Flushing Financial Corporation Reports 4Q21 GAAP EPS of $0.58 and Core EPS of $0.67

Rhea-AI Summary

The Company reported a record fourth quarter in 2021 with GAAP EPS of $0.58, a 427% increase YoY, and Core EPS of $0.67, up 16% YoY. Total net interest income rose to $62.7 million, up 12.5% YoY, despite a marginal QoQ decline of 1.1%. Loans, excluding PPP, increased 3.7% annualized in 4Q21, with loan closings up 49% QoQ. The Company's capital ratios improved, with tangible common equity rising to 8.22%. A one-time increase in employee compensation of $4.3 million was recorded. The company returned 56% of earnings to shareholders through dividends and share repurchases.

Positive

• Record GAAP EPS of $0.58 and Core EPS of $0.67 in 4Q21.
• Total net interest income increased 12.5% YoY to $62.7 million.
• Loan growth (excluding PPP) increased 3.7% annualized in 4Q21.
• Capital ratios improved with TCE/TA at 8.22%.
• Returned 56% of earnings to shareholders through dividends and share repurchases.

Negative

• Net interest income declined 1.1% QoQ.
• Loan pipeline decreased 19% QoQ from record levels in 3Q21.
• Provision for credit losses of $0.8 million due to current period loan originations impacted by COVID-19.

Record GAAP and Core EPS for 2021

John R. Buran, President and CEO Commentary

UNIONDALE, N.Y., Jan. 27, 2022 (GLOBE NEWSWIRE) -- The Company reported fourth quarter 2021 GAAP EPS of $0.58, up 427% YoY, ROAA of 0.89%, and ROAE of 10.77%. For the fourth quarter, Core EPS of $0.67 increased, 16% YoY with ROAA of 1.04% and ROAE of 12.49%. Record GAAP and Core EPS for 2021 of $2.59 and $2.81, respectively.

“2021 was a record year for earnings but it was also a challenging year for employees dealing with the pandemic and a new working environment. Our people continued to tirelessly navigate these challenges, as they supported and served customers, and masterfully executed our strategic objectives. Our employees are our competitive advantage. As a reward for our record year of earnings and employee performance through the pandemic, the Company recorded a one-time increase in compensation and benefits of $4.3 million for all employees. We are looking forward to an exciting year in 2022.”

- John R. Buran, President and CEO

Slight NIM Compression QoQ; Loan Growth Returns. Net interest income of $62.7 million increased 12.5% YoY, but declined 1.1% QoQ. NIM expanded 21 bps to 3.29% YoY, but declined 5 bps from 3Q21. Core NIM increased by 18 bps to 3.21% YoY and compressed 6 bps QoQ. The decline in the NIM QoQ was primarily due to an unfavorable shift in balance sheet mix with high levels of interest-earning deposits and federal funds sold, which was fully deployed by the end of the year. Loans, excluding SBA Paycheck Protection Program (“PPP”), increased 3.7% annualized in 4Q21 and loan closings were up 49% QoQ. Our loan pipeline, which grew 21% YoY, declined 19% QoQ from the record 3Q21 level of $530.7 million. With the yield curve steepening and the Federal Reserve expected to increase short-term rates, we expect refinance volumes will slow in 2022. Additionally, we continue to benefit from the merger disruption in our markets as we have hired 24 people (including 9 revenue producers) in 2021 from institutions involved with mergers. We are looking forward to additional expansion opportunities in 2022.

Returned 56% of Earnings in 4Q21; Capital Ratios Increase. The Company repurchased 150,976 shares of common stock at an average price of $23.75. Cash returned to shareholders through dividends and share repurchases was 56% of earnings in 4Q21. TCE/TA¹ improved to 8.22% in 4Q21 from 8.04% in 3Q21 and 7.52% in 4Q20. Our capital priorities remain unchanged: 1) profitably grow the balance sheet, 2) return dividends to shareholders, and 3) opportunistically repurchase shares.

Key Financial Metrics2
		4Q21					3Q21				2Q21			1Q21			4Q20
GAAP:
EPS		$	0.58				$	0.81			$	0.61		$	0.60		$	0.11
ROAA (%)			0.89					1.26				0.93			0.93			0.18
ROAE (%)			10.77					15.42				11.95			12.29			2.27
NIM FTE3 (%)			3.29					3.34				3.14			3.18			3.08
Core:
EPS		$	0.67				$	0.88			$	0.73		$	0.54		$	0.58
ROAA (%)			1.04					1.38				1.11			0.83			0.92
ROAE (%)			12.49					16.88				14.27			10.96			11.67
Core NIM FTE (%)			3.21					3.27				3.14			3.06			3.03
Efficiency Ratio (%)			58.7					52.3				53.4			58.6			57.6
Credit Quality:
NPAs/Loans&REO (%)			0.23					0.31				0.26			0.31			0.31
LLRs/Loans (%)			0.56					0.55				0.64			0.67			0.67
LLRs/NPLs (%)			248.66					179.86				242.55			212.87			214.27
NCOs/Avg Loans (%)			(0.00	)				(0.04	)			0.05			0.17			0.04
Balance Sheet:
Avg Loans ($B)		$	6.6				$	6.6			$	6.7		$	6.7		$	6.4
Avg Dep ($B)		$	6.5				$	6.4			$	6.5		$	6.3		$	5.5
Book Value/Share		$	22.26				$	21.78			$	21.16		$	20.65		$	20.11
Tangible BV/Share		$	21.61				$	21.13			$	20.51		$	19.99		$	19.45
TCE/TA (%)			8.22					8.04				7.80			7.60			7.52

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

4Q21 Highlights

• Net interest income declined 1.1% QoQ (as asset yields decreased greater than funding costs), but increased 12.5% YoY to $62.7 million; core net interest income fell 1.6% QoQ and increased 11.7% YoY to $61.1 million
• Net interest margin FTE decreased 5 bps QoQ but increased 21 bps YoY to 3.29%, and core net interest margin FTE declined 6 bps QoQ, but expanded 18 bps YoY to 3.21%; Core NIM compression QoQ was primarily from lower loan yields and a less favorable earning asset mix, partially offset by lower funding costs
• Period end net loans excluding PPP, were up 0.9% QoQ and 0.2% YoY; loan closings were $362.7 million in 4Q21, up 48.7% QoQ and 14.8% YoY  
• Average deposits increased 0.8% QoQ and 17.1% YoY to $6.5 billion, with core deposits 85.3% of total average deposits
• Loan pipeline increased 21.1% YoY to $429.3 million
• Provision for credit losses was $0.8 million due to current period loan originations and the increased risk from the COVID-19 Omicron variant
• NPAs decreased 26.1% QoQ and 29.3% YoY to $14.9 million; criticized and classified loans were down 16.3% QoQ to $57.7 million, representing 0.87% of loans
• Tangible Common Equity to Tangible Assets improved 18 bps to 8.22% from 8.04% in 3Q21
• Repurchased 150,976 shares at an average price of $23.75; dividends and share repurchases were 56% of net income in 4Q21

Income Statement Highlights
																							YoY				QoQ
($000s, except EPS)			4Q21					3Q21				2Q21				1Q21			4Q20				Change				Change
Net Interest Income			$	62,674				$	63,364			$	61,039			$	60,892		$	55,732			12.5		%		(1.1	)	%
Provision (Benefit) for Credit Losses				761					(6,927	)			(1,598	)			2,820			3,862			(80.3	)			(111.0	)
Non-interest Income (Loss)				(280	)				866				(3,210	)			6,311			(1,181	)		(76.3	)			(132.3	)
Non-interest Expense				38,807					36,345				34,011				38,159			46,811			(17.1	)			6.8
Income Before Income Taxes				22,826					34,812				25,416				26,224			3,878			488.6				(34.4	)
Provision for Income Taxes				4,743					9,399				6,158				7,185			417			1,037.4				(49.5	)
Net Income			$	18,083				$	25,413			$	19,258			$	19,039		$	3,461			422.5				(28.8	)
Diluted EPS			$	0.58				$	0.81			$	0.61			$	0.60		$	0.11			427.3				(28.4	)
Avg. Diluted Shares (000s)				31,353					31,567				31,677				31,604			30,603			2.5				(0.7	)
Core Net Income1			$	20,968				$	27,829			$	22,994			$	16,973		$	17,784			17.9				(24.7	)
Core EPS1			$	0.67				$	0.88			$	0.73			$	0.54		$	0.58			15.5				(23.9	)

¹ See Reconciliation of GAAP Earnings and Core Earnings

Net interest income totaled $62.7 million in 4Q21 (an increase of 12.5% YoY, but a decrease of 1.1% QoQ), compared to $63.4 million in 3Q21, $61.0 million in 2Q21, $60.9 million in 1Q21, and $55.7 million in 4Q20.

• Net interest margin, FTE (“NIM”) of 3.29% increased 21 bps YoY, but declined 5 bps QoQ; PPP loans caused a 3 bps and 2 bps positive impact on the NIM in 4Q21 and 3Q21, respectively, neutral impact in 2Q21, and a drag of 4 bps in 1Q21 and 3 bps in 4Q20
• 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 $3.1 million (16 bps to the NIM) in 4Q21 compared to $3.4 million (19 bps) in 3Q21, $1.9 million (10 bps) in 2Q21, $3.3 million (17 bps) in 1Q21, and $2.1 million (11 bps) in 4Q20
• Excluding the items in the previous bullet, net interest margin was 3.13% in 4Q21 compared to 3.15% in 3Q21, 3.04% in 2Q21, 3.01% in 1Q21, and 2.97% in 4Q20, or an increase of 16 bps YoY, but a decrease of 2 bps QoQ
• Net PPP loan fees were $1.2 million in 4Q21, $1.3 million in 3Q21, $1.2 million in 2Q21, $0.5 million in 1Q21, and $0.4 million in 4Q20

The Company recorded a provision for credit losses of $0.8 million in 4Q21, $2.8 million in 1Q21, and $3.9 million in 4Q20 compared to a benefit for credit losses of $6.9 million in 3Q21 and $1.6 million in 2Q21.

• 4Q21 provision for credit losses was driven by the current period originations and the increased risk from the COVID-19 Omicron variant
• Net charge-offs (recoveries) were $(29) thousand in 4Q21 (negligible as compared to average loans), $(0.6) million in 3Q21 ((4) bps), $0.9 million in 2Q21 (5 bps), $2.9 million in 1Q21 (17 bps), and $0.6 million in 4Q20 (4 bps)

Non-interest income (loss) was $(0.3) million in 4Q21, $0.9 million in 3Q21, $(3.2) million in 2Q21, $6.3 million in 1Q21, and $(1.2) million in 4Q20.

• Non-interest income included net gains (losses) from fair value adjustments of $(5.1) million in 4Q21 or $(0.13) per share, net of tax, $(2.3) million in 3Q21 or $(0.05) per share, net of tax, $(6.5) million or $(0.15) per share, net of tax in 2Q21, $1.0 million or $0.02 per share, net of tax in 1Q21, and $(4.1) million or $(0.11) per share, net of tax in 4Q20
• Absent all above items and other immaterial adjustments, core non-interest income was $4.9 million in 4Q21, up 36.6% YoY, and 53.6% QoQ
• Included in 4Q21 core non-interest income was a one-time $2.0 million ($0.05 per share, net of tax) dividend received on retirement plan investments
  

Non-interest expense totaled $38.8 million in 4Q21 (a decrease of 17.1% YoY, but an increase of 6.8% QoQ), compared to $36.3 million in 3Q21, $34.0 million in 2Q21, $38.2 million in 1Q21, and $46.8 million in 4Q20.

• 4Q21 non-interest expense includes pre-tax merger benefits of $17 thousand (<$0.01 per share, net of tax)
• 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)
• Excluding the above items and other immaterial adjustments, core operating expenses were $38.7 million in 4Q21, up 15.4% YoY and 13.4% QoQ
• Included in 4Q21 non-interest expense was a one-time $4.3 million ($0.11 per share, net of tax) of increased compensation and benefits for all employees due to record year of earnings in 2021 and employee performance through the pandemic.
• The efficiency ratio was 58.7% in 4Q21, 52.3% in 3Q21, 53.4% in 2Q21, 58.6% in 1Q21, and 57.6% in 4Q20

The provision for income taxes was $4.7 million in 4Q21, compared to $9.4 million in 3Q21, $6.2 million in 2Q21, $7.2 million in 1Q21, and $0.4 million in 4Q20.

• The effective tax rate was 20.8% in 4Q21, 27.0% in 3Q21, 24.2% in 2Q21, 27.4% in 1Q21, and 10.8% in 4Q20
• The 4Q21 effective tax rate declined due to lower levels of taxable state income and higher percentage of permanent differences
• The 2Q21 effective tax rate includes $0.8 million benefit from a state tax rate change; absent this benefit the effective tax rate would have been 27.2%

Balance Sheet, Credit Quality, and Capital Highlights
																		YoY				QoQ
		4Q21				3Q21			2Q21			1Q21			4Q20			Change				Change
Average Loans And Deposits ($MM)
Loans		$	6,558			$	6,633		$	6,687		$	6,700		$	6,376		2.9		%		(1.1	)	%
Deposits			6,459				6,408			6,511			6,285			5,515		17.1				0.8
Credit Quality ($000s)
Nonperforming Loans		$	14,934			$	20,217		$	17,592		$	21,186		$	21,073		(29.1	)	%		(26.1	)	%
Nonperforming Assets			14,934				20,217			17,592			21,221			21,108		(29.2	)			(26.1	)
Criticized and Classified Loans			57,650				68,913			69,161			63,095			71,656		(19.5	)			(16.3	)
Criticized and Classified Assets			78,628				89,889			90,135			63,130			71,691		9.7				(12.5	)
Allowance for Credit Losses/Loans (%)			0.56				0.55			0.64			0.67			0.67		(11	)	bps		1		bps
Capital
Book Value/Share		$	22.26			$	21.78		$	21.16		$	20.65		$	20.11		10.7		%		2.2		%
Tangible Book Value/Share			21.61				21.13			20.51			19.99			19.45		11.1				2.3
Tang. Common Equity/Tang. Assets (%)			8.22				8.04			7.80			7.60			7.52		70		bps		18		bps
Leverage Ratio (%)			8.98				8.83			8.50			8.44			8.38		60				15

Average loans were $6.6 billion, an increase of 2.9% YoY, but a decline of 1.1% QoQ.

• Total loan closings were $362.7 million in 4Q21, $243.9 million in 3Q21, $324.4 million in 2Q21, $322.9 million in 1Q21, and $316.0 million in 4Q20
• The loan pipeline of $429.3 million at December 31, 2021 was up 21.1% YoY, but down 19.1% QoQ as the third quarter 2021 pipeline was at record levels
• PPP loans were $77.4 million at 4Q21, $130.8 million at 3Q21, $197.3 million at 2Q21, $251.0 million at 1Q21, and $151.9 million at 4Q20; forgiven PPP loans were $53.4 million in 4Q21, $66.5 million in 3Q21, $69.2 million in 2Q21, $24.1 million in 1Q21, and $19.7 million in 4Q20; remaining unamortized net PPP fees were $1.9 million at December 31, 2021
• Period end net loans, excluding PPP loans, totaled $6.5 billion, up 0.2% YoY and 0.9% QoQ

Average Deposits totaled $6.5 billion, increasing 17.1% YoY and 0.8% QoQ.

• Average core deposits (non-CD deposits) increased to 85.3% of total average deposits (including escrow deposits) in 4Q21, compared to 79.8% a year ago
• Average non-interest bearing deposits increased 33.6% YoY and 4.6% QoQ and comprised 15.1% of total average deposits (including escrow deposits) in 4Q21 compared to 13.3% a year ago

Credit Quality: Non-performing loans totaled $14.9 million in 4Q21, $20.2 million in 3Q21, $17.6 million in 2Q21, $21.2 million in 1Q21, and $21.1 million in 4Q20.

• Non-performing assets were down 29.3% YoY and 26.1% QoQ
• Criticized and classified loans totaled $57.7 million in 4Q21 (87 bps of loans), $68.9 million in 3Q21 (104 bps of loans), $69.2 million at 2Q21 (103 bps), $63.1 million at 1Q21 (94 bps), and $71.7 million at 4Q20 (107 bps)
• Criticized and classified assets are composed of criticized and classified loans, as detailed above, plus one criticized investment security totaling $21.0 million in both 4Q21 and 3Q21, which is currently under a principal payment forbearance agreement (interest payments are received)
• Loans classified as troubled debt restructured (TDR) totaled $12.7 million in 4Q21 compared to $13.1 million in 3Q21 and $15.7 million a year ago
• Over 87% of gross loans are collateralized by real estate with an average loan-to-value ratio of <38% as of December 31, 2021
• Allowance for credit losses were 0.56% of loans at 4Q21 compared to 0.55% at 3Q21 and 0.67% a year ago
• Allowance for credit losses were 248.7% of nonperforming loans at 4Q21 compared to 179.9% at 3Q21 and 214.3% a year ago
  

Capital: Book value per common share increased to $22.26 at 4Q21, compared to $21.78 at 3Q21, $21.16 at 2Q21, $20.65 at 1Q21, and $20.11 at 4Q20; tangible book value per common share, a non-GAAP measure, was $21.61 in 4Q21, $21.13 at 3Q21, $20.51 at 2Q21, $19.99 at 1Q21, and $19.45 in 4Q20.

• The Company paid a dividend of $0.21 per share and repurchased 150,976 shares at an average price of $23.75 in 4Q21
• As of the end of 4Q21, 848,187 shares remain subject to repurchase under the authorized stock repurchase program, which has no expiration or maximum dollar limit
• Tangible common equity to tangible assets was 8.22% at 4Q21 compared to 8.04% at 3Q21 and 7.52% a year ago
• The Company and the Bank remain well capitalized under all applicable regulatory requirements
• The leverage ratio was 8.98% in 4Q21 versus 8.83% in 3Q21 and 8.38% in 4Q20
  

Conference Call Information And First 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 Friday, January 28, 2022, at 11:00 AM (ET) to discuss the Company’s fourth quarter 2021 results and strategy.
• Dial-in for Live Call: 1-877-509-5836; Canada 855-669-9657
• Webcast: https://services.choruscall.com/links/ffic220128.html
• Dial-in for Replay: 1-877-344-7529; Canada 855-669-9658
• Replay Access Code: 4089423
• The conference call will be simultaneously webcast and archived

First Quarter 2022 Earnings Release Date:

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

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

About Flushing Financial Corporation

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

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

“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: Statements in this Press Release relating to plans, strategies, economic performance and trends, projections of results of specific activities or investments and other statements that are not descriptions of historical facts may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking information is inherently subject to risks and uncertainties, and actual results could differ materially from those currently anticipated due to a number of factors, which include, but are not limited to, risk factors discussed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 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.

#FF

- Statistical Tables Follow -

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
FINANCIAL HIGHLIGHTS
(Unaudited)

	At or for the three months ended																							At or for the year ended
	December 31,					September 30,					June 30,				March 31,				December 31,					December 31,			December 31,
(Dollars in thousands, except per share data)	2021					2021					2021				2021				2020					2021			2020
Performance Ratios (1)
Return on average assets		0.89		%			1.26		%			0.93	%			0.93	%			0.18	%				1.00	%		0.48	%
Return on average equity		10.77					15.42					11.95				12.29				2.27					12.60			5.98
Yield on average interest-earning assets (2)		3.77					3.84					3.69				3.77				3.82					3.77			3.86
Cost of average interest-bearing liabilities		0.58					0.61					0.66				0.69				0.86					0.63			1.16
Cost of funds		0.50					0.53					0.57				0.61				0.77					0.55			1.06
Net interest rate spread during period (2)		3.19					3.23					3.03				3.08				2.96					3.14			2.70
Net interest margin (2)		3.29					3.34					3.14				3.18				3.08					3.24			2.85
Non-interest expense to average assets		1.92					1.80					1.65				1.87				2.43					1.81			1.90
Efficiency ratio (3)		58.66					52.28					53.38				58.58				57.56					55.72			58.69
Average interest-earning assets to average interest-bearing liabilities		1.22		X			1.21		X			1.19	X			1.18	X			1.17	X				1.20	X		1.16	X
Average Balances
Total loans, net	$	6,558,285				$	6,633,301				$	6,686,888			$	6,700,476			$	6,375,516				$	6,644,317		$	6,005,947
Total interest-earning assets		7,627,256					7,608,317					7,790,174				7,667,217				7,243,472					7,672,954			6,862,798
Total assets		8,090,701					8,072,918					8,263,553				8,147,714				7,705,407					8,143,372			7,276,022
Total due to depositors		5,397,802					5,406,423					5,495,936				5,363,647				4,708,760					5,416,020			4,509,206
Total interest-bearing liabilities		6,276,221					6,310,859					6,532,891				6,477,871				6,169,574					6,398,666			5,941,594
Stockholders' equity		671,474					659,288					644,690				619,647				609,463					648,946			580,067
Per Share Data
Book value per common share (4)	$	22.26				$	21.78				$	21.16			$	20.65			$	20.11				$	22.26		$	20.11
Tangible book value per common share (5)	$	21.61				$	21.13				$	20.51			$	19.99			$	19.45				$	21.61		$	19.45
Stockholders' Equity
Stockholders' equity	$	679,628				$	668,096				$	655,167			$	639,201			$	618,997				$	679,628		$	618,997
Tangible stockholders' equity		659,758					648,039					634,959				618,839				598,476					659,758			598,476
Consolidated Regulatory Capital Ratios
Tier 1 capital	$	726,174				$	711,276				$	697,591			$	679,343			$	662,987				$	726,174		$	662,987
Common equity Tier 1 capital		671,494					661,340					649,367				636,071				621,247					671,494			621,247
Total risk-based capital		885,469					832,255					823,494				806,922				794,034					885,469			794,034
Risk Weighted Assets		6,182,095					6,194,207					6,344,076				6,281,136				6,287,598					6,182,095			6,287,598
Tier 1 leverage capital (well capitalized = 5%)		8.98		%			8.83		%			8.50	%			8.44	%			8.38	%				8.98	%		8.38	%
Common equity Tier 1 risk-based capital (well capitalized = 6.5%)		10.86					10.68					10.24				10.13				9.88					10.86			9.88
Tier 1 risk-based capital (well capitalized = 8.0%)		11.75					11.48					11.00				10.82				10.54					11.75			10.54
Total risk-based capital (well capitalized = 10.0%)		14.32					13.44					12.98				12.85				12.63					14.32			12.63
Capital Ratios
Average equity to average assets		8.30		%			8.17		%			7.80	%			7.61	%			7.91	%				7.97	%		7.97	%
Equity to total assets		8.45					8.27					8.03				7.83				7.76					8.45			7.76
Tangible common equity to tangible assets (6)		8.22					8.04					7.80				7.60				7.52					8.22			7.52
Asset Quality
Non-accrual loans (7)	$	14,933				$	18,292				$	17,391			$	18,604			$	18,325				$	14,933		$	18,325
Non-performing loans		14,933					20,217					17,592				21,186				21,073					14,933			21,073
Non-performing assets		14,933					20,217					17,592				21,221				21,108					14,933			21,108
Net charge-offs (recoveries)		(29	)				(619	)				902				2,865				646					3,119			3,639
Asset Quality Ratios
Non-performing loans to gross loans		0.23		%			0.31		%			0.26	%			0.31	%			0.31	%				0.23	%		0.31	%
Non-performing assets to total assets		0.19					0.25					0.22				0.26				0.26					0.19			0.26
Allowance for loan losses to gross loans		0.56					0.55					0.64				0.67				0.67					0.56			0.67
Allowance for loan losses to non-performing assets		248.66					179.86					242.55				212.52				213.91					248.66			213.91
Allowance for loan losses to non-performing loans		248.66					179.86					242.55				212.87				214.27					248.66			214.27
Net charge-offs (recoveries) to average loans		(0.00	)				(0.04	)				0.05				0.17				0.04					0.05			0.06
Full-service customer facilities		24					24					25				25				25					24			25

_____________________
⁽¹⁾ Ratios are presented on an annualized basis, where appropriate.
⁽²⁾ Yields are calculated on the tax equivalent basis using the statutory federal income tax rate of 21% for the periods presented.
⁽³⁾ Efficiency ratio, a non-GAAP measure, was calculated by dividing 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 year ended
	December 31,				September 30,				June 30,				March 31,				December 31,					December 31,				December 31,
(In thousands, except per share data)	2021				2021				2021				2021				2020					2021				2020
Interest and Dividend Income
Interest and fees on loans	$	68,113			$	69,198			$	67,999			$	69,021			$	66,120				$	274,331			$	248,153
Interest and dividends on securities:
Interest		3,536				3,706				3,685				3,072				2,813					13,999				15,776
Dividends		7				7				7				8				8					29				43
Other interest income		74				42				51				36				30					203				355
Total interest and dividend income		71,730				72,953				71,742				72,137				68,971					288,562				264,327
Interest Expense
Deposits		3,975				4,705				5,539				6,105				6,470					20,324				42,312
Other interest expense		5,081				4,884				5,164				5,140				6,769					20,269				26,816
Total interest expense		9,056				9,589				10,703				11,245				13,239					40,593				69,128
Net Interest Income		62,674				63,364				61,039				60,892				55,732					247,969				195,199
Provision (benefit) for credit losses		761				(6,927	)			(1,598	)			2,820				3,862					(4,944	)			23,129
Net Interest Income After Provision (Benefit) for Credit Losses		61,913				70,291				62,637				58,072				51,870					252,913				172,070
Non-interest Income (Loss)
Banking services fee income		1,142				865				1,233				2,725				1,442					5,965				4,500
Net gain (loss) on sale of securities		—				(10	)			123				—				(610	)				113				(701	)
Net gain on sale of loans		46				131				127				31				6					335				48
Net gain on disposition of assets		—				—				—				621				—					621				—
Net gain (loss) from fair value adjustments		(5,140	)			(2,289	)			(6,548	)			982				(4,129	)				(12,995	)			(2,142	)
Federal Home Loan Bank of New York stock dividends		417				491				500				689				734					2,097				3,453
Life insurance proceeds		—				—				—				—				—					—				659
Bank owned life insurance		1,023				1,015				1,009				997				1,016					4,044				3,814
Other income		2,232				663				346				266				360					3,507				1,412
Total non-interest income (loss)		(280	)			866				(3,210	)			6,311				(1,181	)				3,687				11,043
Non-interest Expense
Salaries and employee benefits		25,223				20,544				19,879				22,664				22,089					88,310				74,228
Occupancy and equipment		3,579				3,534				3,522				3,367				3,446					14,002				12,134
Professional services		1,152				1,899				1,988				2,400				2,463					7,439				9,374
FDIC deposit insurance		391				618				729				1,213				562					2,951				2,676
Data processing		1,757				1,759				1,419				2,109				3,411					7,044				8,586
Depreciation and amortization		1,521				1,627				1,638				1,639				1,579					6,425				6,212
Other real estate owned/foreclosure (recoveries) expense		129				182				22				(10	)			95					323				216
Prepayment penalty on borrowings		—				—				—				—				7,834					—				7,834
Other operating expenses		5,055				6,182				4,814				4,777				5,332					20,828				16,671
Total non-interest expense		38,807				36,345				34,011				38,159				46,811					147,322				137,931
Income Before Provision for Income Taxes		22,826				34,812				25,416				26,224				3,878					109,278				45,182
Provision for Income Taxes		4,743				9,399				6,158				7,185				417					27,485				10,508
Net Income	$	18,083			$	25,413			$	19,258			$	19,039			$	3,461				$	81,793			$	34,674
Basic earnings per common share	$	0.58			$	0.81			$	0.61			$	0.60			$	0.11				$	2.59			$	1.18
Diluted earnings per common share	$	0.58			$	0.81			$	0.61			$	0.60			$	0.11				$	2.59			$	1.18
Dividends per common share	$	0.21			$	0.21			$	0.21			$	0.21			$	0.21				$	0.84			$	0.84
Basic average shares		31,353				31,567				31,677				31,604				30,603					31,550				29,301
Diluted average shares		31,353				31,567				31,677				31,604				30,603					31,550				29,301

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

	December 31,				September 30,				June 30,				March 31,				December 31,
(Dollars in thousands)	2021				2021				2021				2021				2020
ASSETS
Cash and due from banks	$	81,723			$	178,598			$	145,971			$	174,420			$	157,388
Securities held-to-maturity:
Mortgage-backed securities		7,894				7,899				7,904				7,909				7,914
Other securities		49,974				49,989				49,986				49,912				49,918
Securities available for sale:
Mortgage-backed securities		572,184				584,145				596,661				518,781				404,460
Other securities		205,052				212,654				224,784				242,440				243,514
Loans		6,638,105				6,630,354				6,718,806				6,745,316				6,704,674
Allowance for loan losses		(37,135	)			(36,363	)			(42,670	)			(45,099	)			(45,153	)
Net loans		6,600,970				6,593,991				6,676,136				6,700,217				6,659,521
Interest and dividends receivable		38,698				40,912				43,803				44,941				44,041
Bank premises and equipment, net		23,338				24,018				26,438				27,498				28,179
Federal Home Loan Bank of New York stock		35,937				36,158				41,630				41,498				43,439
Bank owned life insurance		210,754				184,730				183,715				182,707				181,710
Goodwill		17,636				17,636				17,636				17,636				17,636
Core deposit intangibles		2,562				2,708				2,859				3,013				3,172
Right of use asset		50,200				50,155				51,972				53,802				50,743
Other assets		148,989				93,741				89,850				94,410				84,759
Total assets	$	8,045,911			$	8,077,334			$	8,159,345			$	8,159,184			$	7,976,394
LIABILITIES
Deposits	$	6,333,532			$	6,421,391			$	6,298,790			$	6,326,577			$	6,090,733
Mortgagors' escrow deposits		51,913				67,207				58,230				74,348				45,622
Borrowed funds		815,544				752,925				971,827				948,920				1,020,895
Operating lease liability		54,155				54,239				56,151				58,080				59,100
Other liabilities		111,139				113,476				119,180				112,058				141,047
Total liabilities		7,366,283				7,409,238				7,504,178				7,519,983				7,357,397
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		263,375				262,009				260,958				260,019				261,533
Treasury stock		(75,293	)			(71,738	)			(65,335	)			(65,479	)			(69,400	)
Retained earnings		497,889				486,418				467,620				455,023				442,789
Accumulated other comprehensive loss, net of taxes		(6,684	)			(8,934	)			(8,417	)			(10,703	)			(16,266	)
Total stockholders' equity		679,628				668,096				655,167				639,201				618,997
Total liabilities and stockholders' equity	$	8,045,911			$	8,077,334			$	8,159,345			$	8,159,184			$	7,976,394
(In thousands)
Issued shares		34,088				34,088				34,088				34,088				34,088
Outstanding shares		30,526				30,676				30,962				30,954				30,776
Treasury shares		3,561				3,412				3,126				3,133				3,312

  

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
AVERAGE BALANCE SHEETS
(Unaudited)

	For the three months ended																For the year ended
	December 31,			September 30,			June 30,			March 31,			December 31,				December 31,			December 31,
(In thousands)	2021			2021			2021			2021			2020				2021			2020
Interest-earning Assets:
Mortgage loans, net	$	5,140,233		$	5,158,213		$	5,130,400		$	5,155,975		$	5,010,097			$	5,146,195		$	4,798,232
Other loans, net		1,418,052			1,475,088			1,556,488			1,544,501			1,365,419				1,498,122			1,207,715
Total loans, net		6,558,285			6,633,301			6,686,888			6,700,476			6,375,516				6,644,317			6,005,947
Taxable securities:
Mortgage-backed securities		595,538			590,732			578,134			433,917			413,875				550,136			450,065
Other securities		207,482			217,763			232,020			300,828			266,663				239,208			249,533
Total taxable securities		803,020			808,495			810,154			734,745			680,538				789,344			699,598
Tax-exempt securities:
Other securities		50,834			50,832			50,830			50,828			50,768				50,831			56,530
Total tax-exempt securities		50,834			50,832			50,830			50,828			50,768				50,831			56,530
Interest-earning deposits and federal funds sold		215,117			115,689			242,302			181,168			136,650				188,462			100,723
Total interest-earning assets		7,627,256			7,608,317			7,790,174			7,667,217			7,243,472				7,672,954			6,862,798
Other assets		463,445			464,601			473,379			480,497			461,935				470,418			413,224
Total assets	$	8,090,701		$	8,072,918		$	8,263,553		$	8,147,714		$	7,705,407			$	8,143,372		$	7,276,022
Interest-bearing Liabilities:
Deposits:
Savings accounts	$	154,471		$	153,120		$	153,113		$	170,079		$	163,382			$	157,640		$	176,443
NOW accounts		2,115,619			2,107,866			2,255,581			2,185,384			1,924,840				2,165,762			1,603,402
Money market accounts		2,177,928			2,107,473			2,043,257			1,905,543			1,507,245				2,059,431			1,561,496
Certificate of deposit accounts		949,784			1,037,964			1,043,985			1,102,641			1,113,293				1,033,187			1,167,865
Total due to depositors		5,397,802			5,406,423			5,495,936			5,363,647			4,708,760				5,416,020			4,509,206
Mortgagors' escrow accounts		84,617			68,562			91,545			65,372			75,005				77,552			70,829
Total interest-bearing deposits		5,482,419			5,474,985			5,587,481			5,429,019			4,783,765				5,493,572			4,580,035
Borrowings		793,802			835,874			945,410			1,048,852			1,385,809				905,094			1,361,559
Total interest-bearing liabilities		6,276,221			6,310,859			6,532,891			6,477,871			6,169,574				6,398,666			5,941,594
Non interest-bearing demand deposits		976,803			933,443			923,220			856,052			731,170				922,741			583,235
Other liabilities		166,203			169,328			162,752			194,144			195,200				173,019			171,126
Total liabilities		7,419,227			7,413,630			7,618,863			7,528,067			7,095,944				7,494,426			6,695,955
Equity		671,474			659,288			644,690			619,647			609,463				648,946			580,067
Total liabilities and equity	$	8,090,701		$	8,072,918		$	8,263,553		$	8,147,714		$	7,705,407			$	8,143,372		$	7,276,022
Net interest-earning assets	$	1,351,035		$	1,297,458		$	1,257,283		$	1,189,346		$	1,073,898			$	1,274,288		$	921,204

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

	For the three months ended																						For the year ended
	December 31,				September 30,				June 30,					March 31,				December 31,					December 31,				December 31,
(Dollars in thousands)	2021				2021				2021					2021				2020					2021				2020
Interest Income:
Mortgage loans, net	$	54,260			$	55,114			$	52,987				$	55,219			$	53,777				$	217,580			$	202,722
Other loans, net		13,853				14,084				15,012					13,802				12,343					56,751				45,431
Total loans, net		68,113				69,198				67,999					69,021				66,120					274,331				248,153
Taxable securities:
Mortgage-backed securities		2,125				2,279				2,233					1,698				1,435					8,335				8,730
Other securities		993				1,008				1,037					963				957					4,001				5,178
Total taxable securities		3,118				3,287				3,270					2,661				2,392					12,336				13,908
Tax-exempt securities:
Other securities		538				539				535					530				543					2,142				2,419
Total tax-exempt securities		538				539				535					530				543					2,142				2,419
Interest-earning deposits and federal funds sold		74				42				51					36				30					203				355
Total interest-earning assets		71,843				73,066				71,855					72,248				69,085					289,012				264,835
Interest Expense:
Deposits:
Savings accounts	$	53			$	61			$	66				$	75			$	75				$	255			$	495
NOW accounts		1,021				1,227				1,499					1,706				1,320					5,453				9,309
Money market accounts		1,428				1,683				2,060					2,100				2,010					7,271				14,368
Certificate of deposit accounts		1,471				1,734				1,913					2,222				3,065					7,340				18,096
Total due to depositors		3,973				4,705				5,538					6,103				6,470					20,319				42,268
Mortgagors' escrow accounts		2				—				1					2				—					5				44
Total interest-bearing deposits		3,975				4,705				5,539					6,105				6,470					20,324				42,312
Borrowings		5,081				4,884				5,164					5,140				6,769					20,269				26,816
Total interest-bearing liabilities		9,056				9,589				10,703					11,245				13,239					40,593				69,128
Net interest income- tax equivalent	$	62,787			$	63,477			$	61,152				$	61,003			$	55,846				$	248,419			$	195,707
Included in net interest income above:
Prepayment penalties received on loans and securities and net of reversals and recovered interest from non-accrual loans	$	1,497			$	2,136			$	2,046				$	948			$	1,093				$	6,627			$	4,576
Net gains/(losses) from fair value adjustments on qualifying hedges included in loan interest income		1,122				194				(664	)				1,427				1,023					2,079				(1,185	)
Purchase accounting adjustments		462				1,100				565					922				11					3,049				11
Interest-earning Assets Yields:
Mortgage loans, net		4.22	%			4.27	%			4.13		%			4.28	%			4.29	%				4.23	%			4.22		%
Other loans, net		3.91				3.82				3.86					3.57				3.62					3.79				3.76
Total loans, net		4.15				4.17				4.07					4.12				4.15					4.13				4.13
Taxable securities:
Mortgage-backed securities		1.43				1.54				1.54					1.57				1.39					1.52				1.94
Other securities		1.91				1.85				1.79					1.28				1.44					1.67				2.08
Total taxable securities		1.55				1.63				1.61					1.45				1.41					1.56				1.99
Tax-exempt securities: (1)
Other securities		4.23				4.24				4.21					4.17				4.28					4.21				4.28
Total tax-exempt securities		4.23				4.24				4.21					4.17				4.28					4.21				4.28
Interest-earning deposits and federal funds sold		0.14				0.15				0.08					0.08				0.09					0.11				0.35
Total interest-earning assets		3.77	%			3.84	%			3.69		%			3.77	%			3.82	%				3.77	%			3.86		%
Interest-bearing Liabilities Yields:
Deposits:
Savings accounts		0.14	%			0.16	%			0.17		%			0.18	%			0.18	%				0.16	%			0.28		%
NOW accounts		0.19				0.23				0.27					0.31				0.27					0.25				0.58
Money market accounts		0.26				0.32				0.40					0.44				0.53					0.35				0.92
Certificate of deposit accounts		0.62				0.67				0.73					0.81				1.10					0.71				1.55
Total due to depositors		0.29				0.35				0.40					0.46				0.55					0.38				0.94
Mortgagors' escrow accounts		0.01				—				—					0.01				—					0.01				0.06
Total interest-bearing deposits		0.29				0.34				0.40					0.45				0.54					0.37				0.92
Borrowings		2.56				2.34				2.18					1.96				1.95					2.24				1.97
Total interest-bearing liabilities		0.58	%			0.61	%			0.66		%			0.69	%			0.86	%				0.63	%			1.16		%
Net interest rate spread (tax equivalent)		3.19	%			3.23	%			3.03		%			3.08	%			2.96	%				3.14	%			2.70		%
Net interest margin (tax equivalent)		3.29	%			3.34	%			3.14		%			3.18	%			3.08	%				3.24	%			2.85		%
Ratio of interest-earning assets to interest-bearing liabilities		1.22	X			1.21	X			1.19		X			1.18	X			1.17	X				1.20	X			1.16		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

																	December 2021 vs.				December 2021 vs.
		December 31,			September 30,			June 30,			March 31,			December 31,			September 2021				December 2020
(Dollars in thousands)		2021			2021			2021			2021			2020			% Change				% Change
Non-interest bearing		$	967,621		$	941,259		$	945,491		$	917,189		$	778,672		2.8		%		24.3		%
Interest bearing:
Certificate of deposit accounts			946,575			1,040,098			1,020,615			1,070,595			1,138,361		(9.0	)			(16.8	)
Savings accounts			156,554			152,306			152,931			170,272			168,183		2.8				(6.9	)
Money market accounts			2,342,003			2,152,085			2,057,188			1,990,656			1,682,345		8.8				39.2
NOW accounts			1,920,779			2,135,643			2,122,565			2,177,865			2,323,172		(10.1	)			(17.3	)
Total interest-bearing deposits			5,365,911			5,480,132			5,353,299			5,409,388			5,312,061		(2.1	)			1.0
Total deposits		$	6,333,532		$	6,421,391		$	6,298,790		$	6,326,577		$	6,090,733		(1.4	)	%		4.0		%

Loan Composition

																						December 2021 vs.				December 2021 vs.
		December 31,				September 30,				June 30,				March 31,				December 31,				September 2021				December 2020
(Dollars in thousands)		2021				2021				2021				2021				2020				% Change				% Change
Multifamily residential		$	2,517,026			$	2,498,980			$	2,542,010			$	2,525,967			$	2,533,952			0.7		%		(0.7	)	%
Commercial real estate			1,775,629				1,745,855				1,726,895				1,721,702				1,754,754			1.7				1.2
One-to-four family ― mixed-use property			571,795				579,100				582,211				595,431				602,981			(1.3	)			(5.2	)
One-to-four family ― residential			268,255				280,343				288,652				239,391				245,211			(4.3	)			9.4
Co-operative apartments			8,316				7,804				7,883				7,965				8,051			6.6				3.3
Construction			59,761				71,464				62,802				61,528				83,322			(16.4	)			(28.3	)
Mortgage Loans			5,200,782				5,183,546				5,210,453				5,151,984				5,228,271			0.3				(0.5	)
Small Business Administration (1)			93,811				148,855				215,158				267,120				167,376			(37.0	)			(44.0	)
Taxi medallion			—				—				—				—				2,757			—				(100.0	)
Commercial business and other			1,339,273				1,294,688				1,291,526				1,326,657				1,303,225			3.4				2.8
Non-mortgage loans			1,433,084				1,443,543				1,506,684				1,593,777				1,473,358			(0.7	)			(2.7	)
Net unamortized premiums and unearned loan fees (2)			4,239				3,265				1,669				(445	)			3,045			29.8				39.2
Allowance for loan losses			(37,135	)			(36,363	)			(42,670	)			(45,099	)			(45,153	)		2.1				(17.8	)
Net loans		$	6,600,970			$	6,593,991			$	6,676,136			$	6,700,217			$	6,659,521			0.1		%		(0.9	)	%

_____________________
⁽¹⁾ Includes $77.4 million, $130.8 million, $197.3 million, $251.0 million, and $151.9 million of PPP loans at December 31, 2021, September 30, 2021, June 30, 2021, March 31, 2021, and December 31, 2020, respectively.
⁽²⁾ Includes $8.0 million, $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 December 31, 2021, 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 year ended
		December 31,			September 30,			June 30,			March 31,			December 31,					December 31,		December 31,
(In thousands)		2021			2021			2021			2021			2020				2021			2020
Multifamily residential		$	79,648		$	41,850		$	66,913		$	58,553		$	52,024			$	246,964		$	212,729
Commercial real estate			64,916			48,447			37,963			17,156			57,634				168,482			191,852
One-to-four family – mixed-use property			12,440			12,823			7,135			8,712			9,692				41,110			35,131
One-to-four family – residential			5,162			2,761			59,494			3,131			8,422				70,548			21,805
Co-operative apartments			413			—			—			—			—				413			704
Construction			17,033			8,687			5,281			7,123			6,869				38,124			21,859
Mortgage Loans			179,612			114,568			176,786			94,675			134,641				565,641			484,080
Small Business Administration (1)			270			415			17,585			125,093			598				143,363			112,352
Commercial business and other			182,858			128,946			130,036			103,118			180,787				544,958			407,725
Non-mortgage Loans			183,128			129,361			147,621			228,211			181,385				688,321			520,077
Total Closings		$	362,740		$	243,929		$	324,407		$	322,886		$	316,026			$	1,253,962		$	1,004,157

_____________________
⁽¹⁾ Includes $15.5 million and $123.2 million of PPP closings for the three months ended June 30, 2021 and March 31, 2021, respectively and $138.7 million and $111.6 million for the years ended December 31 2021 and 2020, respectively.

Weighted Average Rate on Loan Closings

		For the three months ended
		December 31,			September 30,			June 30,			March 31,			December 31,
Loan type		2021			2021			2021			2021			2020
Mortgage loans		3.77	%		3.80	%		3.53	%		3.47	%		3.47	%
Non-mortgage loans		3.24			3.49			3.23			2.26			3.37
Total loans		3.51	%		3.64	%		3.39	%		2.62	%		3.41	%
Excluding PPP loans		3.51	%		3.64	%		3.51	%		3.62	%		3.41	%

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
ASSET QUALITY
(Unaudited)

Allowance for Loan Losses

		For the three months ended																										For the year ended
		December 31,					September 30,					June 30,					March 31,					December 31,						December 31,						December 31,
(Dollars in thousands)		2021					2021					2021					2021					2020						2021						2020
Allowance for loan losses
Beginning balances		$	36,363				$	42,670				$	45,099				$	45,153				$	38,343						45,153						21,751
Adoption of Current Expected Credit Losses			—					—					—					—					—						—						379
Net loan charge-off (recoveries):
Multifamily residential			—					—					—					33					(11	)				$	33					$	(38	)
Commercial real estate			—					—					—					64					—						64						—
One-to-four family – mixed-use property			1					(123	)				3					19					—						(100	)					(135	)
One-to-four family – residential			(3	)				(147	)				(2	)				(5	)				(2	)					(157	)					(12	)
Small Business Administration			(7	)				(8	)				(9	)				(10	)				(3	)					(34	)					108
Taxi medallion			—					(1,235	)				(222	)				2,758					124						1,301						1,075
Commercial business and other			(20	)				894					1,132					6					538						2,012						2,641
Total			(29	)				(619	)				902					2,865					646						3,119						3,639
(Benefit) provision for loan losses			743					(6,926	)				(1,527	)				2,811					3,357						(4,899	)					22,563
Allowance recorded at the time of Acquisition			—					—					—					—					4,099						—						4,099
Ending balance		$	37,135				$	36,363				$	42,670				$	45,099				$	45,153					$	37,135					$	45,153
Gross charge-offs		$	7				$	1,019				$	1,186				$	2,922				$	752					$	5,134					$	4,005
Gross recoveries			36					1,638					284					57					106						2,015						366
Allowance for loan losses to gross loans			0.56		%			0.55		%			0.64		%			0.67		%			0.67		%				0.56		%				0.67		%
Net loan charge-offs (recoveries) to average loans			(0.00	)				(0.04	)				0.05					0.17					0.04						0.05						0.06

Non-Performing Assets

		December 31,				September 30,				June 30,				March 31,				December 31,
(Dollars in thousands)		2021				2021				2021				2021				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			2,431				4,192				4,669				4,338				2,524
Commercial real estate			613				613				8				8				1,683
One-to-four family - mixed-use property (1)			1,309				2,204				2,309				2,355				1,366
One-to-four family - residential			7,725				7,807				6,940				7,335				5,854
Small Business Administration			937				976				976				1,151				1,151
Taxi medallion(1)			—				—				—				—				2,317
Commercial business and other(1)			1,918				2,500				2,489				3,417				3,430
Total			14,933				18,292				17,391				18,604				18,325
Total Non-performing Loans (NPLs)			14,933				20,217				17,592				21,186				21,073
Other Non-performing Assets:
Other asset acquired through foreclosure			—				—				—				35				35
Total			—				—				—				35				35
Total Non-performing Assets		$	14,933			$	20,217			$	17,592			$	21,221			$	21,108
Non-performing Assets to Total Assets			0.19	%			0.25	%			0.22	%			0.26	%			0.26	%
Allowance For Loan Losses to NPLs			248.7	%			179.9	%			242.6	%			212.9	%			214.3	%

_____________________
⁽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 4Q21, 3Q21, 2Q21, 1Q21, and 4Q20; non-accrual performing TDR taxi medallion loans totaling $0.4 million in 4Q20, and non-accrual performing TDR commercial business loans totaling $2.2 million each in 2Q21, 1Q21, and 4Q20.

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 year ended
(Dollars in thousands,		December 31,					September 30,					June 30,					March 31,					December 31,						December 31,					December 31,
except per share data)		2021					2021					2021					2021					2020						2021					2020
GAAP income before income taxes		$	22,826				$	34,812				$	25,416				$	26,224				$	3,878					$	109,278				$	45,182
Day 1, Provision for Credit Losses - Empire transaction (Provision for credit losses)			—					—					—					—					1,818						—					1,818
Net (gain) loss from fair value adjustments (Non-interest income (loss))			5,140					2,289					6,548					(982	)				4,129						12,995					2,142
Net (gain) loss on sale of securities (Non-interest income (loss))			—					10					(123	)				—					610						(113	)				701
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)			(1,122	)				(194	)				664					(1,427	)				(1,023	)					(2,079	)				1,185
Prepayment penalty on borrowings (Non-interest expense)			—					—					—					—					7,834						—					7,834
Net amortization of purchase accounting adjustments (Various)			(324	)				(958	)				(418	)				(789	)				80						(2,489	)				80
Merger (benefit) expense (Various)			(17	)				2,096					(490	)				973					5,349						2,562					6,894
Core income before taxes			26,503					38,055					31,597					23,378					22,675						119,533					65,177
Provision for income taxes for core income			5,535					10,226					8,603					6,405					4,891						30,769					15,428
Core net income		$	20,968				$	27,829				$	22,994				$	16,973				$	17,784					$	88,764				$	49,749
GAAP diluted earnings per common share		$	0.58				$	0.81				$	0.61				$	0.60				$	0.11					$	2.59				$	1.18
Day 1, Provision for Credit Losses - Empire transaction, net of tax			—					—					—					—					0.05						—					0.05
Net (gain) loss from fair value adjustments, net of tax			0.13					0.05					0.15					(0.02	)				0.11						0.31					0.06
Net loss on sale of securities, net of tax			—					—					—					—					0.02						—					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			(0.03	)				—					0.02					(0.03	)				(0.03	)					(0.05	)				0.03
Prepayment penalty on borrowings, net of tax			—					—					—					—					0.20						—					0.20
Net amortization of purchase accounting adjustments, net of tax			(0.01	)				(0.02	)				(0.01	)				(0.02	)				—						(0.06	)				—
Merger (benefit) expense, net of tax			—					0.05					(0.01	)				0.02					0.14						0.06					0.18
NYS tax change			—					—					(0.02	)				—					—						(0.02	)				—
Core diluted earnings per common share(1)		$	0.67				$	0.88				$	0.73				$	0.54				$	0.58					$	2.81				$	1.70
Core net income, as calculated above		$	20,968				$	27,829				$	22,994				$	16,973				$	17,784					$	88,764				$	49,749
Average assets			8,090,701					8,072,918					8,263,553					8,147,714					7,705,407						8,143,372					7,276,022
Average equity			671,474					659,288					644,690					619,647					609,463						648,946					580,067
Core return on average assets(2)			1.04		%			1.38		%			1.11		%			0.83		%			0.92		%				1.09		%			0.68		%
Core return on average equity(2)			12.49		%			16.88		%			14.27		%			10.96		%			11.67		%				13.68		%			8.58		%

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

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

		For the three months ended																						For the year ended
		December 31,				September 30,				June 30,				March 31,				December 31,						December 31,				December 31,
(Dollars in thousands)		2021				2021				2021				2021				2020						2021				2020
GAAP Net interest income		$	62,674			$	63,364			$	61,039			$	60,892			$	55,732					$	247,969			$	195,199
Net (gain) loss from fair value adjustments on qualifying hedges			(1,122	)			(194	)			664				(1,427	)			(1,023	)					(2,079	)			1,185
Net amortization of purchase accounting adjustments			(462	)			(1,100	)			(565	)			(922	)			(11	)					(3,049	)			(11	)
Core Net interest income		$	61,090			$	62,070			$	61,138			$	58,543			$	54,698					$	242,841			$	196,373
GAAP Non-interest income (loss)		$	(280	)		$	866			$	(3,210	)		$	6,311			$	(1,181	)				$	3,687			$	11,043
Net (gain) loss from fair value adjustments			5,140				2,289				6,548				(982	)			4,129						12,995				2,142
Net loss on sale of securities			—				10				(123	)			—				610						(113	)			701
Life insurance proceeds			—				—				—				—				—						—				(659	)
Net gain on sale of assets			—				—				—				(621	)			—						(621	)			—
Core Non-interest income		$	4,860			$	3,165			$	3,215			$	4,708			$	3,558					$	15,948			$	13,227
GAAP Non-interest expense		$	38,807			$	36,345			$	34,011			$	38,159			$	46,811					$	147,322			$	137,931
Prepayment penalty on borrowings			—				—				—				—				(7,834	)					—				(7,834	)
Net amortization of purchase accounting adjustments			(138	)			(142	)			(147	)			(133	)			(91	)					(560	)			(91	)
Merger (benefit) expense			17				(2,096	)			490				(973	)			(5,349	)					(2,562	)			(6,894	)
Core Non-interest expense		$	38,686			$	34,107			$	34,354			$	37,053			$	33,537					$	144,200			$	123,112
Net interest income		$	62,674			$	63,364			$	61,039			$	60,892			$	55,732					$	247,969			$	195,199
Non-interest income (loss)			(280	)			866				(3,210	)			6,311				(1,181	)					3,687				11,043
Non-interest expense			(38,807	)			(36,345	)			(34,011	)			(38,159	)			(46,811	)					(147,322	)			(137,931	)
Pre-provision pre-tax net revenue		$	23,587			$	27,885			$	23,818			$	29,044			$	7,740					$	104,334			$	68,311
Core:
Net interest income		$	61,090			$	62,070			$	61,138			$	58,543			$	54,698					$	242,841			$	196,373
Non-interest income			4,860				3,165				3,215				4,708				3,558						15,948				13,227
Non-interest expense			(38,686	)			(34,107	)			(34,354	)			(37,053	)			(33,537	)					(144,200	)			(123,112	)
Pre-provision pre-tax net revenue		$	27,264			$	31,128			$	29,999			$	26,198			$	24,719					$	114,589			$	86,488
Efficiency Ratio			58.7		%		52.3		%		53.4		%		58.6		%		57.6		%				55.7		%		58.7		%

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 year ended
		December 31,					September 30,					June 30,					March 31,					December 31,						December 31,				December 31,
(Dollars in thousands)		2021					2021					2021					2021					2020						2021				2020
GAAP net interest income		$	62,674				$	63,364				$	61,039				$	60,892				$	55,732					$	247,969			$	195,199
Net (gain) loss from fair value adjustments on qualifying hedges			(1,122	)				(194	)				664					(1,427	)				(1,023	)					(2,079	)			1,185
Net amortization of purchase accounting adjustments			(462	)				(1,100	)				(565	)				(922	)				(11	)					(3,049	)			(11	)
Tax equivalent adjustment			113					113					113					111					114						450				508
Core net interest income FTE		$	61,203				$	62,183				$	61,251				$	58,654				$	54,812					$	243,291			$	196,881
Prepayment penalties received on loans and securities, net of reversals and recoveries of interest from non-accrual loans			(1,497	)				(2,136	)				(2,046	)				(948	)				(1,093	)					(6,627	)			(4,576	)
Base net interest income FTE		$	59,706				$	60,047				$	59,205				$	57,706				$	53,719					$	236,664			$	192,305
Total average interest-earning assets (1)		$	7,634,601				$	7,616,332				$	7,799,176				$	7,676,833				$	7,245,147					$	7,681,441			$	6,863,219
Core net interest margin FTE			3.21		%			3.27		%			3.14		%			3.06		%			3.03		%				3.17		%		2.87		%
Base net interest margin FTE			3.13		%			3.15		%			3.04		%			3.01		%			2.97		%				3.08		%		2.80		%
GAAP interest income on total loans, net		$	68,113				$	69,198				$	67,999				$	69,021				$	66,120					$	274,331			$	248,153
Net (gain) loss from fair value adjustments on qualifying hedges			(1,122	)				(194	)				664					(1,427	)				(1,023	)					(2,079	)			1,185
Net amortization of purchase accounting adjustments			(535	)				(1,126	)				(624	)				(728	)				(356	)					(3,013	)			(356	)
Core interest income on total loans, net		$	66,456				$	67,878				$	68,039				$	66,866				$	64,741					$	269,239			$	248,982
Prepayment penalties received on loans, net of reversals and recoveries of interest from non-accrual loans			(1,497	)				(2,135	)				(2,046	)				(947	)				(1,093	)					(6,625	)			(4,501	)
Base interest income on total loans, net		$	64,959				$	65,743				$	65,993				$	65,919				$	63,648					$	262,614			$	244,481
Average total loans, net (1)		$	6,566,654				$	6,642,434				$	6,697,103				$	6,711,446				$	6,379,429					$	6,653,980			$	6,006,931
Core yield on total loans			4.05		%			4.09		%			4.06		%			3.99		%			4.06		%				4.05		%		4.14		%
Base yield on total loans			3.96		%			3.96		%			3.94		%			3.93		%			3.99		%				3.95		%		4.07		%

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

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

		December 31,					September 30,					June 30,					March 31,					December 31,
(Dollars in thousands)		2021					2021					2021					2021					2020
Total Equity		$	679,628				$	668,096				$	655,167				$	639,201				$	618,997
Less:
Goodwill			(17,636	)				(17,636	)				(17,636	)				(17,636	)				(17,636	)
Core deposit Intangibles			(2,562	)				(2,708	)				(2,859	)				(3,013	)				(3,172	)
Intangible deferred tax liabilities			328					287					287					287					287
Tangible Stockholders' Common Equity		$	659,758				$	648,039				$	634,959				$	618,839				$	598,476
Total Assets		$	8,045,911				$	8,077,334				$	8,159,345				$	8,159,184				$	7,976,394
Less:
Goodwill			(17,636	)				(17,636	)				(17,636	)				(17,636	)				(17,636	)
Core deposit Intangibles			(2,562	)				(2,708	)				(2,859	)				(3,013	)				(3,172	)
Intangible deferred tax liabilities			328					287					287					287					287
Tangible Assets		$	8,026,041				$	8,057,277				$	8,139,137				$	8,138,822				$	7,955,873
Tangible Stockholders' Common Equity to Tangible Assets			8.22		%			8.04		%			7.80		%			7.60		%			7.52		%

FAQ

What were the key financial results for FFIC in 4Q21?

In 4Q21, FFIC reported a GAAP EPS of $0.58, a Core EPS of $0.67, and net interest income of $62.7 million.

How did FFIC's loan growth perform in 4Q21?

Loans, excluding PPP, increased by 3.7% annualized in 4Q21, with loan closings up 49% QoQ.

What was the total return to shareholders for FFIC in 4Q21?

The Company returned 56% of earnings to shareholders through dividends and share repurchases in 4Q21.

What challenges did FFIC face in 4Q21?

FFIC experienced a decline in net interest income by 1.1% QoQ and a decrease in the loan pipeline by 19% QoQ.

What impact did COVID-19 have on FFIC's credit losses in 4Q21?

The provision for credit losses was $0.8 million in 4Q21, influenced by loan originations and COVID-19 risks.