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

    Source: Nasdaq GlobeNewswire / 27 Jan 2022 16:30:02   America/Chicago

    Record GAAP and Core EPS for 2021

    John R. Buran, President and CEO Commentary

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

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

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

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

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

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

    4Q21 Highlights
    • Net interest income declined 1.1% QoQ (as asset yields decreased greater than funding costs), but increased 12.5% YoY to $62.7 million; core net interest income fell 1.6% QoQ and increased 11.7% YoY to $61.1 million
    • Net interest margin FTE decreased 5 bps QoQ but increased 21 bps YoY to 3.29%, and core net interest margin FTE declined 6 bps QoQ, but expanded 18 bps YoY to 3.21%; Core NIM compression QoQ was primarily from lower loan yields and a less favorable earning asset mix, partially offset by lower funding costs
    • Period end net loans excluding PPP, were up 0.9% QoQ and 0.2% YoY; loan closings were $362.7 million in 4Q21, up 48.7% QoQ and 14.8% YoY  
    • Average deposits increased 0.8% QoQ and 17.1% YoY to $6.5 billion, with core deposits 85.3% of total average deposits
    • Loan pipeline increased 21.1% YoY to $429.3 million
    • Provision for credit losses was $0.8 million due to current period loan originations and the increased risk from the COVID-19 Omicron variant
    • NPAs decreased 26.1% QoQ and 29.3% YoY to $14.9 million; criticized and classified loans were down 16.3% QoQ to $57.7 million, representing 0.87% of loans
    • Tangible Common Equity to Tangible Assets improved 18 bps to 8.22% from 8.04% in 3Q21
    • Repurchased 150,976 shares at an average price of $23.75; dividends and share repurchases were 56% of net income in 4Q21
    Income Statement Highlights 
                  YoY QoQ
    ($000s, except EPS)  4Q21  3Q21 2Q21 1Q21 4Q20 Change Change
                       
    Net Interest Income  $62,674   $63,364  $61,039  $60,892 $55,732  12.5 % (1.1)%
    Provision (Benefit) for Credit Losses   761    (6,927)  (1,598)  2,820  3,862  (80.3)  (111.0) 
    Non-interest Income (Loss)   (280)   866   (3,210)  6,311  (1,181) (76.3)  (132.3) 
    Non-interest Expense   38,807    36,345   34,011   38,159  46,811  (17.1)  6.8  
    Income Before Income Taxes   22,826    34,812   25,416   26,224  3,878  488.6   (34.4) 
    Provision for Income Taxes   4,743    9,399   6,158   7,185  417  1,037.4   (49.5) 
    Net Income  $18,083   $25,413  $19,258  $19,039 $3,461  422.5   (28.8) 
    Diluted EPS  $0.58   $0.81  $0.61  $0.60 $0.11  427.3   (28.4) 
    Avg. Diluted Shares (000s)   31,353    31,567   31,677   31,604  30,603  2.5   (0.7) 
                       
    Core Net Income1  $20,968   $27,829  $22,994  $16,973 $17,784  17.9   (24.7) 
    Core EPS1  $0.67   $0.88  $0.73  $0.54 $0.58  15.5   (23.9) 

    1 See Reconciliation of GAAP Earnings and Core Earnings

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

    • Net interest margin, FTE (“NIM”) of 3.29% increased 21 bps YoY, but declined 5 bps QoQ; PPP loans caused a 3 bps and 2 bps positive impact on the NIM in 4Q21 and 3Q21, respectively, neutral impact in 2Q21, and a drag of 4 bps in 1Q21 and 3 bps in 4Q20
    • Prepayment penalty income from loans and securities, net reversals and recoveries of interest from non-accrual loans, net gains and losses from fair value adjustments on qualifying hedges, and purchase accounting accretion totaled $3.1 million (16 bps to the NIM) in 4Q21 compared to $3.4 million (19 bps) in 3Q21, $1.9 million (10 bps) in 2Q21, $3.3 million (17 bps) in 1Q21, and $2.1 million (11 bps) in 4Q20
    • Excluding the items in the previous bullet, net interest margin was 3.13% in 4Q21 compared to 3.15% in 3Q21, 3.04% in 2Q21, 3.01% in 1Q21, and 2.97% in 4Q20, or an increase of 16 bps YoY, but a decrease of 2 bps QoQ
    • Net PPP loan fees were $1.2 million in 4Q21, $1.3 million in 3Q21, $1.2 million in 2Q21, $0.5 million in 1Q21, and $0.4 million in 4Q20

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

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

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

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

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

    • 4Q21 non-interest expense includes pre-tax merger benefits of $17 thousand (<$0.01 per share, net of tax)
    • 3Q21 non-interest expense includes $2.1 million of pre-tax merger charges ($0.05 per share, net of tax)
    • 2Q21 non-interest expense includes $0.5 million of pre-tax merger benefits primarily related to a refund received from a data processing vendor ($(0.01) per share, net of tax)
    • 1Q21 non-interest expense includes $1.0 million of pre-tax merger charges ($0.02 per share, net of tax); 1Q21 includes $3.3 million of seasonal compensation expense
    • 4Q20 non-interest expense includes $5.3 million pre-tax merger charges ($0.14 per share, net of tax) and $7.8 million pre-tax debt prepayment penalties ($0.20 per share, net of tax)
    • Excluding the above items and other immaterial adjustments, core operating expenses were $38.7 million in 4Q21, up 15.4% YoY and 13.4% QoQ
    • Included in 4Q21 non-interest expense was a one-time $4.3 million ($0.11 per share, net of tax) of increased compensation and benefits for all employees due to record year of earnings in 2021 and employee performance through the pandemic.
    • The efficiency ratio was 58.7% in 4Q21, 52.3% in 3Q21, 53.4% in 2Q21, 58.6% in 1Q21, and 57.6% in 4Q20

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

    • The effective tax rate was 20.8% in 4Q21, 27.0% in 3Q21, 24.2% in 2Q21, 27.4% in 1Q21, and 10.8% in 4Q20
    • The 4Q21 effective tax rate declined due to lower levels of taxable state income and higher percentage of permanent differences
    • The 2Q21 effective tax rate includes $0.8 million benefit from a state tax rate change; absent this benefit the effective tax rate would have been 27.2%
     Balance Sheet, Credit Quality, and Capital Highlights
                 YoY QoQ
      4Q21  3Q21 2Q21 1Q21 4Q20 Change Change
    Average Loans And Deposits ($MM)                 
    Loans $6,558  $6,633 $6,687 $6,700 $6,376 2.9 % (1.1)%
    Deposits  6,459   6,408  6,511  6,285  5,515 17.1   0.8  
                      
    Credit Quality ($000s)                 
    Nonperforming Loans $14,934  $20,217 $17,592 $21,186 $21,073 (29.1)% (26.1)%
    Nonperforming Assets  14,934   20,217  17,592  21,221  21,108 (29.2)  (26.1) 
    Criticized and Classified Loans  57,650   68,913  69,161  63,095  71,656 (19.5)  (16.3) 
    Criticized and Classified Assets  78,628   89,889  90,135  63,130  71,691 9.7   (12.5) 
    Allowance for Credit Losses/Loans (%)  0.56   0.55  0.64  0.67  0.67 (11)bps 1 bps
                      
    Capital                 
    Book Value/Share $22.26  $21.78 $21.16 $20.65 $20.11 10.7 % 2.2 %
    Tangible Book Value/Share  21.61   21.13  20.51  19.99  19.45 11.1   2.3  
    Tang. Common Equity/Tang. Assets (%)  8.22   8.04  7.80  7.60  7.52 70 bps 18 bps
    Leverage Ratio (%)  8.98   8.83  8.50  8.44  8.38 60   15  

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

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

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

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

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

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

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

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

    Conference Call Information:

    • John R. Buran, President and Chief Executive Officer, and Susan K. Cullen, Senior Executive Vice President and Chief Financial Officer, will host a conference call on Friday, January 28, 2022, at 11:00 AM (ET) to discuss the Company’s fourth quarter 2021 results and strategy.
    • Dial-in for Live Call: 1-877-509-5836; Canada 855-669-9657
    • Webcast: https://services.choruscall.com/links/ffic220128.html
    • Dial-in for Replay: 1-877-344-7529; Canada 855-669-9658
    • Replay Access Code: 4089423
    • The conference call will be simultaneously webcast and archived

    First Quarter 2022 Earnings Release Date:

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

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

    About Flushing Financial Corporation

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

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

    “Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: Statements in this Press Release relating to plans, strategies, economic performance and trends, projections of results of specific activities or investments and other statements that are not descriptions of historical facts may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking information is inherently subject to risks and uncertainties, and actual results could differ materially from those currently anticipated due to a number of factors, which include, but are not limited to, risk factors discussed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020 and in other documents filed by the Company with the Securities and Exchange Commission from time to time. Forward-looking statements may be identified by terms such as “may”, “will”, “should”, “could”, “expects”, “plans”, “intends”, “anticipates”, “believes”, “estimates”, “predicts”, “forecasts”, “goals”, “potential” or “continue” or similar terms or the negative of these terms. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. The Company has no obligation to update these forward-looking statements.

    #FF

    - Statistical Tables Follow -

    FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
    FINANCIAL HIGHLIGHTS
    (Unaudited)

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

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

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

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

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

                   
     December 31, September 30, June 30, March 31, December 31,
    (Dollars in thousands)2021 2021 2021 2021 2020
    ASSETS              
    Cash and due from banks$81,723  $178,598  $145,971  $174,420  $157,388 
    Securities held-to-maturity:              
    Mortgage-backed securities 7,894   7,899   7,904   7,909   7,914 
    Other securities 49,974   49,989   49,986   49,912   49,918 
    Securities available for sale:              
    Mortgage-backed securities 572,184   584,145   596,661   518,781   404,460 
    Other securities 205,052   212,654   224,784   242,440   243,514 
    Loans 6,638,105   6,630,354   6,718,806   6,745,316   6,704,674 
    Allowance for loan losses (37,135)  (36,363)  (42,670)  (45,099)  (45,153)
    Net loans 6,600,970   6,593,991   6,676,136   6,700,217   6,659,521 
    Interest and dividends receivable 38,698   40,912   43,803   44,941   44,041 
    Bank premises and equipment, net 23,338   24,018   26,438   27,498   28,179 
    Federal Home Loan Bank of New York stock 35,937   36,158   41,630   41,498   43,439 
    Bank owned life insurance 210,754   184,730   183,715   182,707   181,710 
    Goodwill 17,636   17,636   17,636   17,636   17,636 
    Core deposit intangibles 2,562   2,708   2,859   3,013   3,172 
    Right of use asset 50,200   50,155   51,972   53,802   50,743 
    Other assets 148,989   93,741   89,850   94,410   84,759 
    Total assets$8,045,911  $8,077,334  $8,159,345  $8,159,184  $7,976,394 
                   
    LIABILITIES              
    Deposits$6,333,532  $6,421,391  $6,298,790  $6,326,577  $6,090,733 
    Mortgagors' escrow deposits 51,913   67,207   58,230   74,348   45,622 
    Borrowed funds 815,544   752,925   971,827   948,920   1,020,895 
    Operating lease liability 54,155   54,239   56,151   58,080   59,100 
    Other liabilities 111,139   113,476   119,180   112,058   141,047 
    Total liabilities 7,366,283   7,409,238   7,504,178   7,519,983   7,357,397 
                   
    STOCKHOLDERS' EQUITY              
    Preferred stock (5,000,000 shares authorized; none issued) —   —   —   —   — 
    Common stock ($0.01 par value; 100,000,000 shares authorized) 341   341   341   341   341 
    Additional paid-in capital 263,375   262,009   260,958   260,019   261,533 
    Treasury stock (75,293)  (71,738)  (65,335)  (65,479)  (69,400)
    Retained earnings 497,889   486,418   467,620   455,023   442,789 
    Accumulated other comprehensive loss, net of taxes (6,684)  (8,934)  (8,417)  (10,703)  (16,266)
    Total stockholders' equity 679,628   668,096   655,167   639,201   618,997 
                   
    Total liabilities and stockholders' equity$8,045,911  $8,077,334  $8,159,345  $8,159,184  $7,976,394 
                   
    (In thousands)              
    Issued shares 34,088   34,088   34,088   34,088   34,088 
    Outstanding shares 30,526   30,676   30,962   30,954   30,776 
    Treasury shares 3,561   3,412   3,126   3,133   3,312 

      

    FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
    AVERAGE BALANCE SHEETS
    (Unaudited)

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


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

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

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

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

    Deposit Composition

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

    Loan Composition

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

    _____________________
    (1) Includes $77.4 million, $130.8 million, $197.3 million, $251.0 million, and $151.9 million of PPP loans at December 31, 2021, September 30, 2021, June 30, 2021, March 31, 2021, and December 31, 2020, respectively.
    (2) Includes $8.0 million, $8.6 million, $9.7 million, $10.5 million, and $11.3 million of purchase accounting unamortized discount resulting from the acquisition of Empire Bancorp at December 31, 2021, September 30, 2021, June 30, 2021, March 31, 2021, and December 31, 2020, respectively.

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

    Loan Closings

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

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

    Weighted Average Rate on Loan Closings

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


    FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
    ASSET QUALITY
    (Unaudited)

    Allowance for Loan Losses

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

    Non-Performing Assets

                         
      December 31, September 30, June 30, March 31, December 31,
    (Dollars in thousands) 2021 2021 2021 2021 2020
    Loans 90 Days Or More Past Due and Still Accruing:                    
    Multifamily residential $—  $—  $201  $201  $201 
    Commercial real estate  —   —   —   —   2,547 
    Construction  —   873   —   2,381   — 
    Commercial business and other  —   1,052   —   —   — 
    Total  —   1,925   201   2,582   2,748 
                         
    Non-accrual Loans:                    
    Multifamily residential  2,431   4,192   4,669   4,338   2,524 
    Commercial real estate  613   613   8   8   1,683 
    One-to-four family - mixed-use property (1)  1,309   2,204   2,309   2,355   1,366 
    One-to-four family - residential  7,725   7,807   6,940   7,335   5,854 
    Small Business Administration  937   976   976   1,151   1,151 
    Taxi medallion(1)  —   —   —   —   2,317 
    Commercial business and other(1)  1,918   2,500   2,489   3,417   3,430 
    Total  14,933   18,292   17,391   18,604   18,325 
                         
    Total Non-performing Loans (NPLs)  14,933   20,217   17,592   21,186   21,073 
                         
    Other Non-performing Assets:                    
    Other asset acquired through foreclosure  —   —   —   35   35 
    Total  —   —   —   35   35 
                         
    Total Non-performing Assets $14,933  $20,217  $17,592  $21,221  $21,108 
                         
    Non-performing Assets to Total Assets  0.19%  0.25%  0.22%  0.26%  0.26%
    Allowance For Loan Losses to NPLs  248.7%  179.9%  242.6%  212.9%  214.3%

    _____________________
    (1) Not included in the above analysis are non-accrual performing TDR one-to-four family mixed use property loans totaling $0.3 million each in 4Q21, 3Q21, 2Q21, 1Q21, and 4Q20; non-accrual performing TDR taxi medallion loans totaling $0.4 million in 4Q20, and non-accrual performing TDR commercial business loans totaling $2.2 million each in 2Q21, 1Q21, and 4Q20.

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

    Non-cash Fair Value Adjustments to GAAP Earnings

    The variance in GAAP and core earnings is partly driven by the impact of non-cash net gains and losses from fair value adjustments. These fair value adjustments relate primarily to swaps designated to protect against rising rates and borrowing carried at fair value under the fair value option. As the swaps get closer to maturity, the volatility in fair value adjustments will dissipate. In a declining interest rate environment, the movement in the curve exaggerates our mark-to-market loss position. In a rising interest rate environment or a steepening of the yield curve, the loss position would experience an improvement.

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

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

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

                                  
      For the three months ended  For the year ended
    (Dollars in thousands,  December 31, September 30, June 30, March 31, December 31,  December 31, December 31,
    except per share data) 2021 2021 2021 2021 2020  2021 2020
                                  
    GAAP income before income taxes $22,826   $34,812   $25,416   $26,224   $3,878    $109,278   $45,182  
                                  
    Day 1, Provision for Credit Losses - Empire transaction (Provision for credit losses)  —    —    —    —    1,818     —    1,818  
    Net (gain) loss from fair value adjustments (Non-interest income (loss))  5,140    2,289    6,548    (982)   4,129     12,995    2,142  
    Net (gain) loss on sale of securities
    (Non-interest income (loss))    		  —    10    (123)   —    610     (113)   701  
    Life insurance proceeds
    (Non-interest income (loss))    		  —    —    —    —    —     —    (659) 
    Net gain on disposition of assets
    (Non-interest income (loss))    		  —    —    —    (621)   —     (621)   —  
    Net (gain) loss from fair value adjustments on qualifying hedges
    (Interest and fees on loans)    		  (1,122)   (194)   664    (1,427)   (1,023)    (2,079)   1,185  
    Prepayment penalty on borrowings
    (Non-interest expense)    		  —    —    —    —    7,834     —    7,834  
    Net amortization of purchase accounting adjustments (Various)  (324)   (958)   (418)   (789)   80     (2,489)   80  
    Merger (benefit) expense (Various)  (17)   2,096    (490)   973    5,349     2,562    6,894  
    Core income before taxes  26,503    38,055    31,597    23,378    22,675     119,533    65,177  
                                  
    Provision for income taxes for core income  5,535    10,226    8,603    6,405    4,891     30,769    15,428  
                                  
    Core net income $20,968   $27,829   $22,994   $16,973   $17,784    $88,764   $49,749  
                                  
    GAAP diluted earnings per common share $0.58   $0.81   $0.61   $0.60   $0.11    $2.59   $1.18  
    Day 1, Provision for Credit Losses - Empire transaction, net of tax  —    —    —    —    0.05     —    0.05  
    Net (gain) loss from fair value adjustments, net of tax  0.13    0.05    0.15    (0.02)   0.11     0.31    0.06  
    Net loss on sale of securities, net of tax  —    —    —    —    0.02     —    0.02  
    Life insurance proceeds  —    —    —    —    —     —    (0.02) 
    Net gain on disposition of assets, net of tax  —    —    —    (0.01)   —     (0.01)   —  
    Net (gain) loss from fair value adjustments on qualifying hedges, net of tax  (0.03)   —    0.02    (0.03)   (0.03)    (0.05)   0.03  
    Prepayment penalty on borrowings,
    net of tax    		  —    —    —    —    0.20     —    0.20  
    Net amortization of purchase accounting adjustments, net of tax  (0.01)   (0.02)   (0.01)   (0.02)   —     (0.06)   —  
    Merger (benefit) expense, net of tax  —    0.05    (0.01)   0.02    0.14     0.06    0.18  
    NYS tax change  —    —    (0.02)   —    —     (0.02)   —  
                                  
    Core diluted earnings per common share(1) $0.67   $0.88   $0.73   $0.54   $0.58    $2.81   $1.70  
                                  
                                  
    Core net income, as calculated above $20,968   $27,829   $22,994   $16,973   $17,784    $88,764   $49,749  
    Average assets  8,090,701    8,072,918    8,263,553    8,147,714    7,705,407     8,143,372    7,276,022  
    Average equity  671,474    659,288    644,690    619,647    609,463     648,946    580,067  
    Core return on average assets(2)  1.04 %  1.38 %  1.11 %  0.83 %  0.92 %   1.09 %  0.68 %
    Core return on average equity(2)  12.49 %  16.88 %  14.27 %  10.96 %  11.67 %   13.68 %  8.58 %

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

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

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

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

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

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

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

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

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