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

Rhea-AI Summary

Uniondale reported Q3 2023 GAAP EPS of $0.32, up 10.3% QoQ. Core EPS totaled $0.31, an increase of 19.2% QoQ. GAAP NIM of 2.22% increased 4 bps QoQ. Nonperforming assets decreased 23.2% YoY and 3.1% QoQ. TCE/TA1 was 7.59% at September 30, 2023.

Positive

• Uniondale reported Q3 2023 GAAP EPS of $0.32, up 10.3% QoQ
• Core EPS totaled $0.31, an increase of 19.2% QoQ
• GAAP NIM of 2.22% increased 4 bps QoQ
• Nonperforming assets decreased 23.2% YoY and 3.1% QoQ
• TCE/TA1 was 7.59% at September 30, 2023

Negative

• None.

John R. Buran, President and CEO Commentary

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

- John R. Buran, President and CEO

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

Strong Credit Quality; Stable Capital. Nonperforming assets decreased 23.2% YoY and 3.1% QoQ while net recoveries were $42,000 in 3Q23. Capital continues to be sound with TCE/TA¹ of 7.59% at September 30, 2023, compared to 7.71% at June 30, 2023.

Key Financial Metrics2

		3Q23				2Q23			1Q23			4Q22			3Q22				9M23				9M22
GAAP:
EPS		$	0.32			$	0.29		$	0.17		$	0.34		$	0.76			$	0.77			$	2.15
ROAA (%)			0.44				0.41			0.24			0.48			1.11				0.36				1.08
ROAE (%)			5.57				5.12			3.02			6.06			13.91				4.56				13.24
NIM FTE3 (%)			2.22				2.18			2.27			2.70			3.07				2.22				3.26
Core:
EPS		$	0.31			$	0.26		$	0.10		$	0.57		$	0.62			$	0.67			$	1.92
ROAA (%)			0.43				0.37			0.14			0.82			0.90				0.31				0.96
ROAE (%)			5.41				4.66			1.76			10.29			11.24				3.93				11.80
Core NIM FTE (%)			2.14				2.17			2.25			2.63			3.03				2.18				3.22
Credit Quality:
NPAs/Loans & OREO (%)			0.56				0.58			0.61			0.77			0.72				0.56				0.72
ACLs/Loans (%)			0.57				0.57			0.56			0.58			0.59				0.57				0.59
ACLs/NPLs (%)			225.38				207.08			182.89			124.89			142.29				225.38				142.29
NCOs/Avg Loans (%)			-				0.09			0.54			0.05			0.02				0.21				0.01
Balance Sheet:
Avg Loans ($B)		$	6.8			$	6.8		$	6.9		$	6.9		$	6.9			$	6.8			$	6.7
Avg Dep ($B)		$	6.8			$	6.9		$	6.8		$	6.7		$	6.3			$	6.8			$	6.4
Book Value/Share		$	23.15			$	23.18		$	22.84		$	22.97		$	22.47			$	23.15			$	22.47
Tangible BV/Share		$	22.48			$	22.51		$	22.18		$	22.31		$	21.81			$	22.48			$	21.81
TCE/TA (%)			7.59				7.71			7.73			7.82			7.62				7.59				7.62

¹ Tangible Common Equity (“TCE”)/Total Assets (“TA”) ² See “Reconciliation of GAAP Earnings and Core Earnings”, “Reconciliation of GAAP Revenue and Pre-Provision Pre-Tax Net Revenue”, and “Reconciliation of GAAP Net Interest Margin to Core Net Interest Income and Net Interest Margin.” ³ Net Interest Margin (“NIM”) Fully Taxable Equivalent (“FTE”)

3Q23 Highlights

• Net interest margin FTE increased 4 bps QoQ, but decreased 85 bps YoY to 2.22%; Core net interest margin FTE decreased 3 bps QoQ and 89 bps YoY to 2.14%; Both GAAP and Core NIMs benefited from $100 million of new interest rate hedges added during the quarter and the closing of $120.5 million of back-to-back swap loans that generate noninterest income immediately and interest income over the life of the loan while adding floating rate assets to provide additional interest rate risk neutralization
• Average total deposits increased 8.6% YoY, but declined 1.2% QoQ to $6.8 billion; Noninterest bearing deposits increased $46.6 million QoQ despite new checking account openings declining 5% YoY in 3Q23; average CDs totaled $2.3 billion, up 116.6% YoY and 11.9% QoQ; growth in CDs generally lengthens the duration of customer deposits and helps reduce rate sensitivity
• Bensonhurst branch opened on September 29, 2023, which expands our Asian market presence
• Period end net loans decreased 0.8% YoY, but increased 0.9% QoQ; loan closings were $241.5 million down 47.9% YoY, but up 52.1% QoQ; the yield on closings increased 288 bps YoY and 34 bps QoQ to 7.48%
• Loan pipeline increased 17.5% YoY, but decreased 12.6% QoQ to $363.3 million; approximately 60% of the loan pipeline consists of floating rate loans including back-to-back swap loans
• NPAs declined to $38.4 million from $50.0 million a year ago and $39.6 million in the prior quarter
• Provision for credit losses was $0.6 million in 3Q23 compared to $2.1 million in 3Q22 and $1.4 million in 2Q23; net recoveries were $42,000 in 3Q23 compared to net charge-offs of $0.3 million in 3Q22 and $1.6 million in 2Q23
• Tangible Common Equity to Tangible Assets declined to 7.59% at 3Q23 compared to 7.71% at 2Q23
• Repurchased 59,352 shares at an average price of $15.88 or a 29.4% discount to September 30, 2023, tangible book value of $22.48

Areas of Focus
Interest Rate Risk	Continued to take actions to position the Company’s balance sheet more towards interest rate risk neutral During 3Q23, the Company added $100 million of interest rate hedges Approximately 60% of the loan pipeline consists of floating rate loans including back-to-back loan swaps Rate sensitivity to a +100 bps shock has been reduced by 66% over the past year Increased noninterest bearing deposits by $46.6 million QoQ
Credit Quality	Manhattan office buildings are minimal at 0.6% of net loans Over 88% of the loan portfolio is collateralized by real estate with an average loan to value less than 36% Debt service coverage ratio is 1.8x for multifamily and investor commercial real estate loans that reprice through 2025
Liquidity	The Company maintains ample liquidity with $3.7 billion of undrawn lines and resources Uninsured and uncollateralized deposits were 16% of total deposits Total deposits increased 9.1% YoY Checking account openings were down 5.0% YoY in 3Q23
Customer Experience	Approximately 33% of our branches are in Asian communities Bensonhurst, our 27th branch, opened on September 29, 2023 Digital banking usage continues to increase with double digit growth in monthly mobile deposit active users and digital banking enrollment in September 2023 versus a year ago

Income Statement Highlights

																				YoY			QoQ
($000s, except EPS)			3Q23				2Q23			1Q23			4Q22				3Q22			Change			Change
Net Interest Income			$	44,427			$	43,378		$	45,262		$	54,201			$	61,206		(27.4	)%		2.4	%
Provision (Benefit) for Credit Losses				596				1,416			7,508			(12	)			2,145		(72.2	)		(57.9	)
Noninterest Income (Loss)				3,476				5,122			6,908			(7,652	)			8,995		(61.4	)		(32.1	)
Noninterest Expense				34,415				35,279			37,703			33,742				35,634		(3.4	)		(2.4	)
Income Before Income Taxes				12,892				11,805			6,959			12,819				32,422		(60.2	)		9.2
Provision for Income Taxes				3,493				3,177			1,801			2,570				8,980		(61.1	)		9.9
Net Income			$	9,399			$	8,628		$	5,158		$	10,249			$	23,442		(59.9	)		8.9
Diluted EPS			$	0.32			$	0.29		$	0.17		$	0.34			$	0.76		(57.9	)		10.3
Avg. Diluted Shares (000s)				29,703				30,090			30,265			30,420				30,695		(3.2	)		(1.3	)
Core Net Income1			$	9,135			$	7,854		$	3,003		$	17,399			$	18,953		(51.8	)		16.3
Core EPS1			$	0.31			$	0.26		$	0.10		$	0.57			$	0.62		(50.0	)		19.2

¹ See Reconciliation of GAAP Earnings and Core Earnings

Net interest income decreased YoY but increased QoQ.

• Net interest margin, FTE of 2.22% decreased 85 bps YoY, but increased 4 bps QoQ
• Prepayment penalty income from loans and securities, net reversals and recoveries of interest from nonaccrual loans, net gains and losses from fair value adjustments on qualifying hedges, and purchase accounting accretion totaled $2.6 million (13 bps to the NIM) compared to $0.5 million (3 bps) in 2Q23, $1.1 million (6 bps) in 1Q23, $2.4 million (12 bps) in 4Q22, and $2.2 million (11 bps) in 3Q22
• Excluding the items in the previous bullet, net interest margin was 2.09% in 3Q23, 2.15% in 2Q23, 2.21% in 1Q23, 2.58% in 4Q22, and 2.96% in 3Q22
  

The provision for credit losses declined YoY and QoQ.

• Net charge-offs (recoveries) were $(42,000) in 3Q23 (less than (1) bp of average loans) compared to $1.6 million in 2Q23 (9 bps), $9.2 million in 1Q23 (54 bps of average loans), $0.8 million in 4Q22 (5 bps of average loans), and $0.3 million in 3Q22 (2 bps of average loans)
• 1Q23 net charge-offs were primarily related to a commercial business relationship that was placed on nonaccrual in 2Q22

Noninterest income (loss) declined YoY and QoQ.

• Noninterest income included net gains (losses) from fair value adjustments of $(1.2) million in 3Q23 ($(0.03) per share, net of tax), $0.3 million in 2Q23 ($0.01 per share, net of tax), $2.6 million in 1Q23 ($0.06 per share, net of tax), $(0.6) million in 4Q22 ($(0.02) per share, net of tax), and $5.6 million in 3Q22 ($0.13 per share, net of tax)
• Loss on the sale of securities was $10.9 million ($0.27 per share, net of tax) in 4Q22 as the Company sold $84.2 million of mortgage-based securities with an approximate yield of 1.17%; proceeds were primarily reinvested in 1Q23 into floating rate securities that had a yield at that time that approximated 6.40%
• Life insurance proceeds were $23,000 in 3Q23 (less than $0.01 per share), $0.6 million ($0.02 per share) in 2Q23, and $0.3 million ($0.01 per share) in 4Q22
• Absent all above items and other immaterial adjustments, core noninterest income was $4.7 million in 3Q23, up 39.5% YoY and 10.1% QoQ
• Back-to-back swap loan closings of $120.5 million in 3Q23 (compared to $11.5 million in 2Q23) contributed to the growth in core noninterest income; the Company earns fee income on back-to-back swap loan closings
  

Noninterest expense decreased YoY and QoQ.

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

Provision for income taxes declined YoY and increased QoQ.

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

Balance Sheet, Credit Quality, and Capital Highlights

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

Average loans decreased YoY and QoQ.

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

Average total deposits increased YoY but declined QoQ.

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

Credit Quality: Nonperforming loans declined YoY and QoQ.

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

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

• The Company paid a dividend of $0.22 per share in 3Q23 and has ample available liquidity to meet its obligations
• The Company repurchased 59,352 shares in 3Q23 at an average price of $15.88, representing a 29.4% discount to tangible book value, with 846,779 shares remaining subject to repurchase under the authorized stock repurchase program, which has no expiration or maximum dollar limit
• Tangible common equity to tangible assets was 7.59% at 3Q23 compared to 7.71% at 2Q23 and 7.62% at 3Q22
  

Conference Call Information and Fourth Quarter Earnings Release Date

Conference Call Information:

• John R. Buran, President and Chief Executive Officer, and Susan K. Cullen, Senior Executive Vice President and Chief Financial Officer and Treasurer, will host a conference call on Wednesday, November 1, 2023, at 9:30 AM (ET) to discuss the Company’s third quarter results and strategy.
• Dial-in for Live Call: 1-877-509-5836; Canada 855-669-9657
• Webcast: https://event.choruscall.com/mediaframe/webcast.html?webcastid=trpzpC32
• Dial-in for Replay: 1-877-344-7529; Canada 855-669-9658
• Replay Access Code: 2779651
• The conference call will be simultaneously webcast and archived

Fourth Quarter 2023 Earnings Release Date:

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

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

About Flushing Financial Corporation

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

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

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

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

#FF

- Statistical Tables Follow -

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
FINANCIAL HIGHLIGHTS
(Unaudited)

		At or for the three months ended																					At or for the nine months ended
		September 30,				June 30,				March 31,				December 31,				September 30,					September 30,				September 30,
(Dollars in thousands, except per share data)		2023				2023				2023				2022				2022					2023				2022
Performance Ratios (1)
Return on average assets			0.44	%			0.41	%			0.24	%			0.48	%			1.11	%				0.36	%			1.08	%
Return on average equity			5.57				5.12				3.02				6.06				13.91					4.56				13.24
Yield on average interest-earning assets (2)			5.20				4.84				4.61				4.44				4.10					4.88				3.91
Cost of average interest-bearing liabilities			3.52				3.15				2.80				2.11				1.25					3.16				0.79
Cost of funds			3.13				2.80				2.47				1.84				1.08					2.80				0.68
Net interest rate spread during period (2)			1.68				1.69				1.81				2.33				2.85					1.72				3.12
Net interest margin (2)			2.22				2.18				2.27				2.70				3.07					2.22				3.26
Noninterest expense to average assets			1.62				1.67				1.78				1.58				1.69					1.69				1.78
Efficiency ratio (3)			72.33				74.02				76.48				59.55				55.68					74.30				55.57
Average interest-earning assets to average interest bearing liabilities			1.18	X			1.18	X			1.19	X			1.21	X			1.22	X				1.19	X			1.22	X
Average Balances
Total loans, net		$	6,813,019			$	6,829,648			$	6,871,192			$	6,881,245			$	6,861,463				$	6,837,740			$	6,694,528
Total interest-earning assets			8,017,460				7,986,020				7,996,677				8,045,691				7,979,070					8,000,129				7,764,873
Total assets			8,504,364				8,461,827				8,468,311				8,518,019				8,442,657					8,478,299				8,236,070
Total deposits			6,819,397				6,899,617				6,810,485				6,678,383				6,276,613					6,843,200				6,375,372
Total interest-bearing liabilities			6,771,860				6,756,859				6,703,558				6,662,209				6,553,087					6,744,342				6,371,542
Stockholders' equity			675,513				673,943				683,071				676,165				674,282					677,481				671,588
Per Share Data
Book value per common share (4)		$	23.15			$	23.18			$	22.84			$	22.97			$	22.47				$	23.15			$	22.47
Tangible book value per common share (5)		$	22.48			$	22.51			$	22.18			$	22.31			$	21.81				$	22.48			$	21.81
Stockholders' Equity
Stockholders' equity		$	669,141			$	671,303			$	673,459			$	677,157			$	670,719				$	669,141			$	670,719
Tangible stockholders' equity			649,854				651,898				653,932				657,504				650,936					649,854				650,936
Consolidated Regulatory Capital Ratios
Tier 1 capital		$	739,364			$	735,810			$	737,138			$	746,880			$	749,526				$	739,364			$	749,526
Common equity Tier 1 capital			692,914				689,876				690,846				698,258				701,532					692,914				701,532
Total risk-based capital			968,152				963,840				965,384				975,709				979,021					968,152				979,021
Risk Weighted Assets			6,802,385				6,649,252				6,659,532				6,640,542				6,689,284					6,802,385				6,689,284
Tier 1 leverage capital (well capitalized = 5%)			8.54	%			8.56	%			8.58	%			8.61	%			8.74	%				8.54	%			8.74	%
Common equity Tier 1 risk-based capital (well capitalized = 6.5%)			10.19				10.38				10.37				10.52				10.49					10.19				10.49
Tier 1 risk-based capital (well capitalized = 8.0%)			10.87				11.07				11.07				11.25				11.20					10.87				11.20
Total risk-based capital (well capitalized = 10.0%)			14.23				14.50				14.50				14.69				14.64					14.23				14.64
Capital Ratios
Average equity to average assets			7.94	%			7.96	%			8.07	%			7.94	%			7.99	%				7.99	%			8.15	%
Equity to total assets			7.80				7.92				7.94				8.04				7.84					7.80				7.84
Tangible common equity to tangible assets (6)			7.59				7.71				7.73				7.82				7.62					7.59				7.62
Asset Quality
Nonaccrual loans (7)		$	17,405			$	18,637			$	21,176			$	29,782			$	27,003				$	17,405			$	27,003
Nonperforming loans			17,405				18,637				21,176				32,382				29,003					17,405				29,003
Nonperforming assets			38,386				39,618				42,157				53,363				49,984					38,386				49,984
Net charge-offs (recoveries)			(42	)			1,560				9,234				811				290					10,752				724
Asset Quality Ratios
Nonperforming loans to gross loans			0.25	%			0.27	%			0.31	%			0.47	%			0.42	%				0.25	%			0.42	%
Nonperforming assets to total assets			0.45				0.47				0.50				0.63				0.58					0.45				0.58
Allowance for credit losses to gross loans			0.57				0.57				0.56				0.58				0.59					0.57				0.59
Allowance for credit losses to nonperforming assets			102.19				97.41				91.87				75.79				82.56					102.19				82.56
Allowance for credit losses to nonperforming loans			225.38				207.08				182.89				124.89				142.29					225.38				142.29
Net charge-offs (recoveries) to average loans			—				0.09				0.54				0.05				0.02					0.21				0.01
Full-service customer facilities			27				26				26				25				25					27				25

(See footnotes on next page)

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

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

	For the three months ended																					For the nine months ended
	September 30,				June 30,				March 31,				December 31,				September 30,					September 30,				September 30,
(In thousands, except per share data)	2023				2023				2023				2022				2022					2023				2022
Interest and Dividend Income
Interest and fees on loans	$	91,466			$	85,377			$	82,889			$	81,033			$	75,546				$	259,732			$	212,254
Interest and dividends on securities:
Interest		10,383				9,172				7,240				6,511				5,676					26,795				14,350
Dividends		33				30				29				24				17					92				36
Other interest income		2,154				1,982				1,959				1,702				506					6,095				716
Total interest and dividend income		104,036				96,561				92,117				89,270				81,745					292,714				227,356
Interest Expense
Deposits		50,066				46,249				39,056				27,226				11,965					135,371				20,059
Other interest expense		9,543				6,934				7,799				7,843				8,574					24,276				17,882
Total interest expense		59,609				53,183				46,855				35,069				20,539					159,647				37,941
Net Interest Income		44,427				43,378				45,262				54,201				61,206					133,067				189,415
Provision (benefit) for credit losses		596				1,416				7,508				(12	)			2,145					9,520				5,093
Net Interest Income After Provision (Benefit) for Credit Losses		43,831				41,962				37,754				54,213				59,061					123,547				184,322
Noninterest Income (Loss)
Banking services fee income		2,636				1,780				1,411				1,231				1,351					5,827				3,891
Net loss on sale of securities		—				—				—				(10,948	)			—					—				—
Net gain on sale of loans		—				54				54				46				—					108				73
Net gain on disposition of assets		—				—				—				104				—					—				—
Net gain (loss) from fair value adjustments		(1,246	)			294				2,619				(622	)			5,626					1,667				6,350
Federal Home Loan Bank of New York stock dividends		624				534				697				658				538					1,855				1,342
Life insurance proceeds		23				561				—				286				—					584				1,536
Bank owned life insurance		1,157				1,134				1,109				1,126				1,132					3,400				3,361
Other income		282				765				1,018				467				348					2,065				1,108
Total noninterest income (loss)		3,476				5,122				6,908				(7,652	)			8,995					15,506				17,661
Noninterest Expense
Salaries and employee benefits		17,825				19,493				20,887				18,178				21,438					58,205				66,196
Occupancy and equipment		3,371				3,534				3,793				3,701				3,541					10,698				10,905
Professional services		3,042				2,657				2,483				2,130				2,570					8,182				7,077
FDIC deposit insurance		912				943				977				485				738					2,832				1,773
Data processing		1,422				1,473				1,435				1,421				1,367					4,330				4,174
Depreciation and amortization		1,482				1,482				1,510				1,535				1,488					4,474				4,395
Other real estate owned/foreclosure expense		185				150				165				35				143					500				259
Other operating expenses		6,176				5,547				6,453				6,257				4,349					18,176				15,171
Total noninterest expense		34,415				35,279				37,703				33,742				35,634					107,397				109,950
Income Before Provision for Income Taxes		12,892				11,805				6,959				12,819				32,422					31,656				92,033
Provision for Income Taxes		3,493				3,177				1,801				2,570				8,980					8,471				25,337
Net Income	$	9,399			$	8,628			$	5,158			$	10,249			$	23,442				$	23,185			$	66,696
Basic earnings per common share	$	0.32			$	0.29			$	0.17			$	0.34			$	0.76				$	0.77			$	2.15
Diluted earnings per common share	$	0.32			$	0.29			$	0.17			$	0.34			$	0.76				$	0.77			$	2.15
Dividends per common share	$	0.22			$	0.22			$	0.22			$	0.22			$	0.22				$	0.66			$	0.66
Basic average shares		29,703				30,090				30,265				30,420				30,695					30,017				30,960
Diluted average shares		29,703				30,090				30,265				30,420				30,695					30,017				30,960

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

		September 30,				June 30,				March 31,				December 31,				September 30,
(Dollars in thousands)		2023				2023				2023				2022				2022
ASSETS
Cash and due from banks		$	200,926			$	160,053			$	176,747			$	151,754			$	164,693
Securities held-to-maturity:
Mortgage-backed securities			7,860				7,865				7,870				7,875				7,880
Other securities, net			65,271				65,469				65,653				65,836				66,032
Securities available for sale:
Mortgage-backed securities			337,879				365,911				380,110				384,283				468,366
Other securities			505,784				503,645				431,818				351,074				351,495
Loans			6,896,074				6,832,425				6,904,176				6,934,769				6,956,674
Allowance for credit losses			(39,228	)			(38,593	)			(38,729	)			(40,442	)			(41,268	)
Net loans			6,856,846				6,793,832				6,865,447				6,894,327				6,915,406
Interest and dividends receivable			55,660				52,911				46,836				45,048				42,571
Bank premises and equipment, net			21,302				22,182				21,567				21,750				22,376
Federal Home Loan Bank of New York stock			43,821				36,168				38,779				45,842				62,489
Bank owned life insurance			214,321				213,164				214,240				213,131				212,353
Goodwill			17,636				17,636				17,636				17,636				17,636
Core deposit intangibles			1,651				1,769				1,891				2,017				2,147
Right of use asset			41,404				41,526				42,268				43,289				44,885
Other assets			206,922				191,752				168,259				179,084				179,090
Total assets		$	8,577,283			$	8,473,883			$	8,479,121			$	8,422,946			$	8,557,419
LIABILITIES
Total deposits		$	6,681,509			$	6,723,690			$	6,734,090			$	6,485,342			$	6,125,305
Borrowed funds			1,001,010				857,400				887,509				1,052,973				1,572,830
Operating lease liability			43,067				44,402				45,353				46,125				48,330
Other liabilities			182,556				177,088				138,710				161,349				140,235
Total liabilities			7,908,142				7,802,580				7,805,662				7,745,789				7,886,700
STOCKHOLDERS' EQUITY
Preferred stock (5,000,000 shares authorized; none issued)			—				—				—				—				—
Common stock ($0.01 par value; 100,000,000 shares authorized)			341				341				341				341				341
Additional paid-in capital			264,486				263,744				262,876				264,332				263,755
Treasury stock			(105,433	)			(104,574	)			(97,760	)			(98,535	)			(90,977	)
Retained earnings			550,678				547,811				545,786				547,507				543,894
Accumulated other comprehensive loss, net of taxes			(40,931	)			(36,019	)			(37,784	)			(36,488	)			(46,294	)
Total stockholders' equity			669,141				671,303				673,459				677,157				670,719
Total liabilities and stockholders' equity		$	8,577,283			$	8,473,883			$	8,479,121			$	8,422,946			$	8,557,419
(In thousands)
Issued shares			34,088				34,088				34,088				34,088				34,088
Outstanding shares			28,905				28,961				29,488				29,476				29,851
Treasury shares			5,183				5,127				4,600				4,612				4,237

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
AVERAGE BALANCE SHEETS
(Unaudited)

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

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

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

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

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
DEPOSIT and LOAN COMPOSITION
(Unaudited)

Deposit Composition

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

Loan Composition

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

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

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

Loan Closings

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

Weighted Average Rate on Loan Closings

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

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
ASSET QUALITY
(Unaudited)

Allowance for Credit Losses

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

Nonperforming Assets

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

_______________
⁽¹⁾ Adopted ASU No. 2022-02 Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures on January 1, 2023; Not included in the above analysis are nonaccrual performing TDR one-to-four family – mixed use property loans totaling $0.2 million in 4Q22 and in 3Q22; nonaccrual performing TDR commercial business loans totaling less than $0.1 million in 4Q22 and $2.9 million in 3Q22.

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

Non-cash Fair Value Adjustments to GAAP Earnings

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

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

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

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
RECONCILIATION OF GAAP EARNINGS and CORE EARNINGS
(Unaudited)

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

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

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

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

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
RECONCILIATION OF GAAP NET INTEREST INCOME and NET INTEREST MARGIN
to CORE NET INTEREST INCOME
(Unaudited)

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

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

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

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

FAQ

What were Uniondale's Q3 2023 GAAP EPS?

Uniondale reported Q3 2023 GAAP EPS of $0.32, up 10.3% QoQ.

What were Uniondale's Q3 2023 core EPS?

Uniondale's Q3 2023 core EPS totaled $0.31, an increase of 19.2% QoQ.

What was Uniondale's GAAP NIM in Q3 2023?

Uniondale's GAAP NIM in Q3 2023 was 2.22%, which increased by 4 bps QoQ.

How did nonperforming assets change for Uniondale?

Nonperforming assets decreased by 23.2% YoY and 3.1% QoQ for Uniondale.

What was Uniondale's TCE/TA1 at September 30, 2023?

Uniondale's TCE/TA1 was 7.59% at September 30, 2023.