Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil Hydroworld Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Flushing Financial Corporation Reports 2Q23 GAAP EPS of $0.29 and Core EPS of $0.26; Delivered Sequential Improvements in Key Metrics; Progressing on Action Plan to Continue Enhancing Business Model Resilience and Drive Profitability By: Flushing Financial Corporation via GlobeNewswire July 25, 2023 at 17:30 PM EDT John R. Buran, President and CEO Commentary “We delivered sequential improvements in key metrics in the second quarter amid continuing uncertainty in the operating environment. We experienced the lowest level of NIM compression of the past four quarters and achieved QoQ improvements in the loan pipeline and asset quality. Further, we increased deposit balances compared to past seasonal trends. As we continue to execute on the action plan announced last quarter, we are pleased with the progress we are making to enhance the resilience of our business model and strengthen performance: 1) continued to move more towards interest rate risk neutral with the addition of over $400 million of interest rate hedges and $250 million in forward hedges becoming effective; 2) the loan pipeline and yield increased 56% and 20 bps, respectively, QoQ; 3) checking account openings increased 10 % YoY; 4) reviewed new and existing relationships resulting in improved credit metrics and normalized net charge-offs; Manhattan office buildings are approximately 0.6% of net loans; 5) available liquidity and capital ratios remained stable; and 6) controlled noninterest expenses, which decreased 1% YoY. In addition, we repurchased approximately 530,000 shares in 2Q23 without a material effect on the tangible common equity ratio. Taken together, these actions support continued improvement of our profitability and liquidity while preparing us for a range of possible rate environments. While we remain conservative regarding our operating environment, our progress gives us cautious optimism for the remainder of the year. Looking ahead, we will continue to focus on positioning the Company for success with an emphasis on reducing interest rate risk, improving credit quality, liquidity, and the customer experience.”- John R. Buran, President and CEO UNIONDALE, N.Y., July 25, 2023 (GLOBE NEWSWIRE) -- EPS Improves QoQ; NIM Compression Slows. The Company reported second quarter 2023 GAAP EPS of $0.29, down 64% YoY, but up 71% QoQ. Core EPS totaled $0.26, a decrease of 63% YoY, but an increase of 160% QoQ. The improvement QoQ was primarily driven by the return to normalized credit costs, the absence of seasonal expenses, and the benefit derived from the interest rate hedge strategy. The interest rate hedges slowed the NIM compression, which was only 9 bps QoQ to 2.18%. The interest rate hedges, and other balance sheet actions, have reduced the liability sensitive position significantly over the past year and are beneficial in a “higher-for-longer” rate environment. Credit Quality Improved; Strong Capital. QoQ, nonperforming assets and criticized and classified assets decreased 6% and 12%, respectively, while net charge offs were 9 basis points. Capital continues to be sound with a TCE1 of 7.71%, stable QoQ. Key Financial Metrics2 2Q23 1Q23 4Q22 3Q22 2Q22 1H23 1H22GAAP: EPS $0.29 $0.17 $0.34 $0.76 $0.81 $0.46 $1.39ROAA (%) 0.41 0.24 0.48 1.11 1.22 0.33 1.06ROAE (%) 5.12 3.02 6.06 13.91 15.00 4.06 12.91NIM FTE3 (%) 2.18 2.27 2.70 3.07 3.35 2.22 3.36Core: EPS $0.26 $0.10 $0.57 $0.62 $0.70 $0.36 $1.30ROAA (%) 0.37 0.14 0.82 0.90 1.05 0.26 1.00ROAE (%) 4.66 1.76 10.29 11.24 12.90 3.20 12.08Core NIM FTE (%) 2.17 2.25 2.63 3.03 3.33 2.21 3.32Credit Quality: NPAs/Loans & OREO (%) 0.58 0.61 0.77 0.72 0.72 0.58 0.72ACLs/Loans (%) 0.57 0.56 0.58 0.59 0.58 0.57 0.58ACLs/NPLs (%) 207.08 182.89 124.89 142.29 141.06 207.08 141.06NCOs/Avg Loans (%) 0.09 0.54 0.05 0.02 (0.03) 0.32 0.01Balance Sheet: Avg Loans ($B) $6.8 $6.9 $6.9 $6.9 $6.6 $6.9 $6.6Avg Dep ($B) $6.9 $6.8 $6.7 $6.3 $6.4 $6.9 $6.4Book Value/Share $23.18 $22.84 $22.97 $22.47 $22.38 $23.18 $22.38Tangible BV/Share $22.51 $22.18 $22.31 $21.81 $21.71 $22.51 $21.71TCE/TA (%) 7.71 7.73 7.82 7.62 7.82 7.71 7.82 1 Tangible Common Equity (“TCE”)/Total Assets (“TA”) 2 See “Reconciliation of GAAP Earnings and Core Earnings”, “Reconciliation of GAAP Revenue and Pre-Provision Pre-Tax Net Revenue”, and “Reconciliation of GAAP Net Interest Margin to Core Net Interest Income and Net Interest Margin.” 3 Net Interest Margin (“NIM”) Fully Taxable Equivalent (“FTE”) 2Q23 Highlights Net interest margin FTE decreased 117 bps YoY and 9 bps QoQ to 2.18%; Core net interest margin FTE decreased 116 bps YoY and 8 bps QoQ to 2.17%; Both GAAP and Core NIMs benefited from the $450 million of new hedges added in late 1Q23, an additional $400 million in 2Q23, and $250 million of forward hedges that became effective in 2Q23; Overall liability sensitivity has been reduced by 64% over the past year.Average total deposits increased 7.1% YoY and 1.3% QoQ to $6.9 billion; average CDs totaled $2.0 billion, up 149.5% YoY and 21.9% QoQ; growth in CDs generally lengthens the duration of customer deposits and helps reduce rate sensitivityPeriod end net loans increased 1.1% YoY, but decreased 1.0% QoQ; loan closings were $158.8 million down 68.5% YoY and 8.5% QoQ; the yield on closings increased 322 bps YoY and 13 bps QoQ to 7.14%Loan pipeline decreased 28.7% YoY, but increased 56.1% QoQ to $415.5 million; nearly 35% of the loan pipeline consists of back-to-back loan swapsNPAs declined to $39.6 million from $48.9 million a year ago and $42.2 million in the prior quarterProvision for credit losses was $1.4 million in 2Q23 compared to $1.6 million in 2Q22 and $7.5 million in 1Q23; net charge-offs were $1.6 million in 2Q23 compared to net recoveries of $0.5 million in 2Q22 and net charge-offs of 9.2 million in 1Q23Tangible Common Equity to Tangible Assets was stable at 7.71% at 2Q23 compared to 7.73% at 1Q23Repurchased 528,815 shares at an average price of $12.94 or at a 42.5% discount to June 30, 2023 tangible book value of $22.51 Areas of FocusInterestRateRisk Continued to take significant actions to position the Company’s balance sheet more towards interest rate risk neutralDuring 2Q23, the Company added $400 million of interest rate hedges and an additional $250 million of forward hedges that became effectiveRate sensitivity to a +100 bps shock has been reduced by 64% over the past year. Credit Quality Manhattan office buildings are approximately 0.6% of net loansOver 88% of the loan portfolio is collateralized by real estate with an average loan to value less than 36%Debt service coverage ratio of 1.8x for multifamily and investor commercial real estate loans that reprice through 2025 Liquidity The Company maintains ample liquidity with $3.7 billion of undrawn lines and resourcesTotal deposits increased 4.9% YoY and 2Q23 balances were higher than normal seasonal declinesChecking account openings were up 9.6% YoY in 2Q23 Customer Experience Additional opportunities emerging as competitors leave the market Approximately 33% of our branches are in Asian communitiesBensonhurst, our 27th branch, is expected to open in the second half of 2023, and will enhance our Asian community branch presenceDigital banking usage continues to increase with double digit growth in monthly mobile deposit active users and digital banking enrollment in June 2023 versus a year ago Income Statement Highlights YoY QoQ($000s, except EPS) 2Q23 1Q23 4Q22 3Q22 2Q22 Change Change Net Interest Income $43,378 $45,262 $54,201 $61,206 $64,730 (33.0)% (4.2)%Provision (Benefit) for Credit Losses 1,416 7,508 (12) 2,145 1,590 (10.9) NM Noninterest Income (Loss) 5,122 6,908 (7,652) 8,995 7,353 (30.3) (25.9) Noninterest Expense 35,279 37,703 33,742 35,634 35,522 (0.7) (6.4) Income Before Income Taxes 11,805 6,959 12,819 32,422 34,971 (66.2) 69.6 Provision for Income Taxes 3,177 1,801 2,570 8,980 9,936 (68.0) 76.4 Net Income $8,628 $5,158 $10,249 $23,442 $25,035 (65.5) 67.3 Diluted EPS $0.29 $0.17 $0.34 $0.76 $0.81 (64.2) 70.6 Avg. Diluted Shares (000s) 30,090 30,265 30,420 30,695 30,937 (2.7) (0.6) Core Net Income1 $7,854 $3,003 $17,399 $18,953 $21,518 (63.5) 161.5 Core EPS1 $0.26 $0.10 $0.57 $0.62 $0.70 (62.9) 160.0 1 See Reconciliation of GAAP Earnings and Core Earnings Net interest income decreased YoY and QoQ. Net interest margin, FTE of 2.18% decreased 117 bps YoY and 9 bps QoQPrepayment penalty income from loans and securities, 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 $0.5 million (3 bps to the NIM) in 2Q23 compared to $1.1 million (6 bps) in 1Q23, $2.4 million (12 bps) in 4Q22, $2.2 million (11 bps) in 3Q22, and $2.6 million (13 bps) in 2Q22; Prepayment penalty income declined primarily due to the higher rate environmentExcluding the items in the previous bullet, net interest margin was 2.15% in 2Q23, 2.21% in 1Q23, 2.58% in 4Q22, 2.96% in 3Q22, and 3.22% in 2Q22Quarterly NIM compression of 9 bps was the slowest decline in the past four quarters primarily due to the balance sheet actions taken in 1Q23 and 2Q23 that reduced liability sensitivity The provision for credit losses declined YoY and QoQ. Net charge-offs (recoveries) were $1.6 million in 2Q23 (9 bps of average loans), $9.2 million in 1Q23 (54 bps of average loans), $0.8 million in 4Q22 (5 bps of average loans), $0.3 million in 3Q22 (2 bps of average loans), and $(0.5) million in 2Q22 ((3) bps of average loans)1Q23 net charge-offs were primarily related to a commercial business relationship that was placed on nonaccrual in 2Q22 Noninterest income (loss) declined YoY and QoQ. Noninterest income included net gains (losses) from fair value adjustments of $0.3 million in 2Q23 ($0.01 per share, net of tax), $2.6 million in 1Q23 ($0.06 per share, net of tax), $(0.6) million in 4Q22 ($(0.02) per share, net of tax), $5.6 million in 3Q22 ($0.13 per share, net of tax), and $2.5 million in 2Q22 ($0.06 per share, net of tax)Loss on the sale of securities was $10.9 million ($0.27 per share, net of tax) in 4Q22 as the Company sold $84.2 million of mortgage-based securities with an approximate yield of 1.17%; proceeds were primarily reinvested in 1Q23 into floating rate securities that had a yield at that time that approximated 6.40%Life insurance proceeds were $0.6 million ($0.02 per share) in 2Q23, $0.3 million ($0.01 per share) in 4Q22 and $1.5 million ($0.05 per share) in 2Q22Absent all above items and other immaterial adjustments, core noninterest income was $4.3 million in 2Q23, up 29.9% YoY but down 0.5% QoQ Noninterest expense decreased YoY and QoQ. Given the challenging rate environment, management continues to actively review all noninterest expensesOther operating expenses include $0.6 million reduction in reserves for unfunded commitments in 3Q22Seasonal compensation expense was $4.1 million in 1Q23Excluding the effects of other immaterial adjustments, core operating expenses were $35.2 million in 2Q23, down 0.6% YoY, and 6.4% QoQGAAP noninterest expense to average assets was 1.67% in 2Q23, 1.78% in 1Q23, 1.58% in 4Q22, 1.69% in 3Q22, and 1.73% in 2Q22 Provision for income taxes declined YoY and increased QoQ. The effective tax rate was 26.9% in 2Q23, 25.9% in 1Q23, 20.0% in 4Q22, 27.7% in 3Q22, and 28.4% in 2Q22The 4Q22 effective tax rate declined due to preferential tax items having a larger impact due to lower levels of pre-tax incomeThe 2Q22 effective tax rate includes a loss of certain state and city tax deductions and a resolution of certain examinations by taxing authorities Balance Sheet, Credit Quality, and Capital Highlights YoY QoQ 2Q23 1Q23 4Q22 3Q22 2Q22 Change ChangeAverages ($MM) Loans $6,830 $6,871 $6,881 $6,861 $6,640 2.9 % (0.6)%Total Deposits 6,900 6,810 6,678 6,277 6,441 7.1 1.3 Credit Quality ($000s) Nonperforming Loans $18,637 $21,176 $32,382 $29,003 $27,948 (33.3)% (12.0)%Nonperforming Assets 39,618 42,157 53,363 49,984 48,929 (19.0) (6.0) Criticized and Classified Loans 48,675 58,130 68,093 61,684 57,145 (14.8) (16.3) Criticized and Classified Assets 69,656 79,111 89,073 82,665 78,125 (10.8) (12.0) Allowance for Credit Losses/Loans (%) 0.57 0.56 0.58 0.59 0.58 (1)bp 1 bps Capital Book Value/Share $23.18 $22.84 $22.97 $22.47 $22.38 3.6 % 1.5 %Tangible Book Value/Share 22.51 22.18 22.31 21.81 21.71 3.7 1.5 Tang. Common Equity/Tang. Assets (%) 7.71 7.73 7.82 7.62 7.82 (11)bps (2)bpsLeverage Ratio (%) 8.56 8.58 8.61 8.74 8.91 (35) (2) Average loans increased YoY but declined QoQ. Maintain the credit strategy of loans secured by real estate with a greater emphasis on back-to-back swap originationsPeriod end net loans totaled $6.8 billion, up 1.1% YoY, but down 1.0% QoQTotal loan closings were $158.8 million in 2Q23, $173.5 million in 1Q23, $225.2 million in 4Q22, $463.7 million in 3Q22, and $503.8 million in 2Q22; the loan pipeline was $415.5 million at June 30, 2023, down 28.7% YoY, but up 56.1% QoQ; closings were impacted by customers adjusting to the higher rate environmentThe diversified loan portfolio is over 88% collateralized by real estate with an average loan-to-value ratio of <36%Manhattan office buildings are approximately 0.6% of net loans Average total deposits increased YoY and QoQ. Average CDs totaled $2.0 billion, up 149.5% YoY and 21.9% QoQ; CDs generally lengthen the duration of customer deposits and reduce sensitivity to rising ratesAverage noninterest bearing deposits decreased 18.7% YoY and 5.2% QoQ in 2Q23 and comprised 12.3% of average total deposits in 2Q23 compared to 16.2% a year ago Credit Quality: Nonperforming loans declined YoY and QoQ. Criticized and classified loans were 71 bps of gross loans at 2Q23 compared to 84 bps at 1Q23, 98 bps at 4Q22, 89 bps at 3Q22, and 85 bps at 2Q22Allowance for credit losses were 207.1% of nonperforming loans at 2Q23 compared to 182.9% at 1Q23, and 141.1% at 2Q22 Capital: Book value per common share and tangible book value per common share, a non-GAAP measure, both increased YoY and QoQ. The Company paid a dividend of $0.22 per share in 2Q23 and has ample available liquidity to meet its obligationsThe Company repurchased 528,815 shares in 2Q23 at an average price of $12.94, representing a 42.5% discount to tangible book value, with 906,131 shares remaining subject to repurchase under the authorized stock repurchase program, which has no expiration or maximum dollar limitTangible common equity to tangible assets was 7.71% at 2Q23 compared to 7.73% at 1Q23 and 7.82% at 2Q22The Company and the Bank remain well capitalized under all applicable regulatory requirements 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 and Treasurer, will host a conference call on Wednesday, July 26, 2023, at 9:30 AM (ET) to discuss the Company’s first quarter results and strategy.Dial-in for Live Call: 1-877-509-5836; Canada 855-669-9657Webcast: https://event.choruscall.com/mediaframe/webcast.html?webcastid=Nb7q4ytYDial-in for Replay: 1-877-344-7529; Canada 855-669-9658Replay Access Code: 7017400The conference call will be simultaneously webcast and archived Third Quarter 2023 Earnings Release Date: The Company plans to release Third Quarter 2023 financial results after the market close on October 31, 2023; followed by a conference call at 9:30 AM (ET) on November 1, 2023. 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®, 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, 2022 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 SUBSIDIARIESFINANCIAL HIGHLIGHTS(Unaudited) At or for the three months ended At or for the six months ended (Dollars in thousands, except per share data) June 30, March 31, December 31, September 30, June 30, June 30, June 30, 2023 2023 2022 2022 2022 2023 2022 Performance Ratios (1) Return on average assets 0.41% 0.24% 0.48% 1.11% 1.22 % 0.33% 1.06%Return on average equity 5.12 3.02 6.06 13.91 15.00 4.06 12.91 Yield on average interest-earning assets (2) 4.84 4.61 4.44 4.10 3.85 4.73 3.81 Cost of average interest-bearing liabilities 3.15 2.80 2.11 1.25 0.60 2.97 0.55 Cost of funds 2.80 2.47 1.84 1.08 0.52 2.63 0.48 Net interest rate spread during period (2) 1.69 1.81 2.33 2.85 3.25 1.76 3.26 Net interest margin (2) 2.18 2.27 2.70 3.07 3.35 2.22 3.36 Noninterest expense to average assets 1.67 1.78 1.58 1.69 1.73 1.72 1.83 Efficiency ratio (3) 74.02 76.48 59.55 55.68 52.27 75.27 55.52 Average interest-earning assets to average interest-bearing liabilities 1.18X 1.19X 1.21X 1.22X 1.22 X 1.19X 1.22X Average Balances Total loans, net $6,829,648 $6,871,192 $6,881,245 $6,861,463 $6,640,331 $6,850,305 $6,609,676 Total interest-earning assets 7,986,020 7,996,677 8,045,691 7,979,070 7,740,683 7,991,320 7,655,999 Total assets 8,461,827 8,468,311 8,518,019 8,442,657 8,211,763 8,465,051 8,131,065 Total deposits 6,899,617 6,810,485 6,678,383 6,276,613 6,440,904 6,855,299 6,425,569 Total interest-bearing liabilities 6,756,859 6,703,558 6,662,209 6,553,087 6,337,374 6,730,357 6,279,265 Stockholders' equity 673,943 683,071 676,165 674,282 667,456 678,481 670,219 Per Share Data Book value per common share (4) $23.18 $22.84 $22.97 $22.47 $22.38 $23.18 $22.38 Tangible book value per common share (5) $22.51 $22.18 $22.31 $21.81 $21.71 $22.51 $21.71 Stockholders' Equity Stockholders' equity $671,303 $673,459 $677,157 $670,719 $670,812 $671,303 $670,812 Tangible stockholders' equity 651,898 653,932 657,504 650,936 650,894 651,898 650,894 Consolidated Regulatory Capital Ratios Tier 1 capital $735,810 $737,138 $746,880 $749,526 $739,776 $735,810 $739,776 Common equity Tier 1 capital 689,876 690,846 698,258 701,532 686,258 689,876 686,258 Total risk-based capital 963,840 965,384 975,709 979,021 903,047 963,840 903,047 Risk Weighted Assets 6,649,252 6,659,532 6,640,542 6,689,284 6,522,710 6,649,252 6,522,710 Tier 1 leverage capital (well capitalized = 5%) 8.56% 8.58% 8.61% 8.74% 8.91 % 8.56% 8.91% Common equity Tier 1 risk-based capital (well capitalized = 6.5%) 10.38 10.37 10.52 10.49 10.52 10.38 10.52 Tier 1 risk-based capital (well capitalized = 8.0%) 11.07 11.07 11.25 11.20 11.34 11.07 11.34 Total risk-based capital (well capitalized = 10.0%) 14.50 14.50 14.69 14.64 13.84 14.50 13.84 Capital Ratios Average equity to average assets 7.96% 8.07% 7.94% 7.99% 8.13 % 8.02% 8.24% Equity to total assets 7.92 7.94 8.04 7.84 8.04 7.92 8.04 Tangible common equity to tangible assets (6) 7.71 7.73 7.82 7.62 7.82 7.71 7.82 Asset Quality Nonaccrual loans (7) $18,637 $21,176 $29,782 $27,003 $27,848 $18,637 $27,848 Nonperforming loans 18,637 21,176 32,382 29,003 27,948 18,637 27,948 Nonperforming assets 39,618 42,157 53,363 49,984 48,929 39,618 48,929 Net charge-offs (recoveries) 1,560 9,234 811 290 (501) 10,794 434 Asset Quality Ratios Nonperforming loans to gross loans 0.27% 0.31% 0.47% 0.42% 0.41 % 0.27% 0.41% Nonperforming assets to total assets 0.47 0.50 0.63 0.58 0.59 0.47 0.59 Allowance for credit losses to gross loans 0.57 0.56 0.58 0.59 0.58 0.57 0.58 Allowance for credit losses to nonperforming assets 97.41 91.87 75.79 82.56 80.57 97.41 80.57 Allowance for credit losses to nonperforming loans 207.08 182.89 124.89 142.29 141.06 207.08 141.06 Net charge-offs (recoveries) to average loans 0.09 0.54 0.05 0.02 (0.03) 0.32 0.01 Full-service customer facilities 26 26 25 25 25 26 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 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”.(7) Excludes performing nonaccrual TDR loans in periods prior to 1Q23. FLUSHING FINANCIAL CORPORATION and SUBSIDIARIESCONSOLIDATED STATEMENTS OF INCOME (Unaudited) For the three months ended For the six months ended (In thousands, except per share data)June 30, March 31, December 31, September 30, June 30, June 30, June 30,2023 2023 2022 2022 2022 2023 2022Interest and Dividend Income Interest and fees on loans$85,377 $82,889 $81,033 $75,546 $69,192 $168,266 $136,708Interest and dividends on securities: Interest 9,172 7,240 6,511 5,676 4,929 16,412 8,674Dividends 30 29 24 17 11 59 19Other interest income 1,982 1,959 1,702 506 159 3,941 210Total interest and dividend income 96,561 92,117 89,270 81,745 74,291 188,678 145,611 Interest Expense Deposits 46,249 39,056 27,226 11,965 4,686 85,305 8,094Other interest expense 6,934 7,799 7,843 8,574 4,875 14,733 9,308Total interest expense 53,183 46,855 35,069 20,539 9,561 100,038 17,402 Net Interest Income 43,378 45,262 54,201 61,206 64,730 88,640 128,209Provision (benefit) for credit losses 1,416 7,508 (12) 2,145 1,590 8,924 2,948Net Interest Income After Provision (Benefit) for Credit Losses 41,962 37,754 54,213 59,061 63,140 79,716 125,261 Noninterest Income (Loss) Banking services fee income 1,780 1,411 1,231 1,351 1,166 3,191 2,540Net loss on sale of securities — — (10,948) — — — —Net gain on sale of loans 54 54 46 — 73 108 73Net gain on disposition of assets — — 104 — — — —Net gain (loss) from fair value adjustments 294 2,619 (622) 5,626 2,533 2,913 724Federal Home Loan Bank of New York stock dividends 534 697 658 538 407 1,231 804Life insurance proceeds 561 — 286 — 1,536 561 1,536Bank owned life insurance 1,134 1,109 1,126 1,132 1,115 2,243 2,229Other income 765 1,018 467 348 523 1,783 760Total noninterest income (loss) 5,122 6,908 (7,652) 8,995 7,353 12,030 8,666 Noninterest Expense Salaries and employee benefits 19,493 20,887 18,178 21,438 21,109 40,380 44,758Occupancy and equipment 3,534 3,793 3,701 3,541 3,760 7,327 7,364Professional services 2,657 2,483 2,130 2,570 2,285 5,140 4,507FDIC deposit insurance 943 977 485 738 615 1,920 1,035Data processing 1,473 1,435 1,421 1,367 1,383 2,908 2,807Depreciation and amortization 1,482 1,510 1,535 1,488 1,447 2,992 2,907Other real estate owned/foreclosure expense 150 165 35 143 32 315 116Other operating expenses 5,547 6,453 6,257 4,349 4,891 12,000 10,822Total noninterest expense 35,279 37,703 33,742 35,634 35,522 72,982 74,316 Income Before Provision for Income Taxes 11,805 6,959 12,819 32,422 34,971 18,764 59,611 Provision for Income Taxes 3,177 1,801 2,570 8,980 9,936 4,978 16,357 Net Income$8,628 $5,158 $10,249 $23,442 $25,035 $13,786 $43,254 Basic earnings per common share$0.29 $0.17 $0.34 $0.76 $0.81 $0.46 $1.39Diluted earnings per common share$0.29 $0.17 $0.34 $0.76 $0.81 $0.46 $1.39Dividends per common share$0.22 $0.22 $0.22 $0.22 $0.22 $0.44 $0.44 Basic average shares 30,090 30,265 30,420 30,695 30,937 30,177 31,095Diluted average shares 30,090 30,265 30,420 30,695 30,937 30,177 31,095 FLUSHING FINANCIAL CORPORATION and SUBSIDIARIESCONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Unaudited) June 30, March 31, December 31, September 30, June 30,(Dollars in thousands) 2023 2023 2022 2022 2022 ASSETS Cash and due from banks $160,053 $176,747 $151,754 $164,693 $137,026 Securities held-to-maturity: Mortgage-backed securities 7,865 7,870 7,875 7,880 7,885 Other securities, net 65,469 65,653 65,836 66,032 66,230 Securities available for sale: Mortgage-backed securities 365,911 380,110 384,283 468,366 510,934 Other securities 503,645 431,818 351,074 351,495 346,720 Loans 6,832,425 6,904,176 6,934,769 6,956,674 6,760,393 Allowance for credit losses (38,593) (38,729) (40,442) (41,268) (39,424)Net loans 6,793,832 6,865,447 6,894,327 6,915,406 6,720,969 Interest and dividends receivable 52,911 46,836 45,048 42,571 38,811 Bank premises and equipment, net 22,182 21,567 21,750 22,376 22,285 Federal Home Loan Bank of New York stock 36,168 38,779 45,842 62,489 50,017 Bank owned life insurance 213,164 214,240 213,131 212,353 211,220 Goodwill 17,636 17,636 17,636 17,636 17,636 Core deposit intangibles 1,769 1,891 2,017 2,147 2,282 Right of use asset 41,526 42,268 43,289 44,885 46,687 Other assets 191,752 168,259 179,084 179,090 160,885 Total assets $8,473,883 $8,479,121 $8,422,946 $8,557,419 $8,339,587 LIABILITIES Total deposits $6,723,690 $6,734,090 $6,485,342 $6,125,305 $6,407,577 Borrowed funds 857,400 887,509 1,052,973 1,572,830 1,089,621 Operating lease liability 44,402 45,353 46,125 48,330 50,346 Other liabilities 177,088 138,710 161,349 140,235 121,231 Total liabilities 7,802,580 7,805,662 7,745,789 7,886,700 7,668,775 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 263,744 262,876 264,332 263,755 262,860 Treasury stock (104,574) (97,760) (98,535) (90,977) (88,342)Retained earnings 547,811 545,786 547,507 543,894 527,217 Accumulated other comprehensive loss, net of taxes (36,019) (37,784) (36,488) (46,294) (31,264)Total stockholders' equity 671,303 673,459 677,157 670,719 670,812 Total liabilities and stockholders' equity $8,473,883 $8,479,121 $8,422,946 $8,557,419 $8,339,587 (In thousands) Issued shares 34,088 34,088 34,088 34,088 34,088 Outstanding shares 28,961 29,488 29,476 29,851 29,980 Treasury shares 5,127 4,600 4,612 4,237 4,108 FLUSHING FINANCIAL CORPORATION and SUBSIDIARIESAVERAGE 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) 2023 2023 2022 2022 2022 2023 2022Interest-earning Assets: Mortgage loans, net $5,308,567 $5,333,274 $5,338,612 $5,340,694 $5,178,029 $5,320,852 $5,165,121Other loans, net 1,521,081 1,537,918 1,542,633 1,520,769 1,462,302 1,529,453 1,444,555Total loans, net 6,829,648 6,871,192 6,881,245 6,861,463 6,640,331 6,850,305 6,609,676Taxable securities: Mortgage-backed securities 448,620 457,911 549,204 568,854 594,923 453,240 587,836Other securities 471,600 411,723 371,897 362,629 333,158 441,827 280,245Total taxable securities 920,220 869,634 921,101 931,483 928,081 895,067 868,081Tax-exempt securities: Other securities 66,632 66,828 67,022 67,211 67,315 66,730 62,490Total tax-exempt securities 66,632 66,828 67,022 67,211 67,315 66,730 62,490Interest-earning deposits and federal funds sold 169,520 189,023 176,323 118,913 104,956 179,218 115,752Total interest-earning assets 7,986,020 7,996,677 8,045,691 7,979,070 7,740,683 7,991,320 7,655,999Other assets 475,807 471,634 472,328 463,587 471,080 473,731 475,066Total assets $8,461,827 $8,468,311 $8,518,019 $8,442,657 $8,211,763 $8,465,051 $8,131,065 Interest-bearing Liabilities: Deposits: Savings accounts $124,041 $134,945 $146,598 $154,545 $156,785 $129,463 $156,689NOW accounts 2,026,950 1,970,555 1,972,134 1,808,608 2,089,851 1,998,909 2,063,529Money market accounts 1,754,574 2,058,523 2,146,649 2,136,829 2,231,743 1,905,709 2,242,626Certificate of deposit accounts 2,046,960 1,679,517 1,350,683 1,057,733 820,476 1,864,254 854,970Total due to depositors 5,952,525 5,843,540 5,616,064 5,157,715 5,298,855 5,898,335 5,317,814Mortgagors' escrow accounts 97,410 70,483 82,483 68,602 97,496 84,021 84,574Total interest-bearing deposits 6,049,935 5,914,023 5,698,547 5,226,317 5,396,351 5,982,356 5,402,388Borrowings 706,924 789,535 963,662 1,326,770 941,023 748,001 876,877Total interest-bearing liabilities 6,756,859 6,703,558 6,662,209 6,553,087 6,337,374 6,730,357 6,279,265Noninterest-bearing demand deposits 849,682 896,462 979,836 1,050,296 1,044,553 872,943 1,023,181Other liabilities 181,343 185,220 199,809 164,992 162,380 183,270 158,400Total liabilities 7,787,884 7,785,240 7,841,854 7,768,375 7,544,307 7,786,570 7,460,846Equity 673,943 683,071 676,165 674,282 667,456 678,481 670,219Total liabilities and equity $8,461,827 $8,468,311 $8,518,019 $8,442,657 $8,211,763 $8,465,051 $8,131,065 Net interest-earning assets $1,229,161 $1,293,119 $1,383,482 $1,425,983 $1,403,309 $1,260,963 $1,376,734 FLUSHING FINANCIAL CORPORATION and SUBSIDIARIESNET 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) 2023 2023 2022 2022 2022 2023 2022Interest Income: Mortgage loans, net $63,688 $62,054 $60,946 $58,374 $54,775 $125,742 $108,745 Other loans, net 21,689 20,835 20,087 17,172 14,417 42,524 27,963 Total loans, net 85,377 82,889 81,033 75,546 69,192 168,266 136,708 Taxable securities: Mortgage-backed securities 2,976 2,281 2,425 2,466 2,356 5,257 4,523 Other securities 5,847 4,611 3,723 2,839 2,090 10,458 3,209 Total taxable securities 8,823 6,892 6,148 5,305 4,446 15,715 7,732 Tax-exempt securities: Other securities 480 477 489 492 625 957 1,216 Total tax-exempt securities 480 477 489 492 625 957 1,216 Interest-earning deposits and federal funds sold 1,982 1,959 1,702 506 159 3,941 210 Total interest-earning assets 96,662 92,217 89,372 81,849 74,422 188,879 145,866 Interest Expense: Deposits: Savings accounts $140 $126 $59 $53 $50 $266 $99 NOW accounts 16,152 13,785 9,515 3,640 1,405 29,937 2,198 Money market accounts 14,625 14,102 10,532 5,280 1,952 28,727 3,227 Certificate of deposit accounts 15,281 11,007 7,037 2,948 1,273 26,288 2,562 Total due to depositors 46,198 39,020 27,143 11,921 4,680 85,218 8,086 Mortgagors' escrow accounts 51 36 83 44 6 87 8 Total interest-bearing deposits 46,249 39,056 27,226 11,965 4,686 85,305 8,094 Borrowings 6,934 7,799 7,843 8,574 4,875 14,733 9,308 Total interest-bearing liabilities 53,183 46,855 35,069 20,539 9,561 100,038 17,402 Net interest income- tax equivalent $43,479 $45,362 $54,303 $61,310 $64,861 $88,841 $128,464 Included in net interest income above: Prepayment penalties received on loans and securities and net of reversals and recovered interest from nonaccrual loans $315 $680 $1,080 $1,368 $2,281 $995 $3,997 Net gains/(losses) from fair value adjustments on qualifying hedges included in net interest income (205) 100 936 28 (60) (105) (189) Purchase accounting adjustments 340 306 342 775 367 646 1,425 Interest-earning Assets Yields: Mortgage loans, net 4.80 % 4.65% 4.57% 4.37% 4.23 % 4.73 % 4.21 %Other loans, net 5.70 5.42 5.21 4.52 3.94 5.56 3.87 Total loans, net 5.00 4.83 4.71 4.40 4.17 4.91 4.14 Taxable securities: Mortgage-backed securities 2.65 1.99 1.77 1.73 1.58 2.32 1.54 Other securities 4.96 4.48 4.00 3.13 2.51 4.73 2.29 Total taxable securities 3.84 3.17 2.67 2.28 1.92 3.51 1.78 Tax-exempt securities: (1) Other securities 2.88 2.86 2.92 2.93 3.71 2.87 3.89 Total tax-exempt securities 2.88 2.86 2.92 2.93 3.71 2.87 3.89 Interest-earning deposits and federal funds sold 4.68 4.15 3.86 1.70 0.61 4.40 0.36 Total interest-earning assets (1) 4.84 % 4.61% 4.44% 4.10% 3.85 % 4.73 % 3.81 %Interest-bearing Liabilities Yields: Deposits: Savings accounts 0.45 % 0.37% 0.16% 0.14% 0.13 % 0.41 % 0.13 %NOW accounts 3.19 2.80 1.93 0.81 0.27 3.00 0.21 Money market accounts 3.33 2.74 1.96 0.99 0.35 3.01 0.29 Certificate of deposit accounts 2.99 2.62 2.08 1.11 0.62 2.82 0.60 Total due to depositors 3.10 2.67 1.93 0.92 0.35 2.89 0.30 Mortgagors' escrow accounts 0.21 0.20 0.40 0.26 0.02 0.21 0.02 Total interest-bearing deposits 3.06 2.64 1.91 0.92 0.35 2.85 0.30 Borrowings 3.92 3.95 3.26 2.58 2.07 3.94 2.12 Total interest-bearing liabilities 3.15 % 2.80% 2.11% 1.25% 0.60 % 2.97 % 0.55 % Net interest rate spread (tax equivalent) (1) 1.69 % 1.81% 2.33% 2.85% 3.25 % 1.76 % 3.26 %Net interest margin (tax equivalent) (1) 2.18 % 2.27% 2.70% 3.07% 3.35 % 2.22 % 3.36 %Ratio of interest-earning assets to interest-bearing liabilities 1.18 X 1.19X 1.21X 1.22X 1.22 X 1.19 X 1.22 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 SUBSIDIARIESDEPOSIT and LOAN COMPOSITION(Unaudited)Deposit Composition 2Q23 vs. 2Q23 vs. June 30, March 31, December 31, September 30, June 30, 1Q23 2Q22(Dollars in thousands) 2023 2023 2022 2022 2022 % Change % ChangeNoninterest bearing $827,820 $872,254 $921,238 $992,378 $1,081,208 (5.1)% (23.4)%Interest bearing: Certificate of deposit accounts 2,232,696 1,880,260 1,526,338 1,036,107 906,943 18.7 146.2 Savings accounts 118,886 128,245 143,641 150,552 154,670 (7.3) (23.1) Money market accounts 1,594,637 1,855,781 2,099,776 2,113,256 2,229,993 (14.1) (28.5) NOW accounts 1,891,834 1,918,977 1,746,190 1,762,468 1,977,186 (1.4) (4.3) Total interest-bearing deposits 5,838,053 5,783,263 5,515,945 5,062,383 5,268,792 0.9 10.8 Total due to depositors 6,665,873 6,655,517 6,437,183 6,054,761 6,350,000 0.2 5.0 Mortgagors' escrow deposits 57,817 78,573 48,159 70,544 57,577 (26.4) 0.4 Total deposits $6,723,690 $6,734,090 $6,485,342 $6,125,305 $6,407,577 (0.2)% 4.9 % Loan Composition 2Q23 vs. 2Q23 vs. June 30, March 31, December 31, September 30, June 30, 1Q23 2Q22(Dollars in thousands) 2023 2023 2022 2022 2022 % Change % ChangeMultifamily residential $2,593,955 $2,601,174 $2,601,384 $2,608,192 $2,531,858 (0.3)% 2.5 %Commercial real estate 1,917,749 1,904,293 1,913,040 1,914,326 1,864,507 0.7 2.9 One-to-four family ― mixed-use property 542,368 549,207 554,314 560,885 561,100 (1.2) (3.3) One-to-four family ― residential 224,039 232,302 235,067 233,469 242,729 (3.6) (7.7) Co-operative apartments 6,016 6,115 6,179 7,015 8,130 (1.6) (26.0) Construction 57,325 60,486 70,951 63,651 72,148 (5.2) (20.5) Mortgage Loans 5,341,452 5,353,577 5,380,935 5,387,538 5,280,472 (0.2) 1.2 Small Business Administration (1) 22,404 22,860 23,275 27,712 40,572 (2.0) (44.8) Commercial business and other 1,466,358 1,518,756 1,521,548 1,532,497 1,431,417 (3.5) 2.4 Nonmortgage loans 1,488,762 1,541,616 1,544,823 1,560,209 1,471,989 (3.4) 1.1 Gross loans 6,830,214 6,895,193 6,925,758 6,947,747 6,752,461 (0.9) 1.2 Net unamortized premiums and unearned loan fees (2) 2,211 8,983 9,011 8,927 7,932 (75.4) (72.1) Allowance for credit losses (38,593) (38,729) (40,442) (41,268) (39,424) (0.4) (2.1) Net loans $6,793,832 $6,865,447 $6,894,327 $6,915,406 $6,720,969 (1.0)% 1.1 % ________________(1)Includes $4.0 million, $4.8 million, $5.2 million, $9.6 million, and $22.2 million of PPP loans at June 30, 2023, March 31, 2023, December 31, 2022, September 30, 2022, and June 30, 2022, respectively.(2)Includes $4.8 million, $5.1 million, $5.4 million, $5.8 million, and $6.6 million of purchase accounting unamortized discount resulting from the acquisition of Empire Bancorp at June 30, 2023, March 31, 2023, December 31, 2022, September 30, 2022, and June 30, 2022, respectively. FLUSHING FINANCIAL CORPORATION and SUBSIDIARIESLOAN 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) 2023 2023 2022 2022 2022 2023 2022Multifamily residential $31,901 $42,164 $65,347 $173,980 $136,902 $74,065 $235,082Commercial real estate 38,523 15,570 20,750 77,777 164,826 54,093 209,928One-to-four family – mixed-use property 5,812 4,938 4,489 12,383 12,228 10,750 20,726One-to-four family – residential 63 4,296 7,485 4,102 4,211 4,359 13,448Co-operative apartments — — — — — — 24Construction 8,811 10,592 7,301 7,170 8,319 19,403 17,121Mortgage Loans 85,110 77,560 105,372 275,412 326,486 162,670 496,329 Small Business Administration 820 318 665 46 2,750 1,138 2,750Commercial business and other 72,850 95,668 119,191 188,202 174,551 168,518 334,027Nonmortgage Loans 73,670 95,986 119,856 188,248 177,301 169,656 336,777 Total Closings $158,780 $173,546 $225,228 $463,660 $503,787 $332,326 $833,106 Weighted Average Rate on Loan Closings For the three months ended June 30, March 31, December 31, September 30, June 30,Loan type 2023 2023 2022 2022 2022Mortgage loans 6.62% 6.30% 5.59% 4.37% 3.76%Nonmortgage loans 7.76 7.58 6.57 4.93 4.21 Total loans 7.14% 7.01% 6.10% 4.60% 3.92% FLUSHING FINANCIAL CORPORATION and SUBSIDIARIESASSET 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) 2023 2023 2022 2022 2022 2023 2022Allowance for credit losses - loans Beginning balances $38,729 $40,442 $41,268 $39,424 $37,433 $40,442 $37,135 Net loan charge-off (recoveries): Multifamily residential — (1) 132 — (1) (1) (1) Commercial real estate 8 — — — — 8 — One-to-four family – residential 4 (36) 17 2 (2) (32) (4) Small Business Administration (158) (6) (9) (12) 13 (164) 1,028 Taxi medallion — — — — (435) — (447) Commercial business and other 1,706 9,277 671 300 (76) 10,983 (142) Total 1,560 9,234 811 290 (501) 10,794 434 Provision (benefit) for loan losses 1,424 7,521 (15) 2,134 1,490 8,945 2,723 Ending balance $38,593 $38,729 $40,442 $41,268 $39,424 $38,593 $39,424 Gross charge-offs $1,731 $9,298 $1,938 $324 $50 $11,029 $1,086 Gross recoveries 171 64 1,127 34 551 235 652 Allowance for credit losses - loans to gross loans 0.57 % 0.56 % 0.58 % 0.59 % 0.58 % 0.57 % 0.58 %Net loan charge-offs (recoveries) to average loans 0.09 0.54 0.05 0.02 (0.03) 0.32 0.01 Nonperforming Assets June 30, March 31, December 31, September 30, June 30,(Dollars in thousands) 2023 2023 2022 2022 2022Loans 90 Days Or More Past Due and Still Accruing: Commercial real estate $— $— $— $2,000 $— Construction — — 2,600 — — Commercial business and other — — — — 100 Total — — 2,600 2,000 100 Nonaccrual Loans: Multifamily residential 3,206 3,628 3,206 3,414 3,414 Commercial real estate — — 237 1,851 242 One-to-four family - mixed-use property(1) 790 790 790 790 790 One-to-four family - residential 5,218 4,961 4,425 4,655 5,055 Construction — — — — 856 Small Business Administration 1,119 937 937 937 937 Commercial business and other(1) 8,304 10,860 20,187 15,356 16,554 Total 18,637 21,176 29,782 27,003 27,848 Total Nonperforming Loans (NPLs) 18,637 21,176 32,382 29,003 27,948 Total Nonaccrual HTM Securities 20,981 20,981 20,981 20,981 20,981 Total Nonperforming Assets $39,618 $42,157 $53,363 $49,984 $48,929 Nonperforming Assets to Total Assets 0.47% 0.50% 0.63% 0.58% 0.59%Allowance for Credit Losses to NPLs 207.1% 182.9% 124.9% 142.3% 141.1% ________________(1)Adopted ASU No. 2022-02 Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures on January 1, 2023; Not included in the above analysis are nonaccrual performing TDR one-to-four family – mixed use property loans totaling $0.2 million in 4Q22 and in 3Q22 and $0.3 million in 2Q22; nonaccrual performing TDR commercial business loans totaling less than $0.1 million in 4Q22, $2.9 million in 3Q22, and $2.8 million in 2Q22. FLUSHING FINANCIAL CORPORATION and SUBSIDIARIESRECONCILIATION OF GAAP EARNINGS and CORE EARNINGS Non-cash Fair Value Adjustments to GAAP Earnings The variance in GAAP and core earnings is partly driven by the impact of non-cash net gains and losses from fair value adjustments. These fair value adjustments relate primarily to borrowings carried at fair value under the fair value option. Core Net Income, Core Diluted EPS, Core ROAE, Core ROAA, Pre-provision Pre-tax Net Revenue, Core Net Interest Income FTE, Core Net Interest Margin FTE, Core Interest Income and Yield on Total Loans, Core Noninterest Income, Core Noninterest Expense and Tangible Book Value per common share are each non-GAAP measures used in this release. A reconciliation to the most directly comparable GAAP financial measures appears below in tabular form. The Company believes that these measures are useful for both investors and management to understand the effects of certain interest and noninterest items and provide an alternative view of the Company’s performance over time and in comparison, to the Company’s competitors. These measures should not be viewed as a substitute for net income. The Company believes that tangible book value per common share is useful for both investors and management as this measure is commonly used by financial institutions, regulators, and investors to measure the capital adequacy of financial institutions. The Company believes these measures facilitate comparison of the quality and composition of the Company’s capital over time and in comparison, to its competitors. These measures should not be viewed as a substitute for total shareholders’ equity. These non-GAAP measures have inherent limitations, are not required to be uniformly applied and are not audited. They should not be considered in isolation or as a substitute for analysis of results reported under GAAP. These non-GAAP measures may not be comparable to similarly titled measures reported by other companies. FLUSHING FINANCIAL CORPORATION and SUBSIDIARIESRECONCILIATION 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) 2023 2023 2022 2022 2022 2023 2022 GAAP income before income taxes $11,805 $6,959 $12,819 $32,422 $34,971 $18,764 $59,611 Net (gain) loss from fair value adjustments (Noninterest income (loss)) (294) (2,619) 622 (5,626) (2,533) (2,913) (724) Net loss on sale of securities (Noninterest income (loss)) — — 10,948 — — — — Life insurance proceeds (Noninterest income (loss)) (561) — (286) — (1,536) (561) (1,536) Net gain on disposition of assets (Noninterest income (loss)) — — (104) — — — — Net (gain) loss from fair value adjustments on qualifying hedges (Net interest income) 205 (100) (936) (28) 60 105 189 Net amortization of purchase accounting adjustments and intangibles (Various) (227) (188) (219) (650) (237) (415) (1,161) Core income before taxes 10,928 4,052 22,844 26,118 30,725 14,980 56,379 Provision for core income taxes 3,074 1,049 5,445 7,165 9,207 4,123 15,892 Core net income $7,854 $3,003 $17,399 $18,953 $21,518 $10,857 $40,487 GAAP diluted earnings per common share $0.29 $0.17 $0.34 $0.76 $0.81 $0.46 $1.39 Net (gain) loss from fair value adjustments, net of tax (0.01) (0.06) 0.02 (0.13) (0.06) (0.07) (0.02) Net loss on sale of securities, net of tax — — 0.27 — — — — Life insurance proceeds (0.02) — (0.01) — (0.05) (0.02) (0.05) Net gain on disposition of assets, net of tax — — — — — — — Net (gain) loss from fair value adjustments on qualifying hedges, net of tax — — (0.02) — — — — Net amortization of purchase accounting adjustments, net of tax (0.01) (0.01) (0.01) (0.02) (0.01) (0.01) (0.03) Core diluted earnings per common share(1) $0.26 $0.10 $0.57 $0.62 $0.70 $0.36 $1.30 Core net income, as calculated above $7,854 $3,003 $17,399 $18,953 $21,518 $10,857 $40,487 Average assets 8,461,827 8,468,311 8,518,019 8,442,657 8,211,763 8,465,051 8,131,065 Average equity 673,943 683,071 676,165 674,282 667,456 678,481 670,219 Core return on average assets(2) 0.37 % 0.14 % 0.82 % 0.90 % 1.05 % 0.26 % 1.00 %Core return on average equity(2) 4.66 % 1.76 % 10.29 % 11.24 % 12.90 % 3.20 % 12.08 % ________________(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 SUBSIDIARIESRECONCILIATION 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) 2023 2023 2022 2022 2022 2023 2022 GAAP Net interest income $43,378 $45,262 $54,201 $61,206 $64,730 $88,640 $128,209 Net (gain) loss from fair value adjustments on qualifying hedges 205 (100) (936) (28) 60 105 189 Net amortization of purchase accounting adjustments (340) (306) (342) (775) (367) (646) (1,425) Core Net interest income $43,243 $44,856 $52,923 $60,403 $64,423 $88,099 $126,973 GAAP Noninterest income (loss) $5,122 $6,908 $(7,652) $8,995 $7,353 $12,030 $8,666 Net (gain) loss from fair value adjustments (294) (2,619) 622 (5,626) (2,533) (2,913) (724) Net loss on sale of securities — — 10,948 — — — — Life insurance proceeds (561) — (286) — (1,536) (561) (1,536) Net gain on sale of assets — — (104) — — — — Core Noninterest income $4,267 $4,289 $3,528 $3,369 $3,284 $8,556 $6,406 GAAP Noninterest expense $35,279 $37,703 $33,742 $35,634 $35,522 $72,982 $74,316 Net amortization of purchase accounting adjustments (113) (118) (123) (125) (130) (231) (264) Core Noninterest expense $35,166 $37,585 $33,619 $35,509 $35,392 $72,751 $74,052 Net interest income $43,378 $45,262 $54,201 $61,206 $64,730 $88,640 $128,209 Noninterest income (loss) 5,122 6,908 (7,652) 8,995 7,353 12,030 8,666 Noninterest expense (35,279) (37,703) (33,742) (35,634) (35,522) (72,982) (74,316) Pre-provision pre-tax net revenue $13,221 $14,467 $12,807 $34,567 $36,561 $27,688 $62,559 Core: Net interest income $43,243 $44,856 $52,923 $60,403 $64,423 $88,099 $126,973 Noninterest income 4,267 4,289 3,528 3,369 3,284 8,556 6,406 Noninterest expense (35,166) (37,585) (33,619) (35,509) (35,392) (72,751) (74,052) Pre-provision pre-tax net revenue $12,344 $11,560 $22,832 $28,263 $32,315 $23,904 $59,327 Efficiency Ratio 74.0 % 76.5 % 59.6 % 55.7 % 52.3 % 75.3 % 55.5 % FLUSHING FINANCIAL CORPORATION and SUBSIDIARIESRECONCILIATION OF GAAP NET INTEREST INCOME and NET INTEREST MARGINto 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)2023 2023 2022 2022 2022 2023 2022 GAAP net interest income$43,378 $45,262 $54,201 $61,206 $64,730 $88,640 $128,209 Net (gain) loss from fair value adjustments on qualifying hedges 205 (100) (936) (28) 60 105 189 Net amortization of purchase accounting adjustments (340) (306) (342) (775) (367) (646) (1,425) Tax equivalent adjustment 101 100 102 104 131 201 255 Core net interest income FTE$43,344 $44,956 $53,025 $60,507 $64,554 $88,300 $127,228 Total average interest-earning assets (1)$7,990,331 $8,001,271 $8,050,601 $7,984,558 $7,746,640 $7,995,772 $7,662,315 Core net interest margin FTE 2.17 % 2.25 % 2.63 % 3.03 % 3.33 % 2.21 % 3.32 % GAAP interest income on total loans, net$85,377 $82,889 $81,033 $75,546 $69,192 $168,266 $136,708 Net (gain) loss from fair value adjustments on qualifying hedges - loans 157 (101) (936) (28) 60 56 189 Net amortization of purchase accounting adjustments (345) (316) (372) (783) (357) (661) (1,474) Core interest income on total loans, net$85,189 $82,472 $79,725 $74,735 $68,895 $167,661 $135,423 Average total loans, net (1)$6,834,644 $6,876,495 $6,886,900 $6,867,758 $6,647,131 $6,855,454 $6,616,860 Core yield on total loans 4.99 % 4.80 % 4.63 % 4.35 % 4.15 % 4.89 % 4.09 % ________________(1)Excludes purchase accounting average balances for all periods presented. FLUSHING FINANCIAL CORPORATION and SUBSIDIARIESCALCULATION OF TANGIBLE STOCKHOLDERS’COMMON EQUITY to TANGIBLE ASSETS(Unaudited) June 30, March 31, December 31, September 30, June 30,(Dollars in thousands) 2023 2023 2022 2022 2022Total Equity $671,303 $673,459 $677,157 $670,719 $670,812 Less: Goodwill (17,636) (17,636) (17,636) (17,636) (17,636) Core deposit intangibles (1,769) (1,891) (2,017) (2,147) (2,282) Tangible Stockholders' Common Equity $651,898 $653,932 $657,504 $650,936 $650,894 Total Assets $8,473,883 $8,479,121 $8,422,946 $8,557,419 $8,339,587 Less: Goodwill (17,636) (17,636) (17,636) (17,636) (17,636) Core deposit intangibles (1,769) (1,891) (2,017) (2,147) (2,282) Tangible Assets $8,454,478 $8,459,594 $8,403,293 $8,537,636 $8,319,669 Tangible Stockholders' Common Equity to Tangible Assets 7.71 % 7.73 % 7.82 % 7.62 % 7.82 % Investor Contact: Susan K. Cullen, SEVP, CFO and Treasurer, 718-961-5400 Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
Flushing Financial Corporation Reports 2Q23 GAAP EPS of $0.29 and Core EPS of $0.26; Delivered Sequential Improvements in Key Metrics; Progressing on Action Plan to Continue Enhancing Business Model Resilience and Drive Profitability By: Flushing Financial Corporation via GlobeNewswire July 25, 2023 at 17:30 PM EDT John R. Buran, President and CEO Commentary “We delivered sequential improvements in key metrics in the second quarter amid continuing uncertainty in the operating environment. We experienced the lowest level of NIM compression of the past four quarters and achieved QoQ improvements in the loan pipeline and asset quality. Further, we increased deposit balances compared to past seasonal trends. As we continue to execute on the action plan announced last quarter, we are pleased with the progress we are making to enhance the resilience of our business model and strengthen performance: 1) continued to move more towards interest rate risk neutral with the addition of over $400 million of interest rate hedges and $250 million in forward hedges becoming effective; 2) the loan pipeline and yield increased 56% and 20 bps, respectively, QoQ; 3) checking account openings increased 10 % YoY; 4) reviewed new and existing relationships resulting in improved credit metrics and normalized net charge-offs; Manhattan office buildings are approximately 0.6% of net loans; 5) available liquidity and capital ratios remained stable; and 6) controlled noninterest expenses, which decreased 1% YoY. In addition, we repurchased approximately 530,000 shares in 2Q23 without a material effect on the tangible common equity ratio. Taken together, these actions support continued improvement of our profitability and liquidity while preparing us for a range of possible rate environments. While we remain conservative regarding our operating environment, our progress gives us cautious optimism for the remainder of the year. Looking ahead, we will continue to focus on positioning the Company for success with an emphasis on reducing interest rate risk, improving credit quality, liquidity, and the customer experience.”- John R. Buran, President and CEO UNIONDALE, N.Y., July 25, 2023 (GLOBE NEWSWIRE) -- EPS Improves QoQ; NIM Compression Slows. The Company reported second quarter 2023 GAAP EPS of $0.29, down 64% YoY, but up 71% QoQ. Core EPS totaled $0.26, a decrease of 63% YoY, but an increase of 160% QoQ. The improvement QoQ was primarily driven by the return to normalized credit costs, the absence of seasonal expenses, and the benefit derived from the interest rate hedge strategy. The interest rate hedges slowed the NIM compression, which was only 9 bps QoQ to 2.18%. The interest rate hedges, and other balance sheet actions, have reduced the liability sensitive position significantly over the past year and are beneficial in a “higher-for-longer” rate environment. Credit Quality Improved; Strong Capital. QoQ, nonperforming assets and criticized and classified assets decreased 6% and 12%, respectively, while net charge offs were 9 basis points. Capital continues to be sound with a TCE1 of 7.71%, stable QoQ. Key Financial Metrics2 2Q23 1Q23 4Q22 3Q22 2Q22 1H23 1H22GAAP: EPS $0.29 $0.17 $0.34 $0.76 $0.81 $0.46 $1.39ROAA (%) 0.41 0.24 0.48 1.11 1.22 0.33 1.06ROAE (%) 5.12 3.02 6.06 13.91 15.00 4.06 12.91NIM FTE3 (%) 2.18 2.27 2.70 3.07 3.35 2.22 3.36Core: EPS $0.26 $0.10 $0.57 $0.62 $0.70 $0.36 $1.30ROAA (%) 0.37 0.14 0.82 0.90 1.05 0.26 1.00ROAE (%) 4.66 1.76 10.29 11.24 12.90 3.20 12.08Core NIM FTE (%) 2.17 2.25 2.63 3.03 3.33 2.21 3.32Credit Quality: NPAs/Loans & OREO (%) 0.58 0.61 0.77 0.72 0.72 0.58 0.72ACLs/Loans (%) 0.57 0.56 0.58 0.59 0.58 0.57 0.58ACLs/NPLs (%) 207.08 182.89 124.89 142.29 141.06 207.08 141.06NCOs/Avg Loans (%) 0.09 0.54 0.05 0.02 (0.03) 0.32 0.01Balance Sheet: Avg Loans ($B) $6.8 $6.9 $6.9 $6.9 $6.6 $6.9 $6.6Avg Dep ($B) $6.9 $6.8 $6.7 $6.3 $6.4 $6.9 $6.4Book Value/Share $23.18 $22.84 $22.97 $22.47 $22.38 $23.18 $22.38Tangible BV/Share $22.51 $22.18 $22.31 $21.81 $21.71 $22.51 $21.71TCE/TA (%) 7.71 7.73 7.82 7.62 7.82 7.71 7.82 1 Tangible Common Equity (“TCE”)/Total Assets (“TA”) 2 See “Reconciliation of GAAP Earnings and Core Earnings”, “Reconciliation of GAAP Revenue and Pre-Provision Pre-Tax Net Revenue”, and “Reconciliation of GAAP Net Interest Margin to Core Net Interest Income and Net Interest Margin.” 3 Net Interest Margin (“NIM”) Fully Taxable Equivalent (“FTE”) 2Q23 Highlights Net interest margin FTE decreased 117 bps YoY and 9 bps QoQ to 2.18%; Core net interest margin FTE decreased 116 bps YoY and 8 bps QoQ to 2.17%; Both GAAP and Core NIMs benefited from the $450 million of new hedges added in late 1Q23, an additional $400 million in 2Q23, and $250 million of forward hedges that became effective in 2Q23; Overall liability sensitivity has been reduced by 64% over the past year.Average total deposits increased 7.1% YoY and 1.3% QoQ to $6.9 billion; average CDs totaled $2.0 billion, up 149.5% YoY and 21.9% QoQ; growth in CDs generally lengthens the duration of customer deposits and helps reduce rate sensitivityPeriod end net loans increased 1.1% YoY, but decreased 1.0% QoQ; loan closings were $158.8 million down 68.5% YoY and 8.5% QoQ; the yield on closings increased 322 bps YoY and 13 bps QoQ to 7.14%Loan pipeline decreased 28.7% YoY, but increased 56.1% QoQ to $415.5 million; nearly 35% of the loan pipeline consists of back-to-back loan swapsNPAs declined to $39.6 million from $48.9 million a year ago and $42.2 million in the prior quarterProvision for credit losses was $1.4 million in 2Q23 compared to $1.6 million in 2Q22 and $7.5 million in 1Q23; net charge-offs were $1.6 million in 2Q23 compared to net recoveries of $0.5 million in 2Q22 and net charge-offs of 9.2 million in 1Q23Tangible Common Equity to Tangible Assets was stable at 7.71% at 2Q23 compared to 7.73% at 1Q23Repurchased 528,815 shares at an average price of $12.94 or at a 42.5% discount to June 30, 2023 tangible book value of $22.51 Areas of FocusInterestRateRisk Continued to take significant actions to position the Company’s balance sheet more towards interest rate risk neutralDuring 2Q23, the Company added $400 million of interest rate hedges and an additional $250 million of forward hedges that became effectiveRate sensitivity to a +100 bps shock has been reduced by 64% over the past year. Credit Quality Manhattan office buildings are approximately 0.6% of net loansOver 88% of the loan portfolio is collateralized by real estate with an average loan to value less than 36%Debt service coverage ratio of 1.8x for multifamily and investor commercial real estate loans that reprice through 2025 Liquidity The Company maintains ample liquidity with $3.7 billion of undrawn lines and resourcesTotal deposits increased 4.9% YoY and 2Q23 balances were higher than normal seasonal declinesChecking account openings were up 9.6% YoY in 2Q23 Customer Experience Additional opportunities emerging as competitors leave the market Approximately 33% of our branches are in Asian communitiesBensonhurst, our 27th branch, is expected to open in the second half of 2023, and will enhance our Asian community branch presenceDigital banking usage continues to increase with double digit growth in monthly mobile deposit active users and digital banking enrollment in June 2023 versus a year ago Income Statement Highlights YoY QoQ($000s, except EPS) 2Q23 1Q23 4Q22 3Q22 2Q22 Change Change Net Interest Income $43,378 $45,262 $54,201 $61,206 $64,730 (33.0)% (4.2)%Provision (Benefit) for Credit Losses 1,416 7,508 (12) 2,145 1,590 (10.9) NM Noninterest Income (Loss) 5,122 6,908 (7,652) 8,995 7,353 (30.3) (25.9) Noninterest Expense 35,279 37,703 33,742 35,634 35,522 (0.7) (6.4) Income Before Income Taxes 11,805 6,959 12,819 32,422 34,971 (66.2) 69.6 Provision for Income Taxes 3,177 1,801 2,570 8,980 9,936 (68.0) 76.4 Net Income $8,628 $5,158 $10,249 $23,442 $25,035 (65.5) 67.3 Diluted EPS $0.29 $0.17 $0.34 $0.76 $0.81 (64.2) 70.6 Avg. Diluted Shares (000s) 30,090 30,265 30,420 30,695 30,937 (2.7) (0.6) Core Net Income1 $7,854 $3,003 $17,399 $18,953 $21,518 (63.5) 161.5 Core EPS1 $0.26 $0.10 $0.57 $0.62 $0.70 (62.9) 160.0 1 See Reconciliation of GAAP Earnings and Core Earnings Net interest income decreased YoY and QoQ. Net interest margin, FTE of 2.18% decreased 117 bps YoY and 9 bps QoQPrepayment penalty income from loans and securities, 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 $0.5 million (3 bps to the NIM) in 2Q23 compared to $1.1 million (6 bps) in 1Q23, $2.4 million (12 bps) in 4Q22, $2.2 million (11 bps) in 3Q22, and $2.6 million (13 bps) in 2Q22; Prepayment penalty income declined primarily due to the higher rate environmentExcluding the items in the previous bullet, net interest margin was 2.15% in 2Q23, 2.21% in 1Q23, 2.58% in 4Q22, 2.96% in 3Q22, and 3.22% in 2Q22Quarterly NIM compression of 9 bps was the slowest decline in the past four quarters primarily due to the balance sheet actions taken in 1Q23 and 2Q23 that reduced liability sensitivity The provision for credit losses declined YoY and QoQ. Net charge-offs (recoveries) were $1.6 million in 2Q23 (9 bps of average loans), $9.2 million in 1Q23 (54 bps of average loans), $0.8 million in 4Q22 (5 bps of average loans), $0.3 million in 3Q22 (2 bps of average loans), and $(0.5) million in 2Q22 ((3) bps of average loans)1Q23 net charge-offs were primarily related to a commercial business relationship that was placed on nonaccrual in 2Q22 Noninterest income (loss) declined YoY and QoQ. Noninterest income included net gains (losses) from fair value adjustments of $0.3 million in 2Q23 ($0.01 per share, net of tax), $2.6 million in 1Q23 ($0.06 per share, net of tax), $(0.6) million in 4Q22 ($(0.02) per share, net of tax), $5.6 million in 3Q22 ($0.13 per share, net of tax), and $2.5 million in 2Q22 ($0.06 per share, net of tax)Loss on the sale of securities was $10.9 million ($0.27 per share, net of tax) in 4Q22 as the Company sold $84.2 million of mortgage-based securities with an approximate yield of 1.17%; proceeds were primarily reinvested in 1Q23 into floating rate securities that had a yield at that time that approximated 6.40%Life insurance proceeds were $0.6 million ($0.02 per share) in 2Q23, $0.3 million ($0.01 per share) in 4Q22 and $1.5 million ($0.05 per share) in 2Q22Absent all above items and other immaterial adjustments, core noninterest income was $4.3 million in 2Q23, up 29.9% YoY but down 0.5% QoQ Noninterest expense decreased YoY and QoQ. Given the challenging rate environment, management continues to actively review all noninterest expensesOther operating expenses include $0.6 million reduction in reserves for unfunded commitments in 3Q22Seasonal compensation expense was $4.1 million in 1Q23Excluding the effects of other immaterial adjustments, core operating expenses were $35.2 million in 2Q23, down 0.6% YoY, and 6.4% QoQGAAP noninterest expense to average assets was 1.67% in 2Q23, 1.78% in 1Q23, 1.58% in 4Q22, 1.69% in 3Q22, and 1.73% in 2Q22 Provision for income taxes declined YoY and increased QoQ. The effective tax rate was 26.9% in 2Q23, 25.9% in 1Q23, 20.0% in 4Q22, 27.7% in 3Q22, and 28.4% in 2Q22The 4Q22 effective tax rate declined due to preferential tax items having a larger impact due to lower levels of pre-tax incomeThe 2Q22 effective tax rate includes a loss of certain state and city tax deductions and a resolution of certain examinations by taxing authorities Balance Sheet, Credit Quality, and Capital Highlights YoY QoQ 2Q23 1Q23 4Q22 3Q22 2Q22 Change ChangeAverages ($MM) Loans $6,830 $6,871 $6,881 $6,861 $6,640 2.9 % (0.6)%Total Deposits 6,900 6,810 6,678 6,277 6,441 7.1 1.3 Credit Quality ($000s) Nonperforming Loans $18,637 $21,176 $32,382 $29,003 $27,948 (33.3)% (12.0)%Nonperforming Assets 39,618 42,157 53,363 49,984 48,929 (19.0) (6.0) Criticized and Classified Loans 48,675 58,130 68,093 61,684 57,145 (14.8) (16.3) Criticized and Classified Assets 69,656 79,111 89,073 82,665 78,125 (10.8) (12.0) Allowance for Credit Losses/Loans (%) 0.57 0.56 0.58 0.59 0.58 (1)bp 1 bps Capital Book Value/Share $23.18 $22.84 $22.97 $22.47 $22.38 3.6 % 1.5 %Tangible Book Value/Share 22.51 22.18 22.31 21.81 21.71 3.7 1.5 Tang. Common Equity/Tang. Assets (%) 7.71 7.73 7.82 7.62 7.82 (11)bps (2)bpsLeverage Ratio (%) 8.56 8.58 8.61 8.74 8.91 (35) (2) Average loans increased YoY but declined QoQ. Maintain the credit strategy of loans secured by real estate with a greater emphasis on back-to-back swap originationsPeriod end net loans totaled $6.8 billion, up 1.1% YoY, but down 1.0% QoQTotal loan closings were $158.8 million in 2Q23, $173.5 million in 1Q23, $225.2 million in 4Q22, $463.7 million in 3Q22, and $503.8 million in 2Q22; the loan pipeline was $415.5 million at June 30, 2023, down 28.7% YoY, but up 56.1% QoQ; closings were impacted by customers adjusting to the higher rate environmentThe diversified loan portfolio is over 88% collateralized by real estate with an average loan-to-value ratio of <36%Manhattan office buildings are approximately 0.6% of net loans Average total deposits increased YoY and QoQ. Average CDs totaled $2.0 billion, up 149.5% YoY and 21.9% QoQ; CDs generally lengthen the duration of customer deposits and reduce sensitivity to rising ratesAverage noninterest bearing deposits decreased 18.7% YoY and 5.2% QoQ in 2Q23 and comprised 12.3% of average total deposits in 2Q23 compared to 16.2% a year ago Credit Quality: Nonperforming loans declined YoY and QoQ. Criticized and classified loans were 71 bps of gross loans at 2Q23 compared to 84 bps at 1Q23, 98 bps at 4Q22, 89 bps at 3Q22, and 85 bps at 2Q22Allowance for credit losses were 207.1% of nonperforming loans at 2Q23 compared to 182.9% at 1Q23, and 141.1% at 2Q22 Capital: Book value per common share and tangible book value per common share, a non-GAAP measure, both increased YoY and QoQ. The Company paid a dividend of $0.22 per share in 2Q23 and has ample available liquidity to meet its obligationsThe Company repurchased 528,815 shares in 2Q23 at an average price of $12.94, representing a 42.5% discount to tangible book value, with 906,131 shares remaining subject to repurchase under the authorized stock repurchase program, which has no expiration or maximum dollar limitTangible common equity to tangible assets was 7.71% at 2Q23 compared to 7.73% at 1Q23 and 7.82% at 2Q22The Company and the Bank remain well capitalized under all applicable regulatory requirements 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 and Treasurer, will host a conference call on Wednesday, July 26, 2023, at 9:30 AM (ET) to discuss the Company’s first quarter results and strategy.Dial-in for Live Call: 1-877-509-5836; Canada 855-669-9657Webcast: https://event.choruscall.com/mediaframe/webcast.html?webcastid=Nb7q4ytYDial-in for Replay: 1-877-344-7529; Canada 855-669-9658Replay Access Code: 7017400The conference call will be simultaneously webcast and archived Third Quarter 2023 Earnings Release Date: The Company plans to release Third Quarter 2023 financial results after the market close on October 31, 2023; followed by a conference call at 9:30 AM (ET) on November 1, 2023. 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®, 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, 2022 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 SUBSIDIARIESFINANCIAL HIGHLIGHTS(Unaudited) At or for the three months ended At or for the six months ended (Dollars in thousands, except per share data) June 30, March 31, December 31, September 30, June 30, June 30, June 30, 2023 2023 2022 2022 2022 2023 2022 Performance Ratios (1) Return on average assets 0.41% 0.24% 0.48% 1.11% 1.22 % 0.33% 1.06%Return on average equity 5.12 3.02 6.06 13.91 15.00 4.06 12.91 Yield on average interest-earning assets (2) 4.84 4.61 4.44 4.10 3.85 4.73 3.81 Cost of average interest-bearing liabilities 3.15 2.80 2.11 1.25 0.60 2.97 0.55 Cost of funds 2.80 2.47 1.84 1.08 0.52 2.63 0.48 Net interest rate spread during period (2) 1.69 1.81 2.33 2.85 3.25 1.76 3.26 Net interest margin (2) 2.18 2.27 2.70 3.07 3.35 2.22 3.36 Noninterest expense to average assets 1.67 1.78 1.58 1.69 1.73 1.72 1.83 Efficiency ratio (3) 74.02 76.48 59.55 55.68 52.27 75.27 55.52 Average interest-earning assets to average interest-bearing liabilities 1.18X 1.19X 1.21X 1.22X 1.22 X 1.19X 1.22X Average Balances Total loans, net $6,829,648 $6,871,192 $6,881,245 $6,861,463 $6,640,331 $6,850,305 $6,609,676 Total interest-earning assets 7,986,020 7,996,677 8,045,691 7,979,070 7,740,683 7,991,320 7,655,999 Total assets 8,461,827 8,468,311 8,518,019 8,442,657 8,211,763 8,465,051 8,131,065 Total deposits 6,899,617 6,810,485 6,678,383 6,276,613 6,440,904 6,855,299 6,425,569 Total interest-bearing liabilities 6,756,859 6,703,558 6,662,209 6,553,087 6,337,374 6,730,357 6,279,265 Stockholders' equity 673,943 683,071 676,165 674,282 667,456 678,481 670,219 Per Share Data Book value per common share (4) $23.18 $22.84 $22.97 $22.47 $22.38 $23.18 $22.38 Tangible book value per common share (5) $22.51 $22.18 $22.31 $21.81 $21.71 $22.51 $21.71 Stockholders' Equity Stockholders' equity $671,303 $673,459 $677,157 $670,719 $670,812 $671,303 $670,812 Tangible stockholders' equity 651,898 653,932 657,504 650,936 650,894 651,898 650,894 Consolidated Regulatory Capital Ratios Tier 1 capital $735,810 $737,138 $746,880 $749,526 $739,776 $735,810 $739,776 Common equity Tier 1 capital 689,876 690,846 698,258 701,532 686,258 689,876 686,258 Total risk-based capital 963,840 965,384 975,709 979,021 903,047 963,840 903,047 Risk Weighted Assets 6,649,252 6,659,532 6,640,542 6,689,284 6,522,710 6,649,252 6,522,710 Tier 1 leverage capital (well capitalized = 5%) 8.56% 8.58% 8.61% 8.74% 8.91 % 8.56% 8.91% Common equity Tier 1 risk-based capital (well capitalized = 6.5%) 10.38 10.37 10.52 10.49 10.52 10.38 10.52 Tier 1 risk-based capital (well capitalized = 8.0%) 11.07 11.07 11.25 11.20 11.34 11.07 11.34 Total risk-based capital (well capitalized = 10.0%) 14.50 14.50 14.69 14.64 13.84 14.50 13.84 Capital Ratios Average equity to average assets 7.96% 8.07% 7.94% 7.99% 8.13 % 8.02% 8.24% Equity to total assets 7.92 7.94 8.04 7.84 8.04 7.92 8.04 Tangible common equity to tangible assets (6) 7.71 7.73 7.82 7.62 7.82 7.71 7.82 Asset Quality Nonaccrual loans (7) $18,637 $21,176 $29,782 $27,003 $27,848 $18,637 $27,848 Nonperforming loans 18,637 21,176 32,382 29,003 27,948 18,637 27,948 Nonperforming assets 39,618 42,157 53,363 49,984 48,929 39,618 48,929 Net charge-offs (recoveries) 1,560 9,234 811 290 (501) 10,794 434 Asset Quality Ratios Nonperforming loans to gross loans 0.27% 0.31% 0.47% 0.42% 0.41 % 0.27% 0.41% Nonperforming assets to total assets 0.47 0.50 0.63 0.58 0.59 0.47 0.59 Allowance for credit losses to gross loans 0.57 0.56 0.58 0.59 0.58 0.57 0.58 Allowance for credit losses to nonperforming assets 97.41 91.87 75.79 82.56 80.57 97.41 80.57 Allowance for credit losses to nonperforming loans 207.08 182.89 124.89 142.29 141.06 207.08 141.06 Net charge-offs (recoveries) to average loans 0.09 0.54 0.05 0.02 (0.03) 0.32 0.01 Full-service customer facilities 26 26 25 25 25 26 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 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”.(7) Excludes performing nonaccrual TDR loans in periods prior to 1Q23. FLUSHING FINANCIAL CORPORATION and SUBSIDIARIESCONSOLIDATED STATEMENTS OF INCOME (Unaudited) For the three months ended For the six months ended (In thousands, except per share data)June 30, March 31, December 31, September 30, June 30, June 30, June 30,2023 2023 2022 2022 2022 2023 2022Interest and Dividend Income Interest and fees on loans$85,377 $82,889 $81,033 $75,546 $69,192 $168,266 $136,708Interest and dividends on securities: Interest 9,172 7,240 6,511 5,676 4,929 16,412 8,674Dividends 30 29 24 17 11 59 19Other interest income 1,982 1,959 1,702 506 159 3,941 210Total interest and dividend income 96,561 92,117 89,270 81,745 74,291 188,678 145,611 Interest Expense Deposits 46,249 39,056 27,226 11,965 4,686 85,305 8,094Other interest expense 6,934 7,799 7,843 8,574 4,875 14,733 9,308Total interest expense 53,183 46,855 35,069 20,539 9,561 100,038 17,402 Net Interest Income 43,378 45,262 54,201 61,206 64,730 88,640 128,209Provision (benefit) for credit losses 1,416 7,508 (12) 2,145 1,590 8,924 2,948Net Interest Income After Provision (Benefit) for Credit Losses 41,962 37,754 54,213 59,061 63,140 79,716 125,261 Noninterest Income (Loss) Banking services fee income 1,780 1,411 1,231 1,351 1,166 3,191 2,540Net loss on sale of securities — — (10,948) — — — —Net gain on sale of loans 54 54 46 — 73 108 73Net gain on disposition of assets — — 104 — — — —Net gain (loss) from fair value adjustments 294 2,619 (622) 5,626 2,533 2,913 724Federal Home Loan Bank of New York stock dividends 534 697 658 538 407 1,231 804Life insurance proceeds 561 — 286 — 1,536 561 1,536Bank owned life insurance 1,134 1,109 1,126 1,132 1,115 2,243 2,229Other income 765 1,018 467 348 523 1,783 760Total noninterest income (loss) 5,122 6,908 (7,652) 8,995 7,353 12,030 8,666 Noninterest Expense Salaries and employee benefits 19,493 20,887 18,178 21,438 21,109 40,380 44,758Occupancy and equipment 3,534 3,793 3,701 3,541 3,760 7,327 7,364Professional services 2,657 2,483 2,130 2,570 2,285 5,140 4,507FDIC deposit insurance 943 977 485 738 615 1,920 1,035Data processing 1,473 1,435 1,421 1,367 1,383 2,908 2,807Depreciation and amortization 1,482 1,510 1,535 1,488 1,447 2,992 2,907Other real estate owned/foreclosure expense 150 165 35 143 32 315 116Other operating expenses 5,547 6,453 6,257 4,349 4,891 12,000 10,822Total noninterest expense 35,279 37,703 33,742 35,634 35,522 72,982 74,316 Income Before Provision for Income Taxes 11,805 6,959 12,819 32,422 34,971 18,764 59,611 Provision for Income Taxes 3,177 1,801 2,570 8,980 9,936 4,978 16,357 Net Income$8,628 $5,158 $10,249 $23,442 $25,035 $13,786 $43,254 Basic earnings per common share$0.29 $0.17 $0.34 $0.76 $0.81 $0.46 $1.39Diluted earnings per common share$0.29 $0.17 $0.34 $0.76 $0.81 $0.46 $1.39Dividends per common share$0.22 $0.22 $0.22 $0.22 $0.22 $0.44 $0.44 Basic average shares 30,090 30,265 30,420 30,695 30,937 30,177 31,095Diluted average shares 30,090 30,265 30,420 30,695 30,937 30,177 31,095 FLUSHING FINANCIAL CORPORATION and SUBSIDIARIESCONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Unaudited) June 30, March 31, December 31, September 30, June 30,(Dollars in thousands) 2023 2023 2022 2022 2022 ASSETS Cash and due from banks $160,053 $176,747 $151,754 $164,693 $137,026 Securities held-to-maturity: Mortgage-backed securities 7,865 7,870 7,875 7,880 7,885 Other securities, net 65,469 65,653 65,836 66,032 66,230 Securities available for sale: Mortgage-backed securities 365,911 380,110 384,283 468,366 510,934 Other securities 503,645 431,818 351,074 351,495 346,720 Loans 6,832,425 6,904,176 6,934,769 6,956,674 6,760,393 Allowance for credit losses (38,593) (38,729) (40,442) (41,268) (39,424)Net loans 6,793,832 6,865,447 6,894,327 6,915,406 6,720,969 Interest and dividends receivable 52,911 46,836 45,048 42,571 38,811 Bank premises and equipment, net 22,182 21,567 21,750 22,376 22,285 Federal Home Loan Bank of New York stock 36,168 38,779 45,842 62,489 50,017 Bank owned life insurance 213,164 214,240 213,131 212,353 211,220 Goodwill 17,636 17,636 17,636 17,636 17,636 Core deposit intangibles 1,769 1,891 2,017 2,147 2,282 Right of use asset 41,526 42,268 43,289 44,885 46,687 Other assets 191,752 168,259 179,084 179,090 160,885 Total assets $8,473,883 $8,479,121 $8,422,946 $8,557,419 $8,339,587 LIABILITIES Total deposits $6,723,690 $6,734,090 $6,485,342 $6,125,305 $6,407,577 Borrowed funds 857,400 887,509 1,052,973 1,572,830 1,089,621 Operating lease liability 44,402 45,353 46,125 48,330 50,346 Other liabilities 177,088 138,710 161,349 140,235 121,231 Total liabilities 7,802,580 7,805,662 7,745,789 7,886,700 7,668,775 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 263,744 262,876 264,332 263,755 262,860 Treasury stock (104,574) (97,760) (98,535) (90,977) (88,342)Retained earnings 547,811 545,786 547,507 543,894 527,217 Accumulated other comprehensive loss, net of taxes (36,019) (37,784) (36,488) (46,294) (31,264)Total stockholders' equity 671,303 673,459 677,157 670,719 670,812 Total liabilities and stockholders' equity $8,473,883 $8,479,121 $8,422,946 $8,557,419 $8,339,587 (In thousands) Issued shares 34,088 34,088 34,088 34,088 34,088 Outstanding shares 28,961 29,488 29,476 29,851 29,980 Treasury shares 5,127 4,600 4,612 4,237 4,108 FLUSHING FINANCIAL CORPORATION and SUBSIDIARIESAVERAGE 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) 2023 2023 2022 2022 2022 2023 2022Interest-earning Assets: Mortgage loans, net $5,308,567 $5,333,274 $5,338,612 $5,340,694 $5,178,029 $5,320,852 $5,165,121Other loans, net 1,521,081 1,537,918 1,542,633 1,520,769 1,462,302 1,529,453 1,444,555Total loans, net 6,829,648 6,871,192 6,881,245 6,861,463 6,640,331 6,850,305 6,609,676Taxable securities: Mortgage-backed securities 448,620 457,911 549,204 568,854 594,923 453,240 587,836Other securities 471,600 411,723 371,897 362,629 333,158 441,827 280,245Total taxable securities 920,220 869,634 921,101 931,483 928,081 895,067 868,081Tax-exempt securities: Other securities 66,632 66,828 67,022 67,211 67,315 66,730 62,490Total tax-exempt securities 66,632 66,828 67,022 67,211 67,315 66,730 62,490Interest-earning deposits and federal funds sold 169,520 189,023 176,323 118,913 104,956 179,218 115,752Total interest-earning assets 7,986,020 7,996,677 8,045,691 7,979,070 7,740,683 7,991,320 7,655,999Other assets 475,807 471,634 472,328 463,587 471,080 473,731 475,066Total assets $8,461,827 $8,468,311 $8,518,019 $8,442,657 $8,211,763 $8,465,051 $8,131,065 Interest-bearing Liabilities: Deposits: Savings accounts $124,041 $134,945 $146,598 $154,545 $156,785 $129,463 $156,689NOW accounts 2,026,950 1,970,555 1,972,134 1,808,608 2,089,851 1,998,909 2,063,529Money market accounts 1,754,574 2,058,523 2,146,649 2,136,829 2,231,743 1,905,709 2,242,626Certificate of deposit accounts 2,046,960 1,679,517 1,350,683 1,057,733 820,476 1,864,254 854,970Total due to depositors 5,952,525 5,843,540 5,616,064 5,157,715 5,298,855 5,898,335 5,317,814Mortgagors' escrow accounts 97,410 70,483 82,483 68,602 97,496 84,021 84,574Total interest-bearing deposits 6,049,935 5,914,023 5,698,547 5,226,317 5,396,351 5,982,356 5,402,388Borrowings 706,924 789,535 963,662 1,326,770 941,023 748,001 876,877Total interest-bearing liabilities 6,756,859 6,703,558 6,662,209 6,553,087 6,337,374 6,730,357 6,279,265Noninterest-bearing demand deposits 849,682 896,462 979,836 1,050,296 1,044,553 872,943 1,023,181Other liabilities 181,343 185,220 199,809 164,992 162,380 183,270 158,400Total liabilities 7,787,884 7,785,240 7,841,854 7,768,375 7,544,307 7,786,570 7,460,846Equity 673,943 683,071 676,165 674,282 667,456 678,481 670,219Total liabilities and equity $8,461,827 $8,468,311 $8,518,019 $8,442,657 $8,211,763 $8,465,051 $8,131,065 Net interest-earning assets $1,229,161 $1,293,119 $1,383,482 $1,425,983 $1,403,309 $1,260,963 $1,376,734 FLUSHING FINANCIAL CORPORATION and SUBSIDIARIESNET 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) 2023 2023 2022 2022 2022 2023 2022Interest Income: Mortgage loans, net $63,688 $62,054 $60,946 $58,374 $54,775 $125,742 $108,745 Other loans, net 21,689 20,835 20,087 17,172 14,417 42,524 27,963 Total loans, net 85,377 82,889 81,033 75,546 69,192 168,266 136,708 Taxable securities: Mortgage-backed securities 2,976 2,281 2,425 2,466 2,356 5,257 4,523 Other securities 5,847 4,611 3,723 2,839 2,090 10,458 3,209 Total taxable securities 8,823 6,892 6,148 5,305 4,446 15,715 7,732 Tax-exempt securities: Other securities 480 477 489 492 625 957 1,216 Total tax-exempt securities 480 477 489 492 625 957 1,216 Interest-earning deposits and federal funds sold 1,982 1,959 1,702 506 159 3,941 210 Total interest-earning assets 96,662 92,217 89,372 81,849 74,422 188,879 145,866 Interest Expense: Deposits: Savings accounts $140 $126 $59 $53 $50 $266 $99 NOW accounts 16,152 13,785 9,515 3,640 1,405 29,937 2,198 Money market accounts 14,625 14,102 10,532 5,280 1,952 28,727 3,227 Certificate of deposit accounts 15,281 11,007 7,037 2,948 1,273 26,288 2,562 Total due to depositors 46,198 39,020 27,143 11,921 4,680 85,218 8,086 Mortgagors' escrow accounts 51 36 83 44 6 87 8 Total interest-bearing deposits 46,249 39,056 27,226 11,965 4,686 85,305 8,094 Borrowings 6,934 7,799 7,843 8,574 4,875 14,733 9,308 Total interest-bearing liabilities 53,183 46,855 35,069 20,539 9,561 100,038 17,402 Net interest income- tax equivalent $43,479 $45,362 $54,303 $61,310 $64,861 $88,841 $128,464 Included in net interest income above: Prepayment penalties received on loans and securities and net of reversals and recovered interest from nonaccrual loans $315 $680 $1,080 $1,368 $2,281 $995 $3,997 Net gains/(losses) from fair value adjustments on qualifying hedges included in net interest income (205) 100 936 28 (60) (105) (189) Purchase accounting adjustments 340 306 342 775 367 646 1,425 Interest-earning Assets Yields: Mortgage loans, net 4.80 % 4.65% 4.57% 4.37% 4.23 % 4.73 % 4.21 %Other loans, net 5.70 5.42 5.21 4.52 3.94 5.56 3.87 Total loans, net 5.00 4.83 4.71 4.40 4.17 4.91 4.14 Taxable securities: Mortgage-backed securities 2.65 1.99 1.77 1.73 1.58 2.32 1.54 Other securities 4.96 4.48 4.00 3.13 2.51 4.73 2.29 Total taxable securities 3.84 3.17 2.67 2.28 1.92 3.51 1.78 Tax-exempt securities: (1) Other securities 2.88 2.86 2.92 2.93 3.71 2.87 3.89 Total tax-exempt securities 2.88 2.86 2.92 2.93 3.71 2.87 3.89 Interest-earning deposits and federal funds sold 4.68 4.15 3.86 1.70 0.61 4.40 0.36 Total interest-earning assets (1) 4.84 % 4.61% 4.44% 4.10% 3.85 % 4.73 % 3.81 %Interest-bearing Liabilities Yields: Deposits: Savings accounts 0.45 % 0.37% 0.16% 0.14% 0.13 % 0.41 % 0.13 %NOW accounts 3.19 2.80 1.93 0.81 0.27 3.00 0.21 Money market accounts 3.33 2.74 1.96 0.99 0.35 3.01 0.29 Certificate of deposit accounts 2.99 2.62 2.08 1.11 0.62 2.82 0.60 Total due to depositors 3.10 2.67 1.93 0.92 0.35 2.89 0.30 Mortgagors' escrow accounts 0.21 0.20 0.40 0.26 0.02 0.21 0.02 Total interest-bearing deposits 3.06 2.64 1.91 0.92 0.35 2.85 0.30 Borrowings 3.92 3.95 3.26 2.58 2.07 3.94 2.12 Total interest-bearing liabilities 3.15 % 2.80% 2.11% 1.25% 0.60 % 2.97 % 0.55 % Net interest rate spread (tax equivalent) (1) 1.69 % 1.81% 2.33% 2.85% 3.25 % 1.76 % 3.26 %Net interest margin (tax equivalent) (1) 2.18 % 2.27% 2.70% 3.07% 3.35 % 2.22 % 3.36 %Ratio of interest-earning assets to interest-bearing liabilities 1.18 X 1.19X 1.21X 1.22X 1.22 X 1.19 X 1.22 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 SUBSIDIARIESDEPOSIT and LOAN COMPOSITION(Unaudited)Deposit Composition 2Q23 vs. 2Q23 vs. June 30, March 31, December 31, September 30, June 30, 1Q23 2Q22(Dollars in thousands) 2023 2023 2022 2022 2022 % Change % ChangeNoninterest bearing $827,820 $872,254 $921,238 $992,378 $1,081,208 (5.1)% (23.4)%Interest bearing: Certificate of deposit accounts 2,232,696 1,880,260 1,526,338 1,036,107 906,943 18.7 146.2 Savings accounts 118,886 128,245 143,641 150,552 154,670 (7.3) (23.1) Money market accounts 1,594,637 1,855,781 2,099,776 2,113,256 2,229,993 (14.1) (28.5) NOW accounts 1,891,834 1,918,977 1,746,190 1,762,468 1,977,186 (1.4) (4.3) Total interest-bearing deposits 5,838,053 5,783,263 5,515,945 5,062,383 5,268,792 0.9 10.8 Total due to depositors 6,665,873 6,655,517 6,437,183 6,054,761 6,350,000 0.2 5.0 Mortgagors' escrow deposits 57,817 78,573 48,159 70,544 57,577 (26.4) 0.4 Total deposits $6,723,690 $6,734,090 $6,485,342 $6,125,305 $6,407,577 (0.2)% 4.9 % Loan Composition 2Q23 vs. 2Q23 vs. June 30, March 31, December 31, September 30, June 30, 1Q23 2Q22(Dollars in thousands) 2023 2023 2022 2022 2022 % Change % ChangeMultifamily residential $2,593,955 $2,601,174 $2,601,384 $2,608,192 $2,531,858 (0.3)% 2.5 %Commercial real estate 1,917,749 1,904,293 1,913,040 1,914,326 1,864,507 0.7 2.9 One-to-four family ― mixed-use property 542,368 549,207 554,314 560,885 561,100 (1.2) (3.3) One-to-four family ― residential 224,039 232,302 235,067 233,469 242,729 (3.6) (7.7) Co-operative apartments 6,016 6,115 6,179 7,015 8,130 (1.6) (26.0) Construction 57,325 60,486 70,951 63,651 72,148 (5.2) (20.5) Mortgage Loans 5,341,452 5,353,577 5,380,935 5,387,538 5,280,472 (0.2) 1.2 Small Business Administration (1) 22,404 22,860 23,275 27,712 40,572 (2.0) (44.8) Commercial business and other 1,466,358 1,518,756 1,521,548 1,532,497 1,431,417 (3.5) 2.4 Nonmortgage loans 1,488,762 1,541,616 1,544,823 1,560,209 1,471,989 (3.4) 1.1 Gross loans 6,830,214 6,895,193 6,925,758 6,947,747 6,752,461 (0.9) 1.2 Net unamortized premiums and unearned loan fees (2) 2,211 8,983 9,011 8,927 7,932 (75.4) (72.1) Allowance for credit losses (38,593) (38,729) (40,442) (41,268) (39,424) (0.4) (2.1) Net loans $6,793,832 $6,865,447 $6,894,327 $6,915,406 $6,720,969 (1.0)% 1.1 % ________________(1)Includes $4.0 million, $4.8 million, $5.2 million, $9.6 million, and $22.2 million of PPP loans at June 30, 2023, March 31, 2023, December 31, 2022, September 30, 2022, and June 30, 2022, respectively.(2)Includes $4.8 million, $5.1 million, $5.4 million, $5.8 million, and $6.6 million of purchase accounting unamortized discount resulting from the acquisition of Empire Bancorp at June 30, 2023, March 31, 2023, December 31, 2022, September 30, 2022, and June 30, 2022, respectively. FLUSHING FINANCIAL CORPORATION and SUBSIDIARIESLOAN 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) 2023 2023 2022 2022 2022 2023 2022Multifamily residential $31,901 $42,164 $65,347 $173,980 $136,902 $74,065 $235,082Commercial real estate 38,523 15,570 20,750 77,777 164,826 54,093 209,928One-to-four family – mixed-use property 5,812 4,938 4,489 12,383 12,228 10,750 20,726One-to-four family – residential 63 4,296 7,485 4,102 4,211 4,359 13,448Co-operative apartments — — — — — — 24Construction 8,811 10,592 7,301 7,170 8,319 19,403 17,121Mortgage Loans 85,110 77,560 105,372 275,412 326,486 162,670 496,329 Small Business Administration 820 318 665 46 2,750 1,138 2,750Commercial business and other 72,850 95,668 119,191 188,202 174,551 168,518 334,027Nonmortgage Loans 73,670 95,986 119,856 188,248 177,301 169,656 336,777 Total Closings $158,780 $173,546 $225,228 $463,660 $503,787 $332,326 $833,106 Weighted Average Rate on Loan Closings For the three months ended June 30, March 31, December 31, September 30, June 30,Loan type 2023 2023 2022 2022 2022Mortgage loans 6.62% 6.30% 5.59% 4.37% 3.76%Nonmortgage loans 7.76 7.58 6.57 4.93 4.21 Total loans 7.14% 7.01% 6.10% 4.60% 3.92% FLUSHING FINANCIAL CORPORATION and SUBSIDIARIESASSET 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) 2023 2023 2022 2022 2022 2023 2022Allowance for credit losses - loans Beginning balances $38,729 $40,442 $41,268 $39,424 $37,433 $40,442 $37,135 Net loan charge-off (recoveries): Multifamily residential — (1) 132 — (1) (1) (1) Commercial real estate 8 — — — — 8 — One-to-four family – residential 4 (36) 17 2 (2) (32) (4) Small Business Administration (158) (6) (9) (12) 13 (164) 1,028 Taxi medallion — — — — (435) — (447) Commercial business and other 1,706 9,277 671 300 (76) 10,983 (142) Total 1,560 9,234 811 290 (501) 10,794 434 Provision (benefit) for loan losses 1,424 7,521 (15) 2,134 1,490 8,945 2,723 Ending balance $38,593 $38,729 $40,442 $41,268 $39,424 $38,593 $39,424 Gross charge-offs $1,731 $9,298 $1,938 $324 $50 $11,029 $1,086 Gross recoveries 171 64 1,127 34 551 235 652 Allowance for credit losses - loans to gross loans 0.57 % 0.56 % 0.58 % 0.59 % 0.58 % 0.57 % 0.58 %Net loan charge-offs (recoveries) to average loans 0.09 0.54 0.05 0.02 (0.03) 0.32 0.01 Nonperforming Assets June 30, March 31, December 31, September 30, June 30,(Dollars in thousands) 2023 2023 2022 2022 2022Loans 90 Days Or More Past Due and Still Accruing: Commercial real estate $— $— $— $2,000 $— Construction — — 2,600 — — Commercial business and other — — — — 100 Total — — 2,600 2,000 100 Nonaccrual Loans: Multifamily residential 3,206 3,628 3,206 3,414 3,414 Commercial real estate — — 237 1,851 242 One-to-four family - mixed-use property(1) 790 790 790 790 790 One-to-four family - residential 5,218 4,961 4,425 4,655 5,055 Construction — — — — 856 Small Business Administration 1,119 937 937 937 937 Commercial business and other(1) 8,304 10,860 20,187 15,356 16,554 Total 18,637 21,176 29,782 27,003 27,848 Total Nonperforming Loans (NPLs) 18,637 21,176 32,382 29,003 27,948 Total Nonaccrual HTM Securities 20,981 20,981 20,981 20,981 20,981 Total Nonperforming Assets $39,618 $42,157 $53,363 $49,984 $48,929 Nonperforming Assets to Total Assets 0.47% 0.50% 0.63% 0.58% 0.59%Allowance for Credit Losses to NPLs 207.1% 182.9% 124.9% 142.3% 141.1% ________________(1)Adopted ASU No. 2022-02 Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures on January 1, 2023; Not included in the above analysis are nonaccrual performing TDR one-to-four family – mixed use property loans totaling $0.2 million in 4Q22 and in 3Q22 and $0.3 million in 2Q22; nonaccrual performing TDR commercial business loans totaling less than $0.1 million in 4Q22, $2.9 million in 3Q22, and $2.8 million in 2Q22. FLUSHING FINANCIAL CORPORATION and SUBSIDIARIESRECONCILIATION OF GAAP EARNINGS and CORE EARNINGS Non-cash Fair Value Adjustments to GAAP Earnings The variance in GAAP and core earnings is partly driven by the impact of non-cash net gains and losses from fair value adjustments. These fair value adjustments relate primarily to borrowings carried at fair value under the fair value option. Core Net Income, Core Diluted EPS, Core ROAE, Core ROAA, Pre-provision Pre-tax Net Revenue, Core Net Interest Income FTE, Core Net Interest Margin FTE, Core Interest Income and Yield on Total Loans, Core Noninterest Income, Core Noninterest Expense and Tangible Book Value per common share are each non-GAAP measures used in this release. A reconciliation to the most directly comparable GAAP financial measures appears below in tabular form. The Company believes that these measures are useful for both investors and management to understand the effects of certain interest and noninterest items and provide an alternative view of the Company’s performance over time and in comparison, to the Company’s competitors. These measures should not be viewed as a substitute for net income. The Company believes that tangible book value per common share is useful for both investors and management as this measure is commonly used by financial institutions, regulators, and investors to measure the capital adequacy of financial institutions. The Company believes these measures facilitate comparison of the quality and composition of the Company’s capital over time and in comparison, to its competitors. These measures should not be viewed as a substitute for total shareholders’ equity. These non-GAAP measures have inherent limitations, are not required to be uniformly applied and are not audited. They should not be considered in isolation or as a substitute for analysis of results reported under GAAP. These non-GAAP measures may not be comparable to similarly titled measures reported by other companies. FLUSHING FINANCIAL CORPORATION and SUBSIDIARIESRECONCILIATION 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) 2023 2023 2022 2022 2022 2023 2022 GAAP income before income taxes $11,805 $6,959 $12,819 $32,422 $34,971 $18,764 $59,611 Net (gain) loss from fair value adjustments (Noninterest income (loss)) (294) (2,619) 622 (5,626) (2,533) (2,913) (724) Net loss on sale of securities (Noninterest income (loss)) — — 10,948 — — — — Life insurance proceeds (Noninterest income (loss)) (561) — (286) — (1,536) (561) (1,536) Net gain on disposition of assets (Noninterest income (loss)) — — (104) — — — — Net (gain) loss from fair value adjustments on qualifying hedges (Net interest income) 205 (100) (936) (28) 60 105 189 Net amortization of purchase accounting adjustments and intangibles (Various) (227) (188) (219) (650) (237) (415) (1,161) Core income before taxes 10,928 4,052 22,844 26,118 30,725 14,980 56,379 Provision for core income taxes 3,074 1,049 5,445 7,165 9,207 4,123 15,892 Core net income $7,854 $3,003 $17,399 $18,953 $21,518 $10,857 $40,487 GAAP diluted earnings per common share $0.29 $0.17 $0.34 $0.76 $0.81 $0.46 $1.39 Net (gain) loss from fair value adjustments, net of tax (0.01) (0.06) 0.02 (0.13) (0.06) (0.07) (0.02) Net loss on sale of securities, net of tax — — 0.27 — — — — Life insurance proceeds (0.02) — (0.01) — (0.05) (0.02) (0.05) Net gain on disposition of assets, net of tax — — — — — — — Net (gain) loss from fair value adjustments on qualifying hedges, net of tax — — (0.02) — — — — Net amortization of purchase accounting adjustments, net of tax (0.01) (0.01) (0.01) (0.02) (0.01) (0.01) (0.03) Core diluted earnings per common share(1) $0.26 $0.10 $0.57 $0.62 $0.70 $0.36 $1.30 Core net income, as calculated above $7,854 $3,003 $17,399 $18,953 $21,518 $10,857 $40,487 Average assets 8,461,827 8,468,311 8,518,019 8,442,657 8,211,763 8,465,051 8,131,065 Average equity 673,943 683,071 676,165 674,282 667,456 678,481 670,219 Core return on average assets(2) 0.37 % 0.14 % 0.82 % 0.90 % 1.05 % 0.26 % 1.00 %Core return on average equity(2) 4.66 % 1.76 % 10.29 % 11.24 % 12.90 % 3.20 % 12.08 % ________________(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 SUBSIDIARIESRECONCILIATION 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) 2023 2023 2022 2022 2022 2023 2022 GAAP Net interest income $43,378 $45,262 $54,201 $61,206 $64,730 $88,640 $128,209 Net (gain) loss from fair value adjustments on qualifying hedges 205 (100) (936) (28) 60 105 189 Net amortization of purchase accounting adjustments (340) (306) (342) (775) (367) (646) (1,425) Core Net interest income $43,243 $44,856 $52,923 $60,403 $64,423 $88,099 $126,973 GAAP Noninterest income (loss) $5,122 $6,908 $(7,652) $8,995 $7,353 $12,030 $8,666 Net (gain) loss from fair value adjustments (294) (2,619) 622 (5,626) (2,533) (2,913) (724) Net loss on sale of securities — — 10,948 — — — — Life insurance proceeds (561) — (286) — (1,536) (561) (1,536) Net gain on sale of assets — — (104) — — — — Core Noninterest income $4,267 $4,289 $3,528 $3,369 $3,284 $8,556 $6,406 GAAP Noninterest expense $35,279 $37,703 $33,742 $35,634 $35,522 $72,982 $74,316 Net amortization of purchase accounting adjustments (113) (118) (123) (125) (130) (231) (264) Core Noninterest expense $35,166 $37,585 $33,619 $35,509 $35,392 $72,751 $74,052 Net interest income $43,378 $45,262 $54,201 $61,206 $64,730 $88,640 $128,209 Noninterest income (loss) 5,122 6,908 (7,652) 8,995 7,353 12,030 8,666 Noninterest expense (35,279) (37,703) (33,742) (35,634) (35,522) (72,982) (74,316) Pre-provision pre-tax net revenue $13,221 $14,467 $12,807 $34,567 $36,561 $27,688 $62,559 Core: Net interest income $43,243 $44,856 $52,923 $60,403 $64,423 $88,099 $126,973 Noninterest income 4,267 4,289 3,528 3,369 3,284 8,556 6,406 Noninterest expense (35,166) (37,585) (33,619) (35,509) (35,392) (72,751) (74,052) Pre-provision pre-tax net revenue $12,344 $11,560 $22,832 $28,263 $32,315 $23,904 $59,327 Efficiency Ratio 74.0 % 76.5 % 59.6 % 55.7 % 52.3 % 75.3 % 55.5 % FLUSHING FINANCIAL CORPORATION and SUBSIDIARIESRECONCILIATION OF GAAP NET INTEREST INCOME and NET INTEREST MARGINto 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)2023 2023 2022 2022 2022 2023 2022 GAAP net interest income$43,378 $45,262 $54,201 $61,206 $64,730 $88,640 $128,209 Net (gain) loss from fair value adjustments on qualifying hedges 205 (100) (936) (28) 60 105 189 Net amortization of purchase accounting adjustments (340) (306) (342) (775) (367) (646) (1,425) Tax equivalent adjustment 101 100 102 104 131 201 255 Core net interest income FTE$43,344 $44,956 $53,025 $60,507 $64,554 $88,300 $127,228 Total average interest-earning assets (1)$7,990,331 $8,001,271 $8,050,601 $7,984,558 $7,746,640 $7,995,772 $7,662,315 Core net interest margin FTE 2.17 % 2.25 % 2.63 % 3.03 % 3.33 % 2.21 % 3.32 % GAAP interest income on total loans, net$85,377 $82,889 $81,033 $75,546 $69,192 $168,266 $136,708 Net (gain) loss from fair value adjustments on qualifying hedges - loans 157 (101) (936) (28) 60 56 189 Net amortization of purchase accounting adjustments (345) (316) (372) (783) (357) (661) (1,474) Core interest income on total loans, net$85,189 $82,472 $79,725 $74,735 $68,895 $167,661 $135,423 Average total loans, net (1)$6,834,644 $6,876,495 $6,886,900 $6,867,758 $6,647,131 $6,855,454 $6,616,860 Core yield on total loans 4.99 % 4.80 % 4.63 % 4.35 % 4.15 % 4.89 % 4.09 % ________________(1)Excludes purchase accounting average balances for all periods presented. FLUSHING FINANCIAL CORPORATION and SUBSIDIARIESCALCULATION OF TANGIBLE STOCKHOLDERS’COMMON EQUITY to TANGIBLE ASSETS(Unaudited) June 30, March 31, December 31, September 30, June 30,(Dollars in thousands) 2023 2023 2022 2022 2022Total Equity $671,303 $673,459 $677,157 $670,719 $670,812 Less: Goodwill (17,636) (17,636) (17,636) (17,636) (17,636) Core deposit intangibles (1,769) (1,891) (2,017) (2,147) (2,282) Tangible Stockholders' Common Equity $651,898 $653,932 $657,504 $650,936 $650,894 Total Assets $8,473,883 $8,479,121 $8,422,946 $8,557,419 $8,339,587 Less: Goodwill (17,636) (17,636) (17,636) (17,636) (17,636) Core deposit intangibles (1,769) (1,891) (2,017) (2,147) (2,282) Tangible Assets $8,454,478 $8,459,594 $8,403,293 $8,537,636 $8,319,669 Tangible Stockholders' Common Equity to Tangible Assets 7.71 % 7.73 % 7.82 % 7.62 % 7.82 % Investor Contact: Susan K. Cullen, SEVP, CFO and Treasurer, 718-961-5400
John R. Buran, President and CEO Commentary “We delivered sequential improvements in key metrics in the second quarter amid continuing uncertainty in the operating environment. We experienced the lowest level of NIM compression of the past four quarters and achieved QoQ improvements in the loan pipeline and asset quality. Further, we increased deposit balances compared to past seasonal trends. As we continue to execute on the action plan announced last quarter, we are pleased with the progress we are making to enhance the resilience of our business model and strengthen performance: 1) continued to move more towards interest rate risk neutral with the addition of over $400 million of interest rate hedges and $250 million in forward hedges becoming effective; 2) the loan pipeline and yield increased 56% and 20 bps, respectively, QoQ; 3) checking account openings increased 10 % YoY; 4) reviewed new and existing relationships resulting in improved credit metrics and normalized net charge-offs; Manhattan office buildings are approximately 0.6% of net loans; 5) available liquidity and capital ratios remained stable; and 6) controlled noninterest expenses, which decreased 1% YoY. In addition, we repurchased approximately 530,000 shares in 2Q23 without a material effect on the tangible common equity ratio. Taken together, these actions support continued improvement of our profitability and liquidity while preparing us for a range of possible rate environments. While we remain conservative regarding our operating environment, our progress gives us cautious optimism for the remainder of the year. Looking ahead, we will continue to focus on positioning the Company for success with an emphasis on reducing interest rate risk, improving credit quality, liquidity, and the customer experience.”- John R. Buran, President and CEO UNIONDALE, N.Y., July 25, 2023 (GLOBE NEWSWIRE) -- EPS Improves QoQ; NIM Compression Slows. The Company reported second quarter 2023 GAAP EPS of $0.29, down 64% YoY, but up 71% QoQ. Core EPS totaled $0.26, a decrease of 63% YoY, but an increase of 160% QoQ. The improvement QoQ was primarily driven by the return to normalized credit costs, the absence of seasonal expenses, and the benefit derived from the interest rate hedge strategy. The interest rate hedges slowed the NIM compression, which was only 9 bps QoQ to 2.18%. The interest rate hedges, and other balance sheet actions, have reduced the liability sensitive position significantly over the past year and are beneficial in a “higher-for-longer” rate environment. Credit Quality Improved; Strong Capital. QoQ, nonperforming assets and criticized and classified assets decreased 6% and 12%, respectively, while net charge offs were 9 basis points. Capital continues to be sound with a TCE1 of 7.71%, stable QoQ. Key Financial Metrics2 2Q23 1Q23 4Q22 3Q22 2Q22 1H23 1H22GAAP: EPS $0.29 $0.17 $0.34 $0.76 $0.81 $0.46 $1.39ROAA (%) 0.41 0.24 0.48 1.11 1.22 0.33 1.06ROAE (%) 5.12 3.02 6.06 13.91 15.00 4.06 12.91NIM FTE3 (%) 2.18 2.27 2.70 3.07 3.35 2.22 3.36Core: EPS $0.26 $0.10 $0.57 $0.62 $0.70 $0.36 $1.30ROAA (%) 0.37 0.14 0.82 0.90 1.05 0.26 1.00ROAE (%) 4.66 1.76 10.29 11.24 12.90 3.20 12.08Core NIM FTE (%) 2.17 2.25 2.63 3.03 3.33 2.21 3.32Credit Quality: NPAs/Loans & OREO (%) 0.58 0.61 0.77 0.72 0.72 0.58 0.72ACLs/Loans (%) 0.57 0.56 0.58 0.59 0.58 0.57 0.58ACLs/NPLs (%) 207.08 182.89 124.89 142.29 141.06 207.08 141.06NCOs/Avg Loans (%) 0.09 0.54 0.05 0.02 (0.03) 0.32 0.01Balance Sheet: Avg Loans ($B) $6.8 $6.9 $6.9 $6.9 $6.6 $6.9 $6.6Avg Dep ($B) $6.9 $6.8 $6.7 $6.3 $6.4 $6.9 $6.4Book Value/Share $23.18 $22.84 $22.97 $22.47 $22.38 $23.18 $22.38Tangible BV/Share $22.51 $22.18 $22.31 $21.81 $21.71 $22.51 $21.71TCE/TA (%) 7.71 7.73 7.82 7.62 7.82 7.71 7.82 1 Tangible Common Equity (“TCE”)/Total Assets (“TA”) 2 See “Reconciliation of GAAP Earnings and Core Earnings”, “Reconciliation of GAAP Revenue and Pre-Provision Pre-Tax Net Revenue”, and “Reconciliation of GAAP Net Interest Margin to Core Net Interest Income and Net Interest Margin.” 3 Net Interest Margin (“NIM”) Fully Taxable Equivalent (“FTE”) 2Q23 Highlights Net interest margin FTE decreased 117 bps YoY and 9 bps QoQ to 2.18%; Core net interest margin FTE decreased 116 bps YoY and 8 bps QoQ to 2.17%; Both GAAP and Core NIMs benefited from the $450 million of new hedges added in late 1Q23, an additional $400 million in 2Q23, and $250 million of forward hedges that became effective in 2Q23; Overall liability sensitivity has been reduced by 64% over the past year.Average total deposits increased 7.1% YoY and 1.3% QoQ to $6.9 billion; average CDs totaled $2.0 billion, up 149.5% YoY and 21.9% QoQ; growth in CDs generally lengthens the duration of customer deposits and helps reduce rate sensitivityPeriod end net loans increased 1.1% YoY, but decreased 1.0% QoQ; loan closings were $158.8 million down 68.5% YoY and 8.5% QoQ; the yield on closings increased 322 bps YoY and 13 bps QoQ to 7.14%Loan pipeline decreased 28.7% YoY, but increased 56.1% QoQ to $415.5 million; nearly 35% of the loan pipeline consists of back-to-back loan swapsNPAs declined to $39.6 million from $48.9 million a year ago and $42.2 million in the prior quarterProvision for credit losses was $1.4 million in 2Q23 compared to $1.6 million in 2Q22 and $7.5 million in 1Q23; net charge-offs were $1.6 million in 2Q23 compared to net recoveries of $0.5 million in 2Q22 and net charge-offs of 9.2 million in 1Q23Tangible Common Equity to Tangible Assets was stable at 7.71% at 2Q23 compared to 7.73% at 1Q23Repurchased 528,815 shares at an average price of $12.94 or at a 42.5% discount to June 30, 2023 tangible book value of $22.51 Areas of FocusInterestRateRisk Continued to take significant actions to position the Company’s balance sheet more towards interest rate risk neutralDuring 2Q23, the Company added $400 million of interest rate hedges and an additional $250 million of forward hedges that became effectiveRate sensitivity to a +100 bps shock has been reduced by 64% over the past year. Credit Quality Manhattan office buildings are approximately 0.6% of net loansOver 88% of the loan portfolio is collateralized by real estate with an average loan to value less than 36%Debt service coverage ratio of 1.8x for multifamily and investor commercial real estate loans that reprice through 2025 Liquidity The Company maintains ample liquidity with $3.7 billion of undrawn lines and resourcesTotal deposits increased 4.9% YoY and 2Q23 balances were higher than normal seasonal declinesChecking account openings were up 9.6% YoY in 2Q23 Customer Experience Additional opportunities emerging as competitors leave the market Approximately 33% of our branches are in Asian communitiesBensonhurst, our 27th branch, is expected to open in the second half of 2023, and will enhance our Asian community branch presenceDigital banking usage continues to increase with double digit growth in monthly mobile deposit active users and digital banking enrollment in June 2023 versus a year ago Income Statement Highlights YoY QoQ($000s, except EPS) 2Q23 1Q23 4Q22 3Q22 2Q22 Change Change Net Interest Income $43,378 $45,262 $54,201 $61,206 $64,730 (33.0)% (4.2)%Provision (Benefit) for Credit Losses 1,416 7,508 (12) 2,145 1,590 (10.9) NM Noninterest Income (Loss) 5,122 6,908 (7,652) 8,995 7,353 (30.3) (25.9) Noninterest Expense 35,279 37,703 33,742 35,634 35,522 (0.7) (6.4) Income Before Income Taxes 11,805 6,959 12,819 32,422 34,971 (66.2) 69.6 Provision for Income Taxes 3,177 1,801 2,570 8,980 9,936 (68.0) 76.4 Net Income $8,628 $5,158 $10,249 $23,442 $25,035 (65.5) 67.3 Diluted EPS $0.29 $0.17 $0.34 $0.76 $0.81 (64.2) 70.6 Avg. Diluted Shares (000s) 30,090 30,265 30,420 30,695 30,937 (2.7) (0.6) Core Net Income1 $7,854 $3,003 $17,399 $18,953 $21,518 (63.5) 161.5 Core EPS1 $0.26 $0.10 $0.57 $0.62 $0.70 (62.9) 160.0 1 See Reconciliation of GAAP Earnings and Core Earnings Net interest income decreased YoY and QoQ. Net interest margin, FTE of 2.18% decreased 117 bps YoY and 9 bps QoQPrepayment penalty income from loans and securities, 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 $0.5 million (3 bps to the NIM) in 2Q23 compared to $1.1 million (6 bps) in 1Q23, $2.4 million (12 bps) in 4Q22, $2.2 million (11 bps) in 3Q22, and $2.6 million (13 bps) in 2Q22; Prepayment penalty income declined primarily due to the higher rate environmentExcluding the items in the previous bullet, net interest margin was 2.15% in 2Q23, 2.21% in 1Q23, 2.58% in 4Q22, 2.96% in 3Q22, and 3.22% in 2Q22Quarterly NIM compression of 9 bps was the slowest decline in the past four quarters primarily due to the balance sheet actions taken in 1Q23 and 2Q23 that reduced liability sensitivity The provision for credit losses declined YoY and QoQ. Net charge-offs (recoveries) were $1.6 million in 2Q23 (9 bps of average loans), $9.2 million in 1Q23 (54 bps of average loans), $0.8 million in 4Q22 (5 bps of average loans), $0.3 million in 3Q22 (2 bps of average loans), and $(0.5) million in 2Q22 ((3) bps of average loans)1Q23 net charge-offs were primarily related to a commercial business relationship that was placed on nonaccrual in 2Q22 Noninterest income (loss) declined YoY and QoQ. Noninterest income included net gains (losses) from fair value adjustments of $0.3 million in 2Q23 ($0.01 per share, net of tax), $2.6 million in 1Q23 ($0.06 per share, net of tax), $(0.6) million in 4Q22 ($(0.02) per share, net of tax), $5.6 million in 3Q22 ($0.13 per share, net of tax), and $2.5 million in 2Q22 ($0.06 per share, net of tax)Loss on the sale of securities was $10.9 million ($0.27 per share, net of tax) in 4Q22 as the Company sold $84.2 million of mortgage-based securities with an approximate yield of 1.17%; proceeds were primarily reinvested in 1Q23 into floating rate securities that had a yield at that time that approximated 6.40%Life insurance proceeds were $0.6 million ($0.02 per share) in 2Q23, $0.3 million ($0.01 per share) in 4Q22 and $1.5 million ($0.05 per share) in 2Q22Absent all above items and other immaterial adjustments, core noninterest income was $4.3 million in 2Q23, up 29.9% YoY but down 0.5% QoQ Noninterest expense decreased YoY and QoQ. Given the challenging rate environment, management continues to actively review all noninterest expensesOther operating expenses include $0.6 million reduction in reserves for unfunded commitments in 3Q22Seasonal compensation expense was $4.1 million in 1Q23Excluding the effects of other immaterial adjustments, core operating expenses were $35.2 million in 2Q23, down 0.6% YoY, and 6.4% QoQGAAP noninterest expense to average assets was 1.67% in 2Q23, 1.78% in 1Q23, 1.58% in 4Q22, 1.69% in 3Q22, and 1.73% in 2Q22 Provision for income taxes declined YoY and increased QoQ. The effective tax rate was 26.9% in 2Q23, 25.9% in 1Q23, 20.0% in 4Q22, 27.7% in 3Q22, and 28.4% in 2Q22The 4Q22 effective tax rate declined due to preferential tax items having a larger impact due to lower levels of pre-tax incomeThe 2Q22 effective tax rate includes a loss of certain state and city tax deductions and a resolution of certain examinations by taxing authorities Balance Sheet, Credit Quality, and Capital Highlights YoY QoQ 2Q23 1Q23 4Q22 3Q22 2Q22 Change ChangeAverages ($MM) Loans $6,830 $6,871 $6,881 $6,861 $6,640 2.9 % (0.6)%Total Deposits 6,900 6,810 6,678 6,277 6,441 7.1 1.3 Credit Quality ($000s) Nonperforming Loans $18,637 $21,176 $32,382 $29,003 $27,948 (33.3)% (12.0)%Nonperforming Assets 39,618 42,157 53,363 49,984 48,929 (19.0) (6.0) Criticized and Classified Loans 48,675 58,130 68,093 61,684 57,145 (14.8) (16.3) Criticized and Classified Assets 69,656 79,111 89,073 82,665 78,125 (10.8) (12.0) Allowance for Credit Losses/Loans (%) 0.57 0.56 0.58 0.59 0.58 (1)bp 1 bps Capital Book Value/Share $23.18 $22.84 $22.97 $22.47 $22.38 3.6 % 1.5 %Tangible Book Value/Share 22.51 22.18 22.31 21.81 21.71 3.7 1.5 Tang. Common Equity/Tang. Assets (%) 7.71 7.73 7.82 7.62 7.82 (11)bps (2)bpsLeverage Ratio (%) 8.56 8.58 8.61 8.74 8.91 (35) (2) Average loans increased YoY but declined QoQ. Maintain the credit strategy of loans secured by real estate with a greater emphasis on back-to-back swap originationsPeriod end net loans totaled $6.8 billion, up 1.1% YoY, but down 1.0% QoQTotal loan closings were $158.8 million in 2Q23, $173.5 million in 1Q23, $225.2 million in 4Q22, $463.7 million in 3Q22, and $503.8 million in 2Q22; the loan pipeline was $415.5 million at June 30, 2023, down 28.7% YoY, but up 56.1% QoQ; closings were impacted by customers adjusting to the higher rate environmentThe diversified loan portfolio is over 88% collateralized by real estate with an average loan-to-value ratio of <36%Manhattan office buildings are approximately 0.6% of net loans Average total deposits increased YoY and QoQ. Average CDs totaled $2.0 billion, up 149.5% YoY and 21.9% QoQ; CDs generally lengthen the duration of customer deposits and reduce sensitivity to rising ratesAverage noninterest bearing deposits decreased 18.7% YoY and 5.2% QoQ in 2Q23 and comprised 12.3% of average total deposits in 2Q23 compared to 16.2% a year ago Credit Quality: Nonperforming loans declined YoY and QoQ. Criticized and classified loans were 71 bps of gross loans at 2Q23 compared to 84 bps at 1Q23, 98 bps at 4Q22, 89 bps at 3Q22, and 85 bps at 2Q22Allowance for credit losses were 207.1% of nonperforming loans at 2Q23 compared to 182.9% at 1Q23, and 141.1% at 2Q22 Capital: Book value per common share and tangible book value per common share, a non-GAAP measure, both increased YoY and QoQ. The Company paid a dividend of $0.22 per share in 2Q23 and has ample available liquidity to meet its obligationsThe Company repurchased 528,815 shares in 2Q23 at an average price of $12.94, representing a 42.5% discount to tangible book value, with 906,131 shares remaining subject to repurchase under the authorized stock repurchase program, which has no expiration or maximum dollar limitTangible common equity to tangible assets was 7.71% at 2Q23 compared to 7.73% at 1Q23 and 7.82% at 2Q22The Company and the Bank remain well capitalized under all applicable regulatory requirements 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 and Treasurer, will host a conference call on Wednesday, July 26, 2023, at 9:30 AM (ET) to discuss the Company’s first quarter results and strategy.Dial-in for Live Call: 1-877-509-5836; Canada 855-669-9657Webcast: https://event.choruscall.com/mediaframe/webcast.html?webcastid=Nb7q4ytYDial-in for Replay: 1-877-344-7529; Canada 855-669-9658Replay Access Code: 7017400The conference call will be simultaneously webcast and archived Third Quarter 2023 Earnings Release Date: The Company plans to release Third Quarter 2023 financial results after the market close on October 31, 2023; followed by a conference call at 9:30 AM (ET) on November 1, 2023. 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®, 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, 2022 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 SUBSIDIARIESFINANCIAL HIGHLIGHTS(Unaudited) At or for the three months ended At or for the six months ended (Dollars in thousands, except per share data) June 30, March 31, December 31, September 30, June 30, June 30, June 30, 2023 2023 2022 2022 2022 2023 2022 Performance Ratios (1) Return on average assets 0.41% 0.24% 0.48% 1.11% 1.22 % 0.33% 1.06%Return on average equity 5.12 3.02 6.06 13.91 15.00 4.06 12.91 Yield on average interest-earning assets (2) 4.84 4.61 4.44 4.10 3.85 4.73 3.81 Cost of average interest-bearing liabilities 3.15 2.80 2.11 1.25 0.60 2.97 0.55 Cost of funds 2.80 2.47 1.84 1.08 0.52 2.63 0.48 Net interest rate spread during period (2) 1.69 1.81 2.33 2.85 3.25 1.76 3.26 Net interest margin (2) 2.18 2.27 2.70 3.07 3.35 2.22 3.36 Noninterest expense to average assets 1.67 1.78 1.58 1.69 1.73 1.72 1.83 Efficiency ratio (3) 74.02 76.48 59.55 55.68 52.27 75.27 55.52 Average interest-earning assets to average interest-bearing liabilities 1.18X 1.19X 1.21X 1.22X 1.22 X 1.19X 1.22X Average Balances Total loans, net $6,829,648 $6,871,192 $6,881,245 $6,861,463 $6,640,331 $6,850,305 $6,609,676 Total interest-earning assets 7,986,020 7,996,677 8,045,691 7,979,070 7,740,683 7,991,320 7,655,999 Total assets 8,461,827 8,468,311 8,518,019 8,442,657 8,211,763 8,465,051 8,131,065 Total deposits 6,899,617 6,810,485 6,678,383 6,276,613 6,440,904 6,855,299 6,425,569 Total interest-bearing liabilities 6,756,859 6,703,558 6,662,209 6,553,087 6,337,374 6,730,357 6,279,265 Stockholders' equity 673,943 683,071 676,165 674,282 667,456 678,481 670,219 Per Share Data Book value per common share (4) $23.18 $22.84 $22.97 $22.47 $22.38 $23.18 $22.38 Tangible book value per common share (5) $22.51 $22.18 $22.31 $21.81 $21.71 $22.51 $21.71 Stockholders' Equity Stockholders' equity $671,303 $673,459 $677,157 $670,719 $670,812 $671,303 $670,812 Tangible stockholders' equity 651,898 653,932 657,504 650,936 650,894 651,898 650,894 Consolidated Regulatory Capital Ratios Tier 1 capital $735,810 $737,138 $746,880 $749,526 $739,776 $735,810 $739,776 Common equity Tier 1 capital 689,876 690,846 698,258 701,532 686,258 689,876 686,258 Total risk-based capital 963,840 965,384 975,709 979,021 903,047 963,840 903,047 Risk Weighted Assets 6,649,252 6,659,532 6,640,542 6,689,284 6,522,710 6,649,252 6,522,710 Tier 1 leverage capital (well capitalized = 5%) 8.56% 8.58% 8.61% 8.74% 8.91 % 8.56% 8.91% Common equity Tier 1 risk-based capital (well capitalized = 6.5%) 10.38 10.37 10.52 10.49 10.52 10.38 10.52 Tier 1 risk-based capital (well capitalized = 8.0%) 11.07 11.07 11.25 11.20 11.34 11.07 11.34 Total risk-based capital (well capitalized = 10.0%) 14.50 14.50 14.69 14.64 13.84 14.50 13.84 Capital Ratios Average equity to average assets 7.96% 8.07% 7.94% 7.99% 8.13 % 8.02% 8.24% Equity to total assets 7.92 7.94 8.04 7.84 8.04 7.92 8.04 Tangible common equity to tangible assets (6) 7.71 7.73 7.82 7.62 7.82 7.71 7.82 Asset Quality Nonaccrual loans (7) $18,637 $21,176 $29,782 $27,003 $27,848 $18,637 $27,848 Nonperforming loans 18,637 21,176 32,382 29,003 27,948 18,637 27,948 Nonperforming assets 39,618 42,157 53,363 49,984 48,929 39,618 48,929 Net charge-offs (recoveries) 1,560 9,234 811 290 (501) 10,794 434 Asset Quality Ratios Nonperforming loans to gross loans 0.27% 0.31% 0.47% 0.42% 0.41 % 0.27% 0.41% Nonperforming assets to total assets 0.47 0.50 0.63 0.58 0.59 0.47 0.59 Allowance for credit losses to gross loans 0.57 0.56 0.58 0.59 0.58 0.57 0.58 Allowance for credit losses to nonperforming assets 97.41 91.87 75.79 82.56 80.57 97.41 80.57 Allowance for credit losses to nonperforming loans 207.08 182.89 124.89 142.29 141.06 207.08 141.06 Net charge-offs (recoveries) to average loans 0.09 0.54 0.05 0.02 (0.03) 0.32 0.01 Full-service customer facilities 26 26 25 25 25 26 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 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”.(7) Excludes performing nonaccrual TDR loans in periods prior to 1Q23. FLUSHING FINANCIAL CORPORATION and SUBSIDIARIESCONSOLIDATED STATEMENTS OF INCOME (Unaudited) For the three months ended For the six months ended (In thousands, except per share data)June 30, March 31, December 31, September 30, June 30, June 30, June 30,2023 2023 2022 2022 2022 2023 2022Interest and Dividend Income Interest and fees on loans$85,377 $82,889 $81,033 $75,546 $69,192 $168,266 $136,708Interest and dividends on securities: Interest 9,172 7,240 6,511 5,676 4,929 16,412 8,674Dividends 30 29 24 17 11 59 19Other interest income 1,982 1,959 1,702 506 159 3,941 210Total interest and dividend income 96,561 92,117 89,270 81,745 74,291 188,678 145,611 Interest Expense Deposits 46,249 39,056 27,226 11,965 4,686 85,305 8,094Other interest expense 6,934 7,799 7,843 8,574 4,875 14,733 9,308Total interest expense 53,183 46,855 35,069 20,539 9,561 100,038 17,402 Net Interest Income 43,378 45,262 54,201 61,206 64,730 88,640 128,209Provision (benefit) for credit losses 1,416 7,508 (12) 2,145 1,590 8,924 2,948Net Interest Income After Provision (Benefit) for Credit Losses 41,962 37,754 54,213 59,061 63,140 79,716 125,261 Noninterest Income (Loss) Banking services fee income 1,780 1,411 1,231 1,351 1,166 3,191 2,540Net loss on sale of securities — — (10,948) — — — —Net gain on sale of loans 54 54 46 — 73 108 73Net gain on disposition of assets — — 104 — — — —Net gain (loss) from fair value adjustments 294 2,619 (622) 5,626 2,533 2,913 724Federal Home Loan Bank of New York stock dividends 534 697 658 538 407 1,231 804Life insurance proceeds 561 — 286 — 1,536 561 1,536Bank owned life insurance 1,134 1,109 1,126 1,132 1,115 2,243 2,229Other income 765 1,018 467 348 523 1,783 760Total noninterest income (loss) 5,122 6,908 (7,652) 8,995 7,353 12,030 8,666 Noninterest Expense Salaries and employee benefits 19,493 20,887 18,178 21,438 21,109 40,380 44,758Occupancy and equipment 3,534 3,793 3,701 3,541 3,760 7,327 7,364Professional services 2,657 2,483 2,130 2,570 2,285 5,140 4,507FDIC deposit insurance 943 977 485 738 615 1,920 1,035Data processing 1,473 1,435 1,421 1,367 1,383 2,908 2,807Depreciation and amortization 1,482 1,510 1,535 1,488 1,447 2,992 2,907Other real estate owned/foreclosure expense 150 165 35 143 32 315 116Other operating expenses 5,547 6,453 6,257 4,349 4,891 12,000 10,822Total noninterest expense 35,279 37,703 33,742 35,634 35,522 72,982 74,316 Income Before Provision for Income Taxes 11,805 6,959 12,819 32,422 34,971 18,764 59,611 Provision for Income Taxes 3,177 1,801 2,570 8,980 9,936 4,978 16,357 Net Income$8,628 $5,158 $10,249 $23,442 $25,035 $13,786 $43,254 Basic earnings per common share$0.29 $0.17 $0.34 $0.76 $0.81 $0.46 $1.39Diluted earnings per common share$0.29 $0.17 $0.34 $0.76 $0.81 $0.46 $1.39Dividends per common share$0.22 $0.22 $0.22 $0.22 $0.22 $0.44 $0.44 Basic average shares 30,090 30,265 30,420 30,695 30,937 30,177 31,095Diluted average shares 30,090 30,265 30,420 30,695 30,937 30,177 31,095 FLUSHING FINANCIAL CORPORATION and SUBSIDIARIESCONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Unaudited) June 30, March 31, December 31, September 30, June 30,(Dollars in thousands) 2023 2023 2022 2022 2022 ASSETS Cash and due from banks $160,053 $176,747 $151,754 $164,693 $137,026 Securities held-to-maturity: Mortgage-backed securities 7,865 7,870 7,875 7,880 7,885 Other securities, net 65,469 65,653 65,836 66,032 66,230 Securities available for sale: Mortgage-backed securities 365,911 380,110 384,283 468,366 510,934 Other securities 503,645 431,818 351,074 351,495 346,720 Loans 6,832,425 6,904,176 6,934,769 6,956,674 6,760,393 Allowance for credit losses (38,593) (38,729) (40,442) (41,268) (39,424)Net loans 6,793,832 6,865,447 6,894,327 6,915,406 6,720,969 Interest and dividends receivable 52,911 46,836 45,048 42,571 38,811 Bank premises and equipment, net 22,182 21,567 21,750 22,376 22,285 Federal Home Loan Bank of New York stock 36,168 38,779 45,842 62,489 50,017 Bank owned life insurance 213,164 214,240 213,131 212,353 211,220 Goodwill 17,636 17,636 17,636 17,636 17,636 Core deposit intangibles 1,769 1,891 2,017 2,147 2,282 Right of use asset 41,526 42,268 43,289 44,885 46,687 Other assets 191,752 168,259 179,084 179,090 160,885 Total assets $8,473,883 $8,479,121 $8,422,946 $8,557,419 $8,339,587 LIABILITIES Total deposits $6,723,690 $6,734,090 $6,485,342 $6,125,305 $6,407,577 Borrowed funds 857,400 887,509 1,052,973 1,572,830 1,089,621 Operating lease liability 44,402 45,353 46,125 48,330 50,346 Other liabilities 177,088 138,710 161,349 140,235 121,231 Total liabilities 7,802,580 7,805,662 7,745,789 7,886,700 7,668,775 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 263,744 262,876 264,332 263,755 262,860 Treasury stock (104,574) (97,760) (98,535) (90,977) (88,342)Retained earnings 547,811 545,786 547,507 543,894 527,217 Accumulated other comprehensive loss, net of taxes (36,019) (37,784) (36,488) (46,294) (31,264)Total stockholders' equity 671,303 673,459 677,157 670,719 670,812 Total liabilities and stockholders' equity $8,473,883 $8,479,121 $8,422,946 $8,557,419 $8,339,587 (In thousands) Issued shares 34,088 34,088 34,088 34,088 34,088 Outstanding shares 28,961 29,488 29,476 29,851 29,980 Treasury shares 5,127 4,600 4,612 4,237 4,108 FLUSHING FINANCIAL CORPORATION and SUBSIDIARIESAVERAGE 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) 2023 2023 2022 2022 2022 2023 2022Interest-earning Assets: Mortgage loans, net $5,308,567 $5,333,274 $5,338,612 $5,340,694 $5,178,029 $5,320,852 $5,165,121Other loans, net 1,521,081 1,537,918 1,542,633 1,520,769 1,462,302 1,529,453 1,444,555Total loans, net 6,829,648 6,871,192 6,881,245 6,861,463 6,640,331 6,850,305 6,609,676Taxable securities: Mortgage-backed securities 448,620 457,911 549,204 568,854 594,923 453,240 587,836Other securities 471,600 411,723 371,897 362,629 333,158 441,827 280,245Total taxable securities 920,220 869,634 921,101 931,483 928,081 895,067 868,081Tax-exempt securities: Other securities 66,632 66,828 67,022 67,211 67,315 66,730 62,490Total tax-exempt securities 66,632 66,828 67,022 67,211 67,315 66,730 62,490Interest-earning deposits and federal funds sold 169,520 189,023 176,323 118,913 104,956 179,218 115,752Total interest-earning assets 7,986,020 7,996,677 8,045,691 7,979,070 7,740,683 7,991,320 7,655,999Other assets 475,807 471,634 472,328 463,587 471,080 473,731 475,066Total assets $8,461,827 $8,468,311 $8,518,019 $8,442,657 $8,211,763 $8,465,051 $8,131,065 Interest-bearing Liabilities: Deposits: Savings accounts $124,041 $134,945 $146,598 $154,545 $156,785 $129,463 $156,689NOW accounts 2,026,950 1,970,555 1,972,134 1,808,608 2,089,851 1,998,909 2,063,529Money market accounts 1,754,574 2,058,523 2,146,649 2,136,829 2,231,743 1,905,709 2,242,626Certificate of deposit accounts 2,046,960 1,679,517 1,350,683 1,057,733 820,476 1,864,254 854,970Total due to depositors 5,952,525 5,843,540 5,616,064 5,157,715 5,298,855 5,898,335 5,317,814Mortgagors' escrow accounts 97,410 70,483 82,483 68,602 97,496 84,021 84,574Total interest-bearing deposits 6,049,935 5,914,023 5,698,547 5,226,317 5,396,351 5,982,356 5,402,388Borrowings 706,924 789,535 963,662 1,326,770 941,023 748,001 876,877Total interest-bearing liabilities 6,756,859 6,703,558 6,662,209 6,553,087 6,337,374 6,730,357 6,279,265Noninterest-bearing demand deposits 849,682 896,462 979,836 1,050,296 1,044,553 872,943 1,023,181Other liabilities 181,343 185,220 199,809 164,992 162,380 183,270 158,400Total liabilities 7,787,884 7,785,240 7,841,854 7,768,375 7,544,307 7,786,570 7,460,846Equity 673,943 683,071 676,165 674,282 667,456 678,481 670,219Total liabilities and equity $8,461,827 $8,468,311 $8,518,019 $8,442,657 $8,211,763 $8,465,051 $8,131,065 Net interest-earning assets $1,229,161 $1,293,119 $1,383,482 $1,425,983 $1,403,309 $1,260,963 $1,376,734 FLUSHING FINANCIAL CORPORATION and SUBSIDIARIESNET 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) 2023 2023 2022 2022 2022 2023 2022Interest Income: Mortgage loans, net $63,688 $62,054 $60,946 $58,374 $54,775 $125,742 $108,745 Other loans, net 21,689 20,835 20,087 17,172 14,417 42,524 27,963 Total loans, net 85,377 82,889 81,033 75,546 69,192 168,266 136,708 Taxable securities: Mortgage-backed securities 2,976 2,281 2,425 2,466 2,356 5,257 4,523 Other securities 5,847 4,611 3,723 2,839 2,090 10,458 3,209 Total taxable securities 8,823 6,892 6,148 5,305 4,446 15,715 7,732 Tax-exempt securities: Other securities 480 477 489 492 625 957 1,216 Total tax-exempt securities 480 477 489 492 625 957 1,216 Interest-earning deposits and federal funds sold 1,982 1,959 1,702 506 159 3,941 210 Total interest-earning assets 96,662 92,217 89,372 81,849 74,422 188,879 145,866 Interest Expense: Deposits: Savings accounts $140 $126 $59 $53 $50 $266 $99 NOW accounts 16,152 13,785 9,515 3,640 1,405 29,937 2,198 Money market accounts 14,625 14,102 10,532 5,280 1,952 28,727 3,227 Certificate of deposit accounts 15,281 11,007 7,037 2,948 1,273 26,288 2,562 Total due to depositors 46,198 39,020 27,143 11,921 4,680 85,218 8,086 Mortgagors' escrow accounts 51 36 83 44 6 87 8 Total interest-bearing deposits 46,249 39,056 27,226 11,965 4,686 85,305 8,094 Borrowings 6,934 7,799 7,843 8,574 4,875 14,733 9,308 Total interest-bearing liabilities 53,183 46,855 35,069 20,539 9,561 100,038 17,402 Net interest income- tax equivalent $43,479 $45,362 $54,303 $61,310 $64,861 $88,841 $128,464 Included in net interest income above: Prepayment penalties received on loans and securities and net of reversals and recovered interest from nonaccrual loans $315 $680 $1,080 $1,368 $2,281 $995 $3,997 Net gains/(losses) from fair value adjustments on qualifying hedges included in net interest income (205) 100 936 28 (60) (105) (189) Purchase accounting adjustments 340 306 342 775 367 646 1,425 Interest-earning Assets Yields: Mortgage loans, net 4.80 % 4.65% 4.57% 4.37% 4.23 % 4.73 % 4.21 %Other loans, net 5.70 5.42 5.21 4.52 3.94 5.56 3.87 Total loans, net 5.00 4.83 4.71 4.40 4.17 4.91 4.14 Taxable securities: Mortgage-backed securities 2.65 1.99 1.77 1.73 1.58 2.32 1.54 Other securities 4.96 4.48 4.00 3.13 2.51 4.73 2.29 Total taxable securities 3.84 3.17 2.67 2.28 1.92 3.51 1.78 Tax-exempt securities: (1) Other securities 2.88 2.86 2.92 2.93 3.71 2.87 3.89 Total tax-exempt securities 2.88 2.86 2.92 2.93 3.71 2.87 3.89 Interest-earning deposits and federal funds sold 4.68 4.15 3.86 1.70 0.61 4.40 0.36 Total interest-earning assets (1) 4.84 % 4.61% 4.44% 4.10% 3.85 % 4.73 % 3.81 %Interest-bearing Liabilities Yields: Deposits: Savings accounts 0.45 % 0.37% 0.16% 0.14% 0.13 % 0.41 % 0.13 %NOW accounts 3.19 2.80 1.93 0.81 0.27 3.00 0.21 Money market accounts 3.33 2.74 1.96 0.99 0.35 3.01 0.29 Certificate of deposit accounts 2.99 2.62 2.08 1.11 0.62 2.82 0.60 Total due to depositors 3.10 2.67 1.93 0.92 0.35 2.89 0.30 Mortgagors' escrow accounts 0.21 0.20 0.40 0.26 0.02 0.21 0.02 Total interest-bearing deposits 3.06 2.64 1.91 0.92 0.35 2.85 0.30 Borrowings 3.92 3.95 3.26 2.58 2.07 3.94 2.12 Total interest-bearing liabilities 3.15 % 2.80% 2.11% 1.25% 0.60 % 2.97 % 0.55 % Net interest rate spread (tax equivalent) (1) 1.69 % 1.81% 2.33% 2.85% 3.25 % 1.76 % 3.26 %Net interest margin (tax equivalent) (1) 2.18 % 2.27% 2.70% 3.07% 3.35 % 2.22 % 3.36 %Ratio of interest-earning assets to interest-bearing liabilities 1.18 X 1.19X 1.21X 1.22X 1.22 X 1.19 X 1.22 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 SUBSIDIARIESDEPOSIT and LOAN COMPOSITION(Unaudited)Deposit Composition 2Q23 vs. 2Q23 vs. June 30, March 31, December 31, September 30, June 30, 1Q23 2Q22(Dollars in thousands) 2023 2023 2022 2022 2022 % Change % ChangeNoninterest bearing $827,820 $872,254 $921,238 $992,378 $1,081,208 (5.1)% (23.4)%Interest bearing: Certificate of deposit accounts 2,232,696 1,880,260 1,526,338 1,036,107 906,943 18.7 146.2 Savings accounts 118,886 128,245 143,641 150,552 154,670 (7.3) (23.1) Money market accounts 1,594,637 1,855,781 2,099,776 2,113,256 2,229,993 (14.1) (28.5) NOW accounts 1,891,834 1,918,977 1,746,190 1,762,468 1,977,186 (1.4) (4.3) Total interest-bearing deposits 5,838,053 5,783,263 5,515,945 5,062,383 5,268,792 0.9 10.8 Total due to depositors 6,665,873 6,655,517 6,437,183 6,054,761 6,350,000 0.2 5.0 Mortgagors' escrow deposits 57,817 78,573 48,159 70,544 57,577 (26.4) 0.4 Total deposits $6,723,690 $6,734,090 $6,485,342 $6,125,305 $6,407,577 (0.2)% 4.9 % Loan Composition 2Q23 vs. 2Q23 vs. June 30, March 31, December 31, September 30, June 30, 1Q23 2Q22(Dollars in thousands) 2023 2023 2022 2022 2022 % Change % ChangeMultifamily residential $2,593,955 $2,601,174 $2,601,384 $2,608,192 $2,531,858 (0.3)% 2.5 %Commercial real estate 1,917,749 1,904,293 1,913,040 1,914,326 1,864,507 0.7 2.9 One-to-four family ― mixed-use property 542,368 549,207 554,314 560,885 561,100 (1.2) (3.3) One-to-four family ― residential 224,039 232,302 235,067 233,469 242,729 (3.6) (7.7) Co-operative apartments 6,016 6,115 6,179 7,015 8,130 (1.6) (26.0) Construction 57,325 60,486 70,951 63,651 72,148 (5.2) (20.5) Mortgage Loans 5,341,452 5,353,577 5,380,935 5,387,538 5,280,472 (0.2) 1.2 Small Business Administration (1) 22,404 22,860 23,275 27,712 40,572 (2.0) (44.8) Commercial business and other 1,466,358 1,518,756 1,521,548 1,532,497 1,431,417 (3.5) 2.4 Nonmortgage loans 1,488,762 1,541,616 1,544,823 1,560,209 1,471,989 (3.4) 1.1 Gross loans 6,830,214 6,895,193 6,925,758 6,947,747 6,752,461 (0.9) 1.2 Net unamortized premiums and unearned loan fees (2) 2,211 8,983 9,011 8,927 7,932 (75.4) (72.1) Allowance for credit losses (38,593) (38,729) (40,442) (41,268) (39,424) (0.4) (2.1) Net loans $6,793,832 $6,865,447 $6,894,327 $6,915,406 $6,720,969 (1.0)% 1.1 % ________________(1)Includes $4.0 million, $4.8 million, $5.2 million, $9.6 million, and $22.2 million of PPP loans at June 30, 2023, March 31, 2023, December 31, 2022, September 30, 2022, and June 30, 2022, respectively.(2)Includes $4.8 million, $5.1 million, $5.4 million, $5.8 million, and $6.6 million of purchase accounting unamortized discount resulting from the acquisition of Empire Bancorp at June 30, 2023, March 31, 2023, December 31, 2022, September 30, 2022, and June 30, 2022, respectively. FLUSHING FINANCIAL CORPORATION and SUBSIDIARIESLOAN 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) 2023 2023 2022 2022 2022 2023 2022Multifamily residential $31,901 $42,164 $65,347 $173,980 $136,902 $74,065 $235,082Commercial real estate 38,523 15,570 20,750 77,777 164,826 54,093 209,928One-to-four family – mixed-use property 5,812 4,938 4,489 12,383 12,228 10,750 20,726One-to-four family – residential 63 4,296 7,485 4,102 4,211 4,359 13,448Co-operative apartments — — — — — — 24Construction 8,811 10,592 7,301 7,170 8,319 19,403 17,121Mortgage Loans 85,110 77,560 105,372 275,412 326,486 162,670 496,329 Small Business Administration 820 318 665 46 2,750 1,138 2,750Commercial business and other 72,850 95,668 119,191 188,202 174,551 168,518 334,027Nonmortgage Loans 73,670 95,986 119,856 188,248 177,301 169,656 336,777 Total Closings $158,780 $173,546 $225,228 $463,660 $503,787 $332,326 $833,106 Weighted Average Rate on Loan Closings For the three months ended June 30, March 31, December 31, September 30, June 30,Loan type 2023 2023 2022 2022 2022Mortgage loans 6.62% 6.30% 5.59% 4.37% 3.76%Nonmortgage loans 7.76 7.58 6.57 4.93 4.21 Total loans 7.14% 7.01% 6.10% 4.60% 3.92% FLUSHING FINANCIAL CORPORATION and SUBSIDIARIESASSET 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) 2023 2023 2022 2022 2022 2023 2022Allowance for credit losses - loans Beginning balances $38,729 $40,442 $41,268 $39,424 $37,433 $40,442 $37,135 Net loan charge-off (recoveries): Multifamily residential — (1) 132 — (1) (1) (1) Commercial real estate 8 — — — — 8 — One-to-four family – residential 4 (36) 17 2 (2) (32) (4) Small Business Administration (158) (6) (9) (12) 13 (164) 1,028 Taxi medallion — — — — (435) — (447) Commercial business and other 1,706 9,277 671 300 (76) 10,983 (142) Total 1,560 9,234 811 290 (501) 10,794 434 Provision (benefit) for loan losses 1,424 7,521 (15) 2,134 1,490 8,945 2,723 Ending balance $38,593 $38,729 $40,442 $41,268 $39,424 $38,593 $39,424 Gross charge-offs $1,731 $9,298 $1,938 $324 $50 $11,029 $1,086 Gross recoveries 171 64 1,127 34 551 235 652 Allowance for credit losses - loans to gross loans 0.57 % 0.56 % 0.58 % 0.59 % 0.58 % 0.57 % 0.58 %Net loan charge-offs (recoveries) to average loans 0.09 0.54 0.05 0.02 (0.03) 0.32 0.01 Nonperforming Assets June 30, March 31, December 31, September 30, June 30,(Dollars in thousands) 2023 2023 2022 2022 2022Loans 90 Days Or More Past Due and Still Accruing: Commercial real estate $— $— $— $2,000 $— Construction — — 2,600 — — Commercial business and other — — — — 100 Total — — 2,600 2,000 100 Nonaccrual Loans: Multifamily residential 3,206 3,628 3,206 3,414 3,414 Commercial real estate — — 237 1,851 242 One-to-four family - mixed-use property(1) 790 790 790 790 790 One-to-four family - residential 5,218 4,961 4,425 4,655 5,055 Construction — — — — 856 Small Business Administration 1,119 937 937 937 937 Commercial business and other(1) 8,304 10,860 20,187 15,356 16,554 Total 18,637 21,176 29,782 27,003 27,848 Total Nonperforming Loans (NPLs) 18,637 21,176 32,382 29,003 27,948 Total Nonaccrual HTM Securities 20,981 20,981 20,981 20,981 20,981 Total Nonperforming Assets $39,618 $42,157 $53,363 $49,984 $48,929 Nonperforming Assets to Total Assets 0.47% 0.50% 0.63% 0.58% 0.59%Allowance for Credit Losses to NPLs 207.1% 182.9% 124.9% 142.3% 141.1% ________________(1)Adopted ASU No. 2022-02 Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures on January 1, 2023; Not included in the above analysis are nonaccrual performing TDR one-to-four family – mixed use property loans totaling $0.2 million in 4Q22 and in 3Q22 and $0.3 million in 2Q22; nonaccrual performing TDR commercial business loans totaling less than $0.1 million in 4Q22, $2.9 million in 3Q22, and $2.8 million in 2Q22. FLUSHING FINANCIAL CORPORATION and SUBSIDIARIESRECONCILIATION OF GAAP EARNINGS and CORE EARNINGS Non-cash Fair Value Adjustments to GAAP Earnings The variance in GAAP and core earnings is partly driven by the impact of non-cash net gains and losses from fair value adjustments. These fair value adjustments relate primarily to borrowings carried at fair value under the fair value option. Core Net Income, Core Diluted EPS, Core ROAE, Core ROAA, Pre-provision Pre-tax Net Revenue, Core Net Interest Income FTE, Core Net Interest Margin FTE, Core Interest Income and Yield on Total Loans, Core Noninterest Income, Core Noninterest Expense and Tangible Book Value per common share are each non-GAAP measures used in this release. A reconciliation to the most directly comparable GAAP financial measures appears below in tabular form. The Company believes that these measures are useful for both investors and management to understand the effects of certain interest and noninterest items and provide an alternative view of the Company’s performance over time and in comparison, to the Company’s competitors. These measures should not be viewed as a substitute for net income. The Company believes that tangible book value per common share is useful for both investors and management as this measure is commonly used by financial institutions, regulators, and investors to measure the capital adequacy of financial institutions. The Company believes these measures facilitate comparison of the quality and composition of the Company’s capital over time and in comparison, to its competitors. These measures should not be viewed as a substitute for total shareholders’ equity. These non-GAAP measures have inherent limitations, are not required to be uniformly applied and are not audited. They should not be considered in isolation or as a substitute for analysis of results reported under GAAP. These non-GAAP measures may not be comparable to similarly titled measures reported by other companies. FLUSHING FINANCIAL CORPORATION and SUBSIDIARIESRECONCILIATION 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) 2023 2023 2022 2022 2022 2023 2022 GAAP income before income taxes $11,805 $6,959 $12,819 $32,422 $34,971 $18,764 $59,611 Net (gain) loss from fair value adjustments (Noninterest income (loss)) (294) (2,619) 622 (5,626) (2,533) (2,913) (724) Net loss on sale of securities (Noninterest income (loss)) — — 10,948 — — — — Life insurance proceeds (Noninterest income (loss)) (561) — (286) — (1,536) (561) (1,536) Net gain on disposition of assets (Noninterest income (loss)) — — (104) — — — — Net (gain) loss from fair value adjustments on qualifying hedges (Net interest income) 205 (100) (936) (28) 60 105 189 Net amortization of purchase accounting adjustments and intangibles (Various) (227) (188) (219) (650) (237) (415) (1,161) Core income before taxes 10,928 4,052 22,844 26,118 30,725 14,980 56,379 Provision for core income taxes 3,074 1,049 5,445 7,165 9,207 4,123 15,892 Core net income $7,854 $3,003 $17,399 $18,953 $21,518 $10,857 $40,487 GAAP diluted earnings per common share $0.29 $0.17 $0.34 $0.76 $0.81 $0.46 $1.39 Net (gain) loss from fair value adjustments, net of tax (0.01) (0.06) 0.02 (0.13) (0.06) (0.07) (0.02) Net loss on sale of securities, net of tax — — 0.27 — — — — Life insurance proceeds (0.02) — (0.01) — (0.05) (0.02) (0.05) Net gain on disposition of assets, net of tax — — — — — — — Net (gain) loss from fair value adjustments on qualifying hedges, net of tax — — (0.02) — — — — Net amortization of purchase accounting adjustments, net of tax (0.01) (0.01) (0.01) (0.02) (0.01) (0.01) (0.03) Core diluted earnings per common share(1) $0.26 $0.10 $0.57 $0.62 $0.70 $0.36 $1.30 Core net income, as calculated above $7,854 $3,003 $17,399 $18,953 $21,518 $10,857 $40,487 Average assets 8,461,827 8,468,311 8,518,019 8,442,657 8,211,763 8,465,051 8,131,065 Average equity 673,943 683,071 676,165 674,282 667,456 678,481 670,219 Core return on average assets(2) 0.37 % 0.14 % 0.82 % 0.90 % 1.05 % 0.26 % 1.00 %Core return on average equity(2) 4.66 % 1.76 % 10.29 % 11.24 % 12.90 % 3.20 % 12.08 % ________________(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 SUBSIDIARIESRECONCILIATION 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) 2023 2023 2022 2022 2022 2023 2022 GAAP Net interest income $43,378 $45,262 $54,201 $61,206 $64,730 $88,640 $128,209 Net (gain) loss from fair value adjustments on qualifying hedges 205 (100) (936) (28) 60 105 189 Net amortization of purchase accounting adjustments (340) (306) (342) (775) (367) (646) (1,425) Core Net interest income $43,243 $44,856 $52,923 $60,403 $64,423 $88,099 $126,973 GAAP Noninterest income (loss) $5,122 $6,908 $(7,652) $8,995 $7,353 $12,030 $8,666 Net (gain) loss from fair value adjustments (294) (2,619) 622 (5,626) (2,533) (2,913) (724) Net loss on sale of securities — — 10,948 — — — — Life insurance proceeds (561) — (286) — (1,536) (561) (1,536) Net gain on sale of assets — — (104) — — — — Core Noninterest income $4,267 $4,289 $3,528 $3,369 $3,284 $8,556 $6,406 GAAP Noninterest expense $35,279 $37,703 $33,742 $35,634 $35,522 $72,982 $74,316 Net amortization of purchase accounting adjustments (113) (118) (123) (125) (130) (231) (264) Core Noninterest expense $35,166 $37,585 $33,619 $35,509 $35,392 $72,751 $74,052 Net interest income $43,378 $45,262 $54,201 $61,206 $64,730 $88,640 $128,209 Noninterest income (loss) 5,122 6,908 (7,652) 8,995 7,353 12,030 8,666 Noninterest expense (35,279) (37,703) (33,742) (35,634) (35,522) (72,982) (74,316) Pre-provision pre-tax net revenue $13,221 $14,467 $12,807 $34,567 $36,561 $27,688 $62,559 Core: Net interest income $43,243 $44,856 $52,923 $60,403 $64,423 $88,099 $126,973 Noninterest income 4,267 4,289 3,528 3,369 3,284 8,556 6,406 Noninterest expense (35,166) (37,585) (33,619) (35,509) (35,392) (72,751) (74,052) Pre-provision pre-tax net revenue $12,344 $11,560 $22,832 $28,263 $32,315 $23,904 $59,327 Efficiency Ratio 74.0 % 76.5 % 59.6 % 55.7 % 52.3 % 75.3 % 55.5 % FLUSHING FINANCIAL CORPORATION and SUBSIDIARIESRECONCILIATION OF GAAP NET INTEREST INCOME and NET INTEREST MARGINto 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)2023 2023 2022 2022 2022 2023 2022 GAAP net interest income$43,378 $45,262 $54,201 $61,206 $64,730 $88,640 $128,209 Net (gain) loss from fair value adjustments on qualifying hedges 205 (100) (936) (28) 60 105 189 Net amortization of purchase accounting adjustments (340) (306) (342) (775) (367) (646) (1,425) Tax equivalent adjustment 101 100 102 104 131 201 255 Core net interest income FTE$43,344 $44,956 $53,025 $60,507 $64,554 $88,300 $127,228 Total average interest-earning assets (1)$7,990,331 $8,001,271 $8,050,601 $7,984,558 $7,746,640 $7,995,772 $7,662,315 Core net interest margin FTE 2.17 % 2.25 % 2.63 % 3.03 % 3.33 % 2.21 % 3.32 % GAAP interest income on total loans, net$85,377 $82,889 $81,033 $75,546 $69,192 $168,266 $136,708 Net (gain) loss from fair value adjustments on qualifying hedges - loans 157 (101) (936) (28) 60 56 189 Net amortization of purchase accounting adjustments (345) (316) (372) (783) (357) (661) (1,474) Core interest income on total loans, net$85,189 $82,472 $79,725 $74,735 $68,895 $167,661 $135,423 Average total loans, net (1)$6,834,644 $6,876,495 $6,886,900 $6,867,758 $6,647,131 $6,855,454 $6,616,860 Core yield on total loans 4.99 % 4.80 % 4.63 % 4.35 % 4.15 % 4.89 % 4.09 % ________________(1)Excludes purchase accounting average balances for all periods presented. FLUSHING FINANCIAL CORPORATION and SUBSIDIARIESCALCULATION OF TANGIBLE STOCKHOLDERS’COMMON EQUITY to TANGIBLE ASSETS(Unaudited) June 30, March 31, December 31, September 30, June 30,(Dollars in thousands) 2023 2023 2022 2022 2022Total Equity $671,303 $673,459 $677,157 $670,719 $670,812 Less: Goodwill (17,636) (17,636) (17,636) (17,636) (17,636) Core deposit intangibles (1,769) (1,891) (2,017) (2,147) (2,282) Tangible Stockholders' Common Equity $651,898 $653,932 $657,504 $650,936 $650,894 Total Assets $8,473,883 $8,479,121 $8,422,946 $8,557,419 $8,339,587 Less: Goodwill (17,636) (17,636) (17,636) (17,636) (17,636) Core deposit intangibles (1,769) (1,891) (2,017) (2,147) (2,282) Tangible Assets $8,454,478 $8,459,594 $8,403,293 $8,537,636 $8,319,669 Tangible Stockholders' Common Equity to Tangible Assets 7.71 % 7.73 % 7.82 % 7.62 % 7.82 % Investor Contact: Susan K. Cullen, SEVP, CFO and Treasurer, 718-961-5400