UNIONDALE, N.Y., July 27, 2021 (GLOBE NEWSWIRE) -- Flushing Financial Corporation (the "Company") (NASDAQ-GS: FFIC)

John R. Buran, President and CEO Commentary

"Our successful deposit strategy, the integration of Empire National Bank and the reopening of the New York metro area, resulted in a strong quarter for our Company. Quarterly GAAP EPS of $0.61 resulted in an increase of 2% over the prior quarter. We achieved record core EPS of $0.73, up 103% YoY and 35% QoQ. Importantly, we recognized GAAP ROAA and ROAE of 0.93% and 11.95%, respectively, and record core ROAA and ROAE of 1.11% and 14.27%, respectively."

"We delivered on our strategic objective of optimizing the cost of funds. The cost of funds decreased four basis points from the prior quarter while the average deposit mix continued to improve with both non-interest bearing and core deposits increasing 8% and 5% (not annualized), respectively. The fifth consecutive quarter of record net interest income equaled $61.0 million, despite total assets remaining flat. We also performed well against our strategic objective to obtain appropriate risk adjusted returns as credit quality improved due to non-performing assets decreasing 17% QoQ."

- John R. Buran, President and CEO

Empire Exceeding Expectations. "The results of the acquisition of Empire National Bank have exceeded our expectations. When the acquisition was announced, tangible book value earn back was modeled at 3.4 years. Our tangible book value per share as of June 30, 2021 totaling $20.51 exceeds the tangible book value per share of $20.22 as of September 30, 2020, the reported value when the deal closed and the tangible book value per share of $19.62 as of September 30, 2019, the reported value when the deal was announced. This accomplishment provided investors with an earn back of 9 months as management actions to achieve targeted cost saves and improved NIM were successful despite the COVID-19 pandemic and subsequent delays."

Strong Capital; Increased Share Repurchase Authorization. "The capital ratios increased during the quarter with TCE/TA increasing to 7.80%. The Board of Directors authorized an increase of 1 million shares to our current share repurchase program, which now totals nearly 1.3 million shares and had no expiration. With our history of a low inherent risk business model, low loan to values for our real estate loans along with improved credit metrics, we are confident in our ability to support an increased stock repurchase program."

2Q21 Key Financial Metrics¹


	2Q21		1Q21		4Q20		3Q20		2Q20
GAAP:
EPS	$	0.61	$	0.60	$	0.11	$	0.50	$	0.63
ROAA (%)		0.93		0.93		0.18		0.81		1.01
ROAE (%)		11.95		12.29		2.27		9.94		13.11
NIM FTE (%)		3.14		3.18		3.08		3.00		2.87
Core:
EPS	$	0.73	$	0.54	$	0.58	$	0.56	$	0.36
ROAA (%)		1.11		0.83		0.92		0.91		0.57
ROAE (%)		14.27		10.96		11.67		11.22		7.39
Core NIM FTE (%)		3.14		3.06		3.03		2.98		2.89
Efficiency Ratio (%)		53.4		58.6		57.6		55.4		54.9
Credit Quality:
NPAs/Loans&REO (%)		0.26		0.31		0.31		0.42		0.34
LLRs/Loans (%)		0.64		0.67		0.67		0.65		0.61
LLRs/NPLs (%)		242.55		212.87		214.27		154.66		181.84
NCOs/Avg Loans (%)		0.05		0.17		0.04		0.06		0.07
Balance Sheet:
Avg Loans ($B)	$	6.7	$	6.7	$	6.4	$	5.9	$	5.9
Avg Dep ($B)	$	6.5	$	6.3	$	5.5	$	5.0	$	5.0
Book Value/Share	$	21.16	$	20.65	$	20.11	$	20.78	$	20.27
Tangible BV/Share	$	20.51	$	19.99	$	19.45	$	20.22	$	19.71
TCE/TA (%)		7.80		7.60		7.52		8.10		7.78

¹ See "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."

2Q21 Highlights

Record net interest income up 0.2% QoQ and 25.3% YoY to $61.0 million, while core net interest income was up 4.4% QoQ and 24.6% YoY to $61.1 million due to continued improvement in funding costs, increased prepayment penalty income, and net PPP fees
Net interest margin declined 4 bps QoQ, but rose 27 bps YoY to 3.14%, and core net interest margin was up 8 bps QoQ and 25 bps YoY to 3.14% primarily due to an improvement in funding costs and a rise in prepayment penalty income
Period end loans, excluding PPP, rose 0.4% QoQ and 10.7% YoY; loan closings were $324.4 million in 2Q21, up 0.5% QoQ and 38.8% YoY
Average deposits rose 3.6% QoQ and 29.1% YoY to $6.5 billion, with core deposits 84% of total average deposits
Loan pipeline rose 39.2% YoY to $432.6 million
Benefit for credit losses of $1.6 million due to an improving economic outlook; strong LTVs, and improving credit metrics; net charge-offs were $0.9 million or 5 bps of average loans in 2Q21
NPAs fell 17% QoQ to $17.6 million; criticized and classified assets increased 9.6% to $69.2 million (representing 1.03% of loans)
Tangible Common Equity to Tangible Assets improved to 7.80% from 7.60% in 1Q21

Income Statement Highlights

													Y/Y		Q/Q
($000s, except EPS)	2Q21			1Q21		4Q20			3Q20		2Q20		Change		Change

Net Interest Income	$	61,039		$	60,892	$	55,732		$	49,924	$	48,717	25.3	%	0.2	%
(Benefit) Provision for Credit Losses		(1,598	)		2,820		3,862			2,470		9,619	(116.6	)	(156.7	)
Non-interest Income (Loss)		(3,210	)		6,311		(1,181	)		1,351		13,737	(123.4	)	(150.9	)
Non-interest Expense		34,011			38,159		46,811			29,985		28,755	18.3		(10.9	)
Income Before Income Taxes		25,416			26,224		3,878			18,820		24,080	5.5		(3.1	)
Provision for Income Taxes		6,158			7,185		417			4,489		5,808	6.0		(14.3	)
Net Income	$	19,258		$	19,039	$	3,461		$	14,331	$	18,272	5.4		1.2
Diluted EPS	$	0.61		$	0.60	$	0.11		$	0.50	$	0.63	(3.2	)	1.7
Avg. Diluted Shares (000s)		31,677			31,604		30,603			28,874		28,867	9.7		0.2

Core Net Income¹	$	22,994		$	16,973	$	17,784		$	16,168	$	10,297	123.3		35.5
Core EPS¹	$	0.73		$	0.54	$	0.58		$	0.56	$	0.36	102.8		35.2

¹ See Reconciliation of GAAP Earnings and Core Earnings

Net interest income for 2Q21 was $61.0 million, an increase of 25.3% YoY and 0.2% QoQ.

Net interest margin of 3.14%, increased 27 bps YoY, but declined 4 bps QoQ; there was no effect of the PPP loans on the NIM in 2Q21, but there was a drag on the NIM of 4 bps in 1Q21, 3 bps in 4Q20, 2 bps in 3Q20, and 1 bp in 2Q20; net purchase accounting accretion was $0.6 million in 2Q21, $0.9 million in 1Q21 and not meaningful in 4Q20
Prepayment penalty income from loans and securities, net reversals and recoveries of interest from non-accrual loans, net gains (losses) from fair value adjustments on qualifying hedges, and purchase accounting accretion totaled $1.8 million (10 bps) in 2Q21, $3.3 million (17 bps) in 1Q21, $2.1 million (11 bps) in 4Q20, $1.7 million (11 bps) in 3Q20, and $0.4 million (2 bps) in 2Q20
Excluding these items in the previous bullet, net interest margin improved to 3.04% in 2Q21 from 3.01% in 1Q21, 2.97% in 4Q20, 2.89% in 3Q20, and 2.85% in 2Q20, or an increase of 19 bps YoY and 3 bps QoQ
Net PPP loan fees were $1.2 million (6 bps NIM impact) in 2Q21, an increase from $0.5 million (3 bps) in 1Q21, $0.4 million (2 bps) in 4Q20, $0.3 million (1 bp) in 3Q20, and $0.1 million (1 bp) in 2Q20

The Company recorded a benefit for credit losses of $1.6 million in 2Q21, compared to provisions for credit losses of $2.8 million in 1Q21 and $9.6 million in 2Q20.

2Q21 benefit for credit losses was driven by the improving economic outlook supported by the low LTVs and inherent risk in the real estate portfolio
Net charge-offs were $0.9 million in 2Q21, an improvement from $2.9 million in 1Q21, but roughly stable from the $0.6 million in 4Q20, $0.8 million in 3Q20, and $1.0 million in 2Q20

Non-interest income for 2Q21 was a loss of $3.2 million, compared to income of $6.3 million in 1Q21 and income of $13.7 million in 2Q20.

Non-interest income included net gains (losses) from fair value adjustments of $(6.5) million ($(0.15) per share, net of tax) in 2Q21, $1.0 million ($0.02 per share, net of tax) in 1Q21, $(4.1) million ($(0.11) per share, net of tax) in 4Q20, $(2.2) million ($(0.06) per share, net of tax) in 3Q20, and $10.2 million ($0.27 per share, net of tax) in 2Q20
Absent all above items and other immaterial adjustments, non-interest income was $3.2 million in 2Q21, up 9.8% YoY, but down 31.7% QoQ as customer swap activity normalized after a strong 1Q21

Non-interest expense was $34.0 million in 2Q21, down from $38.2 million in 1Q21 and $46.8 million in 4Q20, but up from $30.0 million in 3Q20, and $28.8 million in 2Q20.

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)
Non-interest expense includes merger charges of $0.4 million in 3Q20 and $0.2 million in 2Q20 ($0.01 per share, net of tax, for each period)
Excluding the above items and other and immaterial adjustments, core operating expenses were $34.4 million in 2Q21, up 20.3% YoY, but down 7.3% QoQ
The efficiency ratio improved to 53.4% in 2Q21, from 58.6% in 1Q21, 57.6% in 4Q20, 55.4% in 3Q20, and 54.9% in 2Q20

The provision for income taxes was $6.2 million in 2Q21, $7.2 million in 1Q21, $0.4 million in 4Q20, $4.5 million in 3Q20, and $5.8 million in 2Q20.

The effective tax rate was 24.2% in 2Q21, 27.4% in 1Q21, 10.8% in 4Q20, 23.9% in 3Q20, and 24.1% in 2Q20
The 2Q21 effective tax rate includes $0.8 million benefit for the state rate change; absent this benefit the effective tax rate would have been 27.2%

Balance Sheet, Credit Quality, and Capital Highlights

											Y/Y		Q/Q
($000s, except per share data)	2Q21		1Q21		4Q20		3Q20		2Q20		Change		Change
Average Loans And Deposits
Loans	$	6,687	$	6,700	$	6,376	$	5,904	$	5,946	12.5	%	(0.2	)%
Deposits		6,511		6,285		5,515		4,999		5,043	29.1		3.6

Credit Quality
Nonperforming Loans	$	17,592	$	21,186	$	21,073	$	24,792	$	20,188	(12.9	)%	(17.0	)%
Nonperforming Assets		17,592		21,221		21,108		24,827		20,431	(13.9	)	(17.1	)
Criticized and Classified Assets		69,161		63,130		71,691		42,181		48,712	42.0		9.6
Allowance for Credit Losses/Loans (%)		0.64		0.67		0.67		0.65		0.61	3	bps	(3	)bps

Capital
Book Value/Share	$	21.16	$	20.65	$	20.11	$	20.78	$	20.27	4.4	%	2.5	%
Tangible Book Value/Share		20.51		19.99		19.45		20.22		19.71	4.1		2.6
Tang. Common Equity/Tang. Assets (%)		7.80		7.60		7.52		8.10		7.78	2	bps	20	bps
Leverage Ratio (%)		8.50		8.44		8.38		9.03		8.64	(14	)	6

Average loans were $6.7 billion, an increase of 12.5% YoY, but a decline of 0.2% QoQ.

Total loan closings rose to $324.4 million in 2Q21, compared to $322.9 million in 1Q21, $316.0 million in 4Q20, $155.6 million in 3Q20, and $233.8 million in 2Q20
The loan pipeline increased to $432.6 million at June 30, 2021, compared to $310.8 million a year ago
SBA Paycheck Protection Program ("PPP") loans were $197.3 million at 2Q21, $251.0 million at 1Q21, $151.9 million at 4Q20, $111.6 million at 3Q20, and $93.2 million at 2Q20; forgiven PPP loans were $69.2 million in 2Q21 compared to $24.1 million in 1Q21; the SBA has up to 90 days to process forgiveness; remaining unamortized net PPP fees were $4.4 million

Average Deposits totaled $6.5 billion, rising 29.1% YoY and 3.6% QoQ.

Average core deposits (non-CD deposits) rose to 84.0% of total average deposits (including escrow deposits) in 2Q21, compared to 76.5% a year ago

Credit Quality; Non-performing loans declined to $17.6 million in 2Q21, compared to $21.2 million in 1Q21 and $20.4 million in 2Q20.

Non-performing assets totaled $17.6 million, down 17.1% QoQ, and 13.9% YoY
Criticized and classified assets totaled $69.2 million at 2Q21, $63.1 million at 1Q21, $71.7 million at 4Q20, $42.2 million at 3Q20, and $48.7 million at 2Q20; the QoQ increase was primarily due to a rise in watch list loans; partially offset by a decline in classified loans
Loans classified as troubled debt restructured (TDR) totaled $15.5 million versus $15.2 million at 1Q21 and $6.0 million a year ago
Active COVID-19 forbearances totaled 69 loans with a principal balance of $245.8 million at June 30, 2021, with $163.3 million making interest payments and only $82.5 million (1.2% of loans) with full payment deferrals
Over 85% of gross loans are collateralized by real estate and these loans have a loan-to-value ratio of 38% as of June 30, 2021
Allowance for credit losses were 0.64% of loans at 2Q21 compared to 0.67% of loans at 1Q21 and 0.61% a year ago

Capital; Book value per common share increased to $21.16 at 2Q21, versus $20.65 at 1Q21 and $20.27 at 2Q20; tangible book value per common share, a non-GAAP measure, rose to $20.51 at 2Q21, compared to $19.99 at 1Q21 and $19.71 in 2Q20.

The Company paid a dividend of $0.21 per share in 2Q21 and did not repurchase any shares in the quarter
The Board of Directors increased the share repurchase authorization by 1 million shares; up to 1,284,806 shares remained subject to repurchase under the authorized stock repurchase program, which has no expiration or maximum dollar limit
Tangible common equity to tangible assets was 7.80% at 2Q21 compared to 7.78% a year ago
The Company and the Bank remain well capitalized under all applicable regulatory requirements
The leverage ratio was 8.50% in 2Q21 versus 8.64% in 2Q20

Conference Call Information And Third 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 tomorrow, Wednesday, July 28, 2021, at 9:30 AM (ET) to discuss the Company's second quarter 2021 results and strategy.
Dial-in for Live Call: 1-877-509-5836
Webcast: https://services.choruscall.com/links/ffic210728.html
Dial-in for Replay: 1-877-344-7529
Replay Access Code: 10151629
The conference call will be simultaneously webcast and archived through July 28, 2022.

Third Quarter 2021 Earnings Release Date:

The Company plans to release Third Quarter 2021 financial results after the market close on October 26, 2021; conference call at 9:30 AM (ET) on October 27, 2021.

A detailed announcement will be issued prior to the third 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®, a New York State-chartered commercial bank insured by the Federal Deposit Insurance Corporation. The Bank serves consumers, businesses, professionals, corporate clients, and public entities by offering a full complement of deposit, loan, equipment finance, and cash management services through its banking offices located in Queens, Brooklyn, Manhattan, and on Long Island. As a leader in real estate lending, the Bank's experienced lending team creates mortgage solutions for real estate owners and property managers both within and outside the New York City metropolitan area. Flushing Bank is an Equal Housing Lender. The Bank also operates an online banking division consisting of iGObanking.com®, which offers competitively priced deposit products to consumers nationwide, and BankPurely®, an eco-friendly, healthier lifestyle community brand.

Additional information on Flushing Bank and Flushing Financial Corporation may be obtained by visiting the Company's website at http://www.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.

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

- 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)	2021			2021			2020			2020			2020			2021			2020
Performance Ratios ⁽¹⁾
Return on average assets		0.93	%		0.93	%		0.18	%		0.81	%		1.01	%		0.93	%		0.47	%
Return on average equity		11.95			12.29			2.27			9.94			13.11			12.11			5.95
Yield on average interest-earning assets ⁽²⁾		3.69			3.77			3.82			3.84			3.81			3.73			3.89
Cost of average interest-bearing liabilities		0.66			0.69			0.86			0.98			1.09			0.67			1.41
Cost of funds		0.57			0.61			0.77			0.89			0.99			0.59			1.30
Net interest rate spread during period⁽²⁾		3.03			3.08			2.96			2.86			2.72			3.06			2.48
Net interest margin ⁽²⁾		3.14			3.18			3.08			3.00			2.87			3.16			2.66
Non-interest expense to average assets		1.65			1.87			2.43			1.69			1.60			1.76			1.71
Efficiency ratio ⁽³⁾		53.38			58.58			57.56			55.37			54.92			55.96			61.16
Average interest-earning assets to average interest-bearing liabilities		1.19	X		1.18	X		1.17	X		1.16	X		1.15	X		1.19	X		1.14	X

Average Balances
Total loans, net	$	6,686,888		$	6,700,476		$	6,375,516		$	5,904,051		$	5,946,412		$	6,693,644		$	5,870,640
Total interest-earning assets		7,790,174			7,667,217			7,243,472			6,675,896			6,809,835			7,729,035			6,764,846
Total assets		8,263,553			8,147,714			7,705,407			7,083,028			7,206,059			8,205,954			7,156,529
Total due to depositors		5,495,936			5,363,647			4,708,760			4,353,560			4,395,228			5,430,158			4,487,011
Total interest-bearing liabilities		6,532,891			6,477,871			6,169,574			5,731,899			5,912,774			6,505,534			5,932,350
Stockholders' equity		644,690			619,647			609,463			576,512			557,414			632,238			567,006

Per Share Data
Book value per common share ⁽⁴⁾	$	21.16		$	20.65		$	20.11		$	20.78		$	20.27		$	21.16		$	20.27
Tangible book value per common share ⁽⁵⁾	$	20.51		$	19.99		$	19.45		$	20.22		$	19.71		$	20.51		$	19.71

Stockholders' Equity
Stockholders' equity	$	655,167		$	639,201		$	618,997		$	586,406		$	571,921		$	655,167		$	571,921
Tangible stockholders' equity		634,959			618,839			598,476			570,571			556,086			634,959			556,086

Consolidated Regulatory Capital Ratios
Tier 1 capital	$	697,591		$	679,343		$	662,987		$	630,380		$	617,620		$	697,591		$	617,620
Common equity Tier 1 capital		649,367			636,071			621,247			593,344			583,238			649,367			583,238
Total risk-based capital		823,494			806,922			794,034			740,499			726,291			823,494			726,291
Risk Weighted Assets		6,344,076			6,281,136			6,287,598			5,381,938			5,406,014			6,344,076			5,406,104

Tier 1 leverage capital (well capitalized = 5%)		8.50	%		8.44	%		8.38	%		9.03	%		8.64	%		8.50	%		8.64	%
Common equity Tier 1 risk-based capital (well capitalized = 6.5%)		10.24			10.13			9.88			11.02			10.79			10.24			10.79
Tier 1 risk-based capital (well capitalized = 8.0%)		11.00			10.82			10.54			11.71			11.42			11.00			11.42
Total risk-based capital (well capitalized = 10.0%)		12.98			12.85			12.63			13.76			13.43			12.98			13.43

Capital Ratios
Average equity to average assets		7.80	%		7.61	%		7.91	%		8.14	%		7.74	%		7.70	%		7.92	%
Equity to total assets		8.03			7.83			7.76			8.30			7.98			8.03			7.98
Tangible common equity to tangible assets ⁽⁶⁾		7.80			7.60			7.52			8.10			7.78			7.80			7.78

Asset Quality
Non-accrual loans ⁽⁷⁾	$	17,391		$	18,604		$	18,325		$	24,792		$	20,038		$	17,391		$	20,038
Non-performing loans		17,592			21,186			21,073			24,792			20,188			17,592			20,188
Non-performing assets		17,592			21,221			21,108			24,827			20,431			17,592			20,431
Net charge-offs		902			2,865			646			837			1,007			3,767			2,156

Asset Quality Ratios
Non-performing loans to gross loans		0.26	%		0.31	%		0.31	%		0.42	%		0.34	%		0.26	%		0.34	%
Non-performing assets to total assets		0.22			0.26			0.26			0.35			0.29			0.22			0.29
Allowance for loan losses to gross loans		0.64			0.67			0.67			0.65			0.61			0.64			0.61
Allowance for loan losses to non-performing assets		242.55			212.52			213.91			154.44			179.68			242.55			179.68
Allowance for loan losses to non-performing loans		242.55			212.87			214.27			154.66			181.84			242.55			181.84
Net charge-offs to average loans		0.05			0.17			0.04			0.06			0.07			0.11			0.07

Full-service customer facilities		25			25			25			20			20			25			20

(See footnotes on next page)

⁽¹⁾ Ratios are presented on an annualized basis, where appropriate.

⁽²⁾ Yields are calculated on the tax equivalent basis using the statutory federal income tax rate of 21% for the periods presented.

⁽³⁾ Efficiency ratio, a non-GAAP measure, was calculated by dividing 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 six months ended
	June 30,			March 31,			December 31,			September 30,			June 30,			June 30,			June 30,
(In thousands, except per share data)	2021			2021			2020			2020			2020			2021			2020
Interest and Dividend Income
Interest and fees on loans	$	67,999		$	69,021		$	66,120		$	60,367		$	60,557		$	137,020		$	121,666
Interest and dividends on securities:
Interest		3,685			3,072			2,813			3,525			4,182			6,757			9,438
Dividends		7			8			8			9			11			15			26
Other interest income		51			36			30			13			22			87			312
Total interest and dividend income		71,742			72,137			68,971			63,914			64,772			143,879			131,442

Interest Expense
Deposits		5,539			6,105			6,470			7,093			9,971			11,644			28,749
Other interest expense		5,164			5,140			6,769			6,897			6,084			10,304			13,150
Total interest expense		10,703			11,245			13,239			13,990			16,055			21,948			41,899

Net Interest Income		61,039			60,892			55,732			49,924			48,717			121,931			89,543
(Benefit) provision for credit losses		(1,598	)		2,820			3,862			2,470			9,619			1,222			16,797
Net Interest Income After (Benefit) Provision for Credit Losses		62,637			58,072			51,870			47,454			39,098			120,709			72,746

Non-interest Income (loss)
Banking services fee income		1,233			2,725			1,442			1,316			944			3,958			1,742
Net gain (loss) on sale of securities		123			—			(610	)		—			(54	)		123			(91	)
Net gain on sale of loans		127			31			6			—			—			158			42
Net gain on disposition of assets		—			621			—			—			—			621			—
Net gain (loss) from fair value adjustments		(6,548	)		982			(4,129	)		(2,225	)		10,205			(5,566	)		4,212
Federal Home Loan Bank of New York stock dividends		500			689			734			874			881			1,189			1,845
Life insurance proceeds		—			—			—			—			659			—			659
Bank owned life insurance		1,009			997			1,016			923			932			2,006			1,875
Other income		346			266			360			463			170			612			589
Total non-interest income (loss)		(3,210	)		6,311			(1,181	)		1,351			13,737			3,101			10,873

Non-interest Expense
Salaries and employee benefits		19,879			22,664			22,089			17,335			16,184			42,543			34,804
Occupancy and equipment		3,522			3,367			3,446			3,021			2,827			6,889			5,667
Professional services		1,988			2,400			2,463			2,064			1,985			4,388			4,847
FDIC deposit insurance		729			1,213			562			727			737			1,942			1,387
Data processing		1,419			2,109			3,411			1,668			1,813			3,528			3,507
Depreciation and amortization		1,638			1,639			1,579			1,542			1,555			3,277			3,091
Other real estate owned/foreclosure (recoveries) expense		22			(10	)		95			240			45			12			(119	)
Prepayment penalty on borrowings		—			—			7,834			—			—			—			—
Other operating expenses		4,814			4,777			5,332			3,388			3,609			9,591			7,951
Total non-interest expense		34,011			38,159			46,811			29,985			28,755			72,170			61,135

Income Before Income Taxes		25,416			26,224			3,878			18,820			24,080			51,640			22,484

Provision (benefit) for Income Taxes
Federal		4,857			5,071			533			3,359			4,307			9,928			5,296
State and local		1,301			2,114			(116	)		1,130			1,501			3,415			306
Total taxes		6,158			7,185			417			4,489			5,808			13,343			5,602

Net Income	$	19,258		$	19,039		$	3,461		$	14,331		$	18,272		$	38,297		$	16,882

Basic earnings per common share	$	0.61		$	0.60		$	0.11		$	0.50		$	0.63		$	1.21		$	0.58
Diluted earnings per common share	$	0.61		$	0.60		$	0.11		$	0.50		$	0.63		$	1.21		$	0.58
Dividends per common share	$	0.21		$	0.21		$	0.21		$	0.21		$	0.21		$	0.42		$	0.42

Basic average shares		31,677			31,604			30,603			28,874			28,867			31,641			28,860
Diluted average shares		31,677			31,604			30,603			28,874			28,867			31,641			28,860

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(Unaudited)


	June 30,			March 31,		December 31,		September 30,		June 30,
(Dollars in thousands)	2021			2021		2020		2020		2020
ASSETS
Cash and due from banks	$	145,971		$	174,420	$	157,388	$	75,560	$	84,754
Securities held-to-maturity:
Mortgage-backed securities		7,904			7,909		7,914		7,919		7,924
Other securities		49,986			49,912		49,918		50,252		50,078
Securities available for sale:
Mortgage-backed securities		596,661			518,781		404,460		386,235		442,507
Other securities		224,784			242,440		243,514		234,721		232,803
Loans		6,718,806			6,745,316		6,704,674		5,941,398		5,983,275
Allowance for loan losses		(42,670	)