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Flushing Financial Corporation Reports 2Q24 GAAP and Core EPS of $0.18; Net Interest Income Up QoQ

"Our long-term success is derived from executing against the four focus areas we outlined in 2023. For the quarter, GAAP and Core NIM declined 1 and 3 bps, respectively. As loan originations were less than paydowns, we purchased adjustable-rate securities, which led to net interest income increasing 0.9% QoQ. We anticipate the loan pipeline, which increased approximately 88% QoQ, will help to stabilize NIM, which is our first area of focus. Our second area of focus is credit quality, which remains quite strong. At the end of the quarter, we had NPAs to total assets of 61 bps, criticized and classified loans to total loans of 113 bps, and net recoveries of 1 bp. We remain confident that our strong underwriting will continue to drive toward low loss content. The third area of focus is preserving strong liquidity and capital. The Company has over $3 billion of unused lines of credit available as of June 30, 2024, and notwithstanding the normal flows of certain deposit portfolios, average deposits increased 4% YoY and 2% QoQ. Capital ratios remained strong with a leverage ratio of 8.18%. Our last area of focus is bending the expense curve. GAAP and core noninterest expense each increased 6% in the first half of the year compared to the same period a year ago. We are making investments in the business in new lending staff and branches to improve profitability over the long term and expect expense growth in 2024 will be more in line with our historical growth rate of mid-single digits. While progress will not always be in a straight line, we remain confident that adherence to these four areas of focus will favorably impact the long-term profitability of the Company."

- John R. Buran, President and CEO

UNIONDALE, NY / ACCESSWIRE / July 29, 2024 / Growth in Average Deposits; Solid Credit Quality Metrics. Second quarter 2024 GAAP and Core EPS were both $0.18 compared to $0.29, and $0.26, respectively, a year ago. 2Q24 GAAP and Core NIM were 2.05% and 2.03%, down 1 bp and 3 bps QoQ, respectively. Absent episodic items1, NIM was 2.02% in 2Q24 compared to 2.01% in the prior quarter. Average total deposits increased 4.3% YoY and 1.6% QoQ, notwithstanding normal flows of certain portfolios.

Strong Credit Quality; Capital Remains Solid. Credit quality metrics were at low levels with criticized and classified loans to gross loans of 113 bps, nonperforming assets to total assets of 61 bps, and net recoveries of 1 bp in 2Q24. Capital continues to be sound with TCE/TA2 of 7.12% at 2Q24 compared to 7.40% at 1Q24.

Key Financial Metrics3

2Q24

1Q24

4Q23

3Q23

2Q23

1H24

1H23

GAAP:

EPS

$

0.18

$

0.12

$

0.27

$

0.26

$

0.29

$

0.30

$

0.42

ROAA (%)

0.24

0.17

0.38

0.37

0.41

0.21

0.30

ROAE (%)

3.19

2.20

4.84

4.64

5.16

2.69

3.76

NIM FTE4 (%)

2.05

2.06

2.29

2.22

2.18

2.06

2.22

Core:

EPS

$

0.18

$

0.14

$

0.25

$

0.25

$

0.26

$

0.33

$

0.32

ROAA (%)

0.25

0.20

0.35

0.36

0.37

0.22

0.23

ROAE (%)

3.27

2.58

4.51

4.49

4.70

2.92

2.89

Core NIM FTE (%)

2.03

2.06

2.31

2.13

2.17

2.05

2.21

Credit Quality:

NPAs/Loans & OREO (%)

0.82

0.68

0.67

0.56

0.58

0.82

0.58

ACLs/Loans (%)

0.61

0.60

0.58

0.57

0.57

0.61

0.57

ACLs/NPLs (%)

120.58

164.13

159.55

225.38

207.08

120.58

207.08

NCOs/Avg Loans (%)

(0.01

)

-

-

-

0.09

-

0.32

Balance Sheet:

Avg Loans ($B)

$

6.7

$

6.8

$

6.9

$

6.8

$

6.8

$

6.8

$

6.9

Avg Dep ($B)

$

7.2

$

7.1

$

6.9

$

6.8

$

6.9

$

7.1

$

6.9

Book Value/Share

$

22.89

$

23.04

$

23.21

$

23.06

$

23.14

$

22.89

$

23.14

Tangible BV/Share

$

22.24

$

22.39

$

22.54

$

22.39

$

22.47

$

22.24

$

22.47

TCE/TA (%)

7.12

7.40

7.64

7.56

7.70

7.12

7.70

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").

2Q24 Highlights

  • Net interest margin FTE decreased 13 bps YoY, but only 1 bp QoQ to 2.05%; Core net interest margin FTE decreased 14 bps YoY and 3 bps QoQ to 2.03%; absent episodic items1, NIM was 2.02% in 2Q24 compared to 2.15% in 2Q23 and 2.01% in 1Q24

  • Average total deposits increased 4.3% YoY and 1.6% QoQ to $7.2 billion; Average noninterest bearing deposits were 11.4% of total average deposits compared to 12.3% in 2Q23 and 11.8% in 1Q24. Average CDs were $2.4 billion, up 19.4% YoY and 1.5% QoQ

  • Period end net loans decreased 0.9% YoY and 0.7% QoQ to $6.7 billion; Loan closings were $126.0 million, down 20.7% YoY and 3.1% QoQ; The yields on closings increased 63 bps YoY and 57 bps QoQ to 7.77%; Back-to-back swap loan originations were $27.4 million compared to $15.3 million in 1Q24 and generated $0.5 million and $0.2 million of noninterest income, respectively; Loan pipeline decreased 21.1% YoY, but increased 88.4% QoQ to $327.7 million; Approximately 9% of the loan pipeline consists of back-to-back swap loans

  • NPAs increased from a very low base of $39.6 million a year ago and $46.3 million in the prior quarter to $55.8 million equating to only 61 bps of assets compared to 47 bps in 2Q23 and 53 bps in 1Q24

  • Year to date noninterest expense growth was 6.3%, while core noninterest expense growth was 5.7%; The Company remains on target to have core expense growth of mid-single digits for 2024

  • Year to date noninterest expense growth was 6.3%, while core noninterest expense growth was 5.7%; The Company remains on target to have core expense growth of mid-single digits for 2024

  • Provision for credit losses was $0.8 million in 2Q24 compared to $1.4 million in 2Q23 and $0.6 million in 1Q24; Net charge-offs (recoveries) were $(92,000) in 2Q24 compared to $1.6 million in 2Q23 and $4,000 in 1Q24

  • Tangible Common Equity to Tangible Assets was 7.12% at June 30, 2024, compared to 7.40% at March 31, 2024; Tangible book value per share was $22.24 compared to $22.47 a year ago

Areas of Focus

Increase NIM and Reduce Volatility

  • GAAP and Core NIM decreased slightly by 1 bp and 3 bps QoQ, respectively, in 2Q24

  • Absent episodic items1, NIM improved slightly to 2.02% in 2Q24 compared to 2.01% in 1Q24

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

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

  • Average noninterest bearing deposits decreased 1.4% QoQ and accounted for 11.4% of average total deposits

Maintain Credit Discipline

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

  • Weighted average debt service coverage ratio is approximately 1.8x for multifamily and investor commercial real estate loans

  • Criticized and classified loans are 1.13% of gross loans

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

Preserve Strong

Liquidity and Capital

  • Maintaining ample liquidity with $3.1 billion of undrawn lines and resources as of June 30, 2024

  • Uninsured and uncollateralized deposits were 17% of total deposits, while uninsured deposits were 32% of total deposits

  • Total average deposits increased 4.3% YoY and 1.6% QoQ

  • Tangible Common Equity to Tangible Assets was 7.12% at June 30, 2024, down 28 bps QoQ; Leverage ratio was 8.18% at June 30, 2024, compared to 8.32% at March 31, 2024

Bend the Expense

Curve

  • GAAP noninterest expense to average assets was 1.77% in 2Q24 compared to 1.66% in 2Q23 and 1.83% in 1Q24

  • GAAP and Core noninterest expense growth was 11.2% and 9.9% YoY in 2Q24, respectively, and 6.3% and 5.7% year to date, respectively, as investments are made to improve long term profitability

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 $0.7 million or 3 bps in 2Q24 compared to $0.5 million or 3 bps in 2Q23 and $1.0 million or 5 bps in 1Q24

Income Statement Highlights

YoY

QoQ

($000s, except EPS)

2Q24

1Q24

4Q23

3Q23

2Q23

Change

Change

Net Interest Income

$

42,776

$

42,397

$

46,085

$

44,427

$

43,378

(1.4

)%

0.9

%

Provision for Credit Losses

809

592

998

596

1,416

(42.9

)

36.7

Noninterest Income

4,216

3,084

7,402

3,309

5,020

(16.0

)

36.7

Noninterest Expense

39,047

39,892

40,735

36,388

35,110

11.2

(2.1

)

Income Before Income Taxes

7,136

4,997

11,754

10,752

11,872

(39.9

)

42.8

Provision for Income Taxes

1,814

1,313

3,655

2,917

3,186

(43.1

)

38.2

Net Income

$

5,322

$

3,684

$

8,099

$

7,835

$

8,686

(38.7

)

44.5

Diluted EPS

$

0.18

$

0.12

$

0.27

$

0.26

$

0.29

(37.9

)

50.0

Avg. Diluted Shares (000s)

29,789

29,742

29,650

29,703

30,090

(1.0

)

0.2

Core Net Income1

$

5,456

$

4,312

$

7,546

$

7,571

$

7,912

(31.0

)

26.5

Core EPS1

$

0.18

$

0.14

$

0.25

$

0.25

$

0.26

(30.8

)

28.6

1 See Reconciliation of GAAP Earnings and Core Earnings

Net interest income decreased YoY but increased QoQ.

  • Net Interest Margin FTE of 2.05% decreased 13 bps YoY and 1 bp QoQ

  • Episodic items of 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 $0.7 million (3 bps to NIM) in 2Q24, compared to $1.0 million (5 bps to NIM) in 1Q24, $3.0 million (15 bps to NIM) in 4Q23, $2.6 million (13 bps to NIM) in 3Q23, and $0.5 million (3 bps to NIM) in 2Q23

  • Excluding the items in the previous bullet, net interest margin was 2.02% compared to in 2Q24, 2.01% in 1Q24, 2.14% in 4Q23, 2.09% in 3Q23, and 2.15% in 2Q23

The provision for credit losses decreased YoY but increased QoQ.

  • Net charge-offs (recoveries) were $(92,000) ((1) bp of average loans) in 2Q24 compared to $4,000 (less than 1 bp of average loans) in 1Q24, $60,000 in 4Q23 (less than 1 bp of average loans), $(42,000) in 3Q23 (less than (1) bp of average loans), and $1.6 million in 2Q23 (9 bps of average loans)

Noninterest income decreased YoY but increased QoQ.

  • Back-to-back swap loan closings of $27.4 million in 2Q24 (compared to $11.5 million in 2Q23 and $15.3 million in 1Q24) generated $0.5 million of fee income (compared to $0.2 million of fee income in both 2Q23 and 1Q24)

  • Net gains (losses) from fair value adjustments were $0.1 million in 2Q24 (less than $0.01 per share, net of tax), $(0.8) million in 1Q24 ($(0.02) per share, net of tax), $0.9 million in 4Q23 ($0.02 per share, net of tax), $(1.2) million in 3Q23 ($(0.03) per share, net of tax), and $0.3 million in 2Q23 ($0.01 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 $4.2 million in 2Q24, down 0.1% YoY, but up 6.2% QoQ

Noninterest expense increased YoY but declined QoQ.

  • Seasonal compensation expense was $1.6 million in 1Q24 and did not repeat in 2Q24

  • Excluding the effects of immaterial adjustments, core operating expenses were $38.5 million in 2Q24, up 9.9% YoY, but down 3.4% QoQ; year over year increases primarily relate to business investments in people, and higher deposit insurance premiums and data processing costs

  • GAAP noninterest expense to average assets was 1.77% in 2Q24, 1.83% in 1Q24, 1.90% in 4Q23, 1.71% in 3Q23, and 1.66% in 2Q23

Provision for income taxes decreased YoY but increased QoQ.

  • The effective tax rate was 25.4% in 2Q24, 26.3% in 1Q24, 31.1% in 4Q23, 27.1% in 3Q23, and 26.8% in 2Q23

  • The 4Q23 effective tax rate increased because 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

2Q24

1Q24

4Q23

3Q23

2Q23

Change

Change

Averages ($MM)

Loans

$

6,748

$

6,804

$

6,868

$

6,813

$

6,830

(1.2

)%

(0.8

)%

Total Deposits

7,196

7,081

6,884

6,819

6,900

4.3

1.6


Credit Quality ($000s)

Nonperforming Loans

$

34,540

$

24,829

$

25,172

$

17,405

$

18,637

85.3

%

39.1

%

Nonperforming Assets

55,832

46,254

46,153

38,386

39,618

40.9

20.7

Criticized and Classified Loans

76,485

59,021

76,719

74,169

48,675

57.1

29.6

Criticized and Classified Assets

97,777

80,446

97,700

95,150

69,656

40.4

21.5

Allowance for Credit Losses/Loans (%)

0.61

0.60

0.58

0.57

0.57

4

bps

1

bp


Capital

Book Value/Share

$

22.89

$

23.04

$

23.21

$

23.06

$

23.14

(1.1

)%

(0.7

)%

Tangible Book Value/Share

22.24

22.39

22.54

22.39

22.47

(1.0

)

(0.7

)

Tang. Common Equity/Tang. Assets (%)

7.12

7.40

7.64

7.56

7.70

(58

)bps

(28

)bps

Leverage Ratio (%)

8.18

8.32

8.47

8.51

8.54

(36

)

(14

)

Average loans decreased slightly YoY and QoQ.

  • Period end net loans totaled $6.7 billion, down 0.9% YoY and 0.7% QoQ

  • Total loan closings were $126.0 million in 2Q24, $130.0 million in 1Q24, $244.3 million in 4Q23, $241.5 million in 3Q23, and $158.8 million in 2Q23; the loan pipeline was $327.7 million at June 30, 2024, down 21.1% YoY, but up 88.4% QoQ

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

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

Average total deposits increased YoY and QoQ.

  • Average noninterest bearing deposits decreased 3.2% YoY and 1.4% QoQ and comprised 11.4% of average total deposits in 2Q24 compared to 12.3% a year ago

  • Average CDs totaled $2.4 billion, up 19.4% YoY and 1.5% QoQ; approximately $587.5 million of retail CDs are due to mature at an average rate of 4.89% in 3Q24

Credit Quality: Nonperforming loans increased YoY and QoQ.

  • Nonperforming loans were 51 bps of loans in 2Q24 compared to 27 bps in 2Q23 and 36 bps in 1Q24; the increase from 1Q24 in NPLs was primarily driven by 4 credits totaling $9.1 million and we expect minimal, if any losses

  • Criticized and classified loans were 113 bps of gross loans in 2Q24 compared to 87 bps of gross loans at 1Q24, 111 bps at 4Q23, 108 bps at 3Q23, and 71 bps at 2Q23

  • Allowance for credit losses were 120.6% of nonperforming loans at 2Q24 compared to 207.1% at 2Q23 and 164.1% at 1Q24

Capital: Book value per common share and tangible book value per common share, a non-GAAP measure, both decreased 1.1% and 1.0% YoY to $22.89 and $22.24, respectively.

  • The Company paid a dividend of $0.22 per share in 2Q24; 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 7.12% at June 30, 2024, compared to 7.70% at June 30, 2023, and 7.40% at March 31, 2024

Conference Call Information

Conference Call Information:

  • John R. Buran, President and Chief Executive Officer, and Susan K. Cullen, Senior Executive Vice President and Chief Financial Officer and Treasurer, will host a conference call on Tuesday, July 30, 2024, at 9:00 AM (ET) to discuss the Company's second 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=rhmdjtQw

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

  • Replay Access Code: 8422874

  • The conference call will be simultaneously webcast and archived

Third Quarter 2024 Earnings Release Date:

The Company plans to release Third Quarter 2024 financial results after the market close on October 24, 2024, followed by a conference call at 11:00 AM (ET) on October 25, 2024.

A detailed announcement will be issued prior to the third quarter's close confirming the date and the time of the earning release.

About Flushing Financial Corporation

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

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

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this Press Release relating to plans, strategies, economic performance and trends, projections of results of specific activities or investments and other statements that are not descriptions of historical facts may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking information is inherently subject to risks and uncertainties, and actual results could differ materially from those currently anticipated due to a number of factors, which include, but are not limited to, risk factors discussed in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2023 and in other documents filed by the Company with the Securities and Exchange Commission from time to time. Forward-looking statements may be identified by terms such as "may", "will", "should", "could", "expects", "plans", "intends", "anticipates", "believes", "estimates", "predicts", "forecasts", "goals", "potential" or "continue" or similar terms or the negative of these terms. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. The Company has no obligation to update these forward-looking statements.

#FF

- Statistical Tables Follow -

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
FINANCIAL HIGHLIGHTS
(Unaudited)

At or for the three months ended

At or for the six months ended


June 30,

March 31,

December 31,

September 30,

June 30,

June 30,

June 30,

(Dollars in thousands, except per share data)

2024

2024

2023

2023

2023

2024

2023

Performance Ratios (1)

Return on average assets

0.24

%

0.17

%

0.38

%

0.37

%

0.41

%

0.21

%

0.30

%

Return on average equity

3.19

2.20

4.84

4.64

5.16

2.69

3.76

Yield on average interest-earning assets (2)

5.43

5.32

5.39

5.19

4.84

5.37

4.72

Cost of average interest-bearing liabilities

3.95

3.83

3.68

3.52

3.15

3.89

2.97

Cost of funds

3.54

3.42

3.26

3.13

2.80

3.48

2.63

Net interest rate spread during period (2)

1.48

1.49

1.71

1.67

1.69

1.48

1.75

Net interest margin (2)

2.05

2.06

2.29

2.22

2.18

2.06

2.22

Noninterest expense to average assets

1.77

1.83

1.90

1.71

1.66

1.80

1.75

Efficiency ratio (3)

82.57

86.07

76.69

76.76

73.82

84.31

76.72

Average interest-earning assets to average interest-bearing liabilities

1.17

X

1.17

X

1.19

X

1.18

X

1.18

X

1.17

X

1.19

X


Average Balances

Total loans, net

$

6,748,140

$

6,804,117

$

6,867,927

$

6,813,019

$

6,829,648

$

6,776,128

$

6,850,305

Total interest-earning assets

8,354,994

8,235,160

8,076,991

8,023,237

7,991,756

8,295,076

7,997,037

Total assets

8,830,665

8,707,505

8,569,002

8,505,346

8,462,442

8,769,085

8,465,363

Total deposits

7,195,940

7,081,498

6,884,037

6,819,397

6,899,617

7,138,720

6,855,299

Total interest-bearing liabilities

7,140,068

7,014,927

6,813,909

6,771,860

6,756,859

7,077,498

6,730,357

Stockholders' equity

667,557

669,185

669,819

675,041

672,835

668,371

677,917


Per Share Data

Book value per common share (4)

$

22.89

$

23.04

$

23.21

$

23.06

$

23.14

$

22.89

$

23.14

Tangible book value per common share (5)

$

22.24

$

22.39

$

22.54

$

22.39

$

22.47

$

22.24

$

22.47


Stockholders' Equity

Stockholders' equity

$

665,322

$

669,827

$

669,837

$

666,521

$

670,247

$

665,322

$

670,247

Tangible stockholders' equity

646,364

650,763

650,664

647,234

650,842

646,364

650,842


Consolidated Regulatory Capital Ratios

Tier 1 capital

$

733,308

$

734,192

$

737,732

$

736,744

$

734,754

$

733,308

$

734,754

Common equity Tier 1 capital

686,630

687,458

691,754

690,294

688,820

686,630

688,820

Total risk-based capital

965,819

965,796

967,627

965,532

962,784

965,819

962,784

Risk Weighted Assets

6,718,568

6,664,496

6,750,301

6,804,478

6,650,222

6,718,568

6,650,222


Tier 1 leverage capital (well capitalized = 5%)

8.18

%

8.32

%

8.47

%

8.51

%

8.54

%

8.18

%

8.54

%

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

10.22

10.32

10.25

10.14

10.36

10.22

10.36

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

10.91

11.02

10.93

10.83

11.05

10.91

11.05

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

14.38

14.49

14.33

14.19

14.48

14.38

14.48


Capital Ratios

Average equity to average assets

7.56

%

7.69

%

7.82

%

7.94

%

7.95

%

7.62

%

8.01

%

Equity to total assets

7.31

7.61

7.85

7.77

7.91

7.31

7.91

Tangible common equity to tangible assets (6)

7.12

7.40

7.64

7.56

7.70

7.12

7.70


Asset Quality

Nonaccrual loans

$

34,540

$

24,829

$

23,709

$

17,405

$

18,637

$

34,540

$

18,637

Nonperforming loans

34,540

24,829

25,172

17,405

18,637

34,540

18,637

Nonperforming assets

55,832

46,254

46,153

38,386

39,618

55,832

39,618

Net charge-offs (recoveries)

(92

)

4

60

(42

)

1,560

(88

)

10,794


Asset Quality Ratios

Nonperforming loans to gross loans

0.51

%

0.36

%

0.36

%

0.25

%

0.27

%

0.51

%

0.27

%

Nonperforming assets to total assets

0.61

0.53

0.54

0.45

0.47

0.61

0.47

Allowance for credit losses to gross loans

0.61

0.60

0.58

0.57

0.57

0.61

0.57

Allowance for credit losses to nonperforming assets

74.60

88.10

87.02

102.19

97.41

74.60

97.41

Allowance for credit losses to nonperforming loans

120.58

164.13

159.55

225.38

207.08

120.58

207.08

Net charge-offs (recoveries) to average loans

(0.01

)

-

-

-

0.09

-

0.32


Full-service customer facilities

27

27

27

27

26

27

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 SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

For the three months ended

For the six months ended

June 30,

March 31,

December 31,

September 30,

June 30,

June 30,

June 30,

(In thousands, except per share data)

2024

2024

2023

2023

2023

2024

2023

Interest and Dividend Income

Interest and fees on loans

$

92,728

$

92,959

$

95,616

$

91,466

$

85,377

$

185,687

$

168,266

Interest and dividends on securities:

Interest

18,209

12,541

10,803

10,383

9,172

30,750

16,412

Dividends

33

33

34

33

30

66

59

Other interest income

2,260

3,966

2,310

2,154

1,982

6,226

3,941

Total interest and dividend income

113,230

109,499

108,763

104,036

96,561

222,729

188,678

Interest Expense

Deposits

60,893

57,865

53,284

50,066

46,249

118,758

85,305

Other interest expense

9,561

9,237

9,394

9,543

6,934

18,798

14,733

Total interest expense

70,454

67,102

62,678

59,609

53,183

137,556

100,038

Net Interest Income

42,776

42,397

46,085

44,427

43,378

85,173

88,640

Provision for credit losses

809

592

998

596

1,416

1,401

8,924

Net Interest Income After Provision for Credit Losses

41,967

41,805

45,087

43,831

41,962

83,772

79,716

Noninterest Income

Banking services fee income

1,583

1,394

2,824

2,636

1,780

2,977

3,191

Net gain on sale of loans

26

110

-

-

54

136

108

Net gain (loss) from fair value adjustments

57

(834

)

906

(1,246

)

294

(777

)

2,913

Federal Home Loan Bank of New York stock dividends

669

743

658

624

534

1,412

1,231

Life insurance proceeds

-

-

697

23

561

-

561

Bank owned life insurance

1,223

1,200

1,173

1,157

1,134

2,423

2,243

Other income

658

471

1,144

115

663

1,129

1,630

Total noninterest income

4,216

3,084

7,402

3,309

5,020

7,300

11,877

Noninterest Expense

Salaries and employee benefits

21,723

22,113

23,359

20,346

19,690

43,836

42,252

Occupancy and equipment

3,713

3,779

3,698

3,371

3,534

7,492

7,327

Professional services

2,786

2,792

2,523

2,494

2,291

5,578

4,552

FDIC deposit insurance

1,322

1,652

1,162

912

943

2,974

1,920

Data processing

1,785

1,727

1,646

1,422

1,473

3,512

2,908

Depreciation and amortization

1,425

1,457

1,491

1,482

1,482

2,882

2,992

Other real estate owned/foreclosure expense

125

145

105

185

150

270

315

Other operating expenses

6,168

6,227

6,751

6,176

5,547

12,395

12,000

Total noninterest expense

39,047

39,892

40,735

36,388

35,110

78,939

74,266

Income Before Provision for Income Taxes

7,136

4,997

11,754

10,752

11,872

12,133

17,327

Provision for income taxes

1,814

1,313

3,655

2,917

3,186

3,127

4,597

Net Income

$

5,322

$

3,684

$

8,099

$

7,835

$

8,686

$

9,006

$

12,730

Basic earnings per common share

$

0.18

$

0.12

$

0.27

$

0.26

$

0.29

$

0.30

$

0.42

Diluted earnings per common share

$

0.18

$

0.12

$

0.27

$

0.26

$

0.29

$

0.30

$

0.42

Dividends per common share

$

0.22

$

0.22

$

0.22

$

0.22

$

0.22

$

0.44

$

0.44

Basic average shares

29,789

29,742

29,650

29,703

30,090

29,766

30,177

Diluted average shares

29,789

29,742

29,650

29,703

30,090

29,766

30,177

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

June 30,

March 31,

December 31,

September 30,

June 30,

(Dollars in thousands)

2024

2024

2023

2023

2023

ASSETS

Cash and due from banks

$

156,913

$

210,723

$

172,157

$

200,926

$

160,053

Securities held-to-maturity:

Mortgage-backed securities

7,846

7,850

7,855

7,860

7,865

Other securities, net

64,166

64,612

65,068

65,271

65,469

Securities available for sale:

Mortgage-backed securities

869,494

509,527

354,344

337,879

365,911

Other securities

679,117

667,156

520,409

505,784

503,645

Loans

6,777,026

6,821,943

6,906,950

6,896,074

6,832,425

Allowance for credit losses

(41,648

)

(40,752

)

(40,161

)

(39,228

)

(38,593

)

Net loans

6,735,378

6,781,191

6,866,789

6,856,846

6,793,832

Interest and dividends receivable

62,752

61,449

59,018

55,660

52,911

Bank premises and equipment, net

19,426

20,102

21,273

21,302

22,182

Federal Home Loan Bank of New York stock

46,331

24,845

31,066

43,821

36,168

Bank owned life insurance

215,940

214,718

213,518

214,321

213,164

Goodwill

17,636

17,636

17,636

17,636

17,636

Core deposit intangibles

1,322

1,428

1,537

1,651

1,769

Right of use asset

46,636

37,631

39,557

41,404

41,526

Other assets

174,283

188,457

167,009

209,014

192,721

Total assets

$

9,097,240

$

8,807,325

$

8,537,236

$

8,579,375

$

8,474,852

LIABILITIES

Total deposits

$

6,906,863

$

7,253,207

$

6,815,261

$

6,681,509

$

6,723,690

Borrowed funds

1,316,565

671,474

841,281

1,001,010

857,400

Operating lease liability

47,485

38,674

40,822

43,067

44,402

Other liabilities

161,005

174,143

170,035

187,268

179,113

Total liabilities

8,431,918

8,137,498

7,867,399

7,912,854

7,804,605

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

260,585

260,413

264,534

264,486

263,744

Treasury stock

(101,633

)

(101,641

)

(106,070

)

(105,433

)

(104,574

)

Retained earnings

545,345

546,530

549,683

548,058

546,755

Accumulated other comprehensive loss, net of taxes

(39,316

)

(35,816

)

(38,651

)

(40,931

)

(36,019

)

Total stockholders' equity

665,322

669,827

669,837

666,521

670,247

Total liabilities and stockholders' equity

$

9,097,240

$

8,807,325

$

8,537,236

$

8,579,375

$

8,474,852

(In thousands)

Issued shares

34,088

34,088

34,088

34,088

34,088

Outstanding shares

29,069

29,069

28,866

28,905

28,961

Treasury shares

5,019

5,019

5,222

5,183

5,127

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
AVERAGE BALANCE SHEETS
(Unaudited)

For the three months ended

For the six months ended

June 30,

March 31,

December 31,

September 30,

June 30,

June 30,

June 30,

(In thousands)

2024

2024

2023

2023

2023

2024

2023

Interest-earning Assets:

Mortgage loans, net

$

5,338,614

$

5,353,606

$

5,356,112

$

5,314,215

$

5,308,567

$

5,346,110

$

5,320,852

Commercial Business loans, net

1,409,526

1,450,511

1,511,815

1,498,804

1,521,081

1,430,018

1,529,453

Total loans, net

6,748,140

6,804,117

6,867,927

6,813,019

6,829,648

6,776,128

6,850,305

Taxable securities:

Mortgage-backed securities

691,802

462,934

426,612

436,181

448,620

577,368

453,240

Other securities, net

663,975

590,204

527,316

528,091

471,600

627,089

441,827

Total taxable securities

1,355,777

1,053,138

953,928

964,272

920,220

1,204,457

895,067

Tax-exempt securities:

Other securities

65,451

65,939

66,242

66,438

66,632

65,695

66,730

Total tax-exempt securities

65,451

65,939

66,242

66,438

66,632

65,695

66,730

Interest-earning deposits and federal funds sold

185,626

311,966

188,894

179,508

175,256

248,796

184,935

Total interest-earning assets

8,354,994

8,235,160

8,076,991

8,023,237

7,991,756

8,295,076

7,997,037

Other assets

475,671

472,345

492,011

482,109

470,686

474,009

468,326

Total assets

$

8,830,665

$

8,707,505

$

8,569,002

$

8,505,346

$

8,462,442

$

8,769,085

$

8,465,363

Interest-bearing Liabilities:

Deposits:

Savings accounts

$

103,335

$

106,212

$

110,316

$

115,437

$

124,041

$

104,774

$

129,463

NOW accounts

2,017,085

1,935,250

1,848,285

1,907,781

2,026,950

1,976,168

1,998,909

Money market accounts

1,714,085

1,725,714

1,625,453

1,584,308

1,754,574

1,719,899

1,905,709

Certificate of deposit accounts

2,443,047

2,406,283

2,340,115

2,290,669

2,046,960

2,424,665

1,864,254

Total due to depositors

6,277,552

6,173,459

5,924,169

5,898,195

5,952,525

6,225,506

5,898,335

Mortgagors' escrow accounts

95,532

73,822

86,592

69,525

97,410

84,677

84,021

Total interest-bearing deposits

6,373,084

6,247,281

6,010,761

5,967,720

6,049,935

6,310,183

5,982,356

Borrowings

766,984

767,646

803,148

804,140

706,924

767,315

748,001

Total interest-bearing liabilities

7,140,068

7,014,927

6,813,909

6,771,860

6,756,859

7,077,498

6,730,357

Noninterest-bearing demand deposits

822,856

834,217

873,276

851,677

849,682

828,537

872,943

Other liabilities

200,184

189,176

211,998

206,768

183,066

194,679

184,146

Total liabilities

8,163,108

8,038,320

7,899,183

7,830,305

7,789,607

8,100,714

7,787,446

Equity

667,557

669,185

669,819

675,041

672,835

668,371

677,917

Total liabilities and equity

$

8,830,665

$

8,707,505

$

8,569,002

$

8,505,346

$

8,462,442

$

8,769,085

$

8,465,363

Net interest-earning assets

$

1,214,926

$

1,220,233

$

1,263,082

$

1,251,377

$

1,234,897

$

1,217,578

$

1,266,680

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

For the three months ended

For the six months ended

June 30,

March 31,

December 31,

September 30,

June 30,

June 30,

June 30

(Dollars in thousands)

2024

2024

2023

2023

2023

2024

2023

Interest Income:

Mortgage loans, net

$

71,968

$

71,572

$

72,505

$

68,931

$

63,688

$

143,540

$

125,742

Commercial Business loans, net

20,760

21,387

23,111

22,535

21,689

42,147

42,524

Total loans, net

92,728

92,959

95,616

91,466

85,377

185,687

168,266

Taxable securities:

Mortgage-backed securities

7,462

3,696

3,217

3,031

2,976

11,158

5,257

Other securities

10,408

8,504

7,239

7,003

5,847

18,912

10,458

Total taxable securities

17,870

12,200

10,456

10,034

8,823

30,070

15,715

Tax-exempt securities:

Other securities

470

474

482

484

480

944

957

Total tax-exempt securities

470

474

482

484

480

944

957

Interest-earning deposits and federal funds sold

2,260

3,966

2,310

2,154

1,982

6,226

3,941

Total interest-earning assets

113,328

109,599

108,864

104,138

96,662

222,927

188,879

Interest Expense:

Deposits:

Savings accounts

$

115

$

122

$

124

$

130

$

140

$

237

$

266

NOW accounts

20,007

18,491

17,411

16,843

16,152

38,498

29,937

Money market accounts

17,326

17,272

15,785

14,386

14,625

34,598

28,727

Certificate of deposit accounts

23,383

21,918

19,917

18,639

15,281

45,301

26,288

Total due to depositors

60,831

57,803

53,237

49,998

46,198

118,634

85,218

Mortgagors' escrow accounts

62

62

47

68

51

124

87

Total interest-bearing deposits

60,893

57,865

53,284

50,066

46,249

118,758

85,305

Borrowings

9,561

9,237

9,394

9,543

6,934

18,798

14,733

Total interest-bearing liabilities

70,454

67,102

62,678

59,609

53,183

137,556

100,038

Net interest income- tax equivalent

$

42,874

$

42,497

$

46,186

$

44,529

$

43,479

$

85,371

$

88,841

Included in net interest income above:

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

$

369

$

928

$

3,416

$

857

$

315

$

1,297

$

995

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

177

(187

)

(872

)

1,348

(205

)

(10

)

(105

)

Purchase accounting adjustments

182

271

461

347

340

453

646

Interest-earning Assets Yields:

Mortgage loans, net

5.39

%

5.35

%

5.41

%

5.19

%

4.80

%

5.37

%

4.73

%

Commercial Business loans, net

5.89

5.90

6.11

6.01

5.70

5.89

5.56

Total loans, net

5.50

5.46

5.57

5.37

5.00

5.48

4.91

Taxable securities:

Mortgage-backed securities

4.31

3.19

3.02

2.78

2.65

3.87

2.32

Other securities

6.27

5.76

5.49

5.30

4.96

6.03

4.73

Total taxable securities

5.27

4.63

4.38

4.16

3.84

4.99

3.51

Tax-exempt securities: (1)

Other securities

2.87

2.88

2.91

2.91

2.88

2.87

2.87

Total tax-exempt securities

2.87

2.88

2.91

2.91

2.88

2.87

2.87

Interest-earning deposits and federal funds sold

4.87

5.09

4.89

4.80

4.52

5.00

4.26

Total interest-earning assets (1)

5.43

%

5.32

%

5.39

%

5.19

%

4.84

%

5.37

%

4.72

%

Interest-bearing Liabilities Yields:

Deposits:

Savings accounts

0.45

%

0.46

%

0.45

%

0.45

%

0.45

%

0.45

%

0.41

%

NOW accounts

3.97

3.82

3.77

3.53

3.19

3.90

3.00

Money market accounts

4.04

4.00

3.88

3.63

3.33

4.02

3.01

Certificate of deposit accounts

3.83

3.64

3.40

3.25

2.99

3.74

2.82

Total due to depositors

3.88

3.75

3.59

3.39

3.10

3.81

2.89

Mortgagors' escrow accounts

0.26

0.34

0.22

0.39

0.21

0.29

0.21

Total interest-bearing deposits

3.82

3.70

3.55

3.36

3.06

3.76

2.85

Borrowings

4.99

4.81

4.68

4.75

3.92

4.90

3.94

Total interest-bearing liabilities

3.95

%

3.83

%

3.68

%

3.52

%

3.15

%

3.89

%

2.97

%

Net interest rate spread (tax equivalent) (1)

1.48

%

1.49

%

1.71

%

1.67

%

1.69

%

1.48

%

1.75

%

Net interest margin (tax equivalent) (1)

2.05

%

2.06

%

2.29

%

2.22

%

2.18

%

2.06

%

2.22

%

Ratio of interest-earning assets to interest-bearing liabilities

1.17

X

1.17

X

1.19

X

1.18

X

1.18

X

1.17

X

1.19

X

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

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

Deposit Composition

2Q24 vs.

2Q24 vs.

June 30,

March 31,

December 31,

September 30,

June 30,

1Q24

2Q23

(Dollars in thousands)

2024

2024

2023

2023

2023

% Change

% Change

Noninterest bearing

$

825,327

$

815,937

$

847,416

$

874,420

$

827,820

1.2

%

(0.3

)%

Interest bearing:

Certificate of deposit accounts

2,435,894

2,529,095

2,311,290

2,321,369

2,232,696

(3.7

)

9.1

Savings accounts

103,296

105,147

108,605

112,730

118,886

(1.8

)

(13.1

)

Money market accounts

1,710,376

1,717,298

1,726,404

1,551,176

1,594,637

(0.4

)

7.3

NOW accounts

1,774,268

2,003,649

1,771,164

1,749,802

1,891,834

(11.4

)

(6.2

)

Total interest-bearing deposits

6,023,834

6,355,189

5,917,463

5,735,077

5,838,053

(5.2

)

3.2

Total due to depositors

6,849,161

7,171,126

6,764,879

6,609,497

6,665,873

(4.5

)

2.7

Mortgagors' escrow deposits

57,702

82,081

50,382

72,012

57,817

(29.7

)

(0.2

)

Total deposits

$

6,906,863

$

7,253,207

$

6,815,261

$

6,681,509

$

6,723,690

(4.8

)%

2.7

%

Loan Composition

2Q24 vs.

2Q24 vs.

June 30,

March 31,

December 31,

September 30,

June 30

1Q24

2Q23

(Dollars in thousands)

2024

2024

2023

2023

2023

% Change

% Change

Multifamily residential

$

2,631,751

$

2,622,737

$

2,658,205

$

2,614,219

$

2,593,955

0.3

%

1.5

%

Commercial real estate

1,894,509

1,925,312

1,958,252

1,953,243

1,917,749

(1.6

)

(1.2

)

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

518,510

516,198

530,243

537,744

542,368

0.4

(4.4

)

One-to-four family --- residential

261,716

267,156

220,213

222,874

230,055

(2.0

)

13.8

Construction

65,161

60,568

58,673

59,903

57,325

7.6

13.7

Mortgage loans

5,371,647

5,391,971

5,425,586

5,387,983

5,341,452

(0.4

)

0.6

Small Business Administration

13,957

16,244

20,205

21,896

22,404

(14.1

)

(37.7

)

Commercial business and other

1,389,711

1,411,725

1,452,518

1,487,775

1,466,358

(1.6

)

(5.2

)

Commercial Business loans

1,403,668

1,427,969

1,472,723

1,509,671

1,488,762

(1.7

)

(5.7

)

Gross loans

6,775,315

6,819,940

6,898,309

6,897,654

6,830,214

(0.7

)

(0.8

)

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

1,711

2,003

8,641

(1,580

)

2,211

(14.6

)

(22.6

)

Allowance for credit losses

(41,648

)

(40,752

)

(40,161

)

(39,228

)

(38,593

)

2.2

7.9

Net loans

$

6,735,378

$

6,781,191

$

6,866,789

$

6,856,846

$

6,793,832

(0.7

)%

(0.9

)%

(1) Includes $3.4 million, $3.6 million, $3.9 million, $4.4 million, and $4.8 million of purchase accounting unamortized discount resulting from the acquisition of Empire Bancorp at June 30, 2024, March 31, 2024, December 31, 2023, September 30, 2023, and June 30, 2023, respectively.

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

Loan Closings

For the three months ended

For the six months ended

June 30,

March 31,

December 31,

September 30,

June 30,

June 30,

June 30,

(In thousands)

2024

2024

2023

2023

2023

2024

2023

Multifamily residential

$

27,966

$

11,805

$

82,995

$

75,655

$

31,901

$

39,771

$

74,065

Commercial real estate

20,573

10,040

60,092

70,197

38,523

30,613

54,093

One-to-four family - mixed use property

3,980

750

3,319

6,028

5,812

4,730

10,750

One-to-four family - residential

689

52,539

1,454

1,070

63

53,228

4,359

Construction

4,594

1,895

8,007

6,971

8,811

6,489

19,403

Mortgage loans

57,802

77,029

155,867

159,921

85,110

134,831

162,670

Small Business Administration

-

-

1,162

-

820

-

1,138

Commercial business and other

68,162

52,955

87,255

81,549

72,850

121,117

168,518

Commercial Business loans

68,162

52,955

88,417

81,549

73,670

121,117

169,656

Total Closings

$

125,964

$

129,984

$

244,284

$

241,470

$

158,780

$

255,948

$

332,326

Weighted Average Rate on Loan Closings

For the three months ended

June 30,

March 31,

December 31,

September 30,

June 30,

Loan type

2024

2024

2023

2023

2023

Mortgage loans

7.58

%

6.36

%

7.55

%

7.22

%

6.62

%

Commercial Business loans

7.94

8.29

7.93

8.00

7.76

Total loans

7.77

%

7.13

%

7.69

%

7.48

%

7.14

%

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
ASSET QUALITY
(Unaudited)

Allowance for Credit Losses

For the three months ended

For the six months ended

June 30,

March 31,

December 31,

September 30,

June 30,

June 30,

June 30,

(Dollars in thousands)

2024

2024

2023

2023

2023

2024

2023

Allowance for credit losses - loans

Beginning balances

$

40,752

$

40,161

$

39,228

$

38,593

$

38,729

$

40,161

$

40,442

Net loan charge-off (recoveries):

Multifamily residential

(1

)

-

(1

)

-

-

(1

)

(1

)

Commercial real estate

-

-

-

-

8

-

8

One-to-four family - mixed-use property

(2

)

-

(1

)

-

-

(2

)

-

One-to-four family - residential

(2

)

13

9

(6

)

4

11

(32

)

Small Business Administration

(91

)

(5

)

(29

)

(48

)

(158

)

(96

)

(164

)

Commercial business and other

4

(4

)

82

12

1,706

-

10,983

Total net loan charge-offs (recoveries)

(92

)

4

60

(42

)

1,560

(88

)

10,794

Provision (benefit) for loan losses

804

595

993

593

1,424

1,399

8,945

Ending balance

$

41,648

$

40,752

$

40,161

$

39,228

$

38,593

$

41,648

$

38,593

Gross charge-offs

$

11

$

58

$

107

$

21

$

1,731

$

69

$

11,029

Gross recoveries

103

54

47

63

171

157

235

Allowance for credit losses - loans to gross loans

0.61

%

0.60

%

0.58

%

0.57

%

0.57

%

0.61

%

0.57

%

Net loan charge-offs (recoveries) to average loans

(0.01

)

-

-

-

0.09

-

0.32

Nonperforming Assets

June 30,

March 31,

December 31,

September 30,

June 30,

(Dollars in thousands)

2024

2024

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

13,774

4,669

3,206

3,206

3,206

One-to-four family - mixed-use property

909

911

981

1,075

790

One-to-four family - residential

3,633

3,768

5,181

4,161

5,218

Small Business Administration

2,552

2,552

2,552

1,255

1,119

Commercial business and other

13,672

12,929

11,789

7,708

8,304

Total Nonaccrual loans

34,540

24,829

23,709

17,405

18,637

Total Nonperforming Loans (NPLs)

34,540

24,829

25,172

17,405

18,637

Other Nonperforming Assets:

Real estate acquired through foreclosure

665

665

-

-

-

Total Other nonperforming assets

665

665

-

-

-

Total Nonaccrual HTM Securities

20,627

20,760

20,981

20,981

20,981

Total Nonperforming Assets

$

55,832

$

46,254

$

46,153

$

38,386

$

39,618

Nonperforming Assets to Total Assets

0.61

%

0.53

%

0.54

%

0.45

%

0.47

%

Allowance for Credit Losses to NPLs

120.6

%

164.1

%

159.5

%

225.4

%

207.1

%

Non-cash Fair Value Adjustments to GAAP Earnings

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

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

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

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

For the three months ended

For the six months ended

(Dollars in thousands,

June 30,

March 31,

December 31,

September 30,

June 30,

June 30,

June 30,

except per share data)

2024

2024

2023

2023

2023

2024

2023

GAAP income before income taxes

$

7,136

$

4,997

$

11,754

$

10,752

$

11,872

$

12,133

$

17,327

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

(57

)

834

(906

)

1,246

(294

)

777

(2,913

)

Life insurance proceeds (Noninterest income (loss))

-

-

(697

)

(23

)

(561

)

-

(561

)

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

(177

)

187

872

(1,348

)

205

10

105

Net amortization of purchase accounting adjustments and intangibles (Various)

(85

)

(169

)

(355

)

(237

)

(227

)

(254

)

(415

)

Miscellaneous expense (Professional services)

494

-

526

-

-

494

-

Core income before taxes

7,311

5,849

11,194

10,390

10,995

13,160

13,543

Provision for core income taxes

1,855

1,537

3,648

2,819

3,083

3,392

3,742

Core net income

$

5,456

$

4,312

$

7,546

$

7,571

$

7,912

$

9,768

$

9,801

GAAP diluted earnings per common share

$

0.18

$

0.12

$

0.27

$

0.26

$

0.29

$

0.30

$

0.42

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

(0.01

)

0.02

(0.02

)

0.03

(0.01

)

0.02

(0.07

)

Life insurance proceeds

-

-

(0.02

)

-

(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

-

0.01

-

-

0.01

-

Core diluted earnings per common share(1)

$

0.18

$

0.14

$

0.25

$

0.25

$

0.26

$

0.33

$

0.32

Core net income, as calculated above

$

5,456

$

4,312

$

7,546

$

7,571

$

7,912

$

9,768

$

9,801

Average assets

8,830,665

8,707,505

8,569,002

8,505,346

8,462,442

8,769,085

8,465,363

Average equity

667,557

669,185

669,819

675,041

672,835

668,371

677,917

Core return on average assets(2)

0.25

%

0.20

%

0.35

%

0.36

%

0.37

%

0.22

%

0.23

%

Core return on average equity(2)

3.27

%

2.58

%

4.51

%

4.49

%

4.70

%

2.92

%

2.89

%

(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 six months ended

June 30,

March 31,

December 31,

September 30,

June 30,

June 30,

June 30,

(Dollars in thousands)

2024

2024

2023

2023

2023

2024

2023

GAAP Net interest income

$

42,776

$

42,397

$

46,085

$

44,427

$

43,378

$

85,173

$

88,640

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

(177

)

187

872

(1,348

)

205

10

105

Net amortization of purchase accounting adjustments

(182

)

(271

)

(461

)

(347

)

(340

)

(453

)

(646

)

Core Net interest income

$

42,417

$

42,313

$

46,496

$

42,732

$

43,243

$

84,730

$

88,099

GAAP Noninterest income

$

4,216

$

3,084

$

7,402

$

3,309

$

5,020

$

7,300

$

11,877

Net (gain) loss from fair value adjustments

(57

)

834

(906

)

1,246

(294

)

777

(2,913

)

Life insurance proceeds

-

-

(697

)

(23

)

(561

)

-

(561

)

Core Noninterest income

$

4,159

$

3,918

$

5,799

$

4,532

$

4,165

$

8,077

$

8,403

GAAP Noninterest expense

$

39,047

$

39,892

$

40,735

$

36,388

$

35,110

$

78,939

$

74,266

Net amortization of purchase accounting adjustments

(97

)

(102

)

(106

)

(110

)

(113

)

(199

)

(231

)

Miscellaneous expense

(494

)

-

(526

)

-

-

(494

)

-

Core Noninterest expense

$

38,456

$

39,790

$

40,103

$

36,278

$

34,997

$

78,246

$

74,035

Net interest income

$

42,776

$

42,397

$

46,085

$

44,427

$

43,378

$

85,173

$

88,640

Noninterest income

4,216

3,084

7,402

3,309

5,020

7,300

11,877

Noninterest expense

(39,047

)

(39,892

)

(40,735

)

(36,388

)

(35,110

)

(78,939

)

(74,266

)

Pre-provision pre-tax net revenue

$

7,945

$

5,589

$

12,752

$

11,348

$

13,288

$

13,534

$

26,251

Core:

Net interest income

$

42,417

$

42,313

$

46,496

$

42,732

$

43,243

$

84,730

$

88,099

Noninterest income

4,159

3,918

5,799

4,532

4,165

8,077

8,403

Noninterest expense

(38,456

)

(39,790

)

(40,103

)

(36,278

)

(34,997

)

(78,246

)

(74,035

)

Pre-provision pre-tax net revenue

$

8,120

$

6,441

$

12,192

$

10,986

$

12,411

$

14,561

$

22,467

Efficiency Ratio

82.6

%

86.1

%

76.7

%

76.8

%

73.8

%

84.3

%

76.7

%

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

For the three months ended

For the six months ended

June 30,

March 31,

December 31,

September 30,

June 30,

June 30,

June 30,

(Dollars in thousands)

2024

2024

2023

2023

2023

2024

2023

GAAP net interest income

$

42,776

$

42,397

$

46,085

$

44,427

$

43,378

$

85,173

$

88,640

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

(177

)

187

872

(1,348

)

205

10

105

Net amortization of purchase accounting adjustments

(182

)

(271

)

(461

)

(347

)

(340

)

(453

)

(646

)

Tax equivalent adjustment

98

100

101

102

101

198

201

Core net interest income FTE

$

42,515

$

42,413

$

46,597

$

42,834

$

43,344

$

84,928

$

88,300

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

(369

)

(928

)

(3,416

)

(857

)

(315

)

(1,297

)

(995

)

Net interest income FTE excluding episodic items

$

42,146

$

41,485

$

43,181

$

41,977

$

43,029

$

83,631

$

87,305

Total average interest-earning assets (1)

$

8,358,006

$

8,238,395

$

8,080,550

$

8,027,201

$

7,996,067

$

8,298,199

$

8,001,489

Core net interest margin FTE

2.03

%

2.06

%

2.31

%

2.13

%

2.17

%

2.05

%

2.21

%

Net interest margin FTE excluding episodic items

2.02

%

2.01

%

2.14

%

2.09

%

2.15

%

2.02

%

2.18

%

GAAP interest income on total loans, net

$

92,728

$

92,959

$

95,616

$

91,466

$

85,377

$

185,687

$

168,266

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

(137

)

123

978

(1,379

)

157

(14

)

56

Net amortization of purchase accounting adjustments

(198

)

(295

)

(484

)

(358

)

(345

)

(493

)

(661

)

Core interest income on total loans, net

$

92,393

$

92,787

$

96,110

$

89,729

$

85,189

$

185,180

$

167,661

Average total loans, net (1)

$

6,751,715

$

6,807,944

$

6,872,115

$

6,817,642

$

6,834,644

$

6,779,829

$

6,855,454

Core yield on total loans

5.47

%

5.45

%

5.59

%

5.26

%

4.99

%

5.46

%

4.89

%

(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)

June 30,

March 31,

December 31,

September 30,

June 30,

(Dollars in thousands)

2024

2024

2023

2023

2023

Total Equity

$

665,322

$

669,827

$

669,837

$

666,521

$

670,247

Less:

Goodwill

(17,636

)

(17,636

)

(17,636

)

(17,636

)

(17,636

)

Core deposit intangibles

(1,322

)

(1,428

)

(1,537

)

(1,651

)

(1,769

)

Tangible Stockholders' Common Equity

$

646,364

$

650,763

$

650,664

$

647,234

$

650,842

Total Assets

$

9,097,240

$

8,807,325

$

8,537,236

$

8,579,375

$

8,474,852

Less:

Goodwill

(17,636

)

(17,636

)

(17,636

)

(17,636

)

(17,636

)

Core deposit intangibles

(1,322

)

(1,428

)

(1,537

)

(1,651

)

(1,769

)

Tangible Assets

$

9,078,282

$

8,788,261

$

8,518,063

$

8,560,088

$

8,455,447

Tangible Stockholders' Common Equity to Tangible Assets

7.12

%

7.40

%

7.64

%

7.56

%

7.70

%

SOURCE: Flushing Financial Corporation



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