AP NEWS
Press release content from Globe Newswire. The AP news staff was not involved in its creation.
PRESS RELEASE: Paid content from Globe Newswire
Press release content from Globe Newswire. The AP news staff was not involved in its creation.

Flushing Financial Corporation Reports GAAP Diluted EPS of $0.45, an Increase of 21.6% QoQ; Pristine Credit Quality Continues with Classified Assets at Lowest Level Since 2008

January 30, 2020 GMT

FOURTH QUARTER 20191 HIGHLIGHTS

-- GAAP diluted EPS was $0.45, up 21.6% QoQ and 2.3% YoY -- Core diluted EPS was $0.41, down 14.6% QoQ and 24.1% YoY -- Net interest margin was 2.48%, up 11bps QoQ and down 9bps YoY -- Core net interest margin was 2.33%, unchanged QoQ and down 16bps YoY -- GAAP net interest income of $41.2 million, up 5.7% QoQ and 1.3% YoY -- Core net interest income of $40.1 million, down 0.2% QoQ and 1.2% YoY -- GAAP and core ROAE were 9.1% and 8.4%, respectively, compared with 7.6% and 9.8%, respectively in 3Q19 -- GAAP and core ROAA were 0.7% and 0.7%, respectively, compared with 0.6% and 0.8%, respectively in 3Q19

FULL YEAR 20191 HIGHLIGHTS

-- GAAP diluted EPS was $1.44, down 25.0% YoY -- Core diluted EPS was $1.65, down 14.9% YoY -- Net interest margin was 2.47%, down 25bps YoY -- Core net interest margin was 2.40%, down 20bps YoY -- GAAP net interest income of $161.9 million, down 3.3% YoY -- Core net interest income of $163.6 million, down 2.3% YoY -- GAAP and core ROAE were 7.4% and 8.4%, respectively, compared with 10.3% and 10.4%, respectively in 2018 -- GAAP and core ROAA were 0.6% and 0.7%, respectively, compared with 0.9% and 0.9%, respectively in 2018 -- Record C&I originations totaling $609.2 million -- Classified assets totaled $24.6 million, down 47.1% YoY

UNIONDALE, N.Y., Jan. 30, 2020 (GLOBE NEWSWIRE) -- Flushing Financial Corporation (the “Company”) (Nasdaq-GS: FFIC), the parent holding company for Flushing Bank (the “Bank”), today announced its financial results for the fourth quarter and fiscal year ended December 31, 2019.

John R. Buran, President and Chief Executive Officer, stated, “We are pleased to report GAAP EPS of $0.45, an increase of 22% QoQ. Net interest income increased 6% from 3Q19, as the net interest margin improved by 11bps. The improvement in the net interest margin was driven by an 11bps decline in the cost of funds. The cost of funds has shown continuous improvement throughout the quarter. Concurrently, loan portfolio yields increased four basis points QoQ, as the negative effects on our floating rate C&I portfolio were recorded early in the quarter following the Fed decreasing rates. Our hedging strategies contributed positively to both net interest and non-interest income as the yield curve exhibited a small upward slope. We continue to see additional opportunities for repricing retail CDs downward as we have approximately $1 billion maturing in 2020, at an average cost of 2.20%, compared to the current average cost of new deposits of 1.53%. As a result of the above, our core net interest margin for 4Q19 was unchanged from 3Q19. Our strong credit metrics improved as classified loans hit the lowest level since 2008 and delinquent loans decreased to 34bps of the gross loan portfolio. Loan growth declined from 3Q19, however, we start 2020 with a pipeline of $325 million which exceeds the pipeline we started 2019 with by $128 million.”

“In preparation for 2020, we enhanced our distribution network. We are currently in the testing phase of upgrading our mobile and online banking offerings, which are both components of our digital transformation strategy. We expect this digital transformation to significantly improve the customer experience for both business and consumer customers. In December, we opened our 20th branch. The new branch in Hicksville, NY will expand on our successful ethnic strategy in the Asian market. We also relocated our Bell Boulevard branch to better serve our growing Asian market.”

“Most importantly, is our pending acquisition of Empire Bancorp, Inc. The acquisition remains on track with an expected closing in the second quarter of 2020. All required applications and notifications have been filed with the respective agencies. As of December 31, 2019, our pro forma balance sheet would be approximately $8.0 billion in assets, $6.4 billion in loans, and $5.9 billion in deposits while expanding into the Suffolk County market. Suffolk County is one of the richest counties in the country with approximately 1.5 million people and 75,000 businesses. Our plans for substantial cost reductions and improvements in the business remain on track.”

“We remain well capitalized and well positioned to deliver profitable growth and long-term value to our shareholders as we continue to execute our strategic objectives.”

Summary of Strategic Objectives

-- Manage cost of funds and continue to improve funding mix -- Increase interest income by leveraging loan pricing opportunities and portfolio mix -- Enhance core earnings power by improving scalability and efficiency -- Manage credit risk -- Remain well capitalized under all stress test scenarios

Earnings Summary:

Net Interest Income

Net interest income for 4Q19 was $41.2 million, an increase of $0.5 million, or 1.3% YoY (4Q19 compared to 4Q18) and $2.2 million, or 5.7% QoQ (4Q19 compared to 3Q19).

-- Net interest margin of 2.48%, decreased 9bps YoY, but increased 11bps QoQ -- Net interest spread of 2.25%, decreased 10bps YoY, but increased 10bps QoQ -- Yield on average interest-earning assets of 4.21%, decreased 4bps YoY and 1bp QoQ -- Cost of average interest-bearing liabilities of 1.96%, increased 6bps YoY, but decreased 11bps QoQ -- Cost of funds of 1.83%, increased 6bps YoY, but decreased 11bps QoQ -- Average balance of total interest-earning assets of $6,677.3 million, increased $312.9 million, or 4.9%, YoY and $87.8 million, or 1.3%, QoQ -- Net interest income includes prepayment penalty income from loans totaling $0.9 million in 4Q19, $1.7 million in 3Q19 and $0.9 million in 4Q18; recovered interest from delinquent loans of $0.4 million in 4Q19, $0.3 million in 3Q19 and $0.3 million in 4Q18; net gains from fair value adjustments on qualifying hedges totaling $1.0 million in 4Q19 and net losses from fair value adjustments on qualifying hedges totaling $1.3 million in 3Q19 and none in 4Q18 -- Absent all above items noted in the preceding bullet, the yield on interest-earning assets was 4.07% in 4Q19, a decrease of 11bps from 3Q19 and 4Q18 and the net interest margin was 2.33% in 4Q19 and 3Q19, but decreased 16bps from 4Q18

Provision (benefit) for loan losses

The Company recorded a benefit of $0.3 million in 4Q19 compared to a provision of $0.7 million in 3Q19 and $0.4 million in 4Q18.

-- 4Q19 benefit for loan losses was primarily due to a change in the loan portfolio mix -- Net charge-offs (recoveries) of ($34,000) in 4Q19, $0.2 million in 3Q19, and ($0.2) million in 4Q18 -- We continue to finalize our Day One impact assumptions and expect the adoption of CECL to increase the current allowance between 5% and 15% -- The CECL standard will create additional volatility to our future provisions due to the assumptions used for the macroeconomic variables, loan composition and product mix, as they are all subject to change

Non-interest Income

Non-interest income for 4Q19 was $5.0 million, an increase of $6.0 million YoY, and $4.0 million QoQ

-- Non-interest income included net gains from fair value adjustments of $0.8 million in 4Q19 and net losses from fair value adjustments of $2.1 million in 3Q19 and $3.6 million in 4Q18 -- Additionally, non-interest income included net losses from the sale of securities of $1.9 million in 4Q18; net gains from sale of assets of $1.1 million in 4Q18; net gains on sale of loans of $0.5 million in 4Q19 and $0.2 million in 3Q19 and life insurance proceeds of $0.4 million in 4Q19 -- Absent all above items, non-interest income was $3.3 million in 4Q19, a decrease of $0.1 million, or 1.6% YoY, but an increase of $0.4 million, or 12.3% QoQ

Non-interest Expense

Non-interest expense for 4Q19 was $29.6 million, an increase of $3.9 million, or 15.1 % YoY, and $3.6 million, or 13.8% QoQ

-- Non-interest expense included the benefit of the FDIC small business assessment credit of $0.3 million in 4Q19 and $1.3 million in 3Q19 -- Additionally, non-interest expense included the impact of the change in the discount rate used to calculate the Company’s liability of BOLI split dollar insurance; the discount rate decreased in 4Q19 resulting in additional expense totaling $1.2 million, while the discount rate increased in 4Q18 resulting in a decrease in expense totaling $0.8 million -- Lastly, non-interest expense included merger expenses totaling $1.1 million in 4Q19 and $0.5 million in 3Q19 -- Absent all above items, non-interest expense was $27.7 million in 4Q19, an increase of $1.2 million, or 4.4% YoY, and $0.9 million, or 3.4% QoQ -- The ratio of non-interest expense to average assets was to 1.68% in 4Q19 compared to 1.49% in 3Q19 and 1.54% in 4Q18; absent all above items non-interest expense to average assets was 1.57% in 4Q19 compared to 1.54% in 3Q19 and 1.59% in 4Q18 -- The efficiency ratio was 65.0% in 4Q19 compared to 58.9% in 3Q19 and 58.5% in 4Q18

Provision for Income Taxes

The provision for income taxes in 4Q19 was $4.0 million, an increase of $2.9 million YoY and $1.4 million QoQ.

-- Pre-tax income increased by $3.4 million, or 25.4% YoY, and $3.6 million, or 27.4% QoQ -- The effective tax rates were 23.4% in 4Q19, 19.1% in 3Q19 and 7.8% in 4Q18 -- 4Q18 reflects the release of a previously accrued tax liability of $1.8 million

Financial Condition Summary:

Loans:

-- Net loans held for investment were $5,750.5 million reflecting an increase of 4.0% from December 31, 2018, as we continue to focus on the origination of full banking relationship loans through C&I loans, multi-family loans and commercial real estate -- Loan closings of commercial business loans, multi-family loans and commercial real estate totaled $241.0 million for 4Q19, or 89.3% of loan production -- Loan pipeline was $324.5 million at December 31, 2019, compared to $418.9 million at September 30, 2019 and $196.6 million at December 31, 2018 -- The loan-to-value ratio on our portfolio of real estate dependent loans as of December 31, 2019 totaled 38.2%

The following table shows the weighted average rate received from loan closings for the periods indicated:

For the three months ended ------------------------------------------- December 31, September 30, December 31, Loan type 2019 2019 2018 ------------------ ------------ ------------- ------------ Mortgage loans 3.97 % 4.40 % 4.79 % Non-mortgage loans 4.68 % 4.38 % 5.11 % ------------ ------------- ------------ Total loans 4.19 % 4.39 % 4.90 % ------------ ------------- ------------

Credit Quality:

-- Non-performing loans totaled $13.3 million, a decrease of $3.0 million, or 18.4%, from $16.3 million at December 31, 2018 -- Non-performing assets totaled $13.5 million, a decrease of $2.8 million, or 16.9%, from $16.3 million at December 31, 2018 -- Classified assets totaled $24.6 million, a decrease of $21.9 million, or 47.1%, from $46.5 million at December 31, 2018 -- Loans classified as troubled debt restructured (TDR) totaled $6.5 million, a decrease of $1.9 million, or 22.4%, from $8.4 million at December 31, 2018 -- We anticipate continued low loss content in the portfolio, as our strong underwriting standards coupled with our practice of obtaining updated appraisals and recording charge-offs early in the delinquency process has resulted in a 26.2% average loan-to-value for non-performing loans collateralized by real estate -- Net charge-offs totaled $2.0 million during the year ended December 31, 2019 driven mainly by charge-offs of one commercial business loan relationship

Capital Management:

-- The Company and Bank, at December 31, 2019, were both well capitalized under all applicable regulatory requirements -- Through 4Q19, stockholders’ equity increased $30.2 million, or 5.5%, to $579.7 million primarily due to net income of $41.3 million, partially offset by the declaration and payment of dividends on the Company’s common stock -- During 4Q19, the Company did not repurchase any shares; as of December 31, 2019, up to 427,211 shares remained subject to repurchase under the authorized stock repurchase program, which has no expiration or maximum dollar limit -- Book value per common share increased to $20.59 at December 31, 2019, from $19.64 at December 31, 2018 and tangible book value per common share, a non-GAAP measure, increased to $20.02 at December 31, 2019, from $19.07 at December 31, 2018

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 31, 2020 at 9:30 AM (ET) to discuss the Company’s strategy and results for the fourth quarter -- Dial-in for Live Call: 1-877-509-5836 -- Webcast: https://services.choruscall.com/links/ffic200131.html -- Dial-in for Replay: 1-877-344-7529 -- Replay Access Code: 10137546 -- The conference call will be simultaneously webcast and archived through January 31, 2021

About Flushing Financial Corporation

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

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

“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, 2018 and in other documents filed by the Company with the Securities and Exchange Commission (the “SEC”) from time to time, including those additional risk factors discussed under the heading “Risk Factors” in our Registration Statement on Form S-4/A as filed with the SEC on January 9, 2020, relating to the pending acquisition of Empire Bancorp, Inc. 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.

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIESCONSOLIDATED STATEMENTS OF INCOME(Dollars in thousands, except per share data)(Unaudited)

For the three months ended For the twelve months ended ---------------------------------- ------------------------ December September December December December 31, 30, 31, 31, 31, 2019 2019 2018 2019 2018 ---------- ---------- ---------- ----------- ----------- Interest and Dividend Income Interest and fees on loans $ 64,316 $ 62,825 $ 60,722 $ 251,744 $ 232,719 Interest and dividends on securities: Interest 5,528 6,287 6,376 25,535 23,022 Dividends 17 18 18 73 67 Other interest income 318 259 317 1,604 1,190 - ------ - - ------ - - ------ - - ------- - - ------- - Total interest and dividend income 70,179 69,389 67,433 278,956 256,998 - ------ - - ------ - - ------ - - ------- - - ------- - Interest Expense Deposits 21,517 22,244 20,174 88,057 64,497 Other interest expense 7,483 8,196 6,623 28,959 25,095 - ------ - - ------ - - ------ - - ------- - - ------- - Total interest expense 29,000 30,440 26,797 117,016 89,592 - ------ - - ------ - - ------ - - ------- - - ------- - Net Interest Income 41,179 38,949 40,636 161,940 167,406 Provision (benefit) for loan losses (318 ) 683 422 2,811 575 - ------ - - ------ - - ------ - - ------- - - ------- - Net Interest Income After Provision for Loan 41,497 38,266 40,214 159,129 166,831 Losses - ------ - - ------ - - ------ - - ------- - - ------- - Non-interest Income Banking services fee income 844 847 1,065 3,723 4,030 Net loss on sale of securities — — (1,920 ) (15 ) (1,920 ) Net gain on sale of loans 489 204 — 870 168 Net gain on sale of assets — — 1,141 770 1,141 Net gain (loss) from fair value adjustments 807 (2,124 ) (3,585 ) (5,353 ) (4,122 ) Federal Home Loan Bank of New York stock 1,026 834 946 3,589 3,576 dividends Life insurance proceeds 419 — — 462 2,998 Bank owned life insurance 984 1,000 779 3,534 3,099 Other income 469 278 588 1,891 1,367 - ------ - - ------ - - ------ - - ------- - - ------- - Total non-interest income 5,038 1,039 (986 ) 9,471 10,337 - ------ - - ------ - - ------ - - ------- - - ------- - Non-interest Expense Salaries and employee benefits 17,470 15,461 15,094 67,765 64,560 Occupancy and equipment 2,950 2,847 2,551 11,328 10,079 Professional services 2,120 2,167 1,821 8,358 8,360 FDIC deposit insurance 306 (589 ) 472 869 2,115 Data processing 1,476 1,490 1,409 5,878 5,663 Depreciation and amortization 1,476 1,439 1,464 5,930 5,792 Other real estate owned/foreclosure expense 59 48 (128 ) 204 (94 ) (benefit) Net gain from sales of real estate owned — — — — (27 ) Other operating expenses 3,790 3,182 3,077 14,937 15,235 - ------ - - ------ - - ------ - - ------- - - ------- - Total non-interest expense 29,647 26,045 25,760 115,269 111,683 - ------ - - ------ - - ------ - - ------- - - ------- - Income Before Income Taxes 16,888 13,260 13,468 53,331 65,485 - ------ - - ------ - - ------ - - ------- - - ------- - Provision for Income Taxes Federal 3,058 2,457 349 10,439 8,574 State and local 899 79 697 1,613 1,821 - ------ - - ------ - - ------ - - ------- - - ------- - Total taxes 3,957 2,536 1,046 12,052 10,395 - ------ - - ------ - - ------ - - ------- - - ------- - Net Income $ 12,931 $ 10,724 $ 12,422 $ 41,279 $ 55,090 - ------ - - ------ - - ------ - - ------- - - ------- - Basic earnings per common share $ 0.45 $ 0.37 $ 0.44 $ 1.44 $ 1.92 Diluted earnings per common share $ 0.45 $ 0.37 $ 0.44 $ 1.44 $ 1.92 Dividends per common share $ 0.21 $ 0.21 $ 0.20 $ 0.84 $ 0.80

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIESCONSOLIDATED STATEMENTS OF FINANCIAL CONDITION(Dollars in thousands, except per share data)(Unaudited)

December 31, September 30, December 31, 2019 2019 2018 ------------- ------------- ------------- ASSETS Cash and due from banks $ 49,787 $ 86,989 $ 118,561 Securities held-to-maturity: Mortgage-backed securities 7,934 7,939 7,953 Other securities 50,954 52,101 24,065 Securities available for sale: Mortgage-backed securities 523,849 579,010 557,953 Other securities 248,651 246,465 264,702 Loans: Multi-family residential 2,238,591 2,232,305 2,269,048 Commercial real estate 1,582,008 1,559,581 1,542,547 One-to-four family ― mixed-use property 592,471 587,100 577,741 One-to-four family ― residential 188,216 184,432 190,350 Co-operative apartments 8,663 9,089 8,498 Construction 67,754 64,234 50,600 Small Business Administration 14,445 13,982 15,210 Taxi medallion 3,309 3,513 4,539 Commercial business and other 1,061,478 1,096,164 877,763 Net unamortized premiums and unearned loan fees 15,271 15,363 15,188 Allowance for loan losses (21,751 ) (22,035 ) (20,945 ) - --------- - - --------- - - --------- - Net loans 5,750,455 5,743,728 5,530,539 Interest and dividends receivable 25,722 26,566 25,485 Bank premises and equipment, net 28,676 28,146 30,418 Federal Home Loan Bank of New York stock 56,921 65,280 57,282 Bank owned life insurance 157,713 158,604 131,788 Goodwill 16,127 16,127 16,127 Other real estate owned, net 239 239 — Right of use asset 41,254 42,400 — Other assets 59,494 57,301 69,303 - --------- - - --------- - - --------- - Total assets $ 7,017,776 $ 7,110,895 $ 6,834,176 - --------- - - --------- - - --------- - LIABILITIES Due to depositors: Non-interest bearing $ 435,072 $ 421,786 $ 413,747 Certificate of deposit accounts 1,437,890 1,506,376 1,563,310 Savings accounts 191,485 193,497 210,022 Money market accounts 1,592,011 1,329,156 1,427,992 NOW accounts 1,365,591 1,461,694 1,300,852 - --------- - - --------- - - --------- - Total deposits 5,022,049 4,912,509 4,915,923 Mortgagors’ escrow deposits 44,375 61,803 44,861 Borrowed funds 1,237,231 1,422,440 1,250,843 Operating lease liability 49,367 50,626 — Other liabilities 85,082 95,125 73,085 - --------- - - --------- - - --------- - Total liabilities 6,438,104 6,542,503 6,284,712 - --------- - - --------- - - --------- - STOCKHOLDERS’ EQUITY Preferred stock (5,000,000 shares authorized; none issued) — — — Common stock ($0.01 par value; 100,000,000 shares authorized; 31,530,595 shares issued at December 31, 2019, September 30, 2019 and December 31, 2018; 28,157,206 shares, 28,157,206 shares and 315 315 315 27,983,637 shares outstanding at December 31, 2019, September 30, 2019 and December 31, 2018, respectively) Additional paid-in capital 226,691 225,471 222,720 Treasury stock (3,373,389 shares, 3,373,389 shares and 3,546,958 shares at December 31, 2019, September 30, 2019 and December 31, (71,487 ) (71,487 ) (75,146 ) 2018, respectively) Retained earnings 433,960 427,062 414,327 Accumulated other comprehensive loss, net of taxes (9,807 ) (12,969 ) (12,752 ) - --------- - - --------- - - --------- - Total stockholders’ equity 579,672 568,392 549,464 - --------- - - --------- - - --------- - Total liabilities and stockholders’ equity $ 7,017,776 $ 7,110,895 $ 6,834,176 - --------- - - --------- - - --------- -

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIESSELECTED CONSOLIDATED FINANCIAL DATA(Dollars in thousands, except per share data)(Unaudited)

At or for the three months ended At or for the twelve months ended ------------------------------------------ --------------------------- December 31, September December 31, December 31, December 31, 30, 2019 2019 2018 2019 2018 ------------ ------------ ------------ ------------ ------------ Per Share Data Basic earnings per share $ 0.45 $ 0.37 $ 0.44 $ 1.44 $ 1.92 Diluted earnings per share $ 0.45 $ 0.37 $ 0.44 $ 1.44 $ 1.92 Average number of shares outstanding for: Basic earnings per common share 28,723,077 28,730,161 28,422,215 28,709,106 28,709,378 computation Diluted earnings per common share 28,723,077 28,730,161 28,422,517 28,709,109 28,709,833 computation Shares outstanding 28,157,206 28,157,206 27,983,637 28,157,206 27,983,637 Book value per common share (1) $ 20.59 $ 20.19 $ 19.64 $ 20.59 $ 19.64 Tangible book value per common $ 20.02 $ 19.62 $ 19.07 $ 20.02 $ 19.07 share (2) Stockholders’ Equity Stockholders’ equity $ 579,672 $ 568,392 $ 549,464 $ 579,672 $ 549,464 Tangible stockholders’ equity 563,837 552,551 533,627 563,837 533,627 Average Balances Total loans, net $ 5,726,635 $ 5,645,503 $ 5,438,418 $ 5,621,033 $ 5,316,968 Total interest-earning assets 6,677,325 6,589,498 6,364,456 6,582,473 6,194,248 Total assets 7,057,094 6,972,403 6,681,161 6,947,881 6,504,598 Total due to depositors 4,527,645 4,422,050 4,453,200 4,535,292 4,288,868 Total interest-bearing liabilities 5,912,284 5,877,740 5,654,560 5,856,953 5,517,552 Stockholders’ equity 567,461 564,255 541,067 561,289 534,735 Performance Ratios(3) Return on average assets 0.73 % 0.62 % 0.74 % 0.59 % 0.85 % Return on average equity 9.11 7.60 9.18 7.35 10.30 Yield on average interest-earning 4.21 4.22 4.25 4.25 4.16 assets (4) Cost of average interest-bearing 1.96 2.07 1.90 2.00 1.62 liabilities Cost of funds 1.83 1.94 1.77 1.87 1.52 Net interest rate spread during 2.25 2.15 2.35 2.25 2.54 period(4) Net interest margin (4) 2.48 2.37 2.57 2.47 2.72 Non-interest expense to average 1.68 1.49 1.54 1.66 1.72 assets Efficiency ratio (5) 65.00 58.87 58.53 63.89 62.12 Average interest-earning assets to average interest-bearing 1.13 X 1.12 X 1.13 X 1.12 X 1.12 X liabilities

(1) Calculated by dividing stockholders’ equity by shares outstanding.(2) 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”.(3) Ratios are presented on an annualized basis, where appropriate.(4) Yields are calculated on the tax equivalent basis using the statutory federal income tax rate of 21% for the periods presented.(5) Efficiency ratio, a non-GAAP measure, was calculated by dividing non-interest expense (excluding accelerated employee benefits upon officer’s death, merger expense, OREO expense and the net gain/loss from the sale of OREO) by the total of net interest income (excluding net losses from fair value adjustments on qualifying hedges) and non-interest income (excluding net gains and losses from the sale of securities, assets and fair value adjustments and life insurance proceeds).

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIESSELECTED CONSOLIDATED FINANCIAL DATA(Dollars in thousands)(Unaudited)

At or for At or for the the twelve twelve months months ended ended December December 31, 2019 31, 2018 --------- --------- Selected Financial Ratios and Other Data ----------------------------------------------------------------- Regulatory capital ratios (for Flushing Financial Corporation): Tier 1 capital $ 615,500 $ 586,582 Common equity Tier 1 capital 572,651 546,230 Total risk-based capital 712,251 682,527 Tier 1 leverage capital (well capitalized = 5%) 8.73 % 8.74 % Common equity Tier 1 risk-based capital (well capitalized = 6.5%) 10.95 10.98 Tier 1 risk-based capital (well capitalized = 8.0%) 11.77 11.79 Total risk-based capital (well capitalized = 10.0%) 13.62 13.72 Regulatory capital ratios (for Flushing Bank only): Tier 1 capital $ 680,749 $ 660,782 Common equity Tier 1 capital 680,749 660,782 Total risk-based capital 702,500 681,727 Tier 1 leverage capital (well capitalized = 5%) 9.65 % 9.85 % Common equity Tier 1 risk-based capital (well capitalized = 6.5%) 13.02 13.28 Tier 1 risk-based capital (well capitalized = 8.0%) 13.02 13.28 Total risk-based capital (well capitalized = 10.0%) 13.43 13.70 Capital ratios: Average equity to average assets 8.08 % 8.22 % Equity to total assets 8.26 8.04 Tangible common equity to tangible assets (1) 8.05 7.83 Asset quality: Non-accrual loans (2) $ 12,813 $ 16,253 Non-performing loans 13,258 16,253 Non-performing assets 13,532 16,288 Net charge-offs 2,005 (19) Asset quality ratios: Non-performing loans to gross loans 0.23 % 0.29 % Non-performing assets to total assets 0.19 0.24 Allowance for loan losses to gross loans 0.38 0.38 Allowance for loan losses to non-performing assets 160.73 128.60 Allowance for loan losses to non-performing loans 164.05 128.87 Full-service customer facilities 20 19

(1) See “Calculation of Tangible Stockholders’ Common Equity to Tangible Assets”.(2) Excludes performing non-accrual TDR loans.

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIESNET INTEREST MARGIN(Dollars in thousands)(Unaudited)

For the three months ended --------------------------------------------------------------------------------------------- December 31, 2019 September 30, 2019 December 31, 2018 ----------------------------- ----------------------------- ----------------------------- Average Yield/ Average Yield/ Average Yield/ Balance Interest Cost Balance Interest Cost Balance Interest Cost ----------- -------- ------ ----------- -------- ------ ----------- -------- ------ Interest-earning Assets: Mortgage loans, $ 4,628,854 $ 51,927 4.49 % $ 4,598,898 $ 50,462 4.39 % $ 4,555,895 $ 49,789 4.37 % net Other loans, net 1,097,781 12,389 4.51 1,046,605 12,363 4.72 882,523 10,933 4.96 - --------- - ------ ------ - --------- - ------ ------ - --------- - ------ ------ Total loans, net 5,726,635 64,316 4.49 5,645,503 62,825 4.45 5,438,418 60,722 4.47 (1) (2) - --------- - ------ ------ - --------- - ------ ------ - --------- - ------ ------ Taxable securities: Mortgage-backed 555,023 3,230 2.33 574,756 3,765 2.62 558,693 4,004 2.87 securities Other securities 244,075 1,774 2.91 244,757 1,982 3.24 184,592 1,586 3.44 - --------- - ------ ------ - --------- - ------ ------ - --------- - ------ ------ Total taxable 799,098 5,004 2.50 819,513 5,747 2.81 743,285 5,590 3.01 securities - --------- - ------ ------ - --------- - ------ ------ - --------- - ------ ------ Tax-exempt securities: (3) Other securities 63,825 685 4.29 65,709 706 4.30 114,079 1,018 3.57 - --------- - ------ ------ - --------- - ------ ------ - --------- - ------ ------ Total tax-exempt 63,825 685 4.29 65,709 706 4.30 114,079 1,018 3.57 securities - --------- - ------ ------ - --------- - ------ ------ - --------- - ------ ------ Interest-earning deposits and 87,767 318 1.45 58,773 259 1.76 68,674 317 1.85 federal funds sold - --------- - ------ ------ - --------- - ------ ------ - --------- - ------ ------ Total interest-earning 6,677,325 70,323 4.21 6,589,498 69,537 4.22 6,364,456 67,647 4.25 assets - ------ ------ - ------ ------ - ------ ------ Other assets 379,769 382,905 316,705 - --------- - --------- - --------- Total assets $ 7,057,094 $ 6,972,403 $ 6,681,161 - --------- - --------- - --------- Interest-bearing Liabilities: Deposits: Savings accounts $ 192,818 325 0.67 $ 194,736 344 0.71 $ 213,091 392 0.74 NOW accounts 1,362,151 5,227 1.53 1,347,145 5,654 1.68 1,312,834 4,968 1.51 Money market 1,456,676 7,165 1.97 1,306,634 6,859 2.10 1,348,873 6,523 1.93 accounts Certificate of 1,516,000 8,752 2.31 1,573,535 9,321 2.37 1,578,402 8,276 2.10 deposit accounts - --------- - ------ ------ - --------- - ------ ------ - --------- - ------ ------ Total due to 4,527,645 21,469 1.90 4,422,050 22,178 2.01 4,453,200 20,159 1.81 depositors Mortgagors’ 74,751 48 0.26 60,084 66 0.44 71,108 15 0.08 escrow accounts - --------- - ------ ------ - --------- - ------ ------ - --------- - ------ ------ Total interest-bearing 4,602,396 21,517 1.87 4,482,134 22,244 1.99 4,524,308 20,174 1.78 deposits Borrowings 1,309,888 7,483 2.29 1,395,606 8,196 2.35 1,130,252 6,623 2.34 - --------- - ------ ------ - --------- - ------ ------ - --------- - ------ ------ Total interest-bearing 5,912,284 29,000 1.96 5,877,740 30,440 2.07 5,654,560 26,797 1.90 liabilities - ------ ------ - ------ ------ - ------ ------ Non interest-bearing 435,241 400,762 406,501 demand deposits Other 142,108 129,646 79,033 liabilities - --------- - --------- - --------- Total 6,489,633 6,408,148 6,140,094 liabilities Equity 567,461 564,255 541,067 - --------- - --------- - --------- Total liabilities and $ 7,057,094 $ 6,972,403 $ 6,681,161 equity - --------- - --------- - --------- Net interest income / net interest rate $ 41,323 2.25 % $ 39,097 2.15 % $ 40,850 2.35 % spread (tax equivalent) (3) - ------ ------ - ------ ------ - ------ ------ Net interest-earning assets / net $ 765,041 2.48 % $ 711,758 2.37 % $ 709,896 2.57 % interest margin (tax equivalent) - --------- ------ - --------- ------ - --------- ------ Ratio of interest-earning assets to 1.13 X 1.12 X 1.13 X interest-bearing liabilities ------ ------ ------

(1) Loan interest income includes loan fee income (which includes net amortization of deferred fees and costs, late charges, and prepayment penalties) of approximately $0.3 million, $0.9 million and $0.5 million for the three months ended December 31, 2019, September 30, 2019 and December 31, 2018, respectively.(2) Loan interest income includes net gains from fair value adjustments on qualifying hedges of $1.0 million for the three months ended December 31, 2019 and net losses of $1.3 million for the three months ended September 30, 2019.(3) Interest and yields are calculated on the tax equivalent basis using the statutory federal income tax rate of 21% for the three months ended December 31, 2019, September 30, 2019 and December 31, 2018 totaling $0.1 million, $0.1 million and $0.2 million, respectively.

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIESNET INTEREST MARGIN(Dollars in thousands)(Unaudited)

For the twelve months ended -------------------------------------------------------------- December 31, 2019 December 31, 2018 ----------------------------- ------------------------------ Average Yield/ Average Yield/ Balance Interest Cost Balance Interest Cost ----------- --------- ----- ----------- --------- ------ Interest-earning Assets: Mortgage loans, net $ 4,609,439 $ 203,440 4.41 % $ 4,494,210 $ 193,186 4.30 % Other loans, net 1,011,594 48,304 4.78 822,758 39,533 4.80 - --------- - ------- ---- - --------- - ------- ------ Total loans, net (1) (2) 5,621,033 251,744 4.48 5,316,968 232,719 4.38 - --------- - ------- ---- - --------- - ------- ------ Taxable securities: Mortgage-backed securities 572,223 15,468 2.70 539,771 15,065 2.79 Other securities 243,324 8,102 3.33 140,461 4,658 3.32 - --------- - ------- ---- - --------- - ------- ------ Total taxable securities 815,547 23,570 2.89 680,232 19,723 2.90 - --------- - ------- ---- - --------- - ------- ------ Tax-exempt securities: (3) Other securities 60,971 2,580 4.23 121,412 4,261 3.51 - --------- - ------- ---- - --------- - ------- ------ Total tax-exempt securities 60,971 2,580 4.23 121,412 4,261 3.51 - --------- - ------- ---- - --------- - ------- ------ Interest-earning deposits and federal funds 84,922 1,604 1.89 75,636 1,190 1.57 sold - --------- - ------- ---- - --------- - ------- ------ Total interest-earning assets 6,582,473 279,498 4.25 6,194,248 257,893 4.16 - ------- ---- - ------- ------ Other assets 365,408 310,350 - --------- - --------- Total assets $ 6,947,881 $ 6,504,598 - --------- - --------- Interest-bearing Liabilities: Deposits: Savings accounts $ 198,374 1,378 0.69 $ 233,392 1,370 0.59 NOW accounts 1,434,440 23,553 1.64 1,407,945 15,896 1.13 Money market accounts 1,370,038 27,819 2.03 1,164,505 18,707 1.61 Certificate of deposit accounts 1,532,440 35,078 2.29 1,483,026 28,310 1.91 - --------- - ------- ---- - --------- - ------- ------ Total due to depositors 4,535,292 87,828 1.94 4,288,868 64,283 1.50 Mortgagors’ escrow accounts 70,209 229 0.33 66,255 214 0.32 - --------- - ------- ---- - --------- - ------- ------ Total interest-bearing deposits 4,605,501 88,057 1.91 4,355,123 64,497 1.48 Borrowings 1,251,452 28,959 2.31 1,162,429 25,095 2.16 - --------- - ------- ---- - --------- - ------- ------ Total interest-bearing liabilities 5,856,953 117,016 2.00 5,517,552 89,592 1.62 - ------- ---- - ------- ------ Non interest-bearing demand deposits 407,450 380,889 Other liabilities 122,189 71,422 - --------- - --------- Total liabilities 6,386,592 5,969,863 Equity 561,289 534,735 - --------- - --------- Total liabilities and equity $ 6,947,881 $ 6,504,598 - --------- - --------- Net interest income / net interest rate spread $ 162,482 2.25 % $ 168,301 2.54 % (tax equivalent) (3) - ------- ---- - ------- ------ Net interest-earning assets / net interest $ 725,520 2.47 % $ 676,696 2.72 % margin (tax equivalent) - --------- ---- - --------- ------ Ratio of interest-earning assets to 1.12 X 1.12 X interest-bearing liabilities ---- ------

(1) Loan interest income includes loan fee income (which includes net amortization of deferred fees and costs, late charges, and prepayment penalties) of approximately $2.0 million and $2.1 million for the year ended December 31, 2019 and 2018, respectively.(2) Loan interest income includes net losses from fair value adjustments on qualifying hedges of $1.7 million and none for the year ended December 31, 2019 and 2018, respectively.(3) Interest and yields are calculated on the tax equivalent basis using the statutory federal income tax rate of 21% for the year ended December 31, 2019 and 2018 totaling $0.5 million and $0.9 million, respectively.

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIESDEPOSIT COMPOSITION(Unaudited)

December December 2019 2019 vs. vs. December September June 30, March 31, September December December 2018 31, 30, 2019 31, (Dollars in 2019 2019 2019 2019 % Change 2018 % Change thousands) ---------------- ----------- ----------- ----------- ----------- --------- ----------- ------------- Deposits Non-interest $ 435,072 $ 421,786 $ 413,813 $ 401,064 3.1 % $ 413,747 5.2 % bearing Interest bearing: Certificate of 1,437,890 1,506,376 1,544,117 1,511,770 (4.5) % 1,563,310 (8.0) % deposit accounts Savings accounts 191,485 193,497 196,820 201,811 (1.0) % 210,022 (8.8) % Money market 1,592,011 1,329,156 1,302,153 1,352,843 19.8 % 1,427,992 11.5 % accounts NOW accounts 1,365,591 1,461,694 1,368,813 1,542,606 (6.6) % 1,300,852 5.0 % - --------- - --------- - --------- - --------- --------- - --------- ------------- Total interest-bearing 4,586,977 4,490,723 4,411,903 4,609,030 2.1 % 4,502,176 1.9 % deposits - --------- - --------- - --------- - --------- --------- - --------- ------------- Total deposits $ 5,022,049 $ 4,912,509 $ 4,825,716 $ 5,010,094 2.2 % $ 4,915,923 2.2 % - --------- - --------- - --------- - --------- --------- - --------- -------------

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIESLOANS(Unaudited)

Loan Closings

For the three months ended For the twelve months ended ------------------------------- ------------------------ December September December December December 31, 30, 31, 31, 31, (In thousands) 2019 2019 2018 2019 2018 --------------------------------------- --------- --------- --------- ----------- ----------- Multi-family residential $ 104,310 $ 60,454 $ 85,095 $ 247,607 $ 339,732 Commercial real estate 55,047 66,648 95,772 178,336 270,785 One-to-four family – mixed-use property 18,653 18,167 28,924 66,128 74,156 One-to-four family – residential 5,833 7,421 7,356 25,024 42,660 Co-operative apartments — 1,817 948 2,117 2,448 Construction 3,542 5,761 8,968 33,919 39,595 Small Business Administration 721 121 1,304 3,426 3,843 Commercial business and other 81,630 237,754 116,365 605,743 477,572 - ------- - ------- - ------- - --------- - --------- Total $ 269,736 $ 398,143 $ 344,732 $ 1,162,300 $ 1,250,791 - ------- - ------- - ------- - --------- - ---------

Loan Composition

Decembe December r 2019 2019 vs. vs. Septemb December December 31, September 30, June 30, March 31, er December 31, 2018 2019 (Dollars in 2019 2019 2019 2019 % 2018 % thousands) Change Change --------------- ------------- ------------- ------------- ------------- ------ ------------- ------- Loans held for investment: Multi-family $ 2,238,591 $ 2,232,305 $ 2,263,875 $ 2,256,447 0.3 % $ 2,269,048 (1.3 ) % residential Commercial real 1,582,008 1,559,581 1,524,693 1,529,001 1.4 % 1,542,547 2.6 % estate One-to-four family ― 592,471 587,100 582,264 582,049 0.9 % 577,741 2.5 % mixed-use property One-to-four family ― 188,216 184,432 184,024 188,615 2.1 % 190,350 (1.1 ) % residential Co-operative 8,663 9,089 8,137 7,903 (4.7 ) % 8,498 1.9 % apartments Construction 67,754 64,234 58,503 54,933 5.5 % 50,600 33.9 % Small Business 14,445 13,982 14,511 15,188 3.3 % 15,210 (5.0 ) % Administration Taxi medallion 3,309 3,513 3,555 3,891 (5.8 ) % 4,539 (27.1 ) % Commercial business and 1,061,478 1,096,164 983,573 935,297 (3.2 ) % 877,763 20.9 % other Net unamortized premiums and 15,271 15,363 15,278 15,422 (0.6 ) % 15,188 0.5 % unearned loan fees Allowance for (21,751 ) (22,035 ) (21,510 ) (21,015 ) (1.3 ) % (20,945 ) 3.8 % loan losses - --------- - - --------- - - --------- - - --------- - ---- - - --------- - ----- - Net loans $ 5,750,455 $ 5,743,728 $ 5,616,903 $ 5,567,731 0.1 % $ 5,530,539 4.0 % - --------- - - --------- - - --------- - - --------- - ---- - - --------- - ----- -

Net Loans Activity

Three Months Ended -------------------------------------------------------------------- December 31, September June 30, March 31, December 31, 30, (In thousands) 2019 2019 2019 2019 2018 ------------------------------------- ------------ ------------ ------------ ------------ ------------ Loans originated and purchased $ 269,736 $ 398,143 $ 296,397 $ 198,024 $ 344,732 Principal reductions (255,977 ) (266,894 ) (243,263 ) (158,815 ) (173,061 ) Loans sold (7,129 ) (3,553 ) (1,970 ) (1,043 ) — Loan charge-offs (95 ) (431 ) (1,114 ) (1,138 ) (211 ) Foreclosures — — (239 ) — — Net change in deferred fees and costs (92 ) 85 (144 ) 234 (38 ) Net change in the allowance for loan 284 (525 ) (495 ) (70 ) (636 ) losses - -------- - - -------- - - -------- - - -------- - - -------- - Total loan activity $ 6,727 $ 126,825 $ 49,172 $ 37,192 $ 170,786 - -------- - - -------- - - -------- - - -------- - - -------- -

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIESNON-PERFORMING ASSETS and NET CHARGE-OFFS(Unaudited)

December September June 30, March December 31, 30, 31, 31, (Dollars in thousands) 2019 2019 2019 2019 2018 -------------------------------------------------- -------- -------- -------- -------- -------- Loans 90 Days Or More Past Due and Still Accruing: Multi-family residential $ 445 $ 445 $ — $ — $ — - ------ - ------ - ------ - ------ - ------ Total 445 445 — — — - ------ - ------ - ------ - ------ - ------ Non-accrual Loans: Multi-family residential 2,296 3,132 2,008 2,009 2,410 Commercial real estate 367 872 1,488 1,050 1,379 One-to-four family - mixed-use property 274 683 1,752 1,305 928 One-to-four family - residential 5,139 5,050 5,411 5,708 6,144 Construction — — — 950 — Small Business Administration 1,151 1,151 1,224 1,227 1,267 Taxi medallion(1) 1,641 1,352 1,361 1,372 613 Commercial business and other(1) 1,945 2,020 2,458 2,114 3,512 - ------ - ------ - ------ - ------ - ------ Total 12,813 14,260 15,702 15,735 16,253 - ------ - ------ - ------ - ------ - ------ Total Non-performing Loans 13,258 14,705 15,702 15,735 16,253 - ------ - ------ - ------ - ------ - ------ Other Non-performing Assets: Real estate acquired through foreclosure 239 239 239 — — Other asset acquired through foreclosure 35 35 35 35 35 - ------ - ------ - ------ - ------ - ------ Total 274 274 274 35 35 - ------ - ------ - ------ - ------ - ------ Total Non-performing Assets $ 13,532 $ 14,979 $ 15,976 $ 15,770 $ 16,288 - ------ - ------ - ------ - ------ - ------ Non-performing Assets to Total Assets 0.19 % 0.21 % 0.23 % 0.23 % 0.24 % Allowance For Loan Losses to Non-performing Loans 164.1 % 149.8 % 137.0 % 133.6 % 128.9 %

(1) Not included in the above analysis are non-accrual performing TDR taxi medallion loans totaling $1.7 million in 4Q19, $2.2 million in 3Q19, $2.2 million in 2Q19, $2.5 million in 1Q19 and $3.9 million in 4Q18 and non-accrual performing TDR commercial business loans totaling $0.9 million in 4Q19 and $1.0 million in 3Q19.

Net Charge-Offs (Recoveries)

Three Months Ended ----------------------------------------------- December September June March 31, December 31, 30, 30, 31, (In thousands) 2019 2019 2019 2019 2018 --------------------------------------- ------- -------- ------- --------- -------- Multi-family residential $ (14 ) $ 183 $ (10 ) $ (13 ) $ (4 ) Commercial real estate (30 ) — (7 ) — — One-to-four family – mixed-use property 119 (140 ) (2 ) (85 ) (18 ) One-to-four family – residential (3 ) (3 ) 110 (4 ) (199 ) Small Business Administration (8 ) (32 ) (16 ) (4 ) 170 Taxi medallion — — (50 ) (84 ) (143 ) Commercial business and other (98 ) 150 954 1,092 (20 ) - --- - - ---- - - --- - - ----- - - ---- - Total net loan charge-offs (recoveries) $ (34 ) $ 158 $ 979 $ 902 $ (214 ) - --- - - ---- - - --- - - ----- - - ---- -

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIESRECONCILIATION OF GAAP EARNINGS and CORE EARNINGS

Non-cash Fair Value Adjustments to GAAP Earnings

During 2019, core earnings were higher than GAAP earnings primarily due to the impact of non-cash net losses from fair value adjustments. These fair value adjustments relate primarily to swaps designated to protect against rising rates. As the swaps get closer to maturity the volatility in fair value adjustments will dissipate. Overall, the interest movement of the swaps is benefitting the core net interest margin while the fair value adjustments are offsetting the benefit. In a declining interest rate environment, the movement in the curve exaggerates our mark-to-market loss position. In a rising interest rate environment or a steepening of the yield curve the loss position would experience an improvement.

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

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

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIESRECONCILIATION OF GAAP EARNINGS and CORE EARNINGS(Dollars in thousands, except per share data)(Unaudited)

Three Months Ended Twelve Months Ended ------------------------------------------- ----------------------------- December 31, September December 31, December 31, December 31, 30, 2019 2019 2018 2019 2019 ------------- ----------- ------------- ------------- ------------- GAAP income before income taxes $ 16,888 $ 13,260 $ 13,468 $ 53,331 $ 65,485 Net (gain) loss from fair value (807 ) 2,124 3,585 5,353 4,122 adjustments Net loss on sale of securities — — 1,920 15 1,920 Life insurance proceeds (419 ) — — (462 ) (2,998 ) Net gain on sale of assets — — (1,141 ) (770 ) (1,141 ) Net (gain) loss from fair value adjustments on qualifying (1,039 ) 1,262 — 1,678 — hedges Accelerated employee benefits — — — 455 149 upon Officer’s death Merger expense 1,080 510 — 1,590 — - ----------- - --------- - ----------- - ----------- - ----------- Core income before taxes 15,703 17,156 17,832 61,190 67,537 Provision for income taxes for 3,841 3,312 2,395 13,957 11,960 core income - --------- - - --------- - --------- - - --------- - - --------- - Core net income $ 11,862 $ 13,844 $ 15,437 $ 47,233 $ 55,577 - --------- - - --------- - --------- - - --------- - - --------- - GAAP diluted earnings per $ 0.45 $ 0.37 $ 0.44 $ 1.44 $ 1.92 common share Net (gain) loss from fair value (0.02 ) 0.06 0.09 0.14 0.10 adjustments, net of tax Net loss on sale of securities, — — 0.05 — 0.05 net of tax Life insurance proceeds (0.01 ) — — (0.02 ) (0.10 ) Net gain on sale of assets, net — — (0.03 ) (0.02 ) (0.03 ) of tax Net (gain) loss from fair value adjustments on qualifying (0.03 ) 0.04 — 0.05 — hedges, net of tax Accelerated employee benefits upon Officer’s death, net of — — — 0.01 — tax Merger expense, net of tax 0.03 0.01 — 0.04 — - --------- - - --------- - --------- - - --------- - - --------- - Core diluted earnings per $ 0.41 $ 0.48 $ 0.54 $ 1.65 $ 1.94 common share(1) - --------- - - --------- - --------- - - --------- - - --------- - Core net income, as calculated $ 11,862 $ 13,844 $ 15,437 $ 47,233 $ 55,577 above Average assets 7,057,094 6,972,403 6,681,161 6,947,881 6,504,598 Average equity 567,461 564,255 541,067 561,289 534,735 Core return on average assets 0.67 % 0.79 % 0.92 % 0.68 % 0.85 % (2) Core return on average equity 8.36 % 9.81 % 11.41 % 8.42 % 10.39 % (2)

(1) Core diluted earnings per common share may not foot due to rounding.(2) Ratios are calculated on an annualized basis.

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIESRECONCILIATION OF GAAP NET INTEREST INCOME and NET INTEREST MARGINTo CORE NET INTEREST INCOME and NET INTEREST MARGIN(Dollars in thousands)(Unaudited)

Three Months Ended Twelve Months Ended --------------------------------------------- ----------------------------- December 31, September 30, December 31, December 31, December 31, 2019 2019 2018 2019 2018 ------------- ------------- ------------- ------------- ------------- GAAP net interest income $ 41,179 $ 38,949 $ 40,636 $ 161,940 $ 167,406 Net (gain) loss from fair value adjustments on (1,039 ) 1,262 — 1,678 — qualifying hedges - --------- - - --------- - - --------- - - --------- - - --------- - Core net interest income $ 40,140 $ 40,211 $ 40,636 $ 163,618 $ 167,406 - --------- - - --------- - - --------- - - --------- - - --------- - GAAP interest income on total $ 64,316 $ 62,825 $ 60,722 $ 251,744 $ 232,719 loans, net Net (gain) loss from fair value adjustments on (1,039 ) 1,262 — 1,678 — qualifying hedges Prepayment penalties received (926 ) (1,697 ) (892 ) (4,548 ) (5,200 ) on loans Net recoveries of interest (428 ) (292 ) (276 ) (1,953 ) (1,756 ) from non-accrual loans - --------- - - --------- - - --------- - - --------- - - --------- - Core interest income on total $ 61,923 $ 62,098 $ 59,554 $ 246,921 $ 225,763 loans, net - --------- - - --------- - - --------- - - --------- - - --------- - Average total loans, net $ 5,726,635 $ 5,645,503 $ 5,438,418 $ 5,621,033 $ 5,316,968 Core yield on total loans 4.33 % 4.40 % 4.38 % 4.39 % 4.25 % Net interest income tax $ 41,323 $ 39,097 $ 40,850 $ 162,482 $ 168,301 equivalent Net (gain) loss from fair value adjustments on (1,039 ) 1,262 — 1,678 — qualifying hedges Prepayment penalties received (926 ) (1,697 ) (892 ) (4,548 ) (5,302 ) on loans and securities Net recoveries of interest (428 ) (292 ) (276 ) (1,953 ) (1,756 ) from non-accrual loans - --------- - - --------- - - --------- - - --------- - - --------- - Net interest income used in calculation of Core net $ 38,930 $ 38,370 $ 39,682 $ 157,659 $ 161,243 interest margin - --------- - - --------- - - --------- - - --------- - - --------- - Total average $ 6,677,325 $ 6,589,498 $ 6,364,456 $ 6,582,473 $ 6,194,248 interest-earning assets Core net interest margin 2.33 % 2.33 % 2.49 % 2.40 % 2.60 %

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIESCALCULATION OF TANGIBLE STOCKHOLDERS’COMMON EQUITY to TANGIBLE ASSETS(Unaudited)

December 31, September 30, December 31, (Dollars in thousands) 2019 2019 2018 ------------------------------------------------------- ------------- ------------- ------------- Total Equity $ 579,672 $ 568,392 $ 549,464 Less: Goodwill (16,127 ) (16,127 ) (16,127 ) Intangible deferred tax liabilities 292 286 290 - --------- - - --------- - - --------- - Tangible Stockholders’ Common Equity $ 563,837 $ 552,551 $ 533,627 - --------- - - --------- - - --------- - Total Assets $ 7,017,776 $ 7,110,895 $ 6,834,176 Less: Goodwill (16,127 ) (16,127 ) (16,127 ) Intangible deferred tax liabilities 292 286 290 - --------- - - --------- - - --------- - Tangible Assets $ 7,001,941 $ 7,095,054 $ 6,818,339 - ----------- - ----------- - ----------- Tangible Stockholders’ Common Equity to Tangible Assets 8.05 % 7.79 % 7.83 % - --------- - - --------- - - --------- -

__________________________________

1 See the tables entitled “Reconciliation of GAAP Earnings and Core Earnings” and “Reconciliation of GAAP Net Interest Income and Net Interest Margin to Core Net Interest Income and Net Interest Margin.”

Susan K. CullenSenior Executive Vice President, Treasurer and Chief Financial OfficerFlushing Financial Corporation(718) 961-5400