News

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

01/27/2022

Record GAAP and Core EPS for 2021

John R. Buran, President and CEO Commentary

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

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

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

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

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

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

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

1 See Reconciliation of GAAP Earnings and Core Earnings

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Conference Call Information:

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

First Quarter 2022 Earnings Release Date:

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

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

About Flushing Financial Corporation

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

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

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

#FF

Statistical Tables Follow -

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
FINANCIAL HIGHLIGHTS
(Unaudited)

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

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

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

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

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

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

  

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
AVERAGE BALANCE SHEETS
(Unaudited)

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


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

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

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

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

Deposit Composition

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

Loan Composition

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

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

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

Loan Closings

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

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

Weighted Average Rate on Loan Closings

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


FLUSHING FINANCIAL CORPORATION and SUBSIDIARIES
ASSET QUALITY
(Unaudited)

Allowance for Loan Losses

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

Non-Performing Assets

                                         
    December 31,   September 30,   June 30,   March 31,   December 31,
(Dollars in thousands)   2021   2021   2021   2021   2020
Loans 90 Days Or More Past Due and Still Accruing:                                        
Multifamily residential   $     $     $ 201     $ 201     $ 201  
Commercial real estate                             2,547  
Construction           873             2,381        
Commercial business and other           1,052                    
Total           1,925       201       2,582       2,748  
                                         
Non-accrual Loans:                                        
Multifamily residential     2,431       4,192       4,669       4,338       2,524  
Commercial real estate     613       613       8       8       1,683  
One-to-four family - mixed-use property (1)     1,309       2,204       2,309       2,355       1,366  
One-to-four family - residential     7,725       7,807       6,940       7,335       5,854  
Small Business Administration     937       976       976       1,151       1,151  
Taxi medallion(1)                             2,317  
Commercial business and other(1)     1,918       2,500       2,489       3,417       3,430  
Total     14,933       18,292       17,391       18,604       18,325  
                                         
Total Non-performing Loans (NPLs)     14,933       20,217