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Flushing Financial Corporation Reports 3Q24 GAAP and Core EPS of $0.30 and $0.26, Respectively; Net Interest Income and NIM Increased QoQ

"Our third quarter had several positive trends that demonstrate our commitment to improve profitability over the long term. GAAP and Core EPS were $0.30 and $0.26, respectively, the best quarter in the past seven, including non-recurring items. GAAP and Core NIM increased by 5 and 4 bps QoQ to 2.10% and 2.07%, respectively, as the cost of funds peaked in July decreasing in August and September. As a result, NIM bottomed in July then increased in August and September. Credit quality remains solid with a sequential decline in NPAs and criticized and classified assets. Our underwriting remains very strong with a weighted average DCR of 1.9x for our multifamily and CRE portfolios and only 0.5% of exposure to Manhattan office buildings. The Company has $3.9 billion of unused lines of credit available as of September 30, 2024. Average total deposits increased 9% YoY and 4% QoQ. The Company and the Bank remain well capitalized under regulatory standards. Year to date, GAAP and Core noninterest expense growth was approximately 6%, which includes investments in the business including new employees and branches that should enhance our long term profitability over time. While there is more work to do, we are pleased with the direction and execution on our areas of focus."

- John R. Buran, President and CEO

UNIONDALE, NY / ACCESSWIRE / October 24, 2024 / Period End Loans and Average Total Deposits Increase QoQ. Third quarter 2024 GAAP and Core EPS were $0.30 and $0.26, compared to $0.26, and $0.25, respectively, a year ago. Insurance recoveries, discrete income tax items, and other events added $0.05 per share to 3Q24 EPS, while net interest recoveries on delinquent loans added another $0.03 per share. 3Q24 GAAP and Core NIM were 2.10% and 2.07%, up 5 bps and 4 bps QoQ, respectively. Average total deposits increased 9.4% YoY and 3.7% QoQ, while period end net loans increased 0.6% QoQ, but declined 1.2% YoY. This was the first QoQ increase in net loans since 4Q23 (0.1%).

Strong Credit Quality: Capital Remains Solid. Credit quality metrics were at favorable levels with criticized and classified loans to gross loans of 100 bps (down 13 bps QoQ), nonperforming assets to total assets of 59 bps (down 2 bps QoQ), and year to date net charge-offs of 6 bps. Capital continues to be sound with TCE/TA1 of 7.00% at 3Q24.

Key Financial Metrics2

3Q24

2Q24

1Q24

4Q23

3Q23

9M24

9M23

GAAP:

EPS

$

0.30

$

0.18

$

0.12

$

0.27

$

0.26

$

0.60

$

0.69

ROAA (%)

0.39

0.24

0.17

0.38

0.37

0.27

0.32

ROAE (%)

5.30

3.19

2.20

4.84

4.64

3.57

4.05

NIM FTE3 (%)

2.10

2.05

2.06

2.29

2.22

2.07

2.22

Core:

EPS

$

0.26

$

0.18

$

0.14

$

0.25

$

0.25

$

0.59

$

0.58

ROAA (%)

0.34

0.25

0.20

0.35

0.36

0.26

0.27

ROAE (%)

4.59

3.27

2.58

4.51

4.49

3.48

3.42

Core NIM FTE (%)

2.07

2.03

2.06

2.31

2.13

2.05

2.18

Credit Quality:

NPAs/Loans & OREO (%)

0.81

0.82

0.68

0.67

0.56

0.81

0.56

ACLs/Loans (%)

0.59

0.61

0.60

0.58

0.57

0.59

0.57

ACLs/NPLs (%)

117.75

120.58

164.13

159.55

225.38

117.75

225.38

NCOs/Avg Loans (%)

0.18

(0.01

)

-

-

-

0.06

0.21

Balance Sheet:

Avg Loans ($B)

$

6.7

$

6.7

$

6.8

$

6.9

$

6.8

$

6.8

$

6.8

Avg Dep ($B)

$

7.5

$

7.2

$

7.1

$

6.9

$

6.8

$

7.2

$

6.8

Book Value/Share

$

22.94

$

22.89

$

23.04

$

23.21

$

23.06

$

22.94

$

23.06

Tangible BV/Share

$

22.29

$

22.24

$

22.39

$

22.54

$

22.39

$

22.29

$

22.39

TCE/TA (%)

7.00

7.12

7.40

7.64

7.56

7.00

7.56

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

3Q24 Highlights

  • Net interest margin FTE decreased 12 bps YoY and increased 5 bps QoQ to 2.10%; Core net interest margin FTE decreased 6 bps YoY, but increased 4 bps QoQ to 2.07%; Net reversals and recovered interest from delinquent loans totaled $1.1 million and added 5 bps to the GAAP and Core NIM in 3Q24; After bottoming in July, the NIM expanded in both August and September

  • Average total deposits increased 9.4% YoY and 3.7% QoQ to $7.5 billion; Average noninterest bearing deposits declined 0.7% YoY but increased 2.7% QoQ and totaled 11.3% of total average deposits compared to 12.5% in 3Q23 and 11.4% in 2Q24. Average CDs were $2.9 billion, up 25.9% YoY and 18.1% QoQ

  • Period end net loans decreased 1.2% YoY, but increased 0.6% QoQ to $6.8 billion; Loan closings were $217.1 million, down 10.1% YoY, but up 72.3% QoQ; The yields on closings increased 3 bps YoY, but decreased 26 bps QoQ to 7.51%; Back-to-back swap loan originations were $38.5 million compared to $27.4 million in 2Q24 and generated $0.6 million and $0.5 million of noninterest income, respectively; Loan pipeline decreased 19.4% YoY and 10.6% QoQ to $293.0 million; Approximately 20% of the loan pipeline consists of back-to-back swap loans

  • NPAs totaled $54.9 million (59 bps of assets) in 3Q24 compared to $38.4 million (45 bps) a year ago and $55.8 million (61 bps) in the prior quarter

  • Year to date noninterest expense growth was 6.3%, while core noninterest expense growth was 5.9%; The Company remains on target to have core noninterest expense growth of mid-single digits for 2024

  • Provision for credit losses was $1.7 million in 3Q24 compared to $0.6 million in 3Q23 and $0.8 million in 2Q24; Net charge-offs (recoveries) were $3.0 million in 3Q24 compared to $(42,000) in 3Q23 and $(92,000) in 2Q24

  • Tangible Common Equity to Tangible Assets was 7.00% at September 30, 2024, compared to 7.12% at June 30, 2024; Tangible book value per share was $22.29 compared to $22.39 a year ago

Areas of Focus

Increase NIM and Reduce Volatility

  • GAAP and Core NIM increased by 5 bps and 4 bps QoQ, respectively, in 3Q24; Net reversals and recovered interest from delinquent loans added 5 bps to the GAAP and Core NIM in 3Q24

  • Approximately 26% of the loan portfolio consists of floating rate loans (including hedges)

  • Average noninterest bearing deposits increased 2.7% QoQ and accounted for 11.3% of average total deposits

Maintain Credit Discipline

  • Approximately 90% of the loan portfolio is collateralized by real estate with an average loan to value of less than 36%

  • Weighted average debt service coverage ratio is approximately 1.9x for multifamily and investor commercial real estate loans

  • Criticized and classified loans are 1.00% of gross loans

  • Manhattan office buildings exposure is minimal at 0.5% of gross loans

Preserve Strong Liquidity and Capital

  • Maintaining ample liquidity with $3.9billion of undrawn lines and resources as of September 30, 2024

  • Uninsured and uncollateralized deposits were 15% of total deposits, while uninsured deposits were 31% of total deposits

  • Total average deposits increased 9.4% YoY and 3.7% QoQ

  • Tangible Common Equity to Tangible Assets was 7.00% at September 30, 2024, down 12 bps QoQ; Leverage ratio was 7.91% at September 30, 2024, compared to 8.18% at June 30, 2024

Bend the Expense Curve

  • GAAP noninterest expense to average assets was 1.68% in 3Q24 compared to 1.71% in 3Q23 and 1.77% in 2Q24

  • GAAP and Core noninterest expense growth was 6.3% and 6.4% YoY in 3Q24, respectively, and 6.3% and 5.9% year to date, as investments were made to improve long term profitability

Income Statement Highlights

YoY

QoQ

($000s, except EPS)

3Q24

2Q24

1Q24

4Q23

3Q23

Change

Change

Net Interest Income

$

45,603

$

42,776

$

42,397

$

46,085

$

44,427

2.6

%

6.6

%

Provision for Credit Losses

1,727

809

592

998

596

189.8

113.5

Noninterest Income

6,277

4,216

3,084

7,402

3,309

89.7

48.9

Noninterest Expense

38,696

39,047

39,892

40,735

36,388

6.3

(0.9

)

Income Before Income Taxes

11,457

7,136

4,997

11,754

10,752

6.6

60.6

Provision for Income Taxes

2,551

1,814

1,313

3,655

2,917

(12.5

)

40.6

Net Income

$

8,906

$

5,322

$

3,684

$

8,099

$

7,835

13.7

67.3

Diluted EPS

$

0.30

$

0.18

$

0.12

$

0.27

$

0.26

15.4

66.7

Avg. Diluted Shares (000s)

29,742

29,789

29,742

29,650

29,703

0.1

(0.2

)

Core Net Income1

$

7,723

$

5,456

$

4,312

$

7,546

$

7,571

2.0

41.6

Core EPS1

$

0.26

$

0.18

$

0.14

$

0.25

$

0.25

4.0

44.4

1 See Reconciliation of GAAP Earnings and Core Earnings

Net interest income increased YoY and QoQ.

  • Net Interest Margin FTE of 2.10% decreased 12 bps YoY, but increased 5 bps QoQ

  • Prepayment penalty income, customer swap termination fees, net reversals and recoveries of interest from delinquent loans, net gains and losses from fair value adjustments on qualifying hedges, and purchase accounting accretion totaled $2.4 million (11 bps to NIM), in 3Q24, compared to $0.7 million (3 bps to NIM) in 2Q24, $1.0 million (5 bps to NIM) in 1Q24, $3.0 million (15 bps to NIM) in 4Q23, and $2.6 million (13 bps to NIM) in 3Q23

  • Excluding the items in the previous bullet, the net interest margin was 1.99% in 3Q24, compared to 2.02% in 2Q24, 2.01% in 1Q24, 2.14% in 4Q23, and 2.09% in 3Q23

The provision for credit losses increased YoY and QoQ.

  • Net charge-offs (recoveries) were $3.0 million (18 bps of average loans) in 3Q24 compared to $(92,000) ((1) bp of average loans) in 2Q24, $4,000 (less than 1 bp of average loans) in 1Q24, $60,000 in 4Q23 (less than 1 bp of average loans), and $(42,000) in 3Q23 (less than (1) bp of average loans)

Noninterest income increased YoY and QoQ.

  • Back-to-back swap loan closings of $38.5 million in 3Q24 (compared to $120.5 million in 3Q23 and $27.4 million in 2Q24) generated $0.6 million of fee income (compared to $1.6 million of fee income in 3Q23 and $0.5 million in 2Q24)

  • Net gains (losses) from fair value adjustments were $1.0 million ($0.03 per share, net of tax) in 3Q24, $0.1 million in 2Q24 (less than $0.01 per share, net of tax), $(0.8) million in 1Q24 ($(0.02) per share, net of tax), $0.9 million in 4Q23 ($0.02 per share, net of tax), and $(1.2) million in 3Q23 ($(0.03) per share, net of tax)

  • Gain on life insurance proceeds were $1,000 in 3Q24 (less than $0.01 per share), $0.7 million in 4Q23 ($0.02 per share) and $23,000 in 3Q23 (less than $0.01 per share)

  • Absent the items in the previous two bullets and other immaterial adjustments, core noninterest income was $5.3 million in 3Q24, up 17.0% YoY and 27.5% QoQ, and includes approximately $0.8 million of insurance recoveries and other items that are not expected to recur (included in other income)

Noninterest expense increased YoY but declined QoQ.

  • Excluding the effects of immaterial adjustments, core noninterest expenses were $38.6 million in 3Q24, up 6.4% YoY and 0.4% QoQ; YoY increases primarily relate to business investments in staff and branches and deposit insurance premiums

  • GAAP noninterest expense to average assets was 1.68% in 3Q24, 1.77% in 2Q24, 1.83% in 1Q24, 1.90% in 4Q23, and 1.71% in 3Q23

Provision for income taxes decreased YoY but increased QoQ.

  • The effective tax rate was 22.3% in 3Q24, 25.4% in 2Q24, 26.3% in 1Q24, 31.1% in 4Q23, and 27.1% in 3Q23

  • The effective tax rate in 3Q24 includes approximately $0.5 million of discrete tax benefits that are not expected to repeat

Balance Sheet, Credit Quality, and Capital Highlights

YoY

QoQ

3Q24

2Q24

1Q24

4Q23

3Q23

Change

Change

Averages ($MM)

Loans

$

6,737

$

6,748

$

6,804

$

6,868

$

6,813

(1.1

)%

(0.2

)%

Total Deposits

7,464

7,196

7,081

6,884

6,819

9.5

3.7

Credit Quality ($000s)

Nonperforming Loans

$

34,261

$

34,540

$

24,829

$

25,172

$

17,405

96.8

%

(0.8

)%

Nonperforming Assets

54,888

55,832

46,254

46,153

38,386

43.0

(1.7

)

Criticized and Classified Loans

68,338

76,485

59,021

76,719

74,169

(7.9

)

(10.7

)

Criticized and Classified Assets

88,965

97,777

80,446

97,700

95,150

(6.5

)

(9.0

)

Allowance for Credit Losses/Loans (%)

0.59

0.61

0.60

0.58

0.57

2

bps

(2

)bp

Capital

Book Value/Share

$

22.94

$

22.89

$

23.04

$

23.21

$

23.06

(0.5

)%

0.2

%

Tangible Book Value/Share

22.29

22.24

22.39

22.54

22.39

(0.4

)

0.2

Tang. Common Equity/Tang. Assets (%)

7.00

7.12

7.40

7.64

7.56

(56

)bps

(12

)bps

Leverage Ratio (%)

7.91

8.18

8.32

8.47

8.51

(60

)

(27

)

Average loans decreased slightly YoY and QoQ.

  • Period end net loans totaled $6.8 billion, down 1.2% YoY, but up 0.6% QoQ

  • Total loan closings were $217.1 million in 3Q24, $126.0 million in 2Q24, $130.0 million in 1Q24, $244.3 million in 4Q23, and $241.5 million in 3Q23; the loan pipeline was $293.0 million at September 30, 2024, down 19.4% YoY and 10.6% QoQ

  • The diversified loan portfolio is approximately 90% collateralized by real estate with an average loan-to-value ratio of <36%

  • Manhattan office buildings exposure is minimal at 0.5% of gross loans

Average total deposits increased YoY and QoQ.

  • Average noninterest bearing deposits decreased 0.7% YoY, but increased 2.7% QoQ and comprised 11.3% of average total deposits in 3Q24 compared to 12.5% a year ago

  • Average CDs totaled $2.9 billion, up 25.9% YoY and 18.1% QoQ; approximately $647.2 million of retail CDs are due to mature at an average rate of 4.96% in 4Q24

Credit Quality: Nonperforming loans increased YoY but decreased QoQ.

  • Nonperforming loans were 50 bps of loans in 3Q24 compared to 25 bps in 3Q23 and 51 bps in 2Q24

  • Criticized and classified loans were 100 bps of gross loans at 3Q24 compared to 113 bps at 2Q24, 87 bps at 1Q24, 111 bps at 4Q23, and 108 bps at 3Q23

  • Allowance for credit losses were 117.7% of nonperforming loans at 3Q24 compared to 225.4% at 3Q23 and 120.6% at 2Q24

Capital: Book value per common share and tangible book value per common share, a non-GAAP measure, decreased 0.5% and 0.4% YoY to $22.94 and $22.29, respectively.

  • The Company paid a dividend of $0.22 per share in 3Q24; 807,964shares remaining subject to repurchase under the authorized stock repurchase program, which has no expiration or maximum dollar limit

  • Tangible common equity to tangible assets was 7.00% at September 30, 2024 compared to 7.56% at September 30, 2023, and 7.12% at June 30, 2024

Conference Call Information

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, October 25, 2024, at 11:00 AM (ET) to discuss the Company's third quarter results and strategy.

  • Dial-in for Live Call: 1-877-509-5836; Canada 855-669-9657

  • Webcast: https://event.choruscall.com/mediaframe/webcast.html?webcastid=DyENTTHR

  • Dial-in for Replay: 1-877-344-7529; Canada 855-669-9658

  • Replay Access Code: 3119962

  • The conference call will be simultaneously webcast and archived

Fourth Quarter and Full Year 2024 Earnings Release Date:

The Company plans to release Fourth Quarter and Full Year 2024 financial results after the market close on January 28, 2025, followed by a conference call at 9:30 AM (ET) on January 29, 2025.

A detailed announcement will be issued prior to the fourth quarter's close confirming the date and the time of the earning 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, 2023 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 nine months ended

(Dollars in thousands, except per share data)

September 30,
2024

June 30,
2024

March 31,
2024

December 31,
2023

September 30,
2023

September 30,
2024

September 30,
2023

Performance Ratios (1)

Return on average assets

0.39

%

0.24

%

0.17

%

0.38

%

0.37

%

0.27

%

0.32

%

Return on average equity

5.30

3.19

2.20

4.84

4.64

3.57

4.05

Yield on average interest-earning assets (2)

5.63

5.43

5.32

5.39

5.19

5.46

4.88

Cost of average interest-bearing liabilities

4.10

3.95

3.83

3.68

3.52

3.96

3.16

Cost of funds

3.69

3.54

3.42

3.26

3.13

3.55

2.80

Net interest rate spread during period (2)

1.53

1.48

1.49

1.71

1.67

1.50

1.72

Net interest margin (2)

2.10

2.05

2.06

2.29

2.22

2.07

2.22

Noninterest expense to average assets

1.68

1.77

1.83

1.90

1.71

1.76

1.74

Efficiency ratio (3)

77.20

82.57

86.07

76.69

76.76

81.81

76.73

Average interest-earning assets to average interest-bearing liabilities

1.16

X

1.17

X

1.17

X

1.19

X

1.18

X

1.17

X

1.19

X

Average Balances

Total loans, net

$

6,737,261

$

6,748,140

$

6,804,117

$

6,867,927

$

6,813,019

$

6,763,078

$

6,837,740

Total interest-earning assets

8,709,671

8,354,994

8,235,160

8,076,991

8,023,237

8,434,283

8,005,866

Total assets

9,203,884

8,830,665

8,707,505

8,569,002

8,505,346

8,915,076

8,478,837

Total deposits

7,463,783

7,195,940

7,081,498

6,884,037

6,819,397

7,247,863

6,843,200

Total interest-bearing liabilities

7,504,517

7,140,068

7,014,927

6,813,909

6,771,860

7,220,876

6,744,342

Stockholders' equity

672,762

667,557

669,185

669,819

675,041

669,845

676,949

Per Share Data

Book value per common share (4)

$

22.94

$

22.89

$

23.04

$

23.21

$

23.06

$

22.94

$

23.06

Tangible book value per common share (5)

$

22.29

$

22.24

$

22.39

$

22.54

$

22.39

$

22.29

$

22.39

Stockholders' Equity

Stockholders' equity

$

666,891

$

665,322

$

669,827

$

669,837

$

666,521

$

666,891

$

666,521

Tangible stockholders' equity

648,035

646,364

650,763

650,664

647,234

648,035

647,234

Consolidated Regulatory Capital Ratios

Tier 1 capital

$

735,984

$

733,308

$

734,192

$

737,732

$

736,744

$

735,984

$

736,744

Common equity Tier 1 capital

689,902

686,630

687,458

691,754

690,294

689,902

690,294

Total risk-based capital

967,242

965,819

965,796

967,627

965,532

967,242

965,532

Risk Weighted Assets

6,790,253

6,718,568

6,664,496

6,750,301

6,804,478

6,790,253

6,804,478

Tier 1 leverage capital (well capitalized = 5%)

7.91

%

8.18

%

8.32

%

8.47

%

8.51

%

7.91

%

8.51

%

Common equity Tier 1 risk-based capital (well capitalized = 6.5%)

10.16

10.22

10.32

10.25

10.14

10.16

10.14

Tier 1 risk-based capital (well capitalized = 8.0%)

10.84

10.91

11.02

10.93

10.83

10.84

10.83

Total risk-based capital (well capitalized = 10.0%)

14.24

14.38

14.49

14.33

14.19

14.24

14.19

Capital Ratios

Average equity to average assets

7.31

%

7.56

%

7.69

%

7.82

%

7.94

%

7.51

%

7.98

%

Equity to total assets

7.19

7.31

7.61

7.85

7.77

7.19

7.77

Tangible common equity to tangible assets (6)

7.00

7.12

7.40

7.64

7.56

7.00

7.56

Asset Quality

Nonaccrual loans

$

34,261

$

34,540

$

24,829

$

23,709

$

17,405

$

34,261

$

17,405

Nonperforming loans

34,261

34,540

24,829

25,172

17,405

34,261

17,405

Nonperforming assets

54,888

55,832

46,254

46,153

38,386

54,888

38,386

Net charge-offs (recoveries)

3,036

(92

)

4

60

(42

)

2,948

8,903

Asset Quality Ratios

Nonperforming loans to gross loans

0.50

%

0.51

%

0.36

%

0.36

%

0.25

%

0.50

%

0.25

%

Nonperforming assets to total assets

0.59

0.61

0.53

0.54

0.45

0.59

0.45

Allowance for credit losses to gross loans

0.59

0.61

0.60

0.58

0.57

0.59

0.57

Allowance for credit losses to nonperforming assets

73.50

74.60

88.10

87.02

102.19

73.50

102.19

Allowance for credit losses to nonperforming loans

117.75

120.58

164.13

159.55

225.38

117.75

225.38

Net charge-offs (recoveries) to average loans

0.18

(0.01

)

-

-

-

0.06

0.17

Full-service customer facilities

28

27

27

27

27

28

27

(1)

Ratios are presented on an annualized basis, where appropriate.

(2)

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

(3)

Efficiency ratio, a non-GAAP measure, was calculated by dividing core noninterest expense (excluding OREO expense and the net gain/loss from the sale of OREO) by the total of core net interest income and core noninterest income.

(4)

Calculated by dividing stockholders' equity by shares outstanding.

(5)

Calculated by dividing tangible stockholders' common equity, a non-GAAP measure, by shares outstanding. Tangible stockholders' common equity is stockholders' equity less intangible assets. See "Calculation of Tangible Stockholders' Common Equity to Tangible Assets".

(6)

See "Calculation of Tangible Stockholders' Common Equity to Tangible Assets".

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

For the three months ended

For the nine months ended

September 30,

June 30,

March 31,

December 31,

September 30,

September 30,

September 30,

(In thousands, except per share data)

2024

2024

2024

2023

2023

2024

2023

Interest and Dividend Income

Interest and fees on loans

$

95,780

$

92,728

$

92,959

$

95,616

$

91,466

$

281,467

$

259,732

Interest and dividends on securities:

Interest

24,215

18,209

12,541

10,803

10,383

54,965

26,795

Dividends

33

33

33

34

33

99

92

Other interest income

2,565

2,260

3,966

2,310

2,154

8,791

6,095

Total interest and dividend income

122,593

113,230

109,499

108,763

104,036

345,322

292,714

Interest Expense

Deposits

66,150

60,893

57,865

53,284

50,066

184,908

135,371

Other interest expense

10,840

9,561

9,237

9,394

9,543

29,638

24,276

Total interest expense

76,990

70,454

67,102

62,678

59,609

214,546

159,647

Net Interest Income

45,603

42,776

42,397

46,085

44,427

130,776

133,067

Provision for credit losses

1,727

809

592

998

596

3,128

9,520

Net Interest Income After Provision for Credit Losses

43,876

41,967

41,805

45,087

43,831

127,648

123,547

Noninterest Income

Banking services fee income

1,790

1,583

1,394

2,824

2,636

4,767

5,827

Net gain on sale of loans

137

26

110

-

-

273

108

Net gain (loss) from fair value adjustments

974

57

(834

)

906

(1,246

)

197

1,667

Federal Home Loan Bank of New York stock dividends

624

669

743

658

624

2,036

1,855

Life insurance proceeds

1

-

-

697

23

1

584

Bank owned life insurance

1,260

1,223

1,200

1,173

1,157

3,683

3,400

Other income

1,491

658

471

1,144

115

2,620

1,745

Total noninterest income

6,277

4,216

3,084

7,402

3,309

13,577

15,186

Noninterest Expense

Salaries and employee benefits

22,216

21,723

22,113

23,359

20,346

66,052

62,598

Occupancy and equipment

3,745

3,713

3,779

3,698

3,371

11,237

10,698

Professional services

2,752

2,786

2,792

2,523

2,494

8,330

7,046

FDIC deposit insurance

1,318

1,322

1,652

1,162

912

4,292

2,832

Data processing

1,681

1,785

1,727

1,646

1,422

5,193

4,330

Depreciation and amortization

1,436

1,425

1,457

1,491

1,482

4,318

4,474

Other real estate owned/foreclosure expense

135

125

145

105

185

405

500

Gain on sale of other real estate owned

(174

)

-

-

-

-

(174

)

-

Other operating expenses

5,587

6,168

6,227

6,751

6,176

17,982

18,176

Total noninterest expense

38,696

39,047

39,892

40,735

36,388

117,635

110,654

Income Before Provision for Income Taxes

11,457

7,136

4,997

11,754

10,752

23,590

28,079

Provision for income taxes

2,551

1,814

1,313

3,655

2,917

5,678

7,514

Net Income

$

8,906

$

5,322

$

3,684

$

8,099

$

7,835

$

17,912

$

20,565

Basic earnings per common share

$

0.30

$

0.18

$

0.12

$

0.27

$

0.26

$

0.60

$

0.69

Diluted earnings per common share

$

0.30

$

0.18

$

0.12

$

0.27

$

0.26

$

0.60

$

0.69

Dividends per common share

$

0.22

$

0.22

$

0.22

$

0.22

$

0.22

$

0.66

$

0.66

Basic average shares

29,742

29,789

29,742

29,650

29,703

29,758

30,017

Diluted average shares

29,742

29,789

29,742

29,650

29,703

29,758

30,017

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

September 30,

June 30,

March 31,

December 31,

September 30,

(Dollars in thousands)

2024

2024

2024

2023

2023

ASSETS

Cash and due from banks

$

267,643

$

156,913

$

210,723

$

172,157

$

200,926

Securities held-to-maturity:

Mortgage-backed securities

7,841

7,846

7,850

7,855

7,860

Other securities, net

63,859

64,166

64,612

65,068

65,271

Securities available for sale:

Mortgage-backed securities

926,731

869,494

509,527

354,344

337,879

Other securities

687,518

679,117

667,156

520,409

505,784

Loans

6,818,328

6,777,026

6,821,943

6,906,950

6,896,074

Allowance for credit losses

(40,342

)

(41,648

)

(40,752

)

(40,161

)

(39,228

)

Net loans

6,777,986

6,735,378

6,781,191

6,866,789

6,856,846

Interest and dividends receivable

64,369

62,752

61,449

59,018

55,660

Bank premises and equipment, net

18,544

19,426

20,102

21,273

21,302

Federal Home Loan Bank of New York stock

32,745

46,331

24,845

31,066

43,821

Bank owned life insurance

217,200

215,940

214,718

213,518

214,321

Goodwill

17,636

17,636

17,636

17,636

17,636

Core deposit intangibles

1,220

1,322

1,428

1,537

1,651

Right of use asset

44,787

46,636

37,631

39,557

41,404

Other assets

152,807

174,283

188,457

167,009

209,014

Total assets

$

9,280,886

$

9,097,240

$

8,807,325

$

8,537,236

$

8,579,375

LIABILITIES

Total deposits

$

7,572,395

$

6,906,863

$

7,253,207

$

6,815,261

$

6,681,509

Borrowed funds

846,123

1,316,565

671,474

841,281

1,001,010

Operating lease liability

45,437

47,485

38,674

40,822

43,067

Other liabilities

150,040

161,005

174,143

170,035

187,268

Total liabilities

8,613,995

8,431,918

8,137,498

7,867,399

7,912,854

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

261,274

260,585

260,413

264,534

264,486

Treasury stock

(101,633

)

(101,633

)

(101,641

)

(106,070

)

(105,433

)

Retained earnings

547,708

545,345

546,530

549,683

548,058

Accumulated other comprehensive loss, net of taxes

(40,799

)

(39,316

)

(35,816

)

(38,651

)

(40,931

)

Total stockholders' equity

666,891

665,322

669,827

669,837

666,521

Total liabilities and stockholders' equity

$

9,280,886

$

9,097,240

$

8,807,325

$

8,537,236

$

8,579,375

(In thousands)

Issued shares

34,088

34,088

34,088

34,088

34,088

Outstanding shares

29,069

29,069

29,069

28,866

28,905

Treasury shares

5,019

5,019

5,019

5,222

5,183

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
AVERAGE BALANCE SHEETS
(Unaudited)

For the three months ended

For the nine months ended

September 30,

June 30,

March 31,

December 31,

September 30,

September 30,

September 30,

(In thousands)

2024

2024

2024

2023

2023

2024

2023

Interest-earning Assets:

Mortgage loans, net

$

5,337,170

$

5,338,614

$

5,353,606

$

5,356,112

$

5,314,215

$

5,343,108

$

5,318,616

Commercial Business loans, net

1,400,091

1,409,526

1,450,511

1,511,815

1,498,804

1,419,970

1,519,124

Total loans, net

6,737,261

6,748,140

6,804,117

6,867,927

6,813,019

6,763,078

6,837,740

Taxable securities:

Mortgage-backed securities

984,383

691,802

462,934

426,612

436,181

714,030

447,491

Other securities, net

714,161

663,975

590,204

527,316

528,091

656,325

470,898

Total taxable securities

1,698,544

1,355,777

1,053,138

953,928

964,272

1,370,355

918,389

Tax-exempt securities:

Other securities

65,070

65,451

65,939

66,242

66,438

65,485

66,631

Total tax-exempt securities

65,070

65,451

65,939

66,242

66,438

65,485

66,631

Interest-earning deposits and federal funds sold

208,796

185,626

311,966

188,894

179,508

235,365

183,106

Total interest-earning assets

8,709,671

8,354,994

8,235,160

8,076,991

8,023,237

8,434,283

8,005,866

Other assets

494,213

475,671

472,345

492,011

482,109

480,793

472,971

Total assets

$

9,203,884

$

8,830,665

$

8,707,505

$

8,569,002

$

8,505,346

$

8,915,076

$

8,478,837

Interest-bearing Liabilities:

Deposits:

Savings accounts

$

102,196

$

103,335

$

106,212

$

110,316

$

115,437

$

103,908

$

124,736

NOW accounts

1,886,387

2,017,085

1,935,250

1,848,285

1,907,781

1,946,022

1,968,199

Money market accounts

1,673,499

1,714,085

1,725,714

1,625,453

1,584,308

1,704,320

1,797,398

Certificate of deposit accounts

2,884,280

2,443,047

2,406,283

2,340,115

2,290,669

2,578,988

2,007,954

Total due to depositors

6,546,362

6,277,552

6,173,459

5,924,169

5,898,195

6,333,238

5,898,287

Mortgagors' escrow accounts

71,965

95,532

73,822

86,592

69,525

80,408

79,136

Total interest-bearing deposits

6,618,327

6,373,084

6,247,281

6,010,761

5,967,720

6,413,646

5,977,423

Borrowings

886,190

766,984

767,646

803,148

804,140

807,230

766,919

Total interest-bearing liabilities

7,504,517

7,140,068

7,014,927

6,813,909

6,771,860

7,220,876

6,744,342

Noninterest-bearing demand deposits

845,456

822,856

834,217

873,276

851,677

834,217

865,777

Other liabilities

181,149

200,184

189,176

211,998

206,768

190,138

191,769

Total liabilities

8,531,122

8,163,108

8,038,320

7,899,183

7,830,305

8,245,231

7,801,888

Equity

672,762

667,557

669,185

669,819

675,041

669,845

676,949

Total liabilities and equity

$

9,203,884

$

8,830,665

$

8,707,505

$

8,569,002

$

8,505,346

$

8,915,076

$

8,478,837

Net interest-earning assets

$

1,205,154

$

1,214,926

$

1,220,233

$

1,263,082

$

1,251,377

$

1,213,407

$

1,261,524

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

For the three months ended

For the nine months ended

September 30,

June 30,

March 31,

December 31,

September 30,

September 30,

September 30,

(Dollars in thousands)

2024

2024

2024

2023

2023

2024

2023

Interest Income:

Mortgage loans, net

$

74,645

$

71,968

$

71,572

$

72,505

$

68,931

$

218,185

$

194,673

Commercial Business loans, net

21,135

20,760

21,387

23,111

22,535

63,282

65,059

Total loans, net

95,780

92,728

92,959

95,616

91,466

281,467

259,732

Taxable securities:

Mortgage-backed securities

12,443

7,462

3,696

3,217

3,031

23,601

8,288

Other securities

11,431

10,408

8,504

7,239

7,003

30,343

17,461

Total taxable securities

23,874

17,870

12,200

10,456

10,034

53,944

25,749

Tax-exempt securities:

Other securities

474

470

474

482

484

1,418

1,441

Total tax-exempt securities

474

470

474

482

484

1,418

1,441

Interest-earning deposits and federal funds sold

2,565

2,260

3,966

2,310

2,154

8,791

6,095

Total interest-earning assets

122,693

113,328

109,599

108,864

104,138

345,620

293,017

Interest Expense:

Deposits:

Savings accounts

$

122

$

115

$

122

$

124

$

130

$

359

$

396

NOW accounts

18,795

20,007

18,491

17,411

16,843

57,293

46,780

Money market accounts

17,485

17,326

17,272

15,785

14,386

52,083

43,113

Certificate of deposit accounts

29,676

23,383

21,918

19,917

18,639

74,977

44,927

Total due to depositors

66,078

60,831

57,803

53,237

49,998

184,712

135,216

Mortgagors' escrow accounts

72

62

62

47

68

196

155

Total interest-bearing deposits

66,150

60,893

57,865

53,284

50,066

184,908

135,371

Borrowings

10,840

9,561

9,237

9,394

9,543

29,638

24,276

Total interest-bearing liabilities

76,990

70,454

67,102

62,678

59,609

214,546

159,647

Net interest income- tax equivalent

$

45,703

$

42,874

$

42,497

$

46,186

$

44,529

$

131,074

$

133,370

Included in net interest income above:

Prepayment penalty income, net reversals and recovered interest from nonaccrual and delinquent loans, and customer swap terminations fees

$

1,647

$

369

$

928

$

3,416

$

857

$

2,944

$

1,852

Net gains/(losses) from fair value adjustments on qualifying hedges included in net interest income

554

177

(187

)

(872

)

1,348

544

1,243

Purchase accounting adjustments

155

182

271

461

347

608

993

Interest-earning Assets Yields:

Mortgage loans, net

5.59

%

5.39

%

5.35

%

5.41

%

5.19

%

5.44

%

4.88

%

Commercial Business loans, net

6.04

5.89

5.90

6.11

6.01

5.94

5.71

Total loans, net

5.69

5.50

5.46

5.57

5.37

5.55

5.06

Taxable securities:

Mortgage-backed securities

5.06

4.31

3.19

3.02

2.78

4.41

2.47

Other securities

6.40

6.27

5.76

5.49

5.30

6.16

4.94

Total taxable securities

5.62

5.27

4.63

4.38

4.16

5.25

3.74

Tax-exempt securities: (1)

Other securities

2.91

2.87

2.88

2.91

2.91

2.89

2.88

Total tax-exempt securities

2.91

2.87

2.88

2.91

2.91

2.89

2.88

Interest-earning deposits and federal funds sold

4.91

4.87

5.09

4.89

4.80

4.98

4.44

Total interest-earning assets (1)

5.63

%

5.43

%

5.32

%

5.39

%

5.19

%

5.46

%

4.88

%

Interest-bearing Liabilities Yields:

Deposits:

Savings accounts

0.48

%

0.45

%

0.46

%

0.45

%

0.45

%

0.46

%

0.42

%

NOW accounts

3.99

3.97

3.82

3.77

3.53

3.93

3.17

Money market accounts

4.18

4.04

4.00

3.88

3.63

4.07

3.20

Certificate of deposit accounts

4.12

3.83

3.64

3.40

3.25

3.88

2.98

Total due to depositors

4.04

3.88

3.75

3.59

3.39

3.89

3.06

Mortgagors' escrow accounts

0.40

0.26

0.34

0.22

0.39

0.33

0.26

Total interest-bearing deposits

4.00

3.82

3.70

3.55

3.36

3.84

3.02

Borrowings

4.89

4.99

4.81

4.68

4.75

4.90

4.22

Total interest-bearing liabilities

4.10

%

3.95

%

3.83

%

3.68

%

3.52

%

3.96

%

3.16

%

Net interest rate spread (tax equivalent) (1)

1.53

%

1.48

%

1.49

%

1.71

%

1.67

%

1.50

%

1.72

%

Net interest margin (tax equivalent) (1)

2.10

%

2.05

%

2.06

%

2.29

%

2.22

%

2.07

%

2.22

%

Ratio of interest-earning assets to interest-bearing liabilities

1.16

X

1.17

X

1.17

X

1.19

X

1.18

X

1.17

X

1.19

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

3Q24 vs.
2Q24

3Q24 vs.
3Q23

September 30,

June 30,

March 31,

December 31,

September 30,

(Dollars in thousands)

2024

2024

2024

2023

2023

% Change

% Change

Noninterest bearing

$

860,930

$

825,327

$

815,937

$

847,416

$

874,420

4.3

%

(1.5

)%

Interest bearing:

Certificate of deposit accounts

2,875,486

2,435,894

2,529,095

2,311,290

2,321,369

18.0

23.9

Savings accounts

100,279

103,296

105,147

108,605

112,730

(2.9

)

(11.0

)

Money market accounts

1,659,027

1,710,376

1,717,298

1,726,404

1,551,176

(3.0

)

7.0

NOW accounts

2,003,301

1,774,268

2,003,649

1,771,164

1,749,802

12.9

14.5

Total interest-bearing deposits

6,638,093

6,023,834

6,355,189

5,917,463

5,735,077

10.2

15.7

Total due to depositors

7,499,023

6,849,161

7,171,126

6,764,879

6,609,497

9.5

13.5

Mortgagors' escrow deposits

73,372

57,702

82,081

50,382

72,012

27.2

1.9

Total deposits

$

7,572,395

$

6,906,863

$

7,253,207

$

6,815,261

$

6,681,509

9.6

%

13.3

%

Loan Composition

3Q24 vs.
2Q24

3Q24 vs.
3Q23

September 30,

June 30,

March 31,

December 31,

September 30,

(Dollars in thousands)

2024

2024

2024

2023

2023

% Change

% Change

Multifamily residential

$

2,638,863

$

2,631,751

$

2,622,737

$

2,658,205

$

2,614,219

0.3

%

0.9

%

Commercial real estate

1,929,093

1,894,509

1,925,312

1,958,252

1,953,243

1.8

(1.2

)

One-to-four family ??? mixed use property

515,511

518,510

516,198

530,243

537,744

(0.6

)

(4.1

)

One-to-four family ??? residential

252,293

261,716

267,156

220,213

222,874

(3.6

)

13.2

Construction

63,674

65,161

60,568

58,673

59,903

(2.3

)

6.3

Mortgage loans

5,399,434

5,371,647

5,391,971

5,425,586

5,387,983

0.5

0.2

Small Business Administration

19,368

13,957

16,244

20,205

21,896

38.8

(11.5

)

Commercial business and other

1,387,965

1,389,711

1,411,725

1,452,518

1,487,775

(0.1

)

(6.7

)

Commercial Business loans

1,407,333

1,403,668

1,427,969

1,472,723

1,509,671

0.3

(6.8

)

Gross loans

6,806,767

6,775,315

6,819,940

6,898,309

6,897,654

0.5

(1.3

)

Net unamortized (premiums) and unearned loan (cost) fees (1)

11,561

1,711

2,003

8,641

(1,580

)

575.7

(831.7

)

Allowance for credit losses

(40,342

)

(41,648

)

(40,752

)

(40,161

)

(39,228

)

(3.1

)

2.8

Net loans

$

6,777,986

$

6,735,378

$

6,781,191

$

6,866,789

$

6,856,846

0.6

%

(1.2

)%

(1) Includes $3.1 million, $3.4 million, $3.6 million, $3.9 million, and $4.4 million of purchase accounting unamortized discount resulting from the acquisition of Empire Bancorp at September 30, 2024, June 30, 2024, March 31, 2024, December 31, 2023, and September 30, 2023, respectively.

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

Loan Closings

For the three months ended

For the nine months ended

September 30,

June 30,

March 31,

December 31,

September 30,

September 30,

September 30,

(In thousands)

2024

2024

2024

2023

2023

2024

2023

Multifamily residential

$

50,528

$

27,966

$

11,805

$

82,995

$

75,655

$

90,299

$

149,720

Commercial real estate

56,713

20,573

10,040

60,092

70,197

87,326

124,290

One-to-four family - mixed use property

5,709

3,980

750

3,319

6,028

10,439

16,778

One-to-four family - residential

1,705

689

52,539

1,454

1,070

54,933

5,429

Construction

5,063

4,594

1,895

8,007

6,971

11,552

26,374

Mortgage loans

119,718

57,802

77,029

155,867

159,921

254,549

322,591

Small Business Administration

5,930

-

-

1,162

-

5,930

1,138

Commercial business and other

91,447

68,162

52,955

87,255

81,549

212,564

250,067

Commercial Business loans

97,377

68,162

52,955

88,417

81,549

218,494

251,205

Total Closings

$

217,095

$

125,964

$

129,984

$

244,284

$

241,470

$

473,043

$

573,796

Weighted Average Rate on Loan Closings

For the three months ended

September 30,

June 30,

March 31,

December 31,

September 30,

Loan type

2024

2024

2024

2023

2023

Mortgage loans

7.31

%

7.58

%

6.36

%

7.55

%

7.22

%

Commercial Business loans

7.75

7.94

8.29

7.93

8.00

Total loans

7.51

%

7.77

%

7.13

%

7.69

%

7.48

%

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
ASSET QUALITY
(Unaudited)

Allowance for Credit Losses

For the three months ended

For the nine months ended

September 30,

June 30,

March 31,

December 31,

September 30,

September 30,

September 30,

(Dollars in thousands)

2024

2024

2024

2023

2023

2024

2023

Allowance for credit losses - loans

Beginning balances

$

41,648

$

40,752

$

40,161

$

39,228

$

38,593

$

40,161

$

40,442

Net loan charge-off (recoveries):

Multifamily residential

-

(1

)

-

(1

)

-

(1

)

(1

)

Commercial real estate

-

-

-

-

-

-

8

One-to-four family - mixed-use property

-

(2

)

-

(1

)

-

(2

)

-

One-to-four family - residential

(58

)

(2

)

13

9

(6

)

(47

)

(38

)

Small Business Administration

(1

)

(91

)

(5

)

(29

)

(48

)

(97

)

(212

)

Commercial business and other

3,095

4

(4

)

82

12

3,095

10,995

Total net loan charge-offs (recoveries)

3,036

(92

)

4

60

(42

)

2,948

10,752

Provision (benefit) for loan losses

1,730

804

595

993

593

3,129

9,538

Ending balance

$

40,342

$

41,648

$

40,752

$

40,161

$

39,228

$

40,342

$

39,228

Gross charge-offs

$

3,110

$

11

$

58

$

107

$

21

$

3,179

$

11,050

Gross recoveries

74

103

54

47

63

231

298

Allowance for credit losses - loans to gross loans

0.59

%

0.61

%

0.60

%

0.58

%

0.57

%

0.59

%

0.57

%

Net loan charge-offs (recoveries) to average loans

0.18

(0.01

)

-

-

-

0.06

0.21

Nonperforming Assets

(Dollars in thousands)

September 30,
2024

June 30,
2024

March 31,
2024

December 31,
2023

September 30,
2023

Loans 90 Days or More Past Due and Still Accruing:

Multifamily residential

$

-

$

-

$

-

$

1,463

$

-

Total Loans 90 Days or more past due and still accruing

-

-

-

1,463

-

Nonaccrual Loans:

Multifamily residential

9,478

13,774

4,669

3,206

3,206

Commercial real estate

6,705

-

-

-

-

One-to-four family - mixed-use property

369

909

911

981

1,075

One-to-four family - residential

1,493

3,633

3,768

5,181

4,161

Small Business Administration

2,445

2,552

2,552

2,552

1,255

Commercial business and other

13,771

13,672

12,929

11,789

7,708

Total Nonaccrual loans

34,261

34,540

24,829

23,709

17,405

Total Nonperforming Loans (NPLs)

34,261

34,540

24,829

25,172

17,405

Other Nonperforming Assets:

Real estate acquired through foreclosure

-

665

665

-

-

Total Other nonperforming assets

-

665

665

-

-

Total Nonaccrual HTM Securities

20,627

20,627

20,760

20,981

20,981

Total Nonperforming Assets

$

54,888

$

55,832

$

46,254

$

46,153

$

38,386

Nonperforming Assets to Total Assets

0.59

%

0.61

%

0.53

%

0.54

%

0.45

%

Allowance for Credit Losses to NPLs

117.7

%

120.6

%

164.1

%

159.5

%

225.4

%

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

RECONCILIATION OF GAAP EARNINGS and CORE EARNINGS

Non-cash Fair Value Adjustments to GAAP Earnings

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

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

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

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

For the three months ended

For the nine months ended

(Dollars in thousands,

September 30,

June 30,

March 31,

December 31,

September 30,

September 30,

September 30,

except per share data)

2024

2024

2024

2023

2023

2024

2023

GAAP income before income taxes

$

11,457

$

7,136

$

4,997

$

11,754

$

10,752

$

23,590

$

28,079

Net (gain) loss from fair value adjustments (Noninterest income (loss))

(974

)

(57

)

834

(906

)

1,246

(197

)

(1,667

)

Life insurance proceeds (Noninterest income (loss))

(1

)

-

-

(697

)

(23

)

(1

)

(584

)

Net (gain) loss from fair value adjustments on qualifying hedges (Net interest income)

(554

)

(177

)

187

872

(1,348

)

(544

)

(1,243

)

Net amortization of purchase accounting adjustments and intangibles (Various)

(62

)

(85

)

(169

)

(355

)

(237

)

(316

)

(652

)

Miscellaneous expense (Professional services)

10

494

-

526

-

504

-

Core income before taxes

9,876

7,311

5,849

11,194

10,390

23,036

23,933

Provision for core income taxes

2,153

1,855

1,537

3,648

2,819

5,545

6,561

Core net income

$

7,723

$

5,456

$

4,312

$

7,546

$

7,571

$

17,491

$

17,372

GAAP diluted earnings per common share

$

0.30

$

0.18

$

0.12

$

0.27

$

0.26

$

0.60

$

0.69

Net (gain) loss from fair value adjustments, net of tax

(0.03

)

(0.01

)

0.02

(0.02

)

0.03

(0.01

)

(0.04

)

Life insurance proceeds

-

-

-

(0.02

)

-

-

(0.02

)

Net (gain) loss from fair value adjustments on qualifying hedges, net of tax

(0.01

)

-

-

0.02

(0.03

)

(0.01

)

(0.03

)

Net amortization of purchase accounting adjustments, net of tax

-

-

-

(0.01

)

(0.01

)

(0.01

)

(0.02

)

Miscellaneous expense, net of tax

-

0.01

-

0.01

-

0.01

-

Core diluted earnings per common share(1)

$

0.26

$

0.18

$

0.14

$

0.25

$

0.25

$

0.59

$

0.58

Core net income, as calculated above

$

7,723

$

5,456

$

4,312

$

7,546

$

7,571

$

17,491

$

17,372

Average assets

9,203,884

8,830,665

8,707,505

8,569,002

8,505,346

8,915,076

8,478,837

Average equity

672,762

667,557

669,185

669,819

675,041

669,845

676,949

Core return on average assets(2)

0.34

%

0.25

%