Stockbroker Club Presentation Personal Business Lending Government May 4, 2022 Small enough to know you. Large enough to help you.8 Safe Harbor Statement "Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this Presentation 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 meani ...

Table of Contents Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, $0.01 par value FFIC The Nasdaq Stock Market LLC UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 Commission file number 001-33013 FLUSHING FINANCIAL CORPORATION (Exact name of registrant as specified in its charter) Delaware (State ...

Flushing Financial Corporation (NASDAQ:FFIC) Q1 2022 Earnings Conference Call April 27, 2022 9:30 AM ET Company Participants John Buran – President and Chief Executive Officer Susan Cullen – Senior Executive Vice President, Treasurer and Chief Financial Officer Conference Call Participants Mark Fitzgibbon – Piper Sandler Manuel Navas – D.A. Davidson Chris O'Connell – KBW Operator Welcome to Flushing Financial Corporation's First Quarter 2022 Earnings Conference Call. Hosting the call today are John Buran, P ...

Sidoti Spring Small Cap Virtual Conference Personal Business 4 Lending Government March 23, 2022 Small enough to know you. Large enough to help you.8 Safe Harbor Statement "Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this Presentation 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 statement ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FLUSHING FINANCIAL CORPORATION (Exact name of registrant as specified in its charter) Delaware 11-3209278 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 220 RXR Plaza, Uniondale, New York 11556 (Address of principal executive offices) (718) 961-5400 (Registrant's telephone ...

KBW Winter Financial Services Symposium Personal Business 4 Lending Government February 17, 2022 Small enough to know you. Large enough to help you.8 Safe Harbor Statement "Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this Presentation 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 statement ...

4Q21 Earnings Conference Call Personal Business Lending Government January 28, 2022 Small enough to know you. Large enough to help you.8 Safe Harbor Statement "Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this Presentation 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 ...

Flushing Financial Corporation (NASDAQ:FFIC) Q4 2021 Earnings Conference Call January 28, 2022 9:30 AM ET Company Participants John Buran - President and CEO Susan Cullen - Senior EVP, Treasurer and CFO Mike Bingold – Senior Executive Vice President, Chief Retail and Client Development Officer Conference Call Participants Chris O'Connell – Keefe Bruyette & Woods Inc Manuel Novice – D.A. Davidson Operator Welcome to the Flushing Financial Corporation's Fourth Quarter 2021 Earnings Conference Call. Hosting th ...

```markdown PART I – FINANCIAL INFORMATION [ITEM 1. Financial Statements - (Unaudited)](index=4&type=section&id=ITEM%201.%20Financial%20Statements%20-%20(Unaudited)) This section presents the unaudited consolidated financial statements of Flushing Financial Corporation and its subsidiaries, including the statements of financial condition, income, comprehensive income, cash flows, and changes in stockholders' equity, along with detailed notes explaining the basis of presentation, accounting policies, and specific financial instrument details [Consolidated Statements of Financial Condition](index=4&type=section&id=Consolidated%20Statements%20of%20Financial%20Condition) The Consolidated Statements of Financial Condition provide a snapshot of the Company's assets, liabilities, and stockholders' equity as of September 30, 2021, compared to December 31, 2020 | Metric | Sep 30, 2021 (Unaudited) (Dollars in thousands) | Dec 31, 2020 (Dollars in thousands) | |:---|:---|:---| | **Assets** ||| | Cash and due from banks | $178,598 | $157,388 | | Securities held-to-maturity | $57,888 | $57,832 | | Securities available for sale, at fair value | $796,799 | $647,974 | | Net loans | $6,593,991 | $6,659,521 | | Total assets | $8,077,334 | $7,976,394 | | **Liabilities** ||| | Total Deposits | $6,421,391 | $6,090,733 | | Total borrowed funds | $752,925 | $1,020,895 | | Total liabilities | $7,409,238 | $7,357,397 | | **Stockholders' Equity** ||| | Total stockholders' equity | $668,096 | $618,997 | | Total liabilities and stockholders' equity | $8,077,334 | $7,976,394 | [Consolidated Statements of Income](index=5&type=section&id=Consolidated%20Statements%20of%20Income) The Consolidated Statements of Income detail the Company's revenues, expenses, and net income for the three and nine months ended September 30, 2021 and 2020 | Metric (Dollars in thousands, except per share data) | For the three months ended Sep 30, 2021 | For the three months ended Sep 30, 2020 | For the nine months ended Sep 30, 2021 | For the nine months ended Sep 30, 2020 | |:---|:---|:---|:---|:---| | Total interest and dividend income | $72,953 | $63,914 | $216,832 | $195,356 | | Total interest expense | $9,589 | $13,990 | $31,537 | $55,889 | | Net interest income | $63,364 | $49,924 | $185,295 | $139,467 | | (Benefit) provision for credit losses | $(6,927) | $2,470 | $(5,705) | $19,267 | | Total non-interest income | $866 | $1,351 | $3,967 | $12,224 | | Total non-interest expense | $36,345 | $29,985 | $108,515 | $91,120 | | Income before income taxes | $34,812 | $18,820 | $86,452 | $41,304 | | Total taxes | $9,399 | $4,489 | $22,742 | $10,091 | | Net income | $25,413 | $14,331 | $63,710 | $31,213 | | Basic earnings per common share | $0.81 | $0.50 | $2.02 | $1.08 | | Diluted earnings per common share | $0.81 | $0.50 | $2.02 | $1.08 | | Dividends per common share | $0.21 | $0.21 | $0.63 | $0.63 | [Consolidated Statements of Comprehensive Income](index=6&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) The Consolidated Statements of Comprehensive Income present net income and other comprehensive income (loss) components, such as unrealized gains/losses on securities and cash flow hedges, for the three and nine months ended September 30, 2021 and 2020 | Metric (In thousands) | For the three months ended Sep 30, 2021 | For the three months ended Sep 30, 2020 | For the nine months ended Sep 30, 2021 | For the nine months ended Sep 30, 2020 | |:---|:---|:---|:---|:---| | Net income | $25,413 | $14,331 | $63,710 | $31,213 | | Total other comprehensive income (loss), net of tax | $(517) | $5,214 | $7,332 | $(8,501) | | Comprehensive income | $24,896 | $19,545 | $71,042 | $22,712 | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) The Consolidated Statements of Cash Flows categorize cash movements into operating, investing, and financing activities for the nine months ended September 30, 2021 and 2020 | Metric (In thousands) | For the nine months ended Sep 30, 2021 | For the nine months ended Sep 30, 2020 | |:---|:---|:---| | Net cash provided by operating activities | $59,645 | $45,540 | | Net cash (used in) provided by investing activities | $(86,690) | $12,759 | | Net cash provided by (used in) financing activities | $48,255 | $(32,526) | | Net increase in cash and cash equivalents | $21,210 | $25,773 | | Cash and cash equivalents, end of period | $178,598 | $75,560 | [Consolidated Statements of Changes in Stockholders' Equity](index=9&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) This statement outlines the changes in each component of stockholders' equity, including net income, stock-based compensation, dividends, and other comprehensive income/loss, for the nine months ended September 30, 2021 and 2020 | Metric (Dollars in thousands) | Dec 31, 2020 | Sep 30, 2021 | |:---|:---|:---| | Total Stockholders' Equity (Beginning Balance) | $618,997 | $618,997 | | Net Income | $63,710 | $63,710 | | Stock-based compensation expense | $5,516 | $5,516 | | Dividends on common stock | $(19,920) | $(19,920) | | Other comprehensive income (loss) | $7,332 | $7,332 | | Total Stockholders' Equity (Ending Balance) | $618,997 | $668,096 | [Notes to Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) These notes provide detailed explanations and disclosures for the consolidated financial statements, covering accounting policies, estimates, specific financial instruments, and regulatory compliance [Note 1. Basis of Presentation](index=11&type=section&id=Note%201.%20Basis%20of%20Presentation) This note clarifies that the unaudited consolidated financial statements are prepared in accordance with GAAP and SEC regulations for interim financial statements, reflecting the combined results of Flushing Financial Corporation and its wholly-owned subsidiaries - The Company's primary business is the operation of its wholly owned subsidiary, Flushing Bank[28](index=28&type=chunk) - The financial statements are prepared in conformity with GAAP and SEC rules for interim financial statements, with certain information condensed or omitted[30](index=30&type=chunk)[31](index=31&type=chunk) [Note 2. Use of Estimates](index=11&type=section&id=Note%202.%20Use%20of%20Estimates) The preparation of financial statements requires management to make estimates and assumptions, particularly for credit losses, goodwill impairment, deferred tax assets, and fair value of financial instruments, with specific attention to COVID-19 related changes - Estimates are crucial for financial statements, especially for allowance for credit losses, goodwill impairment, deferred tax assets, and fair value of financial instruments, with COVID-19 impacting these estimates[33](index=33&type=chunk) - The Company provided loan modifications (deferrals) to customers impacted by COVID-19, with **active forbearances decreasing from $364.4 million at Dec 31, 2020, to $162.0 million at Sep 30, 2021**[35](index=35&type=chunk) - The Company participated in the Paycheck Protection Program (PPP), with **$179.5 million** of **$310.3 million** in PPP loans forgiven by the SBA as of September 30, 2021[35](index=35&type=chunk) [Note 3. Earnings Per Share](index=12&type=section&id=Note%203.%20Earnings%20Per%20Share) This note details the computation of basic and diluted earnings per common share and the dividend payout ratio for the three and nine months ended September 30, 2021 and 2020 | Metric | For the three months ended Sep 30, 2021 | For the three months ended Sep 30, 2020 | For the nine months ended Sep 30, 2021 | For the nine months ended Sep 30, 2020 | |:---|:---|:---|:---|:---| | Net income | $25,413 | $14,331 | $63,710 | $31,213 | | Total weighted average common shares outstanding | 31,567 | 28,874 | 31,616 | 28,865 | | Basic earnings per common share | $0.81 | $0.50 | $2.02 | $1.08 | | Diluted earnings per common share | $0.81 | $0.50 | $2.02 | $1.08 | | Dividend payout ratio | 25.9% | 42.0% | 31.2% | 58.3% | [Note 4. Securities](index=12&type=section&id=Note%204.%20Securities) This note provides a comprehensive overview of the Company's securities portfolio, distinguishing between held-to-maturity and available-for-sale securities, detailing their amortized cost, fair value, unrealized gains/losses, and allowance for credit losses - The Company holds no trading securities. Securities available for sale are at fair value, and held-to-maturity (HTM) securities are at amortized cost[37](index=37&type=chunk) | Securities Held-to-Maturity (In thousands) | Amortized Cost (Sep 30, 2021) | Fair Value (Sep 30, 2021) | Gross Unrecognized Gains (Sep 30, 2021) | Gross Unrecognized Losses (Sep 30, 2021) | |:---|:---|:---|:---|:---| | Municipals | $50,832 | $52,753 | $2,078 | $157 | | FNMA | $7,899 | $8,698 | $799 | $0 | | Allowance for Credit Losses | $(843) | $0 | $0 | $0 | | Total | $57,888 | $61,451 | $2,877 | $157 | | Securities Available for Sale (In thousands) | Amortized Cost (Sep 30, 2021) | Fair Value (Sep 30, 2021) | Gross Unrealized Gains (Sep 30, 2021) | Gross Unrealized Losses (Sep 30, 2021) | |:---|:---|:---|:---|:---| | Total other securities | $214,351 | $212,654 | $199 | $1,896 | | Total mortgage-backed securities | $585,585 | $584,145 | $4,670 | $6,110 | | Total securities available for sale | $799,936 | $796,799 | $4,869 | $8,006 | - **The Company sold $20.0 million in corporate securities during the three months ended September 30, 2021, and $45.0 million for the nine months ended September 30, 2021**[60](index=60&type=chunk) [Note 5. Loans](index=19&type=section&id=Note%205.%20Loans) This note details the Company's loan portfolio, including recognition policies, allowance for credit losses (ACL), troubled debt restructurings (TDRs), non-accrual loans, and risk categories, highlighting the impact of improving economic conditions on credit loss provisions - **The Company recorded a benefit for credit losses on loans of $6.9 million for the three months ended September 30, 2021, compared to a provision of $2.5 million in the prior year, driven by improving economic outlook**[68](index=68&type=chunk) - **ACL - loans totaled $36.4 million at September 30, 2021 (0.55% of gross loans and 179.9% of non-performing loans), down from $45.2 million at December 31, 2020 (0.67% of gross loans and 214.3% of non-performing loans)**[68](index=68&type=chunk) | Loans Modified as TDR (In thousands) | For the three months ended Sep 30, 2021 | For the three months ended Sep 30, 2020 | For the nine months ended Sep 30, 2021 | For the nine months ended Sep 30, 2020 | |:---|:---|:---|:---|:---| | One-to-four family - mixed-use property | $0 | $270 | $0 | $270 | | Commercial business and other | $0 | $0 | $674 | $0 | | Total | $0 | $270 | $674 | $270 | | Non-Accrual Loans (In thousands) | Amortized Cost (Beginning Reporting Period) | Amortized Cost (Ending Reporting Period) | |:---|:---|:---| | Multi-family residential | $2,576 | $4,461 | | Commercial real estate | $1,766 | $640 | | One-to-four family - mixed-use property | $1,706 | $2,510 | | One-to-four family - residential | $5,313 | $7,509 | | Construction | $0 | $0 | | Small Business Administration | $1,168 | $991 | | Taxi medallion | $2,758 | $0 | | Commercial business and other | $5,660 | $2,500 | | Total | $20,947 | $18,611 | [Note 6. Loans held for sale](index=32&type=section&id=Note%206.%20Loans%20held%20for%20sale) This note explains the Company's policy for loans held for sale, which are carried at the lower of cost or estimated fair value, and provides details on delinquent and non-performing loans sold during the periods - The Bank had no loans held for sale at September 30, 2021, and December 31, 2020[100](index=100&type=chunk) - **The Company sold $6.4 million of delinquent and non-performing loans for a net gain of $131 thousand during the three months ended September 30, 2021**[102](index=102&type=chunk) - **For the nine months ended September 30, 2021, the Company sold $25.0 million of delinquent and non-performing loans, realizing a net gain of $289 thousand**[102](index=102&type=chunk) [Note 7. Leases](index=33&type=section&id=Note%207.%20Leases) This note outlines the Company's operating lease arrangements for branches, vehicles, and equipment, including lease terms, recognition exemptions, and related expenses and liabilities - **The Company has 28 operating leases for branches/office spaces, 10 for vehicles, and 1 for equipment, with terms ranging from one month to 15 years**[104](index=104&type=chunk) | Lease Metric (Dollars in thousands) | Sep 30, 2021 | Dec 31, 2020 | |:---|:---|:---| | Operating lease ROU asset | $50,155 | $50,743 | | Operating lease liability | $54,239 | $59,100 | | Weighted-average remaining lease term | 7.5 years | 8.3 years | | Weighted average discount rate | 3.2% | 3.2% | | Lease Cost (Dollars in thousands) | For the three months ended Sep 30, 2021 | For the three months ended Sep 30, 2020 | For the nine months ended Sep 30, 2021 | For the nine months ended Sep 30, 2020 | |:---|:---|:---|:---|:---| | Operating lease cost | $2,217 | $1,895 | $6,565 | $5,676 | | Short-term lease cost | $34 | $34 | $129 | $102 | | Variable lease cost | $230 | $281 | $826 | $832 | | Total lease cost | $2,481 | $2,210 | $7,520 | $6,610 | [Note 8. Stock-Based Compensation](index=35&type=section&id=Note%208.%20Stock-Based%20Compensation) This note describes the Company's long-term incentive compensation programs, including performance-based restricted stock units (PRSUs), time-based restricted stock units (RSUs), and a phantom stock plan, detailing grants, vesting, and associated compensation costs - Stockholders approved an amendment to the 2014 Omnibus Plan, authorizing an additional **1,100,000 shares**, bringing the total available for future issuance to **1,171,343 shares** at September 30, 2021[114](index=114&type=chunk) | Stock-Based Compensation (In thousands) | For the three months ended Sep 30, 2021 | For the three months ended Sep 30, 2020 | For the nine months ended Sep 30, 2021 | For the nine months ended Sep 30, 2020 | |:---|:---|:---|:---|:---| | Stock-based compensation costs | $1,200 | $900 | $6,300 | $4,300 | | Income tax benefit | $300 | $200 | $1,700 | $1,000 | - As of September 30, 2021, there was **$5.3 million of total unrecognized compensation cost related to RSU and PRSU awards, expected to be recognized over a weighted-average period of 2.4 years**[118](index=118&type=chunk) [Note 9. Pension and Other Postretirement Benefit Plans](index=37&type=section&id=Note%209.%20Pension%20and%20Other%20Postretirement%20Benefit%20Plans) This note provides information on the components of net expense for the Company's Employee Pension Plan, Outside Director Pension Plan, and Other Postretirement Benefit Plans, along with expected and actual contributions | Pension Plan Expense (In thousands) | For the three months ended Sep 30, 2021 | For the three months ended Sep 30, 2020 | For the nine months ended Sep 30, 2021 | For the nine months ended Sep 30, 2020 | |:---|:---|:---|:---|:---| | Net employee pension (benefit) expense | $(24) | $17 | $(72) | $51 | | Net outside director pension expense | $11 | $6 | $33 | $18 | | Net other postretirement expense | $118 | $112 | $354 | $336 | - As of September 30, 2021, the Company contributed **$108,000** to the Outside Director Pension Plan and **$97,000** to the Other Postretirement Benefit Plans, with no expected contribution to the Employee Pension Plan for the year[126](index=126&type=chunk) [Note 10. Fair Value of Financial Instruments](index=38&type=section&id=Note%2010.%20Fair%20Value%20of%20Financial%20Instruments) This note details the fair value measurements of financial assets and liabilities, including those carried at fair value under the fair value option, categorizing them into Level 1, 2, and 3 based on input observability, and describing the valuation techniques used - At September 30, 2021, the Company carried financial assets and liabilities under the fair value option with fair values of **$14.5 million and $51.6 million, respectively**[127](index=127&type=chunk) | Financial Instruments at Fair Value (In thousands) | Sep 30, 2021 | Dec 31, 2020 | |:---|:---|:---| | Mortgage-backed securities (fair value option) | $412 | $505 | | Other securities (fair value option) | $14,120 | $13,998 | | Borrowed funds (fair value option) | $51,578 | $43,136 | | Net gain (loss) from fair value adjustments (3 months) | $(1,844) | $(2,815) | | Net gain (loss) from fair value adjustments (9 months) | $(8,833) | $5,207 | - Fair value measurements are categorized into Level 1 (quoted prices in active markets), Level 2 (significant other observable inputs), and Level 3 (significant unobservable inputs)[135](index=135&type=chunk)[136](index=136&type=chunk)[137](index=137&type=chunk) [Note 11. Derivative Financial Instruments](index=46&type=section&id=Note%2011.%20Derivative%20Financial%20Instruments) This note details the Company's derivative financial instruments, primarily interest rate swaps, used for mitigating interest rate exposure on loans and short-term advances, and for customer risk management, categorizing them as cash flow hedges, fair value hedges, or non-designated hedges - The Company uses interest rate swaps to mitigate exposure to rising interest rates on fixed-rate loans (**$308.4 million**), for customer risk management (**$229.7 million**), and on short-term advances/brokered CDs (**$996.5 million**)[158](index=158&type=chunk) | Derivative Instruments (In thousands) | Notional Amount (Sep 30, 2021) | Net Carrying Value (Sep 30, 2021) | Notional Amount (Dec 31, 2020) | Net Carrying Value (Dec 31, 2020) | |:---|:---|:---|:---|:---| | Interest rate swaps (non-hedge) | $229,670 | $0 | $143,558 | $(5,679) | | Interest rate swaps (cash flow hedge) | $996,500 | $(10,507) | $1,021,500 | $(25,300) | | Interest rate swaps (fair value hedge) | $308,350 | $(15,296) | $316,051 | $(28,689) | | Total derivatives | $1,534,520 | $(25,803) | $1,481,109 | $(59,668) | - For cash flow hedges, **$2.6 million (3 months ended Sep 30, 2021) and $7.9 million (9 months ended Sep 30, 2021) were reclassified from accumulated other comprehensive loss to interest expense**[163](index=163&type=chunk) [Note 12. Accumulated Other Comprehensive Income (Loss)](index=50&type=section&id=Note%2012.%20Accumulated%20Other%20Comprehensive%20Income%20(Loss)) This note details the changes in accumulated other comprehensive income (loss) by component, including unrealized gains/losses on available-for-sale securities, cash flow hedges, and defined benefit pension items, both before and after reclassifications to net income | AOCI Component (In thousands) | Sep 30, 2021 | Dec 31, 2020 | |:---|:---|:---| | Beginning balance, net of tax | $(16,266) | $(16,266) | | Other comprehensive income before reclassifications, net of tax | $1,770 | $1,770 | | Amounts reclassified from AOCI, net of tax | $5,562 | $5,562 | | Ending balance, net of tax | $(8,934) | $(8,934) | - For the nine months ended September 30, 2021, **unrealized losses on available-for-sale securities decreased AOCI by $3.365 million, while cash flow hedges increased AOCI by $4.885 million before reclassifications**[175](index=175&type=chunk) [Note 13. Regulatory Capital](index=56&type=section&id=Note%2013.%20Regulatory%20Capital) This note summarizes the Bank's and Holding Company's compliance with regulatory capital standards, including Tier I (leverage) capital, Common Equity Tier I risk-based capital, Tier 1 risk-based capital, and Total risk-based capital, demonstrating both entities are 'well-capitalized' - **Both the Bank and the Holding Company are categorized as 'well-capitalized' and exceed all regulatory capital requirements as of September 30, 2021**[183](index=183&type=chunk)[186](index=186&type=chunk) | Bank Capital Ratios | Sep 30, 2021 | Dec 31, 2020 | |:---|:---|:---| | Tier I (leverage) capital | 9.93% | 9.27% | | Common Equity Tier I risk-based capital | 12.91% | 11.65% | | Tier 1 risk-based capital | 12.91% | 11.65% | | Total risk-based capital | 13.46% | 12.30% | | Capital Conservation Buffer (CCB) | 5.46% | 4.30% | | Holding Company Capital Ratios | Sep 30, 2021 | Dec 31, 2020 | |:---|:---|:---| | Tier I (leverage) capital | 8.83% | 8.38% | | Common Equity Tier I risk-based capital | 10.68% | 9.88% | | Tier 1 risk-based capital | 11.48% | 10.54% | | Total risk-based capital | 13.44% | 12.63% | | Capital Conservation Buffer (CCB) | 5.44% | 4.54% | [Note 14. New Authoritative Accounting Pronouncements](index=58&type=section&id=Note%2014.%20New%20Authoritative%20Accounting%20Pronouncements) This note discusses recently issued Accounting Standards Updates (ASUs) related to Reference Rate Reform (Topic 848), clarifying optional expedients and exceptions for contract modifications and hedge accounting affected by the transition away from LIBOR - FASB issued ASU No. 2021-01 and ASU No. 2020-04 on Reference Rate Reform (Topic 848), providing optional expedients for GAAP application to transactions affected by the LIBOR transition[189](index=189&type=chunk)[190](index=190&type=chunk) - The Company anticipates these ASUs will simplify modifications related to LIBOR transition by allowing prospective recognition of contract continuation, rather than extinguishment[190](index=190&type=chunk) - The Company is evaluating the impacts of this ASU and has not yet determined whether LIBOR transition and this ASU will have material effects on its business operations and consolidated financial statements[190](index=190&type=chunk) [ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=59&type=section&id=ITEM%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the Company's financial performance and condition, including the impact of COVID-19, an executive summary, detailed comparisons of operating results for the three and nine months ended September 30, 2021 and 2020, and analyses of financial condition, interest rate risk, average balances, loans, TDRs, non-performing assets, criticized assets, and allowance for credit losses [Impact of COVID-19 Update](index=59&type=section&id=Impact%20of%20COVID-19%20Update) The Company actively assisted customers with loan modifications due to COVID-19, with a significant reduction in active forbearances and substantial PPP loan forgiveness, while maintaining stable capital and financial resources - **Active forbearances decreased from 134 loans ($364.4 million) at December 31, 2020, to 38 loans ($162.0 million) at September 30, 2021, with over 57% expected to resolve by year-end 2021**[195](index=195&type=chunk) - **The Company facilitated $310.3 million in PPP loans, with $179.5 million forgiven by the SBA as of September 30, 2021, including $66.5 million in the recent quarter**[195](index=195&type=chunk) - Despite economic pressures, the Company's capital and financial resources have not been materially impacted, benefiting from Federal Reserve actions[197](index=197&type=chunk) [Executive Summary](index=60&type=section&id=Executive%20Summary) Flushing Financial Corporation, operating as a full-service commercial bank, focuses on attracting retail deposits and investing in various loan types and securities. The Company reported record net interest income for the sixth consecutive quarter, driven by reduced cost of funds and increased net gains from hedges, while maintaining strong asset quality and capital levels - The Company's principal business involves attracting retail deposits and investing in multi-family residential, commercial real estate, commercial business, one-to-four family, SBA, and construction loans, as well as mortgage-backed and U.S. government securities[198](index=198&type=chunk) - **Net income for the three months ended September 30, 2021, was $25.4 million ($0.81 diluted EPS), an increase of $6.2 million from June 30, 2021**[202](index=202&type=chunk) - **Record net interest income of $63.4 million was achieved** for the three months ended September 30, 2021, primarily due to a reduction in the cost of funds, increased net gains from qualifying hedges, and purchase accounting accretion[202](index=202&type=chunk) - **Net interest margin increased 20 basis points to 3.34%** for the three months ended September 30, 2021, from 3.14% for the three months ended June 30, 2021[203](index=203&type=chunk) - The **loan portfolio is over 87% collateralized by real estate with an average loan-to-value of less than 38%**, and **non-performing assets were 25 basis points of total assets** at September 30, 2021[204](index=204&type=chunk) [Comparison of Operating Results for the Three Months Ended September 30, 2021 And 2020](index=62&type=section&id=Comparison%20of%20Operating%20Results%20for%20the%20Three%20Months%20Ended%20September%2030,%202021%20And%202020) The Company experienced significant growth in net income and profitability metrics for the three months ended September 30, 2021, compared to the prior year, driven by increased net interest income and a benefit for credit losses, partially offset by higher non-interest expenses | Metric | 3 Months Ended Sep 30, 2021 | 3 Months Ended Sep 30, 2020 | Change ($) | Change (%) | |:---|:---|:---|:---|:---| | Net income | $25.4 million | $14.3 million | $11.1 million | 77.6% | | Diluted EPS | $0.81 | $0.50 | $0.31 | 62.0% | | Return on average equity | 15.42% | 9.94% | 5.48 pp | 55.1% | | Return on average assets | 1.26% | 0.81% | 0.45 pp | 55.6% | - **Interest and dividend income increased by $9.0 million (14.1%) to $73.0 million, primarily due to a $932.4 million increase in average interest-earning assets, partly from the Empire Bancorp acquisition**[208](index=208&type=chunk) - **Interest expense decreased by $4.4 million (31.5%) to $9.6 million, mainly due to a 37 basis point decline in the average cost of interest-bearing liabilities to 0.61%**[210](index=210&type=chunk) - **Net interest income increased by $13.4 million (26.9%) to $63.4 million, with net interest margin rising 34 basis points to 3.34%**[211](index=211&type=chunk) - **A benefit for credit losses of $6.9 million was recorded**, compared to a provision of $2.5 million in the prior year, reflecting improving economic conditions[212](index=212&type=chunk) - **Non-interest expense increased by $6.4 million (21.2%) to $36.3 million, driven by Company growth and $2.1 million in merger charges**[214](index=214&type=chunk) - **The effective tax rate increased to 27.0% from 23.9%, due to the discontinuation of New York State and City tax benefits for Flushing Preferred Funding Corporation**[216](index=216&type=chunk) [Comparison of Operating Results for the Nine Months Ended September 30, 2021 And 2020](index=65&type=section&id=Comparison%20of%20Operating%20Results%20for%20the%20Nine%20Months%20Ended%20September%2030,%202021%20And%202020) For the nine months ended September 30, 2021, the Company achieved substantial increases in net income and profitability, primarily due to higher net interest income and a benefit for credit losses, despite a decrease in non-interest income | Metric | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | Change ($) | Change (%) | |:---|:---|:---|:---|:---| | Net income | $63.7 million | $31.2 million | $32.5 million | 104.1% | | Diluted EPS | $2.02 | $1.08 | $0.94 | 87.0% | | Return on average equity | 13.24% | 7.30% | 5.94 pp | 81.4% | | Return on average assets | 1.04% | 0.58% | 0.46 pp | 79.3% | - **Interest and dividend income increased by $21.5 million (11.0%) to $216.8 million, driven by a $953.4 million increase in average interest-earning assets, partially offset by an 11 basis point decrease in yield**[220](index=220&type=chunk) - **Interest expense decreased by $24.4 million (43.6%) to $31.5 million, primarily due to a 62 basis point decline in the cost of average interest-bearing liabilities to 0.65%**[221](index=221&type=chunk) - **Net interest income increased by $45.8 million (32.9%) to $185.3 million, with net interest margin rising 45 basis points to 3.22%**[222](index=222&type=chunk) - **A benefit for credit losses of $5.7 million was recorded**, compared to a provision of $19.3 million in the prior year, mainly due to improving economic conditions[224](index=224&type=chunk) - **Non-interest income decreased by $8.3 million to $4.0 million, primarily due to an increase in net losses from fair value adjustments**[225](index=225&type=chunk) - **The effective tax rate increased to 26.3% from 24.4%, reflecting the discontinuation of certain New York State and City tax benefits**[228](index=228&type=chunk) [Financial Condition](index=66&type=section&id=Financial%20Condition) The Company's total assets increased, driven by growth in mortgage-backed securities, while net loans decreased due to PPP loan forgiveness. Liabilities saw an increase in deposits, offset by a decrease in borrowed funds, and stockholders' equity grew due to net income and other comprehensive income - **Total assets increased by $100.9 million (1.3%) to $8,077.3 million at September 30, 2021, from $7,976.4 million at December 31, 2020**[229](index=229&type=chunk) - **Net loans decreased by $65.5 million (1.0%) to $6,594.0 million, primarily due to $159.8 million in PPP loan forgiveness**[229](index=229&type=chunk) - **Loan originations and purchases increased by $203.1 million (29.5%) to $891.2 million for the nine months ended September 30, 2021, including $138.7 million in PPP loans**[229](index=229&type=chunk) - **Mortgage-backed securities increased by $179.7 million (43.6%) to $592.0 million, driven by $310.9 million in purchases**[233](index=233&type=chunk) - **Total deposits increased by $330.7 million (5.4%) to $6,421.4 million, mainly due to a $428.9 million increase in non-maturity deposits, while brokered deposits decreased by $468.2 million**[236](index=236&type=chunk) - **Total stockholders' equity increased by $49.1 million (7.9%) to $668.1 million, primarily from net income and an increase in accumulated other comprehensive income**[237](index=237&type=chunk) [Interest Rate Risk](index=68&type=section&id=Interest%20Rate%20Risk) The Company manages interest rate risk through economic value of equity (EVE) and income simulation analyses, quantifying potential impacts of interest rate changes on net portfolio value and net interest income, and utilizes a derivative portfolio to protect against rising rates - The Company quantifies interest rate risk using Economic Value of Equity (EVE) analysis, measuring changes in net portfolio value under various interest rate shock scenarios[239](index=239&type=chunk)[240](index=240&type=chunk) | Change in Interest Rate | Net Portfolio Value Change | Net Portfolio Value Ratio | |:---|:---|:---| | -100 Basis points | (6.63)% | 10.78% | | Base interest rate | — | 11.73% | | +100 Basis points | (4.55)% | 11.46% | | +200 Basis points | (9.87)% | 11.08% | - Income simulation analysis projects a **3.4% reduction in net interest income from a 100 basis point rate increase** over the next twelve months[243](index=243&type=chunk) - The Company holds a **$1.5 billion derivative portfolio, including $996.5 million in forward swaps** on short-term advances and brokered CDs, designed to protect against rising interest rates[244](index=244&type=chunk)[245](index=245&type=chunk) [Average Balances](index=71&type=section&id=Average%20Balances) This section presents average balances, interest income/expense, and yields/costs for interest-earning assets and interest-bearing liabilities, illustrating the components of net interest income and net interest margin for the three and nine months ended September 30, 2021 and 2020 | Metric (3 Months Ended Sep 30) | 2021 Average Balance | 2021 Interest | 2021 Yield/Cost | 2020 Average Balance | 2020 Interest | 2020 Yield/Cost | |:---|:---|:---|:---|:---|:---|:---| | Total interest-earning assets | $7,608,317 | $73,066 | 3.84% | $6,675,896 | $64,031 | 3.84% | | Total interest-bearing liabilities | $6,310,859 | $9,589 | 0.61% | $5,731,899 | $13,990 | 0.98% | | Net interest income / net interest rate spread (tax equivalent) | | $63,477 | 3.23% | | $50,041 | 2.86% | | Net interest-earning assets / net interest margin (tax equivalent) | $1,297,458 | | 3.34% | $943,997 | | 3.00% | | Metric (9 Months Ended Sep 30) | 2021 Average Balance | 2021 Interest | 2021 Yield/Cost | 2020 Average Balance | 2020 Interest | 2020 Yield/Cost | |:---|:---|:---|:---|:---|:---|:---| | Total interest-earning assets | $7,688,354 | $217,169 | 3.77% | $6,734,979 | $195,750 | 3.88% | | Total interest-bearing liabilities | $6,439,928 | $31,537 | 0.65% | $5,865,045 | $55,889 | 1.27% | | Net interest income / net interest rate spread (tax equivalent) | | $185,632 | 3.12% | | $139,861 | 2.61% | | Net interest-earning assets / net interest margin (tax equivalent) | $1,248,426 | | 3.22% | $869,934 | | 2.77% | [Loans](index=74&type=section&id=Loans) This section details the Company's loan portfolio activity, including originations, purchases, and reductions for mortgage and non-mortgage loans, highlighting the impact of PPP loan forgiveness and the focus on specific loan types | Loan Type (In thousands) | 9 Months Ended Sep 30, 2021 Originations | 9 Months Ended Sep 30, 2020 Originations | |:---|:---|:---| | Multi-family residential | $167,316 | $157,577 | | Commercial real estate | $89,678 | $104,213 | | One-to-four family – mixed-use property | $28,670 | $25,439 | | One-to-four family – residential | $7,434 | $13,383 | | Construction | $11,865 | $10,384 | | Small Business Administration | $143,093 | $111,754 | | Commercial business and other | $247,025 | $128,079 | | Total mortgage loans originated | $304,963 | $311,700 | | Total other loans originated | $393,554 | $243,495 | | Total loan originations | $698,517 | $555,195 | - **Total loan originations and purchases for the nine months ended September 30, 2021, were $891.2 million, including $138.7 million in SBA PPP loans**[231](index=231&type=chunk)[253](index=253&type=chunk) - The Bank maintains conservative underwriting standards, including a loan-to-value ratio of **75%** or less and a debt coverage ratio of at least **125%**[231](index=231&type=chunk) [Troubled Debt Restructured ("TDR") and Non-Performing Assets](index=75&type=section&id=Troubled%20Debt%20Restructured%20(%22TDR%22)%20and%20Non-Performing%20Assets) This section provides an overview of the Company's troubled debt restructurings (TDRs) and non-performing assets, detailing their amortized cost and changes over the periods, and highlighting the conservative loan-to-value ratios for non-performing real estate loans | Performing TDR Loans (In thousands) | Sep 30, 2021 Amortized Cost | Dec 31, 2020 Amortized Cost | |:---|:---|:---| | Multi-family residential | $1,681 | $1,700 | | Commercial real estate | $7,572 | $7,702 | | One-to-four family - mixed-use property | $1,391 | $1,459 | | One-to-four family - residential | $489 | $507 | | Commercial business and other | $1,726 | $1,588 | | Total performing troubled debt restructured | $12,859 | $12,956 | | Non-Accrual Status TDRs | $278 | $2,955 | | Total TDRs | $13,137 | $15,911 | | Non-Performing Assets (In thousands) | Sep 30, 2021 | Dec 31, 2020 | |:---|:---|:---| | Loans 90 days or more past due and still accruing | $1,925 | $2,748 | | Non-accrual loans | $18,292 | $18,325 | | Total non-performing loans | $20,217 | $21,073 | | Other non-performing assets | $0 | $35 | | Total non-performing assets | $20,217 | $21,108 | | Non-performing assets to total assets | 0.25% | 0.26% | | ACL - loans to non-performing loans | 179.86% | 214.27% | - The **average loan-to-value ratio for non-performing real estate loans remained conservative at approximately 35%** at September 30, 2021[204](index=204&type=chunk)[212](index=212&type=chunk)[224](index=224&type=chunk) [Criticized and Classified Assets](index=76&type=section&id=Criticized%20and%20Classified%20Assets) The Company's total Criticized and Classified assets increased, primarily due to an increase in criticized investment securities, while maintaining a focus on credit quality within its loan and investment portfolios - **Total Criticized and Classified assets were $89.9 million at September 30, 2021, an increase of $18.0 million from $71.9 million at December 31, 2020**[258](index=258&type=chunk) - The Company **had $21.0 million in criticized investment securities at September 30, 2021, compared to none at December 31, 2020**[258](index=258&type=chunk) - Formal foreclosure proceedings were in process for **$9.3 million of consumer mortgage loans at September 30, 2021, up from $5.9 million at December 31, 2020**[259](index=259&type=chunk) [Allowance for Credit Losses](index=78&type=section&id=Allowance%20for%20Credit%20Losses) This section details the activity in the Allowance for Credit Losses (ACL) for loans, held-to-maturity (HTM) securities, and off-balance sheet commitments, reflecting a benefit for credit losses driven by improving economic conditions | ACL Component (In thousands) | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | |:---|:---|:---| | ACL - loans (beginning balance) | $45,153 | $21,751 | | Loans - (Benefit) Provision | $(5,642) | $19,206 | | Loans - Net charge-offs | $(3,148) | $(2,993) | | ACL - loans (ending balance) | $36,363 | $38,343 | | ACL - HTM Securities (ending balance) | $843 | $402 | | ACL - Off-Balance Sheet (ending balance) | $1,311 | $1,559 | | Total Allowance for Credit Losses | $38,517 | $40,304 | - The **ratio of ACL - loans to gross loans at period-end decreased to 0.31% at September 30, 2021, from 0.65% at December 31, 2020**[263](index=263&type=chunk) - The **ratio of ACL - loans to non-performing loans at period-end was 179.86% at September 30, 2021, compared to 154.66% at December 31, 2020**[263](index=263&type=chunk) [ITEM 3. Quantitative and Qualitative Disclosures About Market Risk](index=80&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section refers to the detailed discussion of market risk, including quantitative and qualitative disclosures, provided within the 'Management's Discussion and Analysis of Financial Condition and Results of Operations - Interest Rate Risk' section - Market risk disclosures are covered under 'Management's Discussion and Analysis of Financial Condition and Results of Operations - Interest Rate Risk'[265](index=265&type=chunk) [ITEM 4. Controls and Procedures](index=80&type=section&id=ITEM%204.%20Controls%20and%20Procedures) The Company's management, including the CEO and CFO, concluded that the design and operation of its disclosure controls and procedures were effective as of September 30, 2021, with no material changes to internal control over financial reporting during the period - The Company's disclosure controls and procedures were evaluated and deemed effective as of September 30, 2021[265](index=265&type=chunk) - No material changes to the Company's internal control over financial reporting occurred during the period[265](index=265&type=chunk) PART II – OTHER INFORMATION [ITEM 1. Legal Proceedings](index=81&type=section&id=ITEM%201.%20Legal%20Proceedings) The Company is involved in various lawsuits, but management, in consultation with legal counsel, believes these will not materially adversely affect its financial condition, results of operations, or cash flows - Management believes that the resolution of current legal proceedings will not have a material adverse effect on the Company's financial condition, results of operations, and cash flows[267](index=267&type=chunk) [ITEM 1A. Risk Factors](index=81&type=section&id=ITEM%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the Company's annual report on Form 10-K for the year ended December 31, 2020 - No material changes have occurred in the risk factors since the Annual Report on Form 10-K for December 31, 2020[268](index=268&type=chunk) [ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=81&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the Company's common stock repurchases during the three months ended September 30, 2021, under its authorized stock repurchase program | Period | Total Number of Shares Purchased | Average Price Paid per Share | |:---|:---|:---| | July 1 to July 31, 2021 | 25,000 | $22.09 | | August 1 to August 31, 2021 | 130,541 | $22.47 | | September 1 to September 30, 2021 | 130,102 | $22.42 | | Total | 285,643 | $22.42 | - As of September 30, 2021, **999,163 shares remained to be repurchased** under the Company's stock repurchase program, which has no expiration or maximum dollar amount[269](index=269&type=chunk) [ITEM 3. Defaults Upon Senior Securities](index=81&type=section&id=ITEM%203.%20Defaults%20Upon%20Senior%20Securities) The Company reported no defaults upon senior securities during the period - There were no defaults upon senior securities[270](index=270&type=chunk) [ITEM 4. Mine Safety Disclosures](index=81&type=section&id=ITEM%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the Company - This item is not applicable[271](index=271&type=chunk) [ITEM 5. Other Information](index=81&type=section&id=ITEM%205.%20Other%20Information) The Company reported no other information for this period - There is no other information to report[272](index=272&type=chunk) [ITEM 6. Exhibits](index=82&type=section&id=ITEM%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including corporate governance documents, indentures, stock plans, certifications, and XBRL-related documents - Exhibits include Certificate of Incorporation, By-Laws, Subordinated Indenture, Amended 2014 Omnibus Plan, Section 302 and 906 certifications, and XBRL documents[276](index=276&type=chunk)[277](index=277&type=chunk)[281](index=281&type=chunk) [SIGNATURES](index=84&type=section&id=SIGNATURES) The report is duly signed on November 5, 2021, by John R. Buran, President and Chief Executive Officer, and Susan K. Cullen, Senior Executive Vice President, Treasurer, and Chief Financial Officer - The report was signed by John R. Buran, President and CEO, and Susan K. Cullen, Senior Executive Vice President, Treasurer, and CFO, on November 5, 2021[284](index=284&type=chunk)[286](index=286&type=chunk) ```

3Q21 Earnings Conference Call Personal Business Lending Government October 27, 2021 Small enough to know you. Large enough to help you.8 Safe Harbor Statement "Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this Presentation 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 ...