts			2,135,643			2,122,565			2,177,865			2,323,172			1,704,915		0.6			25.3
Total interest-bearing deposits			5,480,132			5,353,299			5,409,388			5,312,061			4,298,405		2.4			27.5
Total deposits		$	6,421,391		$	6,298,790		$	6,326,577		$	6,090,733		$	4,906,359		1.9	%		30.9	%

Loan Composition

																						September 2021 vs.			September 2021 vs.
		September 30,				June 30,				March 31,				December 31,				September 30,				June 2021			September 2020
(Dollars in thousands)		2021				2021				2021				2020				2020				% Change			% Change
Multifamily residential		$	2,498,980			$	2,542,010			$	2,525,967			$	2,533,952			$	2,252,757			(1.7	)%		10.9	%
Commercial real estate			1,745,855				1,726,895				1,721,702				1,754,754				1,636,659			1.1			6.7
One-to-four family ― mixed-use property			579,100				582,211				595,431				602,981				585,159			(0.5	)		(1.0	)
One-to-four family ― residential			280,343				288,652				239,391				245,211				191,011			(2.9	)		46.8
Co-operative apartments			7,804				7,883				7,965				8,051				8,132			(1.0	)		(4.0	)
Construction			71,464				62,802				61,528				83,322				63,567			13.8			12.4
Mortgage Loans			5,183,546				5,210,453				5,151,984				5,228,271				4,737,285			(0.5	)		9.4
Small Business Administration (1)			148,855				215,158				267,120				167,376				124,649			(30.8	)		19.4
Taxi medallion			—				—				—				2,757				2,317			—			(100.0	)
Commercial business and other			1,294,688				1,291,526				1,326,657				1,303,225				1,063,429			0.2			21.7
Non-mortgage loans			1,443,543				1,506,684				1,593,777				1,473,358				1,190,395			(4.2	)		21.3
Net unamortized premiums and unearned loan fees (2)			3,265				1,669				(445	)			3,045				13,718			95.6			(76.2	)
Allowance for loan losses			(36,363	)			(42,670	)			(45,099	)			(45,153	)			(38,343	)		(14.8	)		(5.2	)
Net loans		$	6,593,991			$	6,676,136			$	6,700,217			$	6,659,521			$	5,903,055			(1.2	)%		11.7	%

---

⁽¹⁾ Includes $130.8 million, $197.3 million, $251.0 million, $151.9 million and $111.6 million of PPP loans at September 30, 2021, June 30, 2021, March 31, 2021, December 31, 2020, and September 30, 2020, respectively.

⁽²⁾ Includes $8.6 million, $9.7 million, $10.5 million, and $11.3 million of purchase accounting unamortized discount resulting from the acquisition of Empire Bancorp at September 30, 2021, June 30, 2021, March 31, 2021, and December 31, 2020, respectively.

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

Loan Closings

		For the three months ended																For the nine months ended
		September 30,			June 30,			March 31,			December 31,			September 30,					September 30,		September 30,
(In thousands)		2021			2021			2021			2020			2020				2021			2020
Multifamily residential		$	41,850		$	66,913		$	58,553		$	52,024		$	33,733			$	167,316		$	160,705
Commercial real estate			48,447			37,963			17,156			57,634			26,644				103,566			134,218
One-to-four family – mixed-use property			12,823			7,135			8,712			9,692			3,867				28,670			25,439
One-to-four family – residential			2,761			59,494			3,131			8,422			2,296				65,386			13,383
Co-operative apartments			—			—			—			—			—				—			704
Construction			8,687			5,281			7,123			6,869			5,420				21,091			14,990
Mortgage Loans			114,568			176,786			94,675			134,641			71,960				386,029			349,439
Small Business Administration (1)			415			17,585			125,093			598			18,456				143,093			111,754
Commercial business and other			128,946			130,036			103,118			180,787			65,160				362,100			226,895
Non-mortgage Loans			129,361			147,621			228,211			181,385			83,616				505,193			338,649
Total Closings		$	243,929		$	324,407		$	322,886		$	316,026		$	155,576			$	891,222		$	688,088

---

⁽¹⁾ Includes $15.5 million, $123.2 million and $18.4 million of PPP closings for the three months ended June 30, 2021, March 31, 2021, and September 30, 2020, respectively.

Weighted Average Rate on Loan Closings

		For the three months ended
		September 30,			June 30,			March 31,			December 31,			September 30,
Loan type		2021			2021			2021			2020			2020
Mortgage loans		3.80	%		3.53	%		3.47	%		3.47	%		3.56	%
Non-mortgage loans		3.49			3.23			2.26			3.37			2.81
Total loans		3.64	%		3.39	%		2.62	%		3.41	%		3.16	%
Excluding PPP loans		3.64	%		3.51	%		3.62	%		3.41	%		3.45	%

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
ASSET QUALITY
(Unaudited)

Allowance for Loan Losses

		For the three months ended																					For the nine months ended
		September 30,				June 30,				March 31,				December 31,				September 30,					September 30,					September 30,
(Dollars in thousands)		2021				2021				2021				2020				2020					2021					2020
Allowance for loan losses
Beginning balances		$	42,670			$	45,099			$	45,153			$	38,343			$	36,710					45,153					21,751
Adoption of Current Expected Credit Losses			—				—				—				—				—					—					379
Net loan charge-off (recoveries):
Multifamily residential			—				—				33				(11	)			(14	)			$	33				$	(27	)
Commercial real estate			—				—				64				—				—					64					—
One-to-four family – mixed-use property			(123	)			3				19				—				(60	)				(101	)				(135	)
One-to-four family – residential			(147	)			(2	)			(5	)			(2	)			(2	)				(154	)				(10	)
Small Business Administration			(8	)			(9	)			(10	)			(3	)			(47	)				(27	)				111
Taxi medallion			(1,235	)			(222	)			2,758				124				951					1,301					951
Commercial business and other			894				1,132				6				538				9					2,032					2,103
Total			(619	)			902				2,865				646				837					3,148					2,993
(Benefit) provision for loan losses			(6,926	)			(1,527	)			2,811				3,357				2,470					(5,642	)				19,206
Allowance recorded at the time of Acquisition			—				—				—				4,099				—					—					—
Ending balance		$	36,363			$	42,670			$	45,099			$	45,153			$	38,343				$	36,363				$	38,343
Gross charge-offs		$	1,019			$	1,186			$	2,922			$	752			$	964				$	5,127				$	3,253
Gross recoveries			1,638				284				57				106				127					1,979					260
Allowance for loan losses to gross loans			0.55	%			0.64	%			0.67	%			0.67	%			0.65	%				0.55	%				0.65	%
Net loan charge-offs (recoveries) to average loans			(0.04	)			0.05				0.17				0.04				0.06					0.06					0.07

Non-Performing Assets

		September 30,				June 30,				March 31,				December 31,				September 30,
(Dollars in thousands)		2021				2021				2021				2020				2020
Loans 90 Days Or More Past Due and Still Accruing:
Multifamily residential		$	—			$	201			$	201			$	201			$	—
Commercial real estate			—				—				—				2,547				—
Construction			873				—				2,381				—				—
Commercial business and other			1,052				—				—				—				—
Total			1,925				201				2,582				2,748				—
Non-accrual Loans:
Multifamily residential			4,192				4,669				4,338				2,524				2,661
Commercial real estate			613				8				8				1,683				2,657
One-to-four family - mixed-use property (1)			2,204				2,309				2,355				1,366				1,366
One-to-four family - residential			7,807				6,940				7,335				5,854				6,454
Small Business Administration			976				976				1,151				1,151				1,151
Taxi medallion(1)			—				—				—				2,317				2,218
Commercial business and other(1)			2,500				2,489				3,417				3,430				8,285
Total			18,292				17,391				18,604				18,325				24,792
Total Non-performing Loans (NPLs)			20,217				17,592				21,186				21,073				24,792
Other Non-performing Assets:
Other asset acquired through foreclosure			—				—				35				35				35
Total			—				—				35				35				35
Total Non-performing Assets		$	20,217			$	17,592			$	21,221			$	21,108			$	24,827
Non-performing Assets to Total Assets			0.25	%			0.22	%			0.26	%			0.26	%			0.35	%
Allowance For Loan Losses to NPLs			179.9	%			242.6	%			212.9	%			214.3	%			154.7	%

---

⁽¹⁾ Not included in the above analysis are non-accrual performing TDR one-to-four family mixed use property loans totaling $0.3 million each in 3Q21, 2Q21, 1Q21, 4Q20, and 3Q20; non-accrual performing TDR taxi medallion loans totaling $0.4 million in 4Q20 and $0.1 million in 3Q20, and non-accrual performing TDR commercial business loans totaling $2.2 million each in 2Q21, 1Q21, and 4Q20, and $1.0 million in 3Q20.

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 Non-interest Income, Core Non-interest 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 non-interest 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																					For the nine months ended
(Dollars in thousands,		September 30,				June 30,				March 31,				December 31,				September 30,					September 30,				September 30,
except per share data)		2021				2021				2021				2020				2020					2021				2020
GAAP income before income taxes		$	34,812			$	25,416			$	26,224			$	3,878			$	18,820				$	86,452			$	41,304
Day 1, Provision for Credit Losses - Empire transaction (Provision for credit losses)			—				—				—				1,818				—					—				—
Net (gain) loss from fair value adjustments (Non-interest income (loss))			2,289				6,548				(982	)			4,129				2,225					7,855				(1,987	)
Net (gain) loss on sale of securities (Non-interest income (loss))			10				(123	)			—				610				—					(113	)			91
Life insurance proceeds (Non-interest income (loss))			—				—				—				—				—					—				(659	)
Net gain on disposition of assets (Non-interest income (loss))			—				—				(621	)			—				—					(621	)			—
Net (gain) loss from fair value adjustments on qualifying hedges (Interest and fees on loans)			(194	)			664				(1,427	)			(1,023	)			(230	)				(957	)			2,208
Prepayment penalty on borrowings (Non-interest expense)			—				—				—				7,834				—					—				—
Net amortization of purchase accounting adjustments (Various)			(958	)			(418	)			(789	)			80				—					(2,165	)			—
Merger (benefit) expense (Various)			2,096				(490	)			973				5,349				422					2,579				1,545
Core income before taxes			38,055				31,597				23,378				22,675				21,237					93,030				42,502
Provision for income taxes for core income			10,226				8,603				6,405				4,891				5,069					25,234				10,537
Core net income		$	27,829			$	22,994			$	16,973			$	17,784			$	16,168				$	67,796			$	31,965
GAAP diluted earnings per common share		$	0.81			$	0.61			$	0.60			$	0.11			$	0.50				$	2.02			$	1.08
Day 1, Provision for Credit Losses - Empire transaction, net of tax			—				—				—				0.05				—					—				—
Net (gain) loss from fair value adjustments, net of tax			0.05				0.15				(0.02	)			0.11				0.06					0.18				(0.05	)
Net loss on sale of securities, net of tax			—				—				—				0.02				—					—				—
Life insurance proceeds			—				—				—				—				—					—				(0.02	)
Net gain on disposition of assets, net of tax			—				—				(0.01	)			—				—					(0.01	)			—
Net (gain) loss from fair value adjustments on qualifying hedges, net of tax			—				0.02				(0.03	)			(0.03	)			(0.01	)				(0.02	)			0.06
Prepayment penalty on borrowings, net of tax			—				—				—				0.20				—					—				—
Net amortization of purchase accounting adjustments, net of tax			(0.02	)			(0.01	)			(0.02	)			—				—					(0.05	)			—
Merger (benefit) expense, net of tax			0.05				(0.01	)			0.02				0.14				0.01					0.06				0.04
NYS tax change			—				(0.02	)			—				—				—					(0.02	)			—
Core diluted earnings per common share(1)		$	0.88			$	0.73			$	0.54			$	0.58			$	0.56				$	2.14			$	1.11
Core net income, as calculated above		$	27,829			$	22,994			$	16,973			$	17,784			$	16,168				$	67,796			$	31,965
Average assets			8,072,918				8,263,553				8,147,714				7,705,407				7,083,028					8,161,121				7,131,850
Average equity			659,288				644,690				619,647				609,463				576,512					641,354				570,198
Core return on average assets(2)			1.38	%			1.11	%			0.83	%			0.92	%			0.91	%				1.11	%			0.60	%
Core return on average equity(2)			16.88	%			14.27	%			10.96	%			11.67	%			11.22	%				14.09	%			7.47	%

---

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

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
RECONCILIATION OF GAAP REVENUE and PRE-PROVISION
PRE-TAX NET REVENUE
(Unaudited)

		For the three months ended																					For the nine months ended
		September 30,				June 30,				March 31,				December 31,				September 30,					September 30,				September 30,
(Dollars in thousands)		2021				2021				2021				2020				2020					2021				2020
GAAP Net interest income		$	63,364			$	61,039			$	60,892			$	55,732			$	49,924				$	185,295			$	139,467
Net (gain) loss from fair value adjustments on qualifying hedges			(194	)			664				(1,427	)			(1,023	)			(230	)				(957	)			2,208
Net amortization of purchase accounting adjustments			(1,100	)			(565	)			(922	)			(11	)			—					(2,587	)			—
Core Net interest income		$	62,070			$	61,138			$	58,543			$	54,698			$	49,694				$	181,751			$	141,675
GAAP Non-interest income (loss)		$	866			$	(3,210	)		$	6,311			$	(1,181	)		$	1,351				$	3,967			$	12,224
Net (gain) loss from fair value adjustments			2,289				6,548				(982	)			4,129				2,225					7,855				(1,987	)
Net loss on sale of securities			10				(123	)			—				610				—					(113	)			91
Life insurance proceeds			—				—				—				—				—					—				(659	)
Net gain on sale of assets			—				—				(621	)			—				—					(621	)			—
Core Non-interest income		$	3,165			$	3,215			$	4,708			$	3,558			$	3,576				$	11,088			$	9,669
GAAP Non-interest expense		$	36,345			$	34,011			$	38,159			$	46,811			$	29,985				$	108,515			$	91,120
Prepayment penalty on borrowings			—				—				—				(7,834	)			—					—				—
Net amortization of purchase accounting adjustments			(142	)			(147	)			(133	)			(91	)			—					(422	)			—
Merger (benefit) expense			(2,096	)			490				(973	)			(5,349	)			(422	)				(2,579	)			(1,545	)
Core Non-interest expense		$	34,107			$	34,354			$	37,053			$	33,537			$	29,563				$	105,514			$	89,575
Net interest income		$	63,364			$	61,039			$	60,892			$	55,732			$	49,924				$	185,295			$	139,467
Non-interest income (loss)			866				(3,210	)			6,311				(1,181	)			1,351					3,967				12,224
Non-interest expense			(36,345	)			(34,011	)			(38,159	)			(46,811	)			(29,985	)				(108,515	)			(91,120	)
Pre-provision pre-tax net revenue		$	27,885			$	23,818			$	29,044			$	7,740			$	21,290				$	80,747			$	60,571
Core:
Net interest income		$	62,070			$	61,138			$	58,543			$	54,698			$	49,694				$	181,751			$	141,675
Non-interest income			3,165				3,215				4,708				3,558				3,576					11,088				9,669
Non-interest expense			(34,107	)			(34,354	)			(37,053	)			(33,537	)			(29,563	)				(105,514	)			(89,575	)
Pre-provision pre-tax net revenue		$	31,128			$	29,999			$	26,198			$	24,719			$	23,707				$	87,325			$	61,769
Efficiency Ratio			52.3	%			53.4	%			58.6	%			57.6	%			55.4	%				54.7	%			59.1	%

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																					For the nine months ended
		September 30,				June 30,				March 31,				December 31,				September 30,					September 30,				September 30,
(Dollars in thousands)		2021				2021				2021				2020				2020					2021				2020
GAAP net interest income		$	63,364			$	61,039			$	60,892			$	55,732			$	49,924				$	185,295			$	139,467
Net (gain) loss from fair value adjustments on qualifying hedges			(194	)			664				(1,427	)			(1,023	)			(230	)				(957	)			2,208
Net amortization of purchase accounting adjustments			(1,100	)			(565	)			(922	)			(11	)			—					(2,587	)			—
Tax equivalent adjustment			113				113				111				114				117					337				394
Core net interest income FTE		$	62,183			$	61,251			$	58,654			$	54,812			$	49,811				$	182,088			$	142,069
Prepayment penalties received on loans and securities, net of reversals and recoveries of interest from non-accrual loans			(2,136	)			(2,046	)			(948	)			(1,093	)			(1,518	)				(5,130	)			(3,483	)
Base net interest income FTE		$	60,047			$	59,205			$	57,706			$	53,719			$	48,293				$	176,958			$	138,586
Total average interest-earning assets (1)		$	7,616,332			$	7,799,176			$	7,676,833			$	7,245,147			$	6,675,896				$	7,697,229			$	6,734,979
Core net interest margin FTE			3.27	%			3.14	%			3.06	%			3.03	%			2.98	%				3.15	%			2.81	%
Base net interest margin FTE			3.15	%			3.04	%			3.01	%			2.97	%			2.89	%				3.07	%			2.74	%
GAAP interest income on total loans, net		$	69,198			$	67,999			$	69,021			$	66,120			$	60,367				$	206,218			$	182,033
Net (gain) loss from fair value adjustments on qualifying hedges			(194	)			664				(1,427	)			(1,023	)			(230	)				(957	)			2,208
Net amortization of purchase accounting adjustments			(1,126	)			(624	)			(728	)			(356	)			—					(2,478	)			—
Core interest income on total loans, net		$	67,878			$	68,039			$	66,866			$	64,741			$	60,137				$	202,783			$	184,241
Prepayment penalties received on loans, net of reversals and recoveries of interest from non-accrual loans			(2,135	)			(2,046	)			(947	)			(1,093	)			(1,443	)				(5,128	)			(3,408	)
Base interest income on total loans, net		$	65,743			$	65,993			$	65,919			$	63,648			$	58,694				$	197,655			$	180,833
Average total loans, net (1)		$	6,642,434			$	6,697,103			$	6,711,446			$	6,379,429			$	5,904,051				$	6,683,412			$	5,881,858
Core yield on total loans			4.09	%			4.06	%			3.99	%			4.06	%			4.07	%				4.05	%			4.18	%
Base yield on total loans			3.96	%			3.94	%			3.93	%			3.99	%			3.98	%				3.94	%			4.10	%

---

⁽¹⁾ Excludes purchase accounting average balances for three months ended September 30, 2021, June 30, 2021, March 31, 2021, and December 31, 2020.

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
CALCULATION OF TANGIBLE STOCKHOLDERS’
COMMON EQUITY to TANGIBLE ASSETS
(Unaudited)

		September 30,				June 30,				March 31,				December 31,				September 30,
(Dollars in thousands)		2021				2021				2021				2020				2020
Total Equity		$	668,096			$	655,167			$	639,201			$	618,997			$	586,406
Less:
Goodwill			(17,636	)			(17,636	)			(17,636	)			(17,636	)			(16,127	)
Core deposit Intangibles			(2,708	)			(2,859	)			(3,013	)			(3,172	)			—
Intangible deferred tax liabilities			287				287				287				287				292
Tangible Stockholders' Common Equity		$	648,039			$	634,959			$	618,839			$	598,476			$	570,571
Total Assets		$	8,077,334			$	8,159,345			$	8,159,184			$	7,976,394			$	7,063,056
Less:
Goodwill			(17,636	)			(17,636	)			(17,636	)			(17,636	)			(16,127	)
Core deposit Intangibles			(2,708	)			(2,859	)			(3,013	)			(3,172	)			—
Intangible deferred tax liabilities			287				287				287				287				292
Tangible Assets		$	8,057,277			$	8,139,137			$	8,138,822			$	7,955,873			$	7,047,221
Tangible Stockholders' Common Equity to Tangible Assets			8.04	%			7.80	%			7.60	%			7.52	%			8.10	%

FAQ

What were Flushing Bank's EPS results for Q3 2021?

Flushing Bank reported GAAP EPS of $0.81, a 62% increase YoY, and Core EPS of $0.88, up 57.1% YoY.

How much did net interest income increase for Flushing Bank in Q3 2021?

Net interest income increased by 27% YoY to $63.4 million.

What is the loan pipeline amount for Flushing Bank as of Q3 2021?

The loan pipeline reached a record $530.7 million, up 35% YoY.

How did Flushing Bank's NIM change in Q3 2021?

Flushing Bank's net interest margin (NIM) expanded by 20 bps to 3.34%.

What was the share repurchase activity for Flushing Bank in Q3 2021?

The bank repurchased 285,643 shares at an average price of $22.42.