Flushing Financial Corporation Reports 4Q22 GAAP EPS of $0.34 and Core EPS of $0.57; Full Year 2022 GAAP EPS of $2.50 and Core EPS of $2.49

Rhea-AI Summary

On January 26, 2023, the Company reported fourth quarter 2022 GAAP EPS of $0.34, down 41.4% YoY, with full year GAAP EPS of $2.50, a decline of 3.5% YoY. Core EPS for 4Q22 was $0.57, down 14.9% YoY. The decline in net interest income to $54.2 million reflected higher funding costs, with a net interest margin (NIM) of 2.70%. Nonperforming loans rose to $32.4 million, while average loans increased by 4.9% YoY. The Company repurchased 374,862 shares at an average price of $20.16 and returned 71% of earnings to shareholders in 2022. The earnings call is scheduled for January 27, 2023, to discuss these results and future strategies.

Positive

• Core EPS of $0.57 in 4Q22, second-best core earnings for 2022.
• Average loans and deposits increased by 4.9% and 3.4% YoY in 4Q22.
• Credit quality remained strong with net charge-offs of only 5 basis points.

Negative

• GAAP EPS decreased 41.4% YoY in 4Q22, indicating significant profit erosion.
• Net interest income fell 13.5% YoY due to higher funding costs.
• The NIM declined to 2.70%, down from 3.29% YoY, due to liability-sensitive balance sheet.

John R. Buran, President and CEO Commentary

UNIONDALE, N.Y., Jan. 26, 2023 (GLOBE NEWSWIRE) -- The Company reported fourth quarter 2022 GAAP EPS of $0.34, down 41.4% YoY, with ROAA of 0.48%, and ROAE of 6.06%. Core 4Q22 EPS was $0.57, a decrease of 14.9% YoY, with ROAA of 0.82% and ROAE of 10.29%. Full year 2022 GAAP EPS was $2.50, down 3.5% YoY with ROAA of 0.93% and ROAE of 11.44%. Core 2022 EPS was $2.49, a decline of 11.4% YoY with ROAA of 0.92% and ROAE of 11.42%.

“The Company recorded its second-best core earnings for 2022 despite the aggressive Fed movements and resultant net interest margin compression. The net interest margin compression is expected to be temporary and remain until the Fed ceases rate moves with recovery on a lag as funding pressures ease and loans reprice upwards. During the quarter, the yield on new loan originations totaled 6.10%, up 150 basis points QoQ and 259 basis points YoY. Average loans and deposits increased 4.9% and 3.4% respectively, YoY in 4Q22. Credit quality remains a hallmark of the Company with net charge-offs of only 5 basis points for the quarter and 2 basis points for the year as the real estate portfolio has strong debt service coverage ratios and low loan to values. The Company has a long history of solid credit quality. During the quarter, we sold $84.2 million of investment securities with an average yield of 1.17% recognizing a $10.9 million loss. The proceeds will be redeployed into higher yielding assets as we prepare for 2023 and beyond.” - John R. Buran, President and CEO

Loan Growth of 4.4% YoY; NIM Declined QoQ. Period end net loans increased 4.4% YoY, with business loans comprising 38.3% of the growth; loans declined slightly QoQ. Loan closings of $225.2 million decreased 37.9% YoY, while repayment speeds declined both YoY and QoQ. Management has focused on full banking relationships choosing to forgo transactional business. Net interest income of $54.2 million decreased 13.5% YoY and 11.4% QoQ, primarily due to the increase in funding costs. NIM FTE was 2.70% in 4Q22 compared to 3.07% in 3Q22 and 3.29% a year ago. Core NIM FTE was 2.63% in 4Q22 compared to 3.03% in 3Q22 and 3.21% in 4Q21. Net charge-offs were only 5 bps in 4Q22, which is consistent with the loan portfolio having an average LTV <37%.

71% of 2022 Earnings Returned to Shareholders; TCE/TA¹ Improves QoQ. The Company repurchased 374,862 shares of common stock at an average price of $20.16 during the quarter. Book value and tangible book value per share were $22.97 and $22.31, respectively, while TCE/TA was up 20 bps to 7.82% at December 31, 2022, compared to 7.62% at September 30, 2022.

Key Financial Metrics2

		4Q22				3Q22			2Q22			1Q22			4Q21				2022				2021
GAAP:
EPS		$0.34				$0.76			$0.81			$0.58			$0.58				$2.50				$2.59
ROAA (%)		0.48				1.11			1.22			0.91			0.89				0.93				1.00
ROAE (%)		6.06				13.91			15.00			10.83			10.77				11.44				12.60
NIM FTE3(%)		2.70				3.07			3.35			3.36			3.29				3.11				3.24
Core:
EPS		$0.57				$0.62			$0.70			$0.61			$0.67				$2.49				$2.81
ROAA (%)		0.82				0.90			1.05			0.94			1.04				0.92				1.09
ROAE (%)		10.29				11.24			12.90			11.27			12.49				11.42				13.68
Core NIM FTE (%)		2.63				3.03			3.33			3.31			3.21				3.07				3.17
Credit Quality:
NPAs/Loans&REO (%)		0.77				0.72			0.72			0.21			0.23				0.77				0.23
ACLs/Loans (%)		0.58				0.59			0.58			0.57			0.56				0.58				0.56
ACLs/NPLs (%)		124.89				142.29			141.06			266.12			248.66				124.89				248.66
NCOs/Avg Loans (%)		0.05				0.02			(0.03	)		0.06			-				0.02				0.05
Balance Sheet:
Avg Loans ($B)		$6.9				$6.9			$6.6			$6.6			$6.6				$6.7				$6.6
Avg Dep ($B)		$6.7				$6.3			$6.4			$6.4			$6.5				$6.5				$6.4
Book Value/Share		$22.97				$22.47			$22.38			$22.26			$22.26				$22.97				$22.26
Tangible BV/Share		$22.31				$21.81			$21.71			$21.61			$21.61				$22.31				$21.61
TCE/TA (%)		7.82				7.62			7.82			8.05			8.22				7.82				8.22

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”)

4Q22 Highlights

• Period end net loans were stable QoQ and increased 4.4% YoY; loan closings were $225.2 million with a rate of 6.10% in 4Q22, down 51.4% QoQ and 37.9% YoY, while the yield on closings increased 150 bps QoQ and 259 bps YoY
• Average deposits, including mortgage escrow, increased 6.4% QoQ and 3.4% YoY to $6.7 billion, with core deposits comprising 79.8% of total average deposits
• Loan pipeline decreased 41.3% YoY to $252.2 million reflecting higher rates and greater client selectivity
• $84.2 million of mortgage-based securities were sold at a loss of $10.9 million ($0.27 per share, net of tax) in 4Q22
• Net interest income decreased 11.4% QoQ and 13.5% YoY to $54.2 million; Core net interest income declined 12.4% QoQ and 13.4% YoY to $52.9 million
• Net interest margin FTE decreased 37 bps QoQ and 59 bps YoY to 2.70%; Core net interest margin FTE decreased 40 bps QoQ and 58 bps YoY to 2.63%; The decline in GAAP and Core NIM was primarily driven by our liability sensitive balance sheet resulting in liabilities repricing faster than assets; after a lag, the NIM is expected to expand when the Fed stops raising rates as loans continue to reprice higher, while the cost of funding is expected to remain steady
• NPAs increased slightly to $53.4 million from $50.0 million at 3Q22 and from $14.9 million at 4Q21
• Provision for credit losses was negligible in 4Q22 compared to $0.8 million in 4Q21; net charge-offs were $0.8 million in 4Q22 compared to net recoveries of $29 thousand in 4Q21
• Tangible Common Equity to Tangible Assets was 7.82% up from 7.62% at 3Q22; the change in accumulated other comprehensive loss, net of taxes positively impacted this ratio by 11 bps in 4Q22
• Repurchased 374,862 shares at an average price of $20.16; dividends and share repurchases were 71% of net income in 2022
  
  

Income Statement Highlights

																			YoY				QoQ
($000s, except EPS)			4Q22				3Q22			2Q22			1Q22			4Q21			Change				Change
Net Interest Income			$54,201				$61,206			$64,730			$63,479			$62,674			(13.5	)	%		(11.4	)	%
Provision (Benefit) for Credit Losses			(12	)			2,145			1,590			1,358			761			(101.6	)			(100.6	)
Noninterest Income (Loss)			(7,652	)			8,995			7,353			1,313			(280	)		2,632.9				(185.1	)
Noninterest Expense			33,742				35,634			35,522			38,794			38,807			(13.1	)			(5.3	)
Income Before Income Taxes			12,819				32,422			34,971			24,640			22,826			(43.8	)			(60.5	)
Provision for Income Taxes			2,570				8,980			9,936			6,421			4,743			(45.8	)			(71.4	)
Net Income			$10,249				$23,442			$25,035			$18,219			$18,083			(43.3	)			(56.3	)
Diluted EPS			$0.34				$0.76			$0.81			$0.58			$0.58			(41.4	)			(55.3	)
Avg. Diluted Shares (000s)			30,420				30,695			30,937			31,254			31,353			(3.0	)			(0.9	)
Core Net Income1			$17,399				$18,953			$21,518			$18,969			$20,968			(17.0	)			(8.2	)
Core EPS1			$0.57				$0.62			$0.70			$0.61			$0.67			(14.9	)			(8.1	)

¹ See Reconciliation of GAAP Earnings and Core Earnings

Net interest income totaled $54.2 million in 4Q22 compared to $61.2 million in 3Q22, $64.7 million in 2Q22, $63.5 million in 1Q22, and $62.7 million in 4Q21. Net interest income declined 1.8% in 2022 to $243.6 million compared to $248.0 million in 2021.

• Net interest margin, FTE (“NIM”) of 2.70% decreased 59 bps YoY and 37 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 $2.4 million (12 bps to the NIM) in 4Q22 compared to $2.2 million (11 bps) in 3Q22, $2.6 million (13 bps) in 2Q22, $2.6 million (14 bps) in 1Q22, and $3.1 million (16 bps) in 4Q21
• Excluding the items in the previous bullet, net interest margin was 2.58% in 4Q22, 2.96% in 3Q22, 3.22% in both 2Q22 and 1Q22, and 3.13% in 4Q21
  

The Company recorded a benefit for credit losses of $12 thousand in 4Q22, compared to a provision for credit losses of $2.1 million in 3Q22, $1.6 million in 2Q22, $1.4 million in 1Q22, and $0.8 million in 4Q21. The provision for credit losses was $5.1 million in 2022 compared to a benefit for credit losses of $4.9 million in 2021.

• Net charge-offs (recoveries) were $0.8 million in 4Q22 (5 bps of average loans), $0.3 million in 3Q22 (2 bps of average loans), $(0.5) million in 2Q22 ((3) bps of average loans), $0.9 million in 1Q22 (6 bps of average loans), and $(29) thousand in 4Q21 (negligible as compared to average loans)
  

Noninterest income (loss) was $(7.7) million in 4Q22, $9.0 million in 3Q22, $7.4 million in 2Q22, $1.3 million in 1Q22, and $(0.3) million in 4Q21. Noninterest income was $10.0 million in 2022 compared to $3.7 million in 2021.

• 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 are being reinvested into securities that are expected to have an earn back period of 3 years or less
• Noninterest income included net gains (losses) from fair value adjustments of $(0.6) million in 4Q22 (($0.02) per share, net of tax), $5.6 million in 3Q22 ($0.13 per share, net of tax), $2.5 million in 2Q22 ($0.06 per share, net of tax), $(1.8) million in 1Q22 ($(0.04) per share, net of tax), and $(5.1) million in 4Q21 ($(0.13) per share, net of tax)
• Life insurance proceeds were $0.3 million ($0.01 per share) in 4Q22 and $1.5 million ($0.05 per share) in 2Q22
• Absent all above items and other immaterial adjustments, core noninterest income was $3.5 million in 4Q22, down 27.4% YoY but up 4.7% QoQ
• Included in 4Q21 core noninterest income was a one-time $2.0 million ($0.05 per share, net of tax) dividend received on retirement plan investments; absent the effects of this dividend, core noninterest income increased 23% YoY
  

Noninterest expense totaled $33.7 million in 4Q22 (a decrease of 13.1% YoY and 5.3% QoQ) compared to $35.6 million in 3Q22, $35.5 million in 2Q22, and $38.8 million in both 1Q22 and 4Q21. Noninterest expense was $143.7 million in 2022 compared to $147.3 million in 2021.

• Salaries and employee benefits includes $2.8 million benefit from a lower discount rate for certain benefit plans and $1.4 million benefit from an Employee Retention Tax Credit refund in 4Q22
• Other operating expenses include $0.6 million reduction in reserves for unfunded commitments in 3Q22
• Included in 1Q22 noninterest expense was $4.3 million of seasonal compensation expense; 4Q21 noninterest expense included a one-time $4.3 million of increased compensation and benefits for all employees due to a record earnings in 2021 and employee performance through the pandemic
• Noninterest expense included $17 thousand pre-tax merger benefit (<$0.01 per share, net of tax) in 4Q21
• Excluding the effects of the merger and other immaterial adjustments, core operating expenses were $33.6 million in 4Q22, down 13.1% YoY and 5.3% QoQ; excluding the Employee Retention Tax Credit refund and the benefit from the lower discount rate, 4Q22 core noninterest expense would have been $37.9 million
• GAAP noninterest expense to average assets was 1.58% in 4Q22, 1.69% in 3Q22, 1.73% in 2Q22, 1.93% in 1Q22, and 1.92% in 4Q21

The provision for income taxes was $2.6 million in 4Q22, compared to $9.0 million in 3Q22, $9.9 million in 2Q22, $6.4 million in 1Q22, and $4.7 million in 4Q21. Provision for income taxes was $27.9 million in 2022 compared to $27.5 million in 2021.

• The effective tax rate was 20.0% in 4Q22, 27.7% in 3Q22, 28.4% in 2Q22, 26.1% in 1Q22, and 20.8% in 4Q21; for the year, the effective tax rate was 26.6% compared to 25.2% in 2021
• The 4Q22 effective tax rate declined due to preferential tax items having a larger impact due to lower levels of pre-tax income
• The 2Q22 effective tax rate includes a loss of a certain state and city tax deductions and a resolution of certain examinations by taxing authorities
• The 4Q21 effective tax rate declined due to lower levels of taxable state income and higher percentage of permanent differences

Balance Sheet, Credit Quality, and Capital Highlights

																		YoY				QoQ
		4Q22				3Q22			2Q22			1Q22			4Q21			Change				Change
Average Loans And Deposits ($MM)
Loans		$6,881				$6,861			$6,640			$6,579			$6,558			4.9		%		0.3		%
Deposits		6,678				6,277			6,441			6,410			6,459			3.4				6.4
Credit Quality ($000s)
Nonperforming Loans		$32,382				$29,003			$27,948			$14,066			$14,934			116.8		%		11.7		%
Nonperforming Assets		53,363				49,984			48,929			14,066			14,934			257.3				6.8
Criticized and Classified Loans		68,092				61,684			57,145			59,548			57,650			18.1				10.4
Criticized and Classified Assets		89,073				82,665			78,125			80,527			78,628			13.3				7.8
Troubled Debt Restructured Loans		11,779				14,757			14,758			15,124			12,714			(7.4	)			(20.2	)
Allowance for Credit Losses/Loans (%)		0.58				0.59			0.58			0.57			0.56			2		bps		(1	)	bp
Capital
Book Value/Share		$22.97				$22.47			$22.38			$22.26			$22.26			3.2		%		2.2		%
Tangible Book Value/Share		22.31				21.81			21.71			21.61			21.61			3.2				2.3
Tang. Common Equity/Tang. Assets (%)		7.82				7.62			7.82			8.05			8.22			(40	)	bps		20		bps
Leverage Ratio (%)		8.61				8.74			8.91			9.05			8.98			(37	)			(13	)

Average loans were $6.9 billion, an increase of 4.9% YoY and 0.3% QoQ. Average loans for 2022 were $6.7 billion, an 1.5% increase from $6.6 billion in 2021.

• Period end net loans totaled $6.9 billion, up 4.4% YoY, but down 0.3% QoQ
• Total loan closings were $225.2 million in 4Q22, $463.7 million in 3Q22, $503.8 million in 2Q22, $329.3 million in 1Q22, and $362.7 million in 4Q21
• The loan pipeline was $252.2 million at December 31, 2022, down 41.3% YoY and 18.4% QoQ
  

Average Deposits totaled $6.7 billion, increasing 3.4% YoY and 6.4% QoQ. Average deposits were $6.5 billion in 2022, up 0.6% compared to $6.4 billion in 2021.

• Average core deposits (non-CD deposits) were 79.8% of total average deposits (including escrow deposits) in 4Q22, compared to 85.3% a year ago
• Average noninterest bearing deposits increased 0.3% YoY in 4Q22, but decreased 6.7% QoQ and comprised 14.7% of total average deposits (including escrow deposits) in 4Q22 compared to 15.1% a year ago

Credit Quality: Nonperforming loans held at the end of each quarter totaled $32.4 million at 4Q22, $29.0 million at 3Q22, $27.9 million at 2Q22, $14.1 million at 1Q22, and $14.9 million at 4Q21.

• Criticized and classified loans were 98 bps of gross loans at 4Q22 compared to 89 bps at 3Q22, 85 bps at 2Q22, 90 bps at 1Q22, and 87 bps at 4Q21
• Over 88% of gross loans are collateralized by real estate with an average loan-to-value ratio of <37% as of December 31, 2022
• Allowance for credit losses were 124.9% of nonperforming loans at 4Q22 compared to 142.3% at 3Q22 and 248.7% a year ago
  

Capital: Book value per common share was $22.97 at 4Q22, up 2.2% QoQ and 3.2% YoY; tangible book value per common share, a non-GAAP measure, was $22.31 at 4Q22, up 2.3% QoQ and 3.2% YoY.

• The Company paid a dividend of $0.22 per share and repurchased 374,862 shares at an average price of $20.16 in 4Q22
• At the end of 4Q22, 594,462 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 7.82% at 4Q22 compared to 7.62% at 3Q22 and 8.22% at 4Q21
• The Company and the Bank remain well capitalized under all applicable regulatory requirements
• The leverage ratio was 8.61% at 4Q22 compared to 8.74% at 3Q22 and 8.98% at 4Q21
  
  

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 and Treasurer, will host a conference call on Friday, January 27, 2023, at 9:30 AM (ET) to discuss the Company’s fourth quarter and full year 2022 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=54kQH0yX
• Dial-in for Replay: 1-877-344-7529; Canada 855-669-9658
• Replay Access Code: 8079034
• The conference call will be simultaneously webcast and archived

First Quarter 2023 Earnings Release Date:

The Company plans to release First Quarter 2023 financial results after the market close on April 25, 2023; followed by a conference call at 9:30 AM (ET) on April 26, 2023.

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, 2021 and in other documents filed by the Company with the Securities and Exchange Commission from time to time. Forward-looking statements may be identified by terms such as “may”, “will”, “should”, “could”, “expects”, “plans”, “intends”, “anticipates”, “believes”, “estimates”, “predicts”, “forecasts”, “goals”, “potential” or “continue” or similar terms or the negative of these terms. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. The Company has no obligation to update these forward-looking statements.

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

#FF

- Statistical Tables Follow -

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
FINANCIAL HIGHLIGHTS
(Unaudited)

		At or for the three months ended																							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)		2022				2022				2022					2022				2021						2022			2021
Performance Ratios(1)
Return on average assets			0.48	%			1.11	%			1.22		%			0.91	%			0.89		%				0.93	%		1.00	%
Return on average equity			6.06				13.91				15.00					10.83				10.77						11.44			12.60
Yield on average interest-earning assets(2)			4.44				4.10				3.85					3.77				3.77						4.05			3.77
Cost of average interest-bearing liabilities			2.11				1.25				0.60					0.50				0.58						1.13			0.63
Cost of funds			1.84				1.08				0.52					0.43				0.50						0.98			0.55
Net interest rate spread during period(2)			2.33				2.85				3.25					3.27				3.19						2.92			3.14
Net interest margin(2)			2.70				3.07				3.35					3.36				3.29						3.11			3.24
Noninterest expense to average assets			1.58				1.69				1.73					1.93				1.92						1.73			1.81
Efficiency ratio(3)			59.55				55.68				52.27					58.87				58.66						55.22			55.72
Average interest-earning assets to average interest-bearing liabilities			1.21	X			1.22	X			1.22		X			1.22	X			1.22		X				1.22	X		1.20	X
Average Balances
Total loans, net		$	6,881,245			$	6,861,463			$	6,640,331				$	6,578,680			$	6,558,285					$	6,741,590		$	6,644,317
Total interest-earning assets			8,045,691				7,979,070				7,740,683					7,570,373				7,627,256						7,835,654			7,672,954
Total assets			8,518,019				8,442,657				8,211,763					8,049,470				8,090,701						8,307,137			8,143,372
Total due to depositors			5,616,064				5,157,715				5,298,855					5,336,983				5,397,802						5,352,635			5,416,020
Total interest-bearing liabilities			6,662,209				6,553,087				6,337,374					6,220,510				6,276,221						6,444,805			6,398,666
Stockholders' equity			676,165				674,282				667,456					673,012				671,474						672,742			648,946
Per Share Data
Book value per common share(4)		$	22.97			$	22.47			$	22.38				$	22.26			$	22.26					$	22.97		$	22.26
Tangible book value per common share(5)		$	22.31			$	21.81			$	21.71				$	21.61			$	21.61					$	22.31		$	21.61
Stockholders' Equity
Stockholders' equity		$	677,157			$	670,719			$	670,812				$	675,813			$	679,628					$	677,157		$	679,628
Tangible stockholders' equity			657,504				650,936				650,894					656,085				659,758						657,504			659,758
Consolidated Regulatory Capital Ratios
Tier 1 capital		$	746,880			$	749,526			$	739,776				$	731,536			$	726,174					$	746,880		$	726,174
Common equity Tier 1 capital			698,258				701,532				686,258					675,434				671,494						698,258			671,494
Total risk-based capital			975,709				979,021				903,047					892,861				885,469						975,709			885,469
Risk Weighted Assets			6,640,542				6,689,284				6,522,710					6,232,020				6,182,095						6,640,542			6,182,095
Tier 1 leverage capital (well capitalized = 5%)			8.61	%			8.74	%			8.91		%			9.05	%			8.98		%				8.61	%		8.98	%
Common equity Tier 1 risk-based capital (well capitalized = 6.5%)			10.52				10.49				10.52					10.84				10.86						10.52			10.86
Tier 1 risk-based capital (well capitalized = 8.0%)			11.25				11.20				11.34					11.74				11.75						11.25			11.75
Total risk-based capital (well capitalized = 10.0%)			14.69				14.64				13.84					14.33				14.32						14.69			14.32
Capital Ratios
Average equity to average assets			7.94	%			7.99	%			8.13		%			8.36	%			8.30		%				8.10	%		7.97	%
Equity to total assets			8.04				7.84				8.04					8.27				8.45						8.04			8.45
Tangible common equity to tangible assets(6)			7.82				7.62				7.82					8.05				8.22						7.82			8.22
Asset Quality
Nonaccrual loans(7)		$	29,782			$	27,003			$	27,848				$	14,066			$	14,933					$	29,782		$	14,933
Nonperforming loans			32,382				29,003				27,948					14,066				14,933						32,382			14,933
Nonperforming assets			53,363				49,984				48,929					14,066				14,933						53,363			14,933
Net charge-offs (recoveries)			811				290				(501	)				935				(29	)					1,535			3,119
Asset Quality Ratios
Nonperforming loans to gross loans			0.47	%			0.42	%			0.41		%			0.21	%			0.23		%				0.47	%		0.23	%
Nonperforming assets to total assets			0.63				0.58				0.59					0.17				0.19						0.63			0.19
Allowance for credit losses to gross loans			0.58				0.59				0.58					0.57				0.56						0.58			0.56
Allowance for credit losses to nonperforming assets			75.79				82.56				80.57					266.12				248.66						75.79			248.66
Allowance for credit losses to nonperforming loans			124.89				142.29				141.06					266.12				248.66						124.89			248.66
Net charge-offs (recoveries) to average loans			0.05				0.02				(0.03	)				0.06				—						0.02			0.05
Full-service customer facilities			25				25				25					24				24						25			24

(See footnotes on next page)

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

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

	For the three months ended																				For the year ended
	December 31,				September 30,			June 30,			March 31,				December 31,						December 31,				December 31,
(In thousands, except per share data)	2022				2022			2022			2022				2021						2022				2021
Interest and Dividend Income
Interest and fees on loans	$	81,033			$	75,546		$	69,192		$	67,516			$	68,113					$	293,287			$	274,331
Interest and dividends on securities:
Interest		6,511				5,676			4,929			3,745				3,536						20,861				13,999
Dividends		24				17			11			8				7						60				29
Other interest income		1,702				506			159			51				74						2,418				203
Total interest and dividend income		89,270				81,745			74,291			71,320				71,730						316,626				288,562
Interest Expense
Deposits		27,226				11,965			4,686			3,408				3,975						47,285				20,324
Other interest expense		7,843				8,574			4,875			4,433				5,081						25,725				20,269
Total interest expense		35,069				20,539			9,561			7,841				9,056						73,010				40,593
Net Interest Income		54,201				61,206			64,730			63,479				62,674						243,616				247,969
Provision (benefit) for credit losses		(12	)			2,145			1,590			1,358				761						5,081				(4,944	)
Net Interest Income After Provision (Benefit) for Credit Losses		54,213				59,061			63,140			62,121				61,913						238,535				252,913
Noninterest Income (Loss)
Banking services fee income		1,231				1,351			1,166			1,374				1,142						5,122				5,965
Net gain (loss) on sale of securities		(10,948	)			—			—			—				—						(10,948	)			113
Net gain on sale of loans		46				—			73			—				46						119				335
Net gain on disposition of assets		104				—			—			—				—						104				621
Net gain (loss) from fair value adjustments		(622	)			5,626			2,533			(1,809	)			(5,140	)					5,728				(12,995	)
Federal Home Loan Bank of New York stock dividends		658				538			407			397				417						2,000				2,097
Life insurance proceeds		286				—			1,536			—				—						1,822				—
Bank owned life insurance		1,126				1,132			1,115			1,114				1,023						4,487				4,044
Other income		467				348			523			237				2,232						1,575				3,507
Total noninterest income (loss)		(7,652	)			8,995			7,353			1,313				(280	)					10,009				3,687
Noninterest Expense
Salaries and employee benefits		18,178				21,438			21,109			23,649				25,223						84,374				88,310
Occupancy and equipment		3,701				3,541			3,760			3,604				3,579						14,606				14,002
Professional services		2,130				2,570			2,285			2,222				1,152						9,207				7,439
FDIC deposit insurance		485				738			615			420				391						2,258				2,951
Data processing		1,421				1,367			1,383			1,424				1,757						5,595				7,044
Depreciation and amortization		1,535				1,488			1,447			1,460				1,521						5,930				6,425
Other real estate owned/foreclosure expense		35				143			32			84				129						294				323
Other operating expenses		6,257				4,349			4,891			5,931				5,055						21,428				20,828
Total noninterest expense		33,742				35,634			35,522			38,794				38,807						143,692				147,322
Income Before Provision for Income Taxes		12,819				32,422			34,971			24,640				22,826						104,852				109,278
Provision for Income Taxes		2,570				8,980			9,936			6,421				4,743						27,907				27,485
Net Income	$	10,249			$	23,442		$	25,035		$	18,219			$	18,083					$	76,945			$	81,793
Basic earnings per common share	$	0.34			$	0.76		$	0.81		$	0.58			$	0.58					$	2.50			$	2.59
Diluted earnings per common share	$	0.34			$	0.76		$	0.81		$	0.58			$	0.58					$	2.50			$	2.59
Dividends per common share	$	0.22			$	0.22		$	0.22		$	0.22			$	0.21					$	0.88			$	0.84
Basic average shares		30,420				30,695			30,937			31,254				31,353						30,823				31,550
Diluted average shares		30,420				30,695			30,937			31,254				31,353						30,823				31,550

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

		December 31,				September 30,				June 30,				March 31,				December 31,
(Dollars in thousands)		2022				2022				2022				2022				2021
ASSETS
Cash and due from banks		$	151,754			$	164,693			$	137,026			$	186,407			$	81,723
Securities held-to-maturity:
Mortgage-backed securities			7,875				7,880				7,885				7,890				7,894
Other securities			65,836				66,032				66,230				66,327				49,974
Securities available for sale:
Mortgage-backed securities			384,283				468,366				510,934				553,828				572,184
Other securities			351,074				351,495				346,720				286,041				205,052
Loans			6,934,769				6,956,674				6,760,393				6,607,264				6,638,105
Allowance for credit losses			(40,442	)			(41,268	)			(39,424	)			(37,433	)			(37,135	)
Net loans			6,894,327				6,915,406				6,720,969				6,569,831				6,600,970
Interest and dividends receivable			45,048				42,571				38,811				37,308				38,698
Bank premises and equipment, net			21,750				22,376				22,285				22,752				23,338
Federal Home Loan Bank of New York stock			45,842				62,489				50,017				33,891				35,937
Bank owned life insurance			213,131				212,353				211,220				211,867				210,754
Goodwill			17,636				17,636				17,636				17,636				17,636
Core deposit intangibles			2,017				2,147				2,282				2,420				2,562
Right of use asset			43,289				44,885				46,687				48,475				50,200
Other assets			179,084				179,090				160,885				125,160				148,989
Total assets		$	8,422,946			$	8,557,419			$	8,339,587			$	8,169,833			$	8,045,911
LIABILITIES
Deposits		$	6,437,183			$	6,054,761			$	6,350,000			$	6,373,400			$	6,333,532
Mortgagors' escrow deposits			48,159				70,544				57,577				79,495				51,913
Borrowed funds			1,052,973				1,572,830				1,089,621				877,122				815,544
Operating lease liability			46,125				48,330				50,346				52,292				54,155
Other liabilities			161,349				140,235				121,231				111,711				111,139
Total liabilities			7,745,789				7,886,700				7,668,775				7,494,020				7,366,283
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			264,332				263,755				262,860				261,837				263,375
Treasury stock			(98,535	)			(90,977	)			(88,342	)			(79,834	)			(75,293	)
Retained earnings			547,507				543,894				527,217				508,973				497,889
Accumulated other comprehensive loss, net of taxes			(36,488	)			(46,294	)			(31,264	)			(15,504	)			(6,684	)
Total stockholders' equity			677,157				670,719				670,812				675,813				679,628
Total liabilities and stockholders' equity		$	8,422,946			$	8,557,419			$	8,339,587			$	8,169,833			$	8,045,911
(In thousands)
Issued shares			34,088				34,088				34,088				34,088				34,088
Outstanding shares			29,476				29,851				29,980				30,367				30,526
Treasury shares			4,612				4,237				4,108				3,721				3,561

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)		2022			2022			2022			2022			2021					2022			2021
Interest-earning Assets:
Mortgage loans, net		$	5,338,612		$	5,340,694		$	5,178,029		$	5,152,070		$	5,140,233				$	5,253,104		$	5,146,195
Other loans, net			1,542,633			1,520,769			1,462,302			1,426,610			1,418,052					1,488,486			1,498,122
Total loans, net			6,881,245			6,861,463			6,640,331			6,578,680			6,558,285					6,741,590			6,644,317
Taxable securities:
Mortgage-backed securities			549,204			568,854			594,923			580,670			595,538					573,314			550,136
Other securities			371,897			362,629			333,158			226,744			207,482					324,112			239,208
Total taxable securities			921,101			931,483			928,081			807,414			803,020					897,426			789,344
Tax-exempt securities:
Other securities			67,022			67,211			67,315			57,611			50,834					64,822			50,831
Total tax-exempt securities			67,022			67,211			67,315			57,611			50,834					64,822			50,831
Interest-earning deposits and federal funds sold			176,323			118,913			104,956			126,668			215,117					131,816			188,462
Total interest-earning assets			8,045,691			7,979,070			7,740,683			7,570,373			7,627,256					7,835,654			7,672,954
Other assets			472,328			463,587			471,080			479,097			463,445					471,483			470,418
Total assets		$	8,518,019		$	8,442,657		$	8,211,763		$	8,049,470		$	8,090,701				$	8,307,137		$	8,143,372
Interest-bearing Liabilities:
Deposits:
Savings accounts		$	146,598		$	154,545		$	156,785		$	156,592		$	154,471				$	153,605		$	157,640
NOW accounts			1,972,134			1,808,608			2,089,851			2,036,914			2,115,619					1,976,238			2,165,762
Money market accounts			2,146,649			2,136,829			2,231,743			2,253,630			2,177,928					2,191,768			2,059,431
Certificate of deposit accounts			1,350,683			1,057,733			820,476			889,847			949,784					1,031,024			1,033,187
Total due to depositors			5,616,064			5,157,715			5,298,855			5,336,983			5,397,802					5,352,635			5,416,020
Mortgagors' escrow accounts			82,483			68,602			97,496			71,509			84,617					80,021			77,552
Total interest-bearing deposits			5,698,547			5,226,317			5,396,351			5,408,492			5,482,419					5,432,656			5,493,572
Borrowings			963,662			1,326,770			941,023			812,018			793,802					1,012,149			905,094
Total interest-bearing liabilities			6,662,209			6,553,087			6,337,374			6,220,510			6,276,221					6,444,805			6,398,666
Noninterest-bearing demand deposits			979,836			1,050,296			1,044,553			1,001,571			976,803					1,019,090			922,741
Other liabilities			199,809			164,992			162,380			154,377			166,203					170,500			173,019
Total liabilities			7,841,854			7,768,375			7,544,307			7,376,458			7,419,227					7,634,395			7,494,426
Equity			676,165			674,282			667,456			673,012			671,474					672,742			648,946
Total liabilities and equity		$	8,518,019		$	8,442,657		$	8,211,763		$	8,049,470		$	8,090,701				$	8,307,137		$	8,143,372
Net interest-earning assets		$	1,383,482		$	1,425,983		$	1,403,309		$	1,349,863		$	1,351,035				$	1,390,849		$	1,274,288

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)		2022				2022				2022					2022					2021					2022				2021
Interest Income:
Mortgage loans, net		$	60,946			$	58,374			$	54,775				$	53,970				$	54,260				$	228,065			$	217,580
Other loans, net			20,087				17,172				14,417					13,546					13,853					65,222				56,751
Total loans, net			81,033				75,546				69,192					67,516					68,113					293,287				274,331
Taxable securities:
Mortgage-backed securities			2,425				2,466				2,356					2,167					2,125					9,414				8,335
Other securities			3,723				2,839				2,090					1,119					993					9,771				4,001
Total taxable securities			6,148				5,305				4,446					3,286					3,118					19,185				12,336
Tax-exempt securities:
Other securities			489				492				625					591					538					2,197				2,142
Total tax-exempt securities			489				492				625					591					538					2,197				2,142
Interest-earning deposits and federal funds sold			1,702				506				159					51					74					2,418				203
Total interest-earning assets			89,372				81,849				74,422					71,444					71,843					317,087				289,012
Interest Expense:
Deposits:
Savings accounts		$	59			$	53			$	50				$	49				$	53				$	211			$	255
NOW accounts			9,515				3,640				1,405					793					1,021					15,353				5,453
Money market accounts			10,532				5,280				1,952					1,275					1,428					19,039				7,271
Certificate of deposit accounts			7,037				2,948				1,273					1,289					1,471					12,547				7,340
Total due to depositors			27,143				11,921				4,680					3,406					3,973					47,150				20,319
Mortgagors' escrow accounts			83				44				6					2					2					135				5
Total interest-bearing deposits			27,226				11,965				4,686					3,408					3,975					47,285				20,324
Borrowings			7,843				8,574				4,875					4,433					5,081					25,725				20,269
Total interest-bearing liabilities			35,069				20,539				9,561					7,841					9,056					73,010				40,593
Net interest income- tax equivalent		$	54,303			$	61,310			$	64,861				$	63,603				$	62,787				$	244,077			$	248,419
Included in net interest income above:
Prepayment penalties received on loans and securities and net of reversals and recovered interest from nonaccrual loans		$	1,080			$	1,368			$	2,281				$	1,716				$	1,497				$	6,445			$	6,627
Net gains/(losses) from fair value adjustments on qualifying hedges included in loan interest income			936				28				(60	)				(129	)				1,122					775				2,079
Purchase accounting adjustments			342				775				367					1,058					462					2,542				3,049
Interest-earning Assets Yields:
Mortgage loans, net			4.57	%			4.37	%			4.23		%			4.19		%			4.22	%				4.34	%			4.23	%
Other loans, net			5.21				4.52				3.94					3.80					3.91					4.38				3.79
Total loans, net			4.71				4.40				4.17					4.11					4.15					4.35				4.13
Taxable securities:
Mortgage-backed securities			1.77				1.73				1.58					1.49					1.43					1.64				1.52
Other securities			4.00				3.13				2.51					1.97					1.91					3.01				1.67
Total taxable securities			2.67				2.28				1.92					1.63					1.55					2.14				1.56
Tax-exempt securities:(1)
Other securities			2.92				2.93				3.71					4.10					4.23					3.39				4.21
Total tax-exempt securities			2.92				2.93				3.71					4.10					4.23					3.39				4.21
Interest-earning deposits and federal funds sold			3.86				1.70				0.61					0.16					0.14					1.83				0.11
Total interest-earning assets(1)			4.44	%			4.10	%			3.85		%			3.77		%			3.77	%				4.05	%			3.77	%
Interest-bearing Liabilities Yields:
Deposits:
Savings accounts			0.16	%			0.14	%			0.13		%			0.13		%			0.14	%				0.14	%			0.16	%
NOW accounts			1.93				0.81				0.27					0.16					0.19					0.78				0.25
Money market accounts			1.96				0.99				0.35					0.23					0.26					0.87				0.35
Certificate of deposit accounts			2.08				1.11				0.62					0.58					0.62					1.22				0.71
Total due to depositors			1.93				0.92				0.35					0.26					0.29					0.88				0.38
Mortgagors' escrow accounts			0.40				0.26				0.02					0.01					0.01					0.17				0.01
Total interest-bearing deposits			1.91				0.92				0.35					0.25					0.29					0.87				0.37
Borrowings			3.26				2.58				2.07					2.18					2.56					2.54				2.24
Total interest-bearing liabilities			2.11	%			1.25	%			0.60		%			0.50		%			0.58	%				1.13	%			0.63	%
Net interest rate spread (tax equivalent)(1)			2.33	%			2.85	%			3.25		%			3.27		%			3.19	%				2.92	%			3.14	%
Net interest margin (tax equivalent)(1)			2.70	%			3.07	%			3.35		%			3.36		%			3.29	%				3.11	%			3.24	%
Ratio of interest-earning assets to interest-bearing liabilities			1.21	X			1.22	X			1.22		X			1.22		X			1.22	X				1.22	X			1.20	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

																	2022 vs.				2022 vs.
		December 31,			September 30,			June 30,			March 31,			December 31,			2022				2021
(Dollars in thousands)		2022			2022			2022			2022			2021			% Change				% Change
Noninterest bearing		$	921,238		$	992,378		$	1,081,208		$	1,041,027		$	967,621		(7.2	)	%		(4.8	)	%
Interest bearing:
Certificate of deposit accounts			1,526,338			1,036,107			906,943			886,317			946,575		47.3				61.2
Savings accounts			143,641			150,552			154,670			158,542			156,554		(4.6	)			(8.2	)
Money market accounts			2,099,776			2,113,256			2,229,993			2,362,390			2,342,003		(0.6	)			(10.3	)
NOW accounts			1,746,190			1,762,468			1,977,186			1,925,124			1,920,779		(0.9	)			(9.1	)
Total interest-bearing deposits			5,515,945			5,062,383			5,268,792			5,332,373			5,365,911		9.0				2.8
Total deposits		$	6,437,183		$	6,054,761		$	6,350,000		$	6,373,400		$	6,333,532		6.3		%		1.6		%

Loan Composition

																						2022 vs.				2022 vs.
		December 31,				September 30,				June 30,				March 31,				December 31,				2022				2021
(Dollars in thousands)		2022				2022				2022				2022				2021				% Change				% Change
Multifamily residential		$	2,601,384			$	2,608,192			$	2,531,858			$	2,500,570			$	2,517,026			(0.3	)	%		3.4		%
Commercial real estate			1,913,040				1,914,326				1,864,507				1,764,927				1,775,629			(0.1	)			7.7
One-to-four family ― mixed-use property			554,314				560,885				561,100				563,679				571,795			(1.2	)			(3.1	)
One-to-four family ― residential			235,067				233,469				242,729				248,226				268,255			0.7				(12.4	)
Co-operative apartments			6,179				7,015				8,130				8,248				8,316			(11.9	)			(25.7	)
Construction			70,951				63,651				72,148				68,488				59,761			11.5				18.7
Mortgage Loans			5,380,935				5,387,538				5,280,472				5,154,138				5,200,782			(0.1	)			3.5
Small Business Administration(1)			23,275				27,712				40,572				59,331				93,811			(16.0	)			(75.2	)
Commercial business and other			1,521,548				1,532,497				1,431,417				1,387,155				1,339,273			(0.7	)			13.6
Nonmortgage loans			1,544,823				1,560,209				1,471,989				1,446,486				1,433,084			(1.0	)			7.8
Net unamortized premiums and unearned loan fees(2)			9,011				8,927				7,932				6,640				4,239			0.9				112.6
Allowance for credit losses			(40,442	)			(41,268	)			(39,424	)			(37,433	)			(37,135	)		(2.0	)			8.9
Net loans		$	6,894,327			$	6,915,406			$	6,720,969			$	6,569,831			$	6,600,970			(0.3	)	%		4.4		%

_____________________________
⁽¹⁾ Includes $5.2 million, $9.6 million, $22.2 million, $43.2 million, and $77.4 million of PPP loans at December 31, 2022, September 30, 2022, June 30, 2022, March 31, 2022, and December 31, 2021, respectively.
⁽²⁾ Includes $5.4 million, $5.8 million, $6.6 million, $6.9 million, and $8.0 million of purchase accounting unamortized discount resulting from the acquisition of Empire Bancorp at December 31, 2022, September 30, 2022, June 30, 2022, March 31, 2022, and December 31, 2021, 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)		2022			2022			2022			2022			2021				2022			2021
Multifamily residential		$	65,347		$	173,980		$	136,902		$	98,180		$	79,648			$	474,409		$	246,964
Commercial real estate			20,750			77,777			164,826			45,102			64,916				308,455			168,482
One-to-four family – mixed-use property			4,489			12,383			12,228			8,498			12,440				37,598			41,110
One-to-four family – residential			7,485			4,102			4,211			9,237			5,162				25,035			70,548
Co-operative apartments			—			—			—			24			413				24			413
Construction			7,301			7,170			8,319			8,802			17,033				31,592			38,124
Mortgage Loans			105,372			275,412			326,486			169,843			179,612				877,113			565,641
Small Business Administration(1)			665			46			2,750			—			270				3,461			143,363
Commercial business and other			119,191			188,202			174,551			159,476			182,858				641,420			544,958
Nonmortgage Loans			119,856			188,248			177,301			159,476			183,128				644,881			688,321
Total Closings		$	225,228		$	463,660		$	503,787		$	329,319		$	362,740			$	1,521,994		$	1,253,962

 

____________________________
⁽¹⁾ Includes $138.7 million of PPP closings for the year ended December 31, 2021.

Weighted Average Rate on Loan Closings

		For the three months ended
		December 31,			September 30,			June 30,			March 31,			December 31,
Loan type		2022			2022			2022			2022			2021
Mortgage loans		5.59	%		4.37	%		3.76	%		3.61	%		3.77	%
Nonmortgage loans		6.57			4.93			4.21			3.27			3.24
Total loans		6.10	%		4.60	%		3.92	%		3.44	%		3.51	%

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
ASSET QUALITY
(Unaudited)

Allowance for Credit Losses

		For the three months ended																										For the year ended
		December 31,					September 30,					June 30,					March 31,					December 31,						December 31,						December 31,
(Dollars in thousands)		2022					2022					2022					2022					2021						2022						2021
Allowance for credit losses
Beginning balances		$	41,268				$	39,424				$	37,433				$	37,135				$	36,363					$	37,135					$	45,153
Net loan charge-off (recoveries):
Multifamily residential			132					—					(1	)				—					—						131						33
Commercial real estate			—					—					—					—					—						—						64
One-to-four family – mixed-use property			—					—					—					—					1						—						(100	)
One-to-four family – residential			17					2					(2	)				(2	)				(3	)					15						(157	)
Small Business Administration			(9	)				(12	)				13					1,015					(7	)					1,007						(34	)
Taxi medallion			—					—					(435	)				(12	)				—						(447	)					1,301
Commercial business and other			671					300					(76	)				(66	)				(20	)					829						2,012
Total			811					290					(501	)				935					(29	)					1,535						3,119
Provision (benefit) for loan losses			(15	)				2,134					1,490					1,233					743						4,842						(4,899	)
Ending balance		$	40,442				$	41,268				$	39,424				$	37,433				$	37,135					$	40,442					$	37,135
Gross charge-offs		$	1,938				$	324				$	50				$	1,036				$	7					$	3,348					$	5,134
Gross recoveries			1,127					34					551					101					36						1,813						2,015
Allowance for credit losses to gross loans			0.58		%			0.59		%			0.58		%			0.57		%			0.56		%				0.58		%				0.56		%
Net loan charge-offs (recoveries) to average loans			0.05					0.02					(0.03	)				0.06					—						0.02						0.05

Nonperforming Assets

		December 31,				September 30,				June 30,				March 31,				December 31,
(Dollars in thousands)		2022				2022				2022				2022				2021
Loans 90 Days Or More Past Due and Still Accruing:
Commercial real estate		$	—			$	2,000			$	—			$	—			$	—
Construction			2,600				—				—				—				—
Commercial business and other			—				—				100				—				—
Total			2,600				2,000				100				—				—
Nonaccrual Loans:
Multifamily residential			3,206				3,414				3,414				3,414				2,431
Commercial real estate			237				1,851				242				5				613
One-to-four family - mixed-use property(1)			790				790				790				790				1,309
One-to-four family - residential			4,425				4,655				5,055				7,387				7,725
Construction			—				—				856				—				—
Small Business Administration			937				937				937				937				937
Commercial business and other(1)			20,187				15,356				16,554				1,533				1,918
Total			29,782				27,003				27,848				14,066				14,933
Total Nonperforming Loans (NPLs)			32,382				29,003				27,948				14,066				14,933
Total Nonaccrual HTM Securities			20,981				20,981				20,981				—				—
Total Nonperforming Assets		$	53,363			$	49,984			$	48,929			$	14,066			$	14,933
Nonperforming Assets to Total Assets			0.63	%			0.58	%			0.59	%			0.17	%			0.19	%
Allowance for Credit Losses to NPLs			124.9	%			142.3	%			141.1	%			266.1	%			248.7	%

_______________________________
⁽¹⁾ 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 and $0.3 million each in 2Q22, 1Q22, 4Q21; nonaccrual performing TDR commercial business loans totaling less than $0.1 million in 4Q22, $2.9 million in 3Q22, $2.8 million in 2Q22 and 1Q22, and less than $0.1 million in 4Q21.

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 and swaps designated to protect against rising rates. As the swaps get closer to maturity, the volatility in fair value adjustments will dissipate. In a rising interest rate environment or a steepening of the yield curve, the loss position would experience an improvement. In a declining interest rate environment, the movement in the curve exaggerates our mark-to-market loss position.

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 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)		2022					2022					2022					2022					2021						2022					2021
GAAP income before income taxes		$	12,819				$	32,422				$	34,971				$	24,640				$	22,826					$	104,852				$	109,278
Net (gain) loss from fair value adjustments (Noninterest income (loss))			622					(5,626	)				(2,533	)				1,809					5,140						(5,728	)				12,995
Net (gain) loss on sale of securities (Noninterest income (loss))			10,948					—					—					—					—						10,948					(113	)
Life insurance proceeds (Noninterest income (loss))			(286	)				—					(1,536	)				—					—						(1,822	)				—
Net gain on disposition of assets (Noninterest income (loss))			(104	)				—					—					—					—						(104	)				(621	)
Net (gain) loss from fair value adjustments on qualifying hedges (Interest and fees on loans)			(936	)				(28	)				60					129					(1,122	)					(775	)				(2,079	)
Net amortization of purchase accounting adjustments (Various)			(219	)				(650	)				(237	)				(924	)				(324	)					(2,030	)				(2,489	)
Merger (benefit) expense (Various)			—					—					—					—					(17	)					—					2,562
Core income before taxes			22,844					26,118					30,725					25,654					26,503						105,341					119,533
Provision for income taxes for core income			5,445					7,165					9,207					6,685					5,535						28,502					30,769
Core net income		$	17,399				$	18,953				$	21,518				$	18,969				$	20,968					$	76,839				$	88,764
GAAP diluted earnings per common share		$	0.34				$	0.76				$	0.81				$	0.58				$	0.58					$	2.50				$	2.59
Net (gain) loss from fair value adjustments, net of tax			0.02					(0.13	)				(0.06	)				0.04					0.13						(0.14	)				0.31
Net loss on sale of securities, net of tax			0.27					—					—					—					—						0.26					—
Life insurance proceeds			(0.01	)				—					(0.05	)				—					—						(0.06	)				—
Net gain on disposition of assets, net of tax			—					—					—					—					—						—					(0.01	)
Net (gain) loss from fair value adjustments on qualifying hedges, net of tax			(0.02	)				—					—					—					(0.03	)					(0.02	)				(0.05	)
Net amortization of purchase accounting adjustments, net of tax			(0.01	)				(0.02	)				(0.01	)				(0.02	)				(0.01	)					(0.05	)				(0.06	)
Merger (benefit) expense, net of tax			—					—					—					—					—						—					0.06
NYS tax change			—					—					—					—					—						—					(0.02	)
Core diluted earnings per common share(1)		$	0.57				$	0.62				$	0.70				$	0.61				$	0.67					$	2.49				$	2.81
Core net income, as calculated above		$	17,399				$	18,953				$	21,518				$	18,969				$	20,968					$	76,839				$	88,764
Average assets			8,518,019					8,442,657					8,211,763					8,049,470					8,090,701						8,307,137					8,143,372
Average equity			676,165					674,282					667,456					673,012					671,474						672,742					648,946
Core return on average assets(2)			0.82		%			0.90		%			1.05		%			0.94		%			1.04		%				0.92		%			1.09		%
Core return on average equity(2)			10.29		%			11.24		%			12.90		%			11.27		%			12.49		%				11.42		%			13.68		%

___________________________
⁽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)		2022				2022				2022				2022				2021							2022				2021
GAAP Net interest income		$	54,201			$	61,206			$	64,730			$	63,479			$	62,674						$	243,616			$	247,969
Net (gain) loss from fair value adjustments on qualifying hedges			(936	)			(28	)			60				129				(1,122	)						(775	)			(2,079	)
Net amortization of purchase accounting adjustments			(342	)			(775	)			(367	)			(1,058	)			(462	)						3,016				(3,049	)
Core Net interest income		$	52,923			$	60,403			$	64,423			$	62,550			$	61,090						$	245,857			$	242,841
GAAP Noninterest income (loss)		$	(7,652	)		$	8,995			$	7,353			$	1,313			$	(280	)					$	10,009			$	3,687
Net (gain) loss from fair value adjustments			622				(5,626	)			(2,533	)			1,809				5,140							(5,728	)			12,995
Net gain (loss) on sale of securities			10,948				—				—				—				—							10,948				(113	)
Life insurance proceeds			(286	)			—				(1,536	)			—				—							(1,822	)			—
Net gain on sale of assets			(104	)			—				—				—				—							(104	)			(621	)
Core Noninterest income		$	3,528			$	3,369			$	3,284			$	3,122			$	4,860						$	13,303			$	15,948
GAAP Noninterest expense		$	33,742			$	35,634			$	35,522			$	38,794			$	38,807						$	143,692			$	147,322
Net amortization of purchase accounting adjustments			(123	)			(125	)			(130	)			(134	)			(138	)						(578	)			(560	)
Merger expense (benefit)			—				—				—				—				17							—				(2,562	)
Core Noninterest expense		$	33,619			$	35,509			$	35,392			$	38,660			$	38,686						$	143,114			$	144,200
Net interest income		$	54,201			$	61,206			$	64,730			$	63,479			$	62,674						$	243,616			$	247,969
Noninterest income (loss)			(7,652	)			8,995				7,353				1,313				(280	)						10,009				3,687
Noninterest expense			(33,742	)			(35,634	)			(35,522	)			(38,794	)			(38,807	)						(143,692	)			(147,322	)
Pre-provision pre-tax net revenue		$	12,807			$	34,567			$	36,561			$	25,998			$	23,587						$	109,933			$	104,334
Core:
Net interest income		$	52,923			$	60,403			$	64,423			$	62,550			$	61,090						$	245,857			$	242,841
Noninterest income			3,528				3,369				3,284				3,122				4,860							13,303				15,948
Noninterest expense			(33,619	)			(35,509	)			(35,392	)			(38,660	)			(38,686	)						(143,114	)			(144,200	)
Pre-provision pre-tax net revenue		$	22,832			$	28,263			$	32,315			$	27,012			$	27,264						$	116,046			$	114,589
Efficiency Ratio			59.6		%		55.7		%		52.3		%		58.9		%		58.7		%					55.2		%		55.7		%

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

	For the three months ended																										For the year ended
	December 31,					September 30,					June 30,					March 31,					December 31,						December 31,				December 31,
(Dollars in thousands)	2022					2022					2022					2022					2021						2022				2021
GAAP net interest income	$	54,201				$	61,206				$	64,730				$	63,479				$	62,674					$	243,616			$	247,969
Net (gain) loss from fair value adjustments on qualifying hedges		(936	)				(28	)				60					129					(1,122	)					(775	)			(2,079	)
Net amortization of purchase accounting adjustments		(342	)				(775	)				(367	)				(1,058	)				(462	)					3,016				(3,049	)
Tax equivalent adjustment		102					104					131					124					113						461				450
Core net interest income FTE	$	53,025				$	60,507				$	64,554				$	62,674				$	61,203					$	246,318			$	243,291
Total average interest-earning assets(1)	$	8,050,601				$	7,984,558				$	7,746,640				$	7,577,053				$	7,634,601					$	7,841,407			$	7,681,441
Core net interest margin FTE		2.63		%			3.03		%			3.33		%			3.31		%			3.21		%				3.14		%		3.17		%
GAAP interest income on total loans, net	$	81,033				$	75,546				$	69,192				$	67,516				$	68,113					$	293,287			$	274,331
Net (gain) loss from fair value adjustments on qualifying hedges		(936	)				(28	)				60					129					(1,122	)					(775	)			(2,079	)
Net amortization of purchase accounting adjustments		(372	)				(783	)				(357	)				(1,117	)				(535	)					2,628				(3,013	)
Core interest income on total loans, net	$	79,725				$	74,735				$	68,895				$	66,528				$	66,456					$	295,140			$	269,239
Average total loans, net(1)	$	6,886,900				$	6,867,758				$	6,647,131				$	6,586,253				$	6,566,654					$	6,748,165			$	6,653,980
Core yield on total loans		4.63		%			4.35		%			4.15		%			4.04		%			4.05		%				4.37		%		4.05		%

___________________________
⁽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)		2022					2022					2022					2022					2021
Total Equity		$	677,157				$	670,719				$	670,812				$	675,813				$	679,628
Less:
Goodwill			(17,636	)				(17,636	)				(17,636	)				(17,636	)				(17,636	)
Core deposit Intangibles			(2,017	)				(2,147	)				(2,282	)				(2,420	)				(2,562	)
Intangible deferred tax liabilities			—					—					—					328					328
Tangible Stockholders' Common Equity		$	657,504				$	650,936				$	650,894				$	656,085				$	659,758
Total Assets		$	8,422,946				$	8,557,419				$	8,339,587				$	8,169,833				$	8,045,911
Less:
Goodwill			(17,636	)				(17,636	)				(17,636	)				(17,636	)				(17,636	)
Core deposit Intangibles			(2,017	)				(2,147	)				(2,282	)				(2,420	)				(2,562	)
Intangible deferred tax liabilities			—					—					—					328					328
Tangible Assets		$	8,403,293				$	8,537,636				$	8,319,669				$	8,150,105				$	8,026,041
Tangible Stockholders' Common Equity to Tangible Assets			7.82		%			7.62		%			7.82		%			8.05		%			8.22		%

FAQ

What were the earnings per share for FFIC in Q4 2022?

The GAAP EPS for FFIC in Q4 2022 was $0.34, a decrease of 41.4% YoY.

How did the core EPS for FFIC perform in 2022?

The core EPS for FFIC in 2022 was $2.49, down 11.4% YoY.

What was the net interest income for FFIC in Q4 2022?

FFIC reported a net interest income of $54.2 million in Q4 2022, down 13.5% YoY.

What are the projections for FFIC's net interest margin?

The net interest margin for FFIC was 2.70% in Q4 2022, down 59 basis points YoY.

How much of the net income was returned to shareholders in 2022?

FFIC returned 71% of its net income to shareholders in 2022.