Flushing Financial Corporation Reports 1Q24 GAAP and Core EPS of $0.12 and $0.14, Respectively; Excellent Quality Driven by Low Risk Credit Profile

Flushing Financial Corporation
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In this article:

"We take pride in what we believe is our low risk credit profile that has performed well over our 95-year history. While there have been increased concerns about commercial real estate loans, especially New York City office and rent regulated multifamily exposure, hallmarks of our risk averse credit culture are demonstrated by only $4,000 of net charge-offs, 24 bps of 30-89 day delinquencies to gross loans, and decreased criticized and classified loans of 23% and flat NPAs during 1Q24. The drivers of this excellent credit performance are centered in our conservative underwriting with 89% of the portfolio secured by real estate, average LTV ratios of less than 36%, multifamily and investor commercial real estate weighted average DCRs of 1.8x, and strong sponsor support. Our exposure to New York City office buildings is very low - approximately 0.5% of total loans, all of which are performing. Our multifamily portfolio has only 18 bps of NPLs, 41 bps of 30-89 day delinquencies, and 54 bps of criticized and classified loans. Additionally, over 99% of our real estate loans that repriced in 1Q24 are current. Our conservative lending profile has served us well. We believe the foundation for our long-term success is pillared by our four areas of focus, which include 1) increasing NIM and reducing volatility; 2) maintaining credit discipline; 3) preserving strong liquidity and capital; and 4) bending the expense curve. While there is more work to do, we continue to make progress and are committed to achieving these goals."

- John R. Buran, President and CEO

UNIONDALE, NY / ACCESSWIRE / April 23, 2024 / Growth in Average Deposits; GAAP and Core NIM Compress. The Company reported first quarter 2024 GAAP and Core EPS of $0.12 and $0.14, respectively, compared to $0.13, and $0.06, respectively, a year ago. 1Q24 GAAP and Core NIM were both 2.06%, down 21 bps and 19 bps YoY, and 23 bps and 25 bps QoQ, respectively. Absent episodic items1, the NIM was 2.01% in 1Q24 compared to 2.21% a year ago and 2.14% in the prior quarter. The expected NIM compression was driven by CD repricing, the absence of loan originations that met both our underwriting and pricing criteria, and increased cash from deposit growth. Average total deposits increased 4.0% YoY and 2.9% QoQ,

Credit Quality Improves; Capital Remains Solid. Criticized and classified loans to loans declined to 0.87% in 1Q24, compared to 1.11% in 4Q23, while nonperforming assets to total assets decreased to 53 bps compared to 54 bps in 4Q23. Net charge-offs were only $4,000 in 1Q24. Capital continues to be sound with TCE/TA2 of 7.40% at 1Q24 compared to 7.64% at 4Q23.

Key Financial Metrics3


1Q24

4Q23

3Q23

2Q23

1Q23

GAAP:

EPS

$

0.12

$

0.27

$

0.26

$

0.29

$

0.13

ROAA (%)

0.17

0.38

0.37

0.41

0.19

ROAE (%)

2.20

4.84

4.64

5.16

2.37

NIM FTE4 (%)

2.06

2.29

2.22

2.18

2.27

Core:

EPS

$

0.14

$

0.25

$

0.25

$

0.26

$

0.06

ROAA (%)

0.20

0.35

0.36

0.37

0.09

ROAE (%)

2.58

4.51

4.49

4.70

1.11

Core NIM FTE (%)

2.06

2.31

2.13

2.17

2.25

Credit Quality:

NPAs/Loans & OREO (%)

0.68

0.67

0.56

0.58

0.61

ACLs/Loans (%)

0.60

0.58

0.57

0.57

0.56

ACLs/NPLs (%)

164.13

159.55

225.38

207.08

182.89

NCOs/Avg Loans (%)

-

-

-

0.09

0.54

Balance Sheet:

Avg Loans ($B)

$

6.8

$

6.9

$

6.8

$

6.8

$

6.9

Avg Dep ($B)

$

7.1

$

6.9

$

6.8

$

6.9

$

6.8

Book Value/Share

$

23.04

$

23.21

$

23.06

$

23.14

$

22.80

Tangible BV/Share

$

22.39

$

22.54

$

22.39

$

22.47

$

22.14

TCE/TA (%)

7.40

7.64

7.56

7.70

7.72

Note: In certain circumstances, reclassifications have been made to prior periods to conform to the current presentation.

1 Episodic items include prepayment penalty income, customer swap termination fees, net reversals and recovered interest from nonaccrual loans, net gain/loss from fair value on qualifying hedges, and purchase accounting adjustments 2 Tangible Common Equity ("TCE")/Total Assets ("TA") 3 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." 4 Net Interest Margin ("NIM") Fully Taxable Equivalent ("FTE").

1Q24 Highlights

  • Net interest margin FTE decreased 21 bps YoY and 23 bps QoQ to 2.06%; Core net interest margin FTE decreased 19 bps YoY and 25 bps QoQ to 2.06%; absent prepayment penalty income, customer swap termination fees, net reversals and recoveries of interest from nonaccrual loans, net gains and losses from fair value adjustments on qualifying hedges, and purchase accounting accretion the NIM was 2.01% in 1Q24 compared to 2.21% in 1Q23 and 2.14% in 4Q23.

  • Average total deposits increased 4.0% YoY and 2.9% QoQ to $7.1 billion; Average noninterest bearing deposits were 11.8% of total average deposits compared to 13.2% in 1Q23 and 12.7% in 4Q23. Average CDs were $2.4 billion, up 43.3% YoY and 2.8% QoQ; During March and April, new CD rates were lowered across most products.

  • Period end net loans decreased 1.2% YoY and QoQ to $6.8 billion; Loan closings were $130.0 million down 25.1% YoY and 46.8% QoQ; The yields on closings increased 19 bps YoY, but decreased 49 bps QoQ to 7.20%; Back-to-back swap loan originations were $15.3 million compared to $121.6 million in 4Q23 and generated $0.2 million and $1.5 million of noninterest income, respectively; Loan pipeline decreased 34.6% YoY, but increased 6.7% QoQ to $173.9 million; Approximately 22% of the loan pipeline consists of back-to-back swap loans

  • NPAs increased slightly to $46.3 million from $42.2 million a year ago and from $46.2 million in the prior quarter

  • 1Q24 noninterest expense includes $1.6 million of seasonal compensation expense that are not expected to repeat in 2Q24

  • Provision for credit losses was $0.6 million in 1Q24 compared to $7.5 million in 1Q23 and $1.0 million in 4Q23; Net charge-offs were $4,000 in 1Q24 compared to $9.2 million in 1Q23 and $60,000 in 4Q23

  • Tangible Common Equity to Tangible Assets was 7.40% at March 31, 2024, compared to 7.64% at December 31, 2023; Tangible book value was $22.39 compared to $22.14 a year ago

Areas of Focus

Increase NIM and Reduce Volatility

  • GAAP and Core NIM decreased as anticipated by 23 bps and 25 bps QoQ, respectively, in 1Q24

  • Absent episodic items1, the NIM was 2.01% in 1Q24 compared to 2.14% in 4Q23

  • Remain largely interest rate neutral to a 100 bps change in rates

  • Approximately 25% of the loan portfolio consists of floating rate loans (including interest rate hedges)

  • Average noninterest bearing decreased 4.5% QoQ and accounted for 11.8% of average total deposits

Maintain Credit Discipline

  • Approximately 89% 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 1.8x for multifamily and investor commercial real estate loans

  • NPAs are a low 53 bps of assets and criticized and classified loans are 0.87% of loans

  • Manhattan office buildings exposure is minimal at 0.5% of net loans, none of which are nonperforming

Preserve Strong Liquidity and Capital

  • Maintaining ample liquidity with $2.9 billion of undrawn lines and resources as of March 31, 2024; this increased to $3.3 billion as of April 15, 2024

  • Uninsured and uncollateralized deposits were 17% of total deposits, while uninsured deposits were 34% of total deposits

  • Total average deposits increased 4.0% YoY and 2.9% QoQ

  • Checking account openings declined 20.6% YoY in 1Q24, but remain above 1Q22 levels

  • Tangible Common Equity to Tangible Assets was 7.40% at March 31, 2024, down 24 bps QoQ Leverage ratio was 8.32% at March 31, 2024 compared to 8.47% at December 31, 2023

Bend the Expense Curve

  • GAAP noninterest expense to average assets was 1.83% in 1Q24 compared to 1.85% in 1Q23 and 1.90% in 4Q23

  • GAAP and Core noninterest expense growth was 1.9% YoY

  • 1Q24 seasonal compensation expense was $1.6 million compared to $4.1 million a year ago

1 Episodic items include prepayment penalty income, customer swap termination fees, net reversals and recovered interest from nonaccrual loans, net gain/loss from fair value on qualifying hedges, and purchase accounting adjustments, which totaled $1.0 million or 5 bps in 1Q24 compared to $3.0 million or 15 bps in 4Q23

Income Statemen

YoY

QoQ

($000s, except EPS)

1Q24

4Q23

3Q23

2Q23

1Q23

Change

Change

Net Interest Income

$

42,397

$

46,085

$

44,427

$

43,378

$

45,262

(6.3

)%

(8.0

)%

Provision for Credit Losses

592

998

596

1,416

7,508

(92.1

)

(40.7

)

Noninterest Income

3,084

7,402

3,309

5,020

6,857

(55.0

)

(58.3

)

Noninterest Expense

39,892

40,735

36,388

35,110

39,156

1.9

(2.1

)

Income Before Income Taxes

4,997

11,754

10,752

11,872

5,455

(8.4

)

(57.5

)

Provision for Income Taxes

1,313

3,655

2,917

3,186

1,411

(6.9

)

(64.1

)

Net Income

$

3,684

$

8,099

$

7,835

$

8,686

$

4,044

(8.9

)

(54.5

)

Diluted EPS

$

0.12

$

0.27

$

0.26

$

0.29

$

0.13

(7.7

)

(55.6

)

Avg. Diluted Shares (000s)

29,742

29,650

29,703

30,090

30,265

(1.7

)

0.3


Core Net Income1

$

4,312

$

7,546

$

7,571

$

7,912

$

1,889

128.3

(42.9

)

Core EPS1

$

0.14

$

0.25

$

0.25

$

0.26

$

0.06

133.3

(44.0

)

1 See Reconciliation of GAAP Earnings and Core Earnings

Net interest income decreased YoY and QoQ.

  • Net Interest Margin FTE of 2.06% decreased 21 bps YoY and 23 bps QoQ

  • Prepayment penalty income, customer swap termination fees, 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 $1.0 million (5 bps to the NIM) compared to $3.0 million (15 bps) in 4Q23, $2.6 million (13 bps to the NIM) in 3Q23, $0.5 million (3 bps) in 2Q23, and $1.1 million (6 bps) in 1Q23

  • Excluding the items in the previous bullet, net interest margin was 2.01% in 1Q24, 2.14% in 4Q23, 2.09% in 3Q23, 2.15% in 2Q23, and 2.21% in 1Q23

The provision for credit losses decreased YoY and QoQ.

  • Net charge-offs (recoveries) were $4,000 (less than 1 bp of average loans) in 1Q24 compared to $60,000 in 4Q23 (less than 1 bp of average loans), $(42,000) in 3Q23 (less than (1) bp of average loans), $1.6 million in 2Q23 (9 bps of average loans), and $9.2 million in 1Q23 (54 bps of average loans)

  • 1Q23 net charge-offs were primarily related to a commercial business relationship that was placed on nonaccrual in 2Q22

Noninterest income decreased YoY and QoQ.

  • Back-to-back swap loan closings of $15.3 million in 1Q24 (compared to $121.6 million in 4Q23 and none in 1Q23) and generated $0.2 million of fee income compared to $1.5 million in 4Q23

  • Net gains (losses) from fair value adjustments were $(0.8) million in 1Q24 ($(0.02) per share, net of tax), $0.9 million in 4Q23 ($0.02 per share, net of tax), $(1.2) million in 3Q23 ($(0.03) per share, net of tax), $0.3 million in 2Q23 ($0.01 per share, net of tax), and $2.6 million in 1Q23 ($0.06 per share, net of tax)

  • Life insurance proceeds were $0.7 million in 4Q23 ($0.02 per share), $23,000 in 3Q23 (less than $0.01 per share), and $0.6 million ($0.02 per share) in 2Q23

  • Absent the items in the previous two bullets and other immaterial adjustments, core noninterest income was $3.9 million in 1Q24, down 7.6% YoY and 32.4% QoQ

  • 4Q23 other fee income includes net realized gains on the sale of assets and other dividends from nonqualified plans that are expected to normalize in future periods

Noninterest expense increased slightly YoY but declined QoQ.

  • Seasonal compensation expense was $1.6 million in 1Q24 compared to $4.1 million in 1Q23

  • Excluding the effects of immaterial adjustments, core operating expenses were $39.8 million in 1Q24, up 1.9% YoY, but down 0.8% QoQ

  • GAAP noninterest expense to average assets was 1.83% in 1Q24, 1.90% in 4Q23, 1.71% in 3Q23, 1.66% in 2Q23, and 1.85% in 1Q23

Provision for income taxes decreased YoY and QoQ.

  • The effective tax rate was 26.3% in 1Q24, 31.1% in 4Q23, 27.1% in 3Q23, 26.8% in 2Q23, and 25.9% in 1Q23

  • The 4Q23 effective tax rate increased as a result of preferential tax items having a smaller impact due to higher pre-tax income than estimated in 3Q23 and 2Q23

Balance Sheet, Credit Quality, and Capital Highlights

YoY

QoQ

1Q24

4Q23

3Q23

2Q23

1Q23

Change

Change

Averages ($MM)

Loans

$

6,804

$

6,868

$

6,813

$

6,830

$

6,871

(1.0

)%

(0.9

)%

Total Deposits

7,081

6,884

6,819

6,900

6,810

4.0

2.9


Credit Quality ($000s)

Nonperforming Loans

$

24,829

$

25,172

$

17,405

$

18,637

$

21,176

17.3

%

(1.4

)%

Nonperforming Assets

46,254

46,153

38,386

39,618

42,157

9.7

0.2

Criticized and Classified Loans

59,021

76,719

74,169

48,675

58,130

1.5

(23.1

)

Criticized and Classified Assets

80,446

97,700

95,150

69,656

79,111

1.7

(17.7

)

Allowance for Credit Losses/Loans (%)

0.60

0.58

0.57

0.57

0.56

4

bps

2

bps


Capital

Book Value/Share

$

23.04

$

23.21

$

23.06

$

23.14

$

22.80

1.1

%

(0.7

)%

Tangible Book Value/Share

22.39

22.54

22.39

22.47

22.14

1.1

(0.7

)

Tang. Common Equity/Tang. Assets (%)

7.40

7.64

7.56

7.70

7.72

(32

)bps

(24

)bps

Leverage Ratio (%)

8.32

8.47

8.51

8.54

8.56

(24

)

(15

)

Average loans decreased slightly YoY and QoQ.

  • Period end net loans totaled $6.8 billion, down 1.2% YoY and QoQ

  • Total loan closings were $130.0 million in 1Q24, $244.3 million in 4Q23, $241.5 million in 3Q23, $158.8 million in 2Q23, and $173.5 million in 1Q23; the loan pipeline was $173.9 million at March 31, 2024, down 34.6% YoY, but up 6.7% QoQ

  • The diversified loan portfolio is approximately 89% collateralized by real estate with an average loan-to-value ratio of <36%

  • Manhattan office buildings exposure is minimal at 0.5% of net loans with all loans performing

Average total deposits increased YoY and QoQ.

  • Average noninterest bearing deposits decreased 6.9% YoY and 4.5% QoQ and comprised 11.8% of average total deposits in 1Q24 compared to 13.2% a year ago

  • Average CDs totaled $2.4 billion, up 43.3% YoY and 2.8% QoQ; approximately $450 million of non-swapped CDs are due to mature at a rate of 4.15% in 2Q24

Credit Quality: Nonperforming loans increased YoY but declined QoQ.

  • Criticized and classified loans were 87 bps of gross loans at 1Q24 compared to 111 bps at 4Q23, 108 bps at 3Q23, 71 bps at 2Q23, and 84 bps at 1Q23

  • Allowance for credit losses were 164.1% of nonperforming loans at 1Q24 compared to 182.9% at 1Q23 and 159.5% at 4Q23

Capital: Book value per common share and tangible book value per common share, a non-GAAP measure, both increased 1.1% YoY to $23.04 and $22.39, respectively.

  • The Company paid a dividend of $0.22 per share in 1Q24; 807,964 shares remaining subject to repurchase under the authorized stock repurchase program, which has no expiration or maximum dollar limit

  • Tangible common equity to tangible assets was 7.40% at March 31, 2024, compared to 7.72% at March 31, 2023, and 7.64% at December 31, 2023

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 Wednesday, April 24, 2024, at 9:30 AM (ET) to discuss the Company's first 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=DCkbMHoc

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

  • Replay Access Code: 7388314

  • The conference call will be simultaneously webcast and archived

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


March 31,

December 31,

September 30,

June 30,

March 31,

(Dollars in thousands, except per share data)

2024

2023

2023

2023

2023

Performance Ratios (1)

Return on average assets

0.17

%

0.38

%

0.37

%

0.41

%

0.19

%

Return on average equity

2.20

4.84

4.64

5.16

2.37

Yield on average interest-earning assets (2)

5.32

5.39

5.19

4.84

4.61

Cost of average interest-bearing liabilities

3.83

3.68

3.52

3.15

2.80

Cost of funds

3.42

3.26

3.13

2.80

2.47

Net interest rate spread during period (2)

1.49

1.71

1.67

1.69

1.81

Net interest margin (2)

2.06

2.29

2.22

2.18

2.27

Noninterest expense to average assets

1.83

1.90

1.71

1.66

1.85

Efficiency ratio (3)

86.07

76.69

76.76

73.82

79.52

Average interest-earning assets to average interest-bearing liabilities

1.17

X

1.19

X

1.18

X

1.18

X

1.19

X


Average Balances

Total loans, net

$

6,804,117

$

6,867,927

$

6,813,019

$

6,829,648

$

6,871,192

Total interest-earning assets

8,235,160

8,076,991

8,023,237

7,991,756

8,002,376

Total assets

8,707,505

8,569,002

8,505,346

8,462,442

8,468,317

Total deposits

7,081,498

6,884,037

6,819,397

6,899,617

6,810,485

Total interest-bearing liabilities

7,014,927

6,813,909

6,771,860

6,756,859

6,703,558

Stockholders' equity

669,185

669,819

675,041

672,835

683,058


Per Share Data

Book value per common share (4)

$

23.04

$

23.21

$

23.06

$

23.14

$

22.80

Tangible book value per common share (5)

$

22.39

$

22.54

$

22.39

$

22.47

$

22.14


Stockholders' Equity

Stockholders' equity

$

669,827

$

669,837

$

666,521

$

670,247

$

672,345

Tangible stockholders' equity

650,763

650,664

647,234

650,842

652,818


Consolidated Regulatory Capital Ratios

Tier 1 capital

$

734,192

$

737,732

$

736,744

$

734,754

$

736,024

Common equity Tier 1 capital

687,458

691,754

690,294

688,820

689,732

Total risk-based capital

965,796

967,627

965,532

962,784

964,270

Risk Weighted Assets

6,664,496

6,750,301

6,804,478

6,650,222

6,660,145


Tier 1 leverage capital (well capitalized = 5%)

8.32

%

8.47

%

8.51

%

8.54

%

8.56

%

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

10.32

10.25

10.14

10.36

10.36

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

11.02

10.93

10.83

11.05

11.05

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

14.49

14.33

14.19

14.48

14.48

Capital Ratios

Average equity to average assets

7.69

%

7.82

%

7.94

%

7.95

%

8.07

%

Equity to total assets

7.61

7.85

7.77

7.91

7.93

Tangible common equity to tangible assets (6)

7.40

7.64

7.56

7.70

7.72


Asset Quality

Nonaccrual loans

$

24,829

$

23,709

$

17,405

$

18,637

$

21,176

Nonperforming loans

24,829

25,172

17,405

18,637

21,176

Nonperforming assets

46,254

46,153

38,386

39,618

42,157

Net charge-offs (recoveries)

4

60

(42

)

1,560

9,234


Asset Quality Ratios

Nonperforming loans to gross loans

0.36

%

0.36

%

0.25

%

0.27

%

0.31

%

Nonperforming assets to total assets

0.53

0.54

0.45

0.47

0.50

Allowance for credit losses to gross loans

0.60

0.58

0.57

0.57

0.56

Allowance for credit losses to nonperforming assets

88.10

87.02

102.19

97.41

91.87

Allowance for credit losses to nonperforming loans

164.13

159.55

225.38

207.08

182.89

Net charge-offs (recoveries) to average loans

-

-

-

0.09

0.54


Full-service customer facilities

27

27

27

26

26

(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 SUBSIDIARIE
CONSOLIDATED STATEMENTS OF INCOM
(Unaudited)

For the three months ended


March 31,

December 31,

September 30,

June 30,

March 31,

(In thousands, except per share data)

2024

2023

2023

2023

2023

Interest and Dividend Income

Interest and fees on loans

$

92,959

$

95,616

$

91,466

$

85,377

$

82,889

Interest and dividends on securities:

Interest

12,541

10,803

10,383

9,172

7,240

Dividends

33

34

33

30

29

Other interest income

3,966

2,310

2,154

1,982

1,959

Total interest and dividend income

109,499

108,763

104,036

96,561

92,117


Interest Expense

Deposits

57,865

53,284

50,066

46,249

39,056

Other interest expense

9,237

9,394

9,543

6,934

7,799

Total interest expense

67,102

62,678

59,609

53,183

46,855


Net Interest Income

42,397

46,085

44,427

43,378

45,262

Provision for credit losses

592

998

596

1,416

7,508

Net Interest Income After Provision for Credit Losses

41,805

45,087

43,831

41,962

37,754


Noninterest Income

Banking services fee income

1,394

2,824

2,636

1,780

1,411

Net gain on sale of loans

110

-

-

54

54

Net gain (loss) from fair value adjustments

(834

)

906

(1,246

)

294

2,619

Federal Home Loan Bank of New York stock dividends

743

658

624

534

697

Life insurance proceeds

-

697

23

561

-

Bank owned life insurance

1,200

1,173

1,157

1,134

1,109

Other income

471

1,144

115

663

967

Total noninterest income

3,084

7,402

3,309

5,020

6,857


Noninterest Expense

Salaries and employee benefits

22,113

23,359

20,346

19,690

22,562

Occupancy and equipment

3,779

3,698

3,371

3,534

3,793

Professional services

2,792

2,523

2,494

2,291

2,261

FDIC deposit insurance

1,652

1,162

912

943

977

Data processing

1,727

1,646

1,422

1,473

1,435

Depreciation and amortization

1,457

1,491

1,482

1,482

1,510

Other real estate owned/foreclosure expense

145

105

185

150

165

Other operating expenses

6,227

6,751

6,176

5,547

6,453

Total noninterest expense

39,892

40,735

36,388

35,110

39,156


Income Before Provision for Income Taxes

4,997

11,754

10,752

11,872

5,455


Provision for income taxes

1,313

3,655

2,917

3,186

1,411


Net Income

$

3,684

$

8,099

$

7,835

$

8,686

$

4,044


Basic earnings per common share

$

0.12

$

0.27

$

0.26

$

0.29

$

0.13

Diluted earnings per common share

$

0.12

$

0.27

$

0.26

$

0.29

$

0.13

Dividends per common share

$

0.22

$

0.22

$

0.22

$

0.22

$

0.22


Basic average shares

29,742

29,650

29,703

30,090

30,265

Diluted average shares

29,742

29,650

29,703

30,090

30,265

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

March 31,

December 31,

September 30,

June 30,

March 31,

(Dollars in thousands)

2024

2023

2023

2023

2023

ASSETS

Cash and due from banks

$

210,723

$

172,157

$

200,926

$

160,053

$

176,747

Securities held-to-maturity:

Mortgage-backed securities

7,850

7,855

7,860

7,865

7,870

Other securities, net

64,612

65,068

65,271

65,469

65,653

Securities available for sale:

Mortgage-backed securities

509,527

354,344

337,879

365,911

380,110

Other securities

667,156

520,409

505,784

503,645

431,818

Loans

6,821,943

6,906,950

6,896,074

6,832,425

6,904,176

Allowance for credit losses

(40,752

)

(40,161

)

(39,228

)

(38,593

)

(38,729

)

Net loans

6,781,191

6,866,789

6,856,846

6,793,832

6,865,447

Interest and dividends receivable

61,449

59,018

55,660

52,911

46,836

Bank premises and equipment, net

20,102

21,273

21,302

22,182

21,567

Federal Home Loan Bank of New York stock

24,845

31,066

43,821

36,168

38,779

Bank owned life insurance

214,718

213,518

214,321

213,164

214,240

Goodwill

17,636

17,636

17,636

17,636

17,636

Core deposit intangibles

1,428

1,537

1,651

1,769

1,891

Right of use asset

37,631

39,557

41,404

41,526

42,268

Other assets

188,457

167,009

209,014

192,721

168,872

Total assets

$

8,807,325

$

8,537,236

$

8,579,375

$

8,474,852

$

8,479,734


LIABILITIES

Total deposits

$

7,253,207

$

6,815,261

$

6,681,509

$

6,723,690

$

6,734,090

Borrowed funds

671,474

841,281

1,001,010

857,400

887,509

Operating lease liability

38,674

40,822

43,067

44,402

45,353

Other liabilities

174,143

170,035

187,268

179,113

140,437

Total liabilities

8,137,498

7,867,399

7,912,854

7,804,605

7,807,389


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

260,413

264,534

264,486

263,744

262,876

Treasury stock

(101,641

)

(106,070

)

(105,433

)

(104,574

)

(97,760

)

Retained earnings

546,530

549,683

548,058

546,755

544,672

Accumulated other comprehensive loss, net of taxes

(35,816

)

(38,651

)

(40,931

)

(36,019

)

(37,784

)

Total stockholders' equity

669,827

669,837

666,521

670,247

672,345


Total liabilities and stockholders' equity

$

8,807,325

$

8,537,236

$

8,579,375

$

8,474,852

$

8,479,734


(In thousands)

Issued shares

34,088

34,088

34,088

34,088

34,088

Outstanding shares

29,069

28,866

28,905

28,961

29,488

Treasury shares

5,019

5,222

5,183

5,127

4,600

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
AVERAGE BALANCE SHEETS
(Unaudited)

For the three months ended

March 31,

December 31,

September 30,

June 30,

March 31,

(In thousands)

2024

2023

2023

2023

2023

Interest-earning Assets:

Mortgage loans, net

$

5,353,606

$

5,356,112

$

5,314,215

$

5,308,567

$

5,333,274

Commercial Business loans, net

1,450,511

1,511,815

1,498,804

1,521,081

1,537,918

Total loans, net

6,804,117

6,867,927

6,813,019

6,829,648

6,871,192

Taxable securities:

Mortgage-backed securities

462,934

426,612

436,181

448,620

457,911

Other securities, net

590,204

527,316

528,091

471,600

411,723

Total taxable securities

1,053,138

953,928

964,272

920,220

869,634

Tax-exempt securities:

Other securities

65,939

66,242

66,438

66,632

66,828

Total tax-exempt securities

65,939

66,242

66,438

66,632

66,828

Interest-earning deposits and federal funds sold

311,966

188,894

179,508

175,256

194,722

Total interest-earning assets

8,235,160

8,076,991

8,023,237

7,991,756

8,002,376

Other assets

472,345

492,011

482,109

470,686

465,941

Total assets

$

8,707,505

$

8,569,002

$

8,505,346

$

8,462,442

$

8,468,317


Interest-bearing Liabilities:

Deposits:

Savings accounts

$

106,212

$

110,316

$

115,437

$

124,041

$

134,945

NOW accounts

1,935,250

1,848,285

1,907,781

2,026,950

1,970,555

Money market accounts

1,725,714

1,625,453

1,584,308

1,754,574

2,058,523

Certificate of deposit accounts

2,406,283

2,340,115

2,290,669

2,046,960

1,679,517

Total due to depositors

6,173,459

5,924,169

5,898,195

5,952,525

5,843,540

Mortgagors' escrow accounts

73,822

86,592

69,525

97,410

70,483

Total interest-bearing deposits

6,247,281

6,010,761

5,967,720

6,049,935

5,914,023

Borrowings

767,646

803,148

804,140

706,924

789,535

Total interest-bearing liabilities

7,014,927

6,813,909

6,771,860

6,756,859

6,703,558

Noninterest-bearing demand deposits

834,217

873,276

851,677

849,682

896,462

Other liabilities

189,176

211,998

206,768

183,066

185,239

Total liabilities

8,038,320

7,899,183

7,830,305

7,789,607

7,785,259

Equity

669,185

669,819

675,041

672,835

683,058

Total liabilities and equity

$

8,707,505

$

8,569,002

$

8,505,346

$

8,462,442

$

8,468,317


Net interest-earning assets

$

1,220,233

$

1,263,082

$

1,251,377

$

1,234,897

$

1,298,818

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

For the three months ended

March 31,

December 31,

September 30,

June 30,

March 31,

(Dollars in thousands)

2024

2023

2023

2023

2023

Interest Income:

Mortgage loans, net

$

71,572

$

72,505

$

68,931

$

63,688

$

62,054

Commercial Business loans, net

21,387

23,111

22,535

21,689

20,835

Total loans, net

92,959

95,616

91,466

85,377

82,889

Taxable securities:

Mortgage-backed securities

3,696

3,217

3,031

2,976

2,281

Other securities

8,504

7,239

7,003

5,847

4,611

Total taxable securities

12,200

10,456

10,034

8,823

6,892

Tax-exempt securities:

Other securities

474

482

484

480

477

Total tax-exempt securities

474

482

484

480

477

Interest-earning deposits and federal funds sold

3,966

2,310

2,154

1,982

1,959

Total interest-earning assets

109,599

108,864

104,138

96,662

92,217

Interest Expense:

Deposits:

Savings accounts

$

122

$

124

$

130

$

140

$

126

NOW accounts

18,491

17,411

16,843

16,152

13,785

Money market accounts

17,272

15,785

14,386

14,625

14,102

Certificate of deposit accounts

21,918

19,917

18,639

15,281

11,007

Total due to depositors

57,803

53,237

49,998

46,198

39,020

Mortgagors' escrow accounts

62

47

68

51

36

Total interest-bearing deposits

57,865

53,284

50,066

46,249

39,056

Borrowings

9,237

9,394

9,543

6,934

7,799

Total interest-bearing liabilities

67,102

62,678

59,609

53,183

46,855

Net interest income- tax equivalent

$

42,497

$

46,186

$

44,529

$

43,479

$

45,362

Included in net interest income above:

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

$

928

$

3,416

$

857

$

315

$

680

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

(187

)

(872

)

1,348

(205

)

100

Purchase accounting adjustments

271

461

347

340

306

Interest-earning Assets Yields:

Mortgage loans, net

5.35

%

5.41

%

5.19

%

4.80

%

4.65

%

Commercial Business loans, net

5.90

6.11

6.01

5.70

5.42

Total loans, net

5.46

5.57

5.37

5.00

4.83

Taxable securities:

Mortgage-backed securities

3.19

3.02

2.78

2.65

1.99

Other securities

5.76

5.49

5.30

4.96

4.48

Total taxable securities

4.63

4.38

4.16

3.84

3.17

Tax-exempt securities: (1)

Other securities

2.88

2.91

2.91

2.88

2.86

Total tax-exempt securities

2.88

2.91

2.91

2.88

2.86

Interest-earning deposits and federal funds sold

5.09

4.89

4.80

4.52

4.02

Total interest-earning assets (1)

5.32

%

5.39

%

5.19

%

4.84

%

4.61

%

Interest-bearing Liabilities Yields:

Deposits:

Savings accounts

0.46

%

0.45

%

0.45

%

0.45

%

0.37

%

NOW accounts

3.82

3.77

3.53

3.19

2.80

Money market accounts

4.00

3.88

3.63

3.33

2.74

Certificate of deposit accounts

3.64

3.40

3.25

2.99

2.62

Total due to depositors

3.75

3.59

3.39

3.10

2.67

Mortgagors' escrow accounts

0.34

0.22

0.39

0.21

0.20

Total interest-bearing deposits

3.70

3.55

3.36

3.06

2.64

Borrowings

4.81

4.68

4.75

3.92

3.95

Total interest-bearing liabilities

3.83

%

3.68

%

3.52

%

3.15

%

2.80

%


Net interest rate spread (tax equivalent) (1)

1.49

%

1.71

%

1.67

%

1.69

%

1.81

%

Net interest margin (tax equivalent) (1)

2.06

%

2.29

%

2.22

%

2.18

%

2.27

%

Ratio of interest-earning assets to interest-bearing liabilities

1.17

X

1.19

X

1.18

X

1.18

X

1.19

X

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

Deposit Composition

1Q24 vs.

1Q24 vs.

March 31,

December 31,

September 30,

June 30,

March 31,

4Q23

1Q23

(Dollars in thousands)

2024

2023

2023

2023

2023

% Change

% Change

Noninterest bearing

$

815,937

$

847,416

$

874,420

$

827,820

$

872,254

(3.7

)%

(6.5

)%

Interest bearing:

Certificate of deposit accounts

2,529,095

2,311,290

2,321,369

2,232,696

1,880,260

9.4

34.5

Savings accounts

105,147

108,605

112,730

118,886

128,245

(3.2

)

(18.0

)

Money market accounts

1,717,298

1,726,404

1,551,176

1,594,637

1,855,781

(0.5

)

(7.5

)

NOW accounts

2,003,649

1,771,164

1,749,802

1,891,834

1,918,977

13.1

4.4

Total interest-bearing deposits

6,355,189

5,917,463

5,735,077

5,838,053

5,783,263

7.4

9.9

Total due to depositors

7,171,126

6,764,879

6,609,497

6,665,873

6,655,517

6.0

7.7

Mortgagors' escrow deposits

82,081

50,382

72,012

57,817

78,573

62.9

4.5

Total deposits

$

7,253,207

$

6,815,261

$

6,681,509

$

6,723,690

$

6,734,090

6.4

%

7.7

%

Loan Composition

1Q24 vs.

1Q24 vs.

March 31,

December 31,

September 30,

June 30,

March 31,

4Q23

1Q23

(Dollars in thousands)

2024

2023

2023

2023

2023

% Change

% Change

Multifamily residential

$

2,622,737

$

2,658,205

$

2,614,219

$

2,593,955

$

2,601,174

(1.3

)%

0.8

%

Commercial real estate

1,925,312

1,958,252

1,953,243

1,917,749

1,904,293

(1.7

)

1.1

One-to-four family - mixed use property

516,198

530,243

537,744

542,368

549,207

(2.6

)

(6.0

)

One-to-four family - residential

267,156

220,213

222,874

230,055

238,417

21.3

12.1

Construction

60,568

58,673

59,903

57,325

60,486

3.2

0.1

Mortgage loans

5,391,971

5,425,586

5,387,983

5,341,452

5,353,577

(0.6

)

0.7


Small Business Administration

16,244

20,205

21,896

22,404

22,860

(19.6

)

(28.9

)

Commercial business and other

1,411,725

1,452,518

1,487,775

1,466,358

1,518,756

(2.8

)

(7.0

)

Commercial Business loans

1,427,969

1,472,723

1,509,671

1,488,762

1,541,616

(3.0

)

(7.4

)


Gross loans

6,819,940

6,898,309

6,897,654

6,830,214

6,895,193

(1.1

)

(1.1

)

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

2,003

8,641

(1,580

)

2,211

8,983

(76.8

)

(77.7

)

Allowance for credit losses

(40,752

)

(40,161

)

(39,228

)

(38,593

)

(38,729

)

1.5

5.2

Net loans

$

6,781,191

$

6,866,789

$

6,856,846

$

6,793,832

$

6,865,447

(1.2

)%

(1.2

)%

(1) Includes $3.6 million, $3.9 million, $4.4 million, $4.8 million, and $5.1 million of purchase accounting unamortized discount resulting from the acquisition of Empire Bancorp at March 31, 2024, December 31, 2023, September 30, 2023, June 30, 2023, and March 31, 2023, respectively.

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

Loan Closings

For the three months ended

March 31,

December 31,

September 30,

June 30,

March 31,

(In thousands)

2024

2023

2023

2023

2023

Multifamily residential

$

11,805

$

82,995

$

75,655

$

31,901

$

42,164

Commercial real estate

10,040

60,092

70,197

38,523

15,570

One-to-four family - mixed use property

750

3,319

6,028

5,812

4,938

One-to-four family - residential

52,539

1,454

1,070

63

4,296

Construction

1,895

8,007

6,971

8,811

10,592

Mortgage loans

77,029

155,867

159,921

85,110

77,560


Small Business Administration

-

1,162

-

820

318

Commercial business and other

52,955

87,255

81,549

72,850

95,668

Commercial Business loans

52,955

88,417

81,549

73,670

95,986


Total Closings

$

129,984

$

244,284

$

241,470

$

158,780

$

173,546

Weighted Average Rate on Loan Closings

For the three months ended

March 31,

December 31,

September 30,

June 30,

March 31,

Loan type

2024

2023

2023

2023

2023

Mortgage loans

6.46

%

7.55

%

7.22

%

6.62

%

6.30

%

Commercial Business loans

8.29

7.93

8.00

7.76

7.58

Total loans

7.20

%

7.69

%

7.48

%

7.14

%

7.01

%


FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
ASSET QUALITY
(Unaudited)

Allowance for Credit Losses

For the three months ended

March 31,

December 31,

September 30,

June 30,

March 31,

(Dollars in thousands)

2024

2023

2023

2023

2023

Allowance for credit losses - loans

Beginning balances

$

40,161

$

39,228

$

38,593

$

38,729

$

40,442


Net loan charge-off (recoveries):

Multifamily residential

-

(1

)

-

-

(1

)

Commercial real estate

-

-

-

8

-

One-to-four family - mixed-use property

-

(1

)

-

-

-

One-to-four family - residential

13

9

(6

)

4

(36

)

Small Business Administration

(5

)

(29

)

(48

)

(158

)

(6

)

Commercial business and other

(4

)

82

12

1,706

9,277

Total net loan charge-offs (recoveries)

4

60

(42

)

1,560

9,234

Provision (benefit) for loan losses

595

993

593

1,424

7,521

Ending balance

$

40,752

$

40,161

$

39,228

$

38,593

$

38,729


Gross charge-offs

$

58

$

107

$

21

$

1,731

$

9,298

Gross recoveries

54

47

63

171

64


Allowance for credit losses - loans to gross loans

0.60

%

0.58

%

0.57

%

0.57

%

0.56

%

Net loan charge-offs (recoveries) to average loans

-

-

-

0.09

0.54

Nonperforming Assets


March 31,

December 31,

September 30,

June 30,

March 31,

(Dollars in thousands)

2024

2023

2023

2023

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

4,669

3,206

3,206

3,206

3,628

One-to-four family - mixed-use property

911

981

1,075

790

790

One-to-four family - residential

3,768

5,181

4,161

5,218

4,961

Small Business Administration

2,552

2,552

1,255

1,119

937

Commercial business and other

12,929

11,789

7,708

8,304

10,860

Total Nonaccrual loans

24,829

23,709

17,405

18,637

21,176


Total Nonperforming Loans (NPLs)

24,829

25,172

17,405

18,637

21,176


Other Nonperforming Assets:

Real estate acquired through foreclosure

665

-

-

-

-

Total Other nonperforming assets

665

-

-

-

-


Total Nonaccrual HTM Securities

20,760

20,981

20,981

20,981

20,981


Total Nonperforming Assets

$

46,254

$

46,153

$

38,386

$

39,618

$

42,157


Nonperforming Assets to Total Assets

0.53

%

0.54

%

0.45

%

0.47

%

0.50

%

Allowance for Credit Losses to NPLs

164.1

%

159.5

%

225.4

%

207.1

%

182.9

%

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

(Dollars in thousands,

March 31,

December 31,

September 30,

June 30,

March 31,

except per share data)

2024

2023

2023

2023

2023


GAAP income before income taxes

$

4,997

$

11,754

$

10,752

$

11,872

$

5,455


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

834

(906

)

1,246

(294

)

(2,619

)

Life insurance proceeds (Noninterest income (loss))

-

(697

)

(23

)

(561

)

-

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

187

872

(1,348

)

205

(100

)

Net amortization of purchase accounting adjustments and intangibles (Various)

(169

)

(355

)

(237

)

(227

)

(188

)

Miscellaneous expense (Professional services)

-

526

-

-

-


Core income before taxes

5,849

11,194

10,390

10,995

2,548


Provision for core income taxes

1,537

3,648

2,819

3,083

659


Core net income

$

4,312

$

7,546

$

7,571

$

7,912

$

1,889


GAAP diluted earnings per common share

$

0.12

$

0.27

$

0.26

$

0.29

$

0.13

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

0.02

(0.02

)

0.03

(0.01

)

(0.06

)

Life insurance proceeds

-

(0.02

)

-

(0.02

)

-

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

-

0.02

(0.03

)

-

-

Net amortization of purchase accounting adjustments, net of tax

-

(0.01

)

(0.01

)

(0.01

)

(0.01

)

Miscellaneous expense, net of tax

-

0.01

-

-

-


Core diluted earnings per common share(1)

$

0.14

$

0.25

$

0.25

$

0.26

$

0.06


Core net income, as calculated above

$

4,312

$

7,546

$

7,571

$

7,912

$

1,889

Average assets

8,707,505

8,569,002

8,505,346

8,462,442

8,468,317

Average equity

669,185

669,819

675,041

672,835

683,058

Core return on average assets(2)

0.20

%

0.35

%

0.36

%

0.37

%

0.09

%

Core return on average equity(2)

2.58

%

4.51

%

4.49

%

4.70

%

1.11

%

(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

March 31,

December 31,

September 30,

June 30,

March 31,

(Dollars in thousands)

2024

2023

2023

2023

2023

GAAP Net interest income

$

42,397

$

46,085

$

44,427

$

43,378

$

45,262

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

187

872

(1,348

)

205

(100

)

Net amortization of purchase accounting adjustments

(271

)

(461

)

(347

)

(340

)

(306

)

Core Net interest income

$

42,313

$

46,496

$

42,732

$

43,243

$

44,856


GAAP Noninterest income

$

3,084

$

7,402

$

3,309

$

5,020

$

6,857

Net (gain) loss from fair value adjustments

834

(906

)

1,246

(294

)

(2,619

)

Life insurance proceeds

-

(697

)

(23

)

(561

)

-

Core Noninterest income

$

3,918

$

5,799

$

4,532

$

4,165

$

4,238


GAAP Noninterest expense

$

39,892

$

40,735

$

36,388

$

35,110

$

39,156

Net amortization of purchase accounting adjustments

(102

)

(106

)

(110

)

(113

)

(118

)

Miscellaneous expense

-

(526

)

-

-

-

Core Noninterest expense

$

39,790

$

40,103

$

36,278

$

34,997

$

39,038


Net interest income

$

42,397

$

46,085

$

44,427

$

43,378

$

45,262

Noninterest income

3,084

7,402

3,309

5,020

6,857

Noninterest expense

(39,892

)

(40,735

)

(36,388

)

(35,110

)

(39,156

)

Pre-provision pre-tax net revenue

$

5,589

$

12,752

$

11,348

$

13,288

$

12,963


Core:

Net interest income

$

42,313

$

46,496

$

42,732

$

43,243

$

44,856

Noninterest income

3,918

5,799

4,532

4,165

4,238

Noninterest expense

(39,790

)

(40,103

)

(36,278

)

(34,997

)

(39,038

)

Pre-provision pre-tax net revenue

$

6,441

$

12,192

$

10,986

$

12,411

$

10,056

Efficiency Ratio

86.1

%

76.7

%

76.8

%

73.8

%

79.5

%


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

March 31,

December 31,

September 30,

June 30,

March 31,

(Dollars in thousands)

2024

2023

2023

2023

2023

GAAP net interest income

$

42,397

$

46,085

$

44,427

$

43,378

$

45,262

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

187

872

(1,348

)

205

(100

)

Net amortization of purchase accounting adjustments

(271

)

(461

)

(347

)

(340

)

(306

)

Tax equivalent adjustment

100

101

102

101

100

Core net interest income FTE

$

42,413

$

46,597

$

42,834

$

43,344

$

44,956

Prepayment penalties received on loans and securities, net of reversals and recoveries of interest from nonaccrual loans

(928

)

(3,416

)

(857

)

(315

)

(680

)

Net interest income FTE excluding episodic items

$

41,485

$

43,181

$

41,977

$

43,029

$

44,276


Total average interest-earning assets (1)

$

8,238,395

$

8,080,550

$

8,027,201

$

7,996,067

$

8,006,970

Core net interest margin FTE

2.06

%

2.31

%

2.13

%

2.17

%

2.25

%

Net interest margin FTE excluding episodic items

2.01

%

2.14

%

2.09

%

2.15

%

2.21

%


GAAP interest income on total loans, net

$

92,959

$

95,616

$

91,466

$

85,377

$

82,889

Net (gain) loss from fair value adjustments on qualifying hedges - loans

123

978

(1,379

)

157

(101

)

Net amortization of purchase accounting adjustments

(295

)

(484

)

(358

)

(345

)

(316

)

Core interest income on total loans, net

$

92,787

$

96,110

$

89,729

$

85,189

$

82,472


Average total loans, net (1)

$

6,807,944

$

6,872,115

$

6,817,642

$

6,834,644

$

6,876,495

Core yield on total loans

5.45

%

5.59

%

5.26

%

4.99

%

4.80

%

(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)


March 31,

December 31,

September 30,

June 30,

March 31,

(Dollars in thousands)

2024

2023

2023

2023

2023

Total Equity

$

669,827

$

669,837

$

666,521

$

670,247

$

672,345

Less:

Goodwill

(17,636

)

(17,636

)

(17,636

)

(17,636

)

(17,636

)

Core deposit intangibles

(1,428

)

(1,537

)

(1,651

)

(1,769

)

(1,891

)

Tangible Stockholders' Common Equity

$

650,763

$

650,664

$

647,234

$

650,842

$

652,818


Total Assets

$

8,807,325

$

8,537,236

$

8,579,375

$

8,474,852

$

8,479,734

Less:

Goodwill

(17,636

)

(17,636

)

(17,636

)

(17,636

)

(17,636

)

Core deposit intangibles

(1,428

)

(1,537

)

(1,651

)

(1,769

)

(1,891

)

Tangible Assets

$

8,788,261

$

8,518,063

$

8,560,088

$

8,455,447

$

8,460,207


Tangible Stockholders' Common Equity to Tangible Assets

7.40

%

7.64

%

7.56

%

7.70

%

7.72

%


SOURCE: Flushing Financial Corporation



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