GlobeNewswire Inc | Jul 21, 2020 05:30PM EDT

July 21, 2020

SECOND QUARTER 20201HIGHLIGHTS

-- GAAP diluted EPS was $0.63, compared to ($0.05) in 1Q20 and $0.37 in 2Q19 -- Core diluted EPS was $0.36 compared to $0.19 in 1Q20 and $0.42 in 2Q19 -- Net interest margin was 2.87%, up 43bps QoQ and 42bps YoY -- Core net interest margin was 2.85%, up 36bps QoQ and 45bps YoY -- Record GAAP net interest income of $48.7 million, up 19.3% QoQ and 21.8% YoY -- Record Core net interest income of $49.1 million, up 14.4% QoQ and 20.2% YoY -- GAAP and core ROAE 13.1% and 7.4%, respectively, compared with (1.0)% and 3.8%, respectively in 1Q20 -- GAAP and core ROAA were 1.0% and 0.6%, respectively, compared with (0.1)% and 0.3%, respectively in 1Q20 -- Loan pipeline remains strong at $310.8 million -- Provision for credit losses of $9.6 million, $0.25 after-tax per diluted common share, driven mainly by economic conditions arising from COVID-19 pandemic -- Net charge-offs were $1.0 million, compared to $1.1 million in 1Q20

UNIONDALE, N.Y., July 21, 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 second quarter ended June 30, 2020.

John R. Buran, President and Chief Executive Officer stated, I want to thank our employees for their outstanding work during these unprecedented times. The health and welfare of our employees and customers remain our highest priority.

Mr. Buran continued, We are pleased to announce our second quarter earnings totaled $18.3 million, or $0.63 per diluted common share. Our GAAP earnings for the quarter were positively impacted by two items. First, we executed on our strategic objective to manage our cost of funds and improve funding mix. We achieved record net interest income as a result of the Companys quick response to the Fed decreasing interest rates in late March resulting in cost of funds decreasing 62 basis points from the previous quarter with additional opportunity to further reduce funding costs in the third quarter. Adding to the reduction of cost of funds in the second quarter, core deposits increased 7% while the net interest margin expanded 43 basis points from the previous quarter.

The second item positively affecting our GAAP net earnings was the non-cash fair value adjustment on our junior subordinated debt of $10.3 million, or $0.27 per diluted common share, after-tax, due to market conditions.

Core earnings for the quarter totaled $10.3 million, or $0.36 per diluted common share. Pre-provision pre-tax net revenue totaled $33.7 million, an increase of $28.1 million from the previous quarter. Non-performing assets at the end of the quarter were 29 basis points of total assets. Our loan portfolio is 88% collateralized by real estate with an average loan to value of less than 40%. Despite the current economic environment due to COVID-19, we have a long history and foundation built upon disciplined underwriting, good credit quality and a resilient seasoned loan portfolio with strong asset protection.

We continue to actively assist our customers during these turbulent times. As a result of COVID-19, we granted forbearances to our customers. Originally, we granted forbearances for one to six months. In anticipation of an extended relief period, we have most recently predominately granted forbearance of principal and interest for six months. At the height of the request period, April and May 2020, COVID-19 forbearances peaked at $1.5 billion. By June 30, 2020, we reduced that number to $1.3 billion comprised of 82% real estate loans. Through July 10th, 63% of the $146 million in loans scheduled to return to regularly scheduled payments have done so.

Additionally, we have actively participated in the SBA Paycheck Protection Program originating $93 million of these loans. We are one of nine banks in the State of New York participating in the Main Street Lending Program. We are also a proud participant in the FHLBNY Small Business Recovery Grant Program, helping our customers and communities navigate through the current environment.

During this pandemic, our customers have utilized our enhanced technology platform with new mobile banking capabilities that went live in March 2020. Mobile deposits have increased over 13% from April 2020 through June 2020. Similarly, the usage of ATMs has increased with over 75% of all transactions now completed via ATM. The number of accounts enrolling in online banking and opening new accounts online has also grown during the current quarter to 19% of retail account openings.

Given the current economic environment at the end of the quarter, we adjusted our economic forecast in our current expected credit loss (CECL) model resulting in a provision for credit losses of $9.6 million, or $0.25 per diluted share, after-tax. Our allowance for credit losses stands at 61 basis points of gross loans and 182% of non-performing loans. As a reminder, our maximum charge-offs were only 64 basis points in the midst of the Great Recession while industry peak charge-offs were nearly 5x.

As we previously disclosed, the pending acquisition of Empire Bancorp was delayed due to the severe instability and volatility in the U.S. financial and stock markets caused by the pandemic. The Company continues to believe that the merger offers benefits to both shareholders and customers of Empire Bancorp and Flushing. We will be refraining from any additional comments at this time.

Mr. Buran concluded by saying, Overall, we made good progress in the second quarter to achieve our strategic objectives. Importantly, the Company remains committed to building and fostering an environment of diversity and inclusion in our workforce and the communities we serve. In light of recent events, we have formed a Diversity and Inclusion Committee chaired by the EVP/Director of Human Resources, reporting directly to me. The role of this Committee is to make recommendations ensuring Flushing Financial continues to provide a safe and inclusive environment for all employees and ensure our message of inclusion is supported by our actions and participation in community organizations.

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 2Q20 was $48.7 million, an increase of $8.7 million, or 21.8% YoY and $7.9 million, or 19.3% QoQ.

-- Net interest margin of 2.87%, increased 42bps YoY and 43bps QoQ -- Net interest spread of 2.72%, increased 49bps YoY and 48bps QoQ -- Yield on average interest-earning assets of 3.81%, decreased 45bps YoY and 17bps QoQ -- Cost of average interest-bearing liabilities of 1.09%, decreased 94bpsYoY and 65bps QoQ -- Cost of funds of 0.99%, decreased 91bps YoY and 62bps QoQ -- Average balance of total interest-earning assets of $6,809.9 million, increased $269.7 million, or 4.1%, YoY and $90.0 million, or 1.3%, QoQ -- Net interest income includes prepayment penalty income from loans totaling $0.7 million in 2Q20, $0.8 million in 1Q20 and $1.1 million in 2Q19; recovered interest from delinquent loans of $0.1 million in 2Q20, $0.4 million in 1Q20 and $0.5 million in 2Q19; net losses from fair value adjustments on qualifying hedges totaling $0.4 million in 2Q20, $2.1 million in 1Q20 and $0.8 million in 2Q19 -- Absent all above items noted in the preceding bullet, the net interest margin was 2.85% in 2Q20, an increase of 45bps YoY and 36bps QoQ

Provision for Credit Losses

The Company recorded a provision for credit losses of $9.6 million in 2Q20 compared to a provision of $7.2 million in 1Q20 and a provision of $1.5 million in 2Q19.

-- 2Q20 and 1Q20 provision for credit losses were primarily driven by the negative economic forecast resulting from the impact of COVID-19 -- Net charge-offs of $1.0 million in 2Q20, $1.1 million in 1Q20 and $1.0 million in 2Q19

Non-interest Income

Non-interest income for 2Q20 was $13.7 million, an increase of $11.3 million YoY, and $16.6 million QoQ.

-- Non-interest income included net gains from fair value adjustments of $10.2 million in 2Q20; net losses from fair value adjustments of $6.0 million and $2.0 million in 1Q20 and 2Q19, respectively -- Additionally, non-interest income included life insurance proceeds totaling $0.7 million in 2Q20, net gain on sale of assets of $0.8 million and capital gain of $0.5 million, both in 2Q19 -- Absent all above items, non-interest income was $2.9 million in 2Q20, a decrease of $0.2 million, or 7.7% YoY, and $0.3 million, or 8.2% QoQ

Non-interest Expense

Non-interest expense for 2Q20 was $28.8 million, a decrease of $3.6 million, or 11.2 % QoQ, and an increase of $1.6 million or 5.9% YoY.

-- Non-interest expense improved QoQ primarily due to 1Q20 including seasonal expenses, and increased YoY primarily due to Company growth -- Additionally, non-interest expense included merger expenses totaling $0.2 million in 2Q20 and $0.9 million in 1Q20 -- The ratio of non-interest expense to average assets was 1.60% in 2Q20 compared to 1.82% in 1Q20 and 1.58% in 2Q19 -- The efficiency ratio improved to 54.9% in 2Q20 compared to 68.2% in 1Q20 and 61.1% in 2Q19

Provision for Income Taxes

The provision for income taxes in 2Q20 was $5.8 million, compared to benefit of $0.2 million in 1Q20 and a provision of $3.3 million in 2Q19.

-- Pre-tax income increased by $10.3 million YoY and $25.7 million QoQ -- The effective tax rates were 24.1% in 2Q20, 12.9% in 1Q20 and 23.7% in 2Q19

Financial Condition Summary:

Loans:

-- Net loans held for investment were $5,946.6 million reflecting an increase of 3.4% from December 31, 2019, as we continue to focus on the origination of full banking relationship loans through C&I loans, multi-family loans and commercial real estate -- SBA Paycheck Protection Program (PPP) closings totaled $93.2 million in 2Q20 -- Loan closings of commercial business loans, multi-family loans and commercial real estate totaled $126.9 million for 2Q20, or 90.3% of loan production, excluding PPP closings -- Loan pipeline was $310.8 million at June 30, 2020, compared to $324.5 million at December 31, 2019

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

For the three months ended June30, March 31, June30, Loan type 2020 2020 2019 Mortgage loans 3.79 % 3.93 % 4.75 %Non-mortgage loans 1.99 % 4.23 % 5.01 %Total loans 2.62 % 4.03 % 4.89 % Excluding PPP loans 3.71 % 4.03 % 4.89 %

Credit Quality:

-- Non-performing loans totaled $20.2 million, an increase of $6.9 million, or 52.3%, from $13.3 million at December 31, 2019 -- Non-performing assets totaled $20.4 million, an increase of $6.9 million, or 51.0%, from $13.5 million at December 31, 2019 -- Classified assets totaled $25.1 million, an increase of $0.5 million, or 2.0%, from $24.6 million at December 31, 2019 -- Loans classified as troubled debt restructured (TDR) totaled $6.0 million, a decrease of $0.5 million, or 8.2%, from $6.5 million at December 31, 2019 -- 799 active COVID-19 forbearances outstanding at July 10th for loans with a combined principal balance of $1.3 billion at the time of forbearance; total combined deferment of $36.4 million in principal, interest and escrow -- Over 88% of our gross loans are collateralized by real estate -- The loan-to-value ratio on our portfolio of real estate dependent loans as of June 30, 2020 totaled 38.1% -- Net charge-offs totaled $1.0 million

Capital Management:

-- The Company and Bank, at June 30, 2020, were both well capitalized under all applicable regulatory requirements -- Through 2Q20, stockholders equity decreased $7.8 million, or 1.3%, from December 31, 2019, to $571.9 million primarily due to unrealized losses in the fair value of securities and interest rate swaps, coupled with the declaration and payment of dividends on the Companys common stock, partially offset by net income of $16.9 million -- During 2Q20, the Company did not repurchase any shares; as of June 30, 2020, up to 284,806 shares remained subject to repurchase under the authorized stock repurchase program, which has no expiration or maximum dollar limit -- Book value per common share was $20.27 at June 30, 2020, compared to $20.59 at December 31, 2019 -- Tangible book value per common share, a non-GAAP measure, was $19.71 at June 30, 2020, compared to $20.02 at December 31, 2019

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 Wednesday, July 22, 2020 at 9:30 AM (ET) to discuss the Companys strategy and results for the second quarter -- Dial-in for Live Call: 1-877-509-5836 -- Webcast: https://services.choruscall.com/links/ffic200722.html -- Dial-in for Replay: 1-877-344-7529 -- Replay Access Code: 10138500 -- The conference call will be simultaneously webcastand archived through July 22, 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 Banks 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 Companys 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 Companys Annual Report on Form 10-K for the fiscal year ended December 31, 2019 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.

-Statistical Tables Follow-

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIESCONSOLIDATED STATEMENTS OF INCOME(Dollars in thousands, except per share data)(Unaudited) For the three months ended For the six months ended June30, March 31, June30, June30, June30, 2020 2020 2019 2020 2019Interest andDividend IncomeInterest andfees on $ 60,557 $ 61,109 $ 62,273 $ 121,666 $ 124,603 loansInterest anddividends on securities:Interest 4,182 5,256 6,811 9,438 13,720 Dividends 11 15 19 26 38 Otherinterest 22 290 472 312 1,027 incomeTotalinterest and 64,772 66,670 69,575 131,442 139,388 dividendincome Interest ExpenseDeposits 9,971 18,778 22,827 28,749 44,296 Otherinterest 6,084 7,066 6,739 13,150 13,280 expenseTotalinterest 16,055 25,844 29,566 41,899 57,576 expense Net Interest 48,717 40,826 40,009 89,543 81,812 IncomeProvisionfor credit 9,619 7,178 1,474 16,797 2,446 lossesNet InterestIncome AfterProvision 39,098 33,648 38,535 72,746 79,366 for CreditLosses Non-interest IncomeBankingservices fee 944 798 1,059 1,742 2,032 incomeNet loss onsale of (54 ) (37 ) (15 ) (91 ) (15 )securitiesNet gain onsale of ? 42 114 42 177 loansNet gain onsale of ? ? 770 ? 770 assetsNet gain(loss) from 10,205 (5,993 ) (1,956 ) 4,212 (4,036 )fair valueadjustmentsFederal HomeLoan Bank ofNew York 881 964 826 1,845 1,729 stockdividendsLifeinsurance 659 ? ? 659 43 proceedsBank ownedlife 932 943 810 1,875 1,550 insuranceOther income 170 419 843 589 1,144 Totalnon-interest 13,737 (2,864 ) 2,451 10,873 3,394 income(loss) Non-interest ExpenseSalaries andemployee 16,184 18,620 15,668 34,804 34,834 benefitsOccupancyand 2,827 2,840 2,742 5,667 5,531 equipmentProfessional 1,985 2,862 1,806 4,847 4,071 servicesFDIC deposit 737 650 667 1,387 1,152 insuranceData 1,813 1,694 1,420 3,507 2,912 processingDepreciationand 1,555 1,536 1,497 3,091 3,015 amortizationOther realestate owned/foreclosure 45 (164 ) 20 (119 ) 97 expense(benefit)Net lossfrom sales ? 31 ? 31 ? of realestate ownedOtheroperating 3,609 4,311 3,338 7,920 7,965 expensesTotalnon-interest 28,755 32,380 27,158 61,135 59,577 expense Income(Loss) 24,080 (1,596 ) 13,828 22,484 23,183 BeforeIncome Taxes Provision(Benefit) for IncomeTaxesFederal 4,307 989 2,981 5,296 4,924 State and 1,501 (1,195 ) 291 306 635 localTotal taxes 5,808 (206 ) 3,272 5,602 5,559 Net Income $ 18,272 $ (1,390 ) $ 10,556 $ 16,882 $ 17,624 (Loss) Basicearnings $ 0.63 $ (0.05 ) $ 0.37 $ 0.58 $ 0.61 (loss) percommon shareDilutedearnings $ 0.63 $ (0.05 ) $ 0.37 $ 0.58 $ 0.61 (loss) percommon shareDividendsper common $ 0.21 $ 0.21 $ 0.21 $ 0.42 $ 0.42 share

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIESCONSOLIDATED STATEMENTS OF FINANCIAL CONDITION(Dollars in thousands, except per share data)(Unaudited) June30, March 31, December 31, 2020 2020 2019ASSETS Cash and due from banks $ 84,754 $ 157,184 $ 49,787 Securities held-to-maturity: Mortgage-backed securities 7,924 7,929 7,934 Other securities 50,078 50,225 50,954 Securities available for sale: Mortgage-backed securities 442,507 489,556 523,849 Other securities 232,803 225,856 248,651 Loans: Multi-family residential 2,285,555 2,272,343 2,238,591 Commercial real estate 1,646,085 1,664,934 1,582,008 One-to-four family ? mixed-use 591,347 592,109 592,471 propertyOne-to-four family ? 184,741 189,774 188,216 residentialCo-operative apartments 8,423 8,493 8,663 Construction 69,433 66,727 67,754 Small Business Administration 106,813 14,076 14,445 Taxi medallion 3,269 3,281 3,309 Commercial business and other 1,073,623 1,104,967 1,061,478 Net unamortized premiums and 13,986 15,384 15,271 unearned loan feesAllowance for loan losses (36,710 ) (28,098 ) (21,751 )Net loans 5,946,565 5,903,990 5,750,455 Interest and dividends 30,219 25,526 25,722 receivableBank premises and equipment, 27,018 27,899 28,676 netFederal Home Loan Bank of New 56,400 74,000 56,921 York stockBank owned life insurance 157,779 158,655 157,713 Goodwill 16,127 16,127 16,127 Other real estate owned, net 208 208 239 Right of use asset 38,303 39,729 41,254 Other assets 71,974 68,526 59,494 Total assets $ 7,162,659 $ 7,245,410 $ 7,017,776 LIABILITIES Due to depositors: Non-interest bearing $ 581,881 $ 489,198 $ 435,072 Certificate of deposit accounts 1,135,977 1,172,381 1,437,890 Savings accounts 184,895 192,192 191,485 Money market accounts 1,474,880 1,597,109 1,592,011 NOW accounts 1,672,241 1,377,555 1,365,591 Total deposits 5,049,874 4,828,435 5,022,049 Mortgagors' escrow deposits 48,525 73,051 44,375 Borrowed funds 1,305,187 1,617,582 1,237,231 Operating lease liability 45,897 47,726 49,367 Other liabilities 141,255 128,933 85,082 Total liabilities 6,590,738 6,695,727 6,438,104 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 atJune30,2020, March31,2020and December31,2019;28,217,434 shares, 28,213,602 315 315 315 shares and 28,157,206 sharesoutstanding at June30,2020,March31,2020 andDecember31,2019,respectively)Additional paid-in capital 226,901 225,893 226,691 Treasury stock (3,313,161shares, 3,316,993 shares and3,373,389 shares at (69,436 ) (69,540 ) (71,487 )June30,2020, March31,2020and December31,2019,respectively)Retained earnings 437,663 425,455 433,960 Accumulated other comprehensive (23,522 ) (32,440 ) (9,807 )loss, net of taxesTotal stockholders' equity 571,921 549,683 579,672 Total liabilities and $ 7,162,659 $ 7,245,410 $ 7,017,776 stockholders' equity

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 six months ended June30, March 31, June30, June30, June30, 2020 2020 2019 2020 2019 Per Share Data Basic earnings $ 0.63 $ (0.05 ) $ 0.37 $ 0.58 $ 0.61 (loss) per shareDiluted earnings $ 0.63 $ (0.05 ) $ 0.37 $ 0.58 $ 0.61 (loss) per shareAverage numberof shares outstanding for:Basic earningsper common share 28,866,984 28,852,819 28,760,816 28,859,901 28,691,303 computationDiluted earningsper common share 28,866,984 28,852,819 28,760,816 28,859,901 28,691,309 computationShares 28,217,434 28,213,602 28,187,922 28,217,434 28,187,922 outstandingBook value percommon share ^ $ 20.27 $ 19.48 $ 20.06 $ 20.27 $ 20.06 (1)Tangible bookvalue per common $ 19.71 $ 18.92 $ 19.50 $ 19.71 $ 19.50 share ^(2) Stockholders' EquityStockholders' $ 571,921 $ 549,683 $ 565,390 $ 571,921 $ 565,390 equityTangiblestockholders' 556,086 533,848 549,549 556,086 549,549 equity Average Balances Total loans, net $ 5,946,412 $ 5,794,866 $ 5,565,057 $ 5,870,640 $ 5,554,919 Totalinterest-earning 6,809,835 6,719,857 6,540,134 6,764,846 6,530,692 assetsTotal assets 7,206,059 7,106,998 6,891,541 7,156,529 6,879,905 Total due to 4,395,228 4,578,793 4,595,189 4,487,011 4,596,738 depositorsTotalinterest-bearing 5,912,774 5,951,925 5,825,187 5,932,350 5,818,263 liabilitiesStockholders' 557,414 576,597 560,624 567,006 556,645 equity Performance Ratios ^(3)Return on 1.01 % (0.08 )% 0.61 % 0.47 % 0.51 %average assetsReturn on 13.11 (0.96 ) 7.53 5.95 6.33 average equityYield on averageinterest-earning 3.81 3.98 4.26 3.89 4.28 assets ^(4)Cost of averageinterest-bearing 1.09 1.74 2.03 1.41 1.98 liabilitiesCost of funds 0.99 1.61 1.90 1.30 1.85 Net interestrate spread 2.72 2.24 2.23 2.48 2.30 during period^(4)Net interest 2.87 2.44 2.45 2.66 2.51 margin ^(4)Non-interestexpense to 1.60 1.82 1.58 1.71 1.73 average assetsEfficiency ratio 54.92 68.21 61.06 61.16 67.36 ^(5)Averageinterest-earningassets to 1.15 X 1.13 X 1.12 X 1.14 X 1.12 Xaverageinterest-bearingliabilities

_____________________(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 officers death, merger expense, OREO expense and the net gain/loss from the sale of OREO) by the total of net interest income (excluding net gains and losses from fair value adjustments on qualifying hedges) and non-interest income (excluding life insurance proceeds, net gains and losses from the sale of securities and fair value adjustments).

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIESSELECTED CONSOLIDATED FINANCIAL DATA(Dollars in thousands)(Unaudited) Atorforthesix Atorfortheyear Atorforthesix monthsended ended monthsended June30,2020 December31,2019 June30,2019 SelectedFinancial Ratios andOther Data Regulatorycapital ratios(for Flushing FinancialCorporation):Tier 1 capital $ 617,620 $ 615,500 $ 600,730 Common equity 583,238 572,651 558,848 Tier 1 capitalTotalrisk-based 726,291 712,251 697,240 capital Tier 1leveragecapital (well 8.64 % 8.73 % 8.72 %capitalized =5%)Common equityTier 1risk-based 10.79 10.95 10.60 capital (wellcapitalized =6.5%)Tier 1risk-basedcapital (well 11.42 11.77 11.39 capitalized =8.0%)Totalrisk-basedcapital (well 13.43 13.62 13.22 capitalized =10.0%) Regulatorycapital ratios (for FlushingBank only):Tier 1 capital $ 683,521 $ 680,749 $ 667,882 Common equity 683,521 680,749 667,882 Tier 1 capitalTotalrisk-based 717,192 702,500 689,392 capital Tier 1leveragecapital (well 9.56 % 9.65 % 9.69 %capitalized =5%)Common equityTier 1risk-based 12.63 13.02 12.66 capital (wellcapitalized =6.5%)Tier 1risk-basedcapital (well 12.63 13.02 12.66 capitalized =8.0%)Totalrisk-basedcapital (well 13.25 13.43 13.07 capitalized =10.0%) Capital ratios:Average equityto average 7.92 % 8.08 % 8.09 %assetsEquity to 7.98 8.26 8.14 total assetsTangiblecommon equity 7.78 8.05 7.93 to tangibleassets ^(1) Asset quality: Non-accrual $ 20,038 $ 12,813 $ 15,702 loans ^(2)Non-performing 20,188 13,258 15,702 loansNon-performing 20,431 13,532 15,976 assetsNet 2,156 2,005 1,881 charge-offs Asset quality ratios:Non-performingloans to gross 0.34 % 0.23 % 0.28 %loansNon-performingassets to 0.29 0.19 0.23 total assetsAllowance forloan losses to 0.61 0.38 0.38 gross loansAllowance forloan losses to 179.68 160.73 134.64 non-performingassetsAllowance forloan losses to 181.85 164.05 136.99 non-performingloans Full-servicecustomer 20 20 19 facilities

_____________________(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 June30,2020 March 31, 2020 June30,2019 Average Yield Average Yield Average Yield / / / Balance Interest Cost Balance Interest Cost Balance Interest Cost Interest-earning Assets:Mortgage loans, net $ 4,762,068 $ 49,719 4.18 % $ 4,697,531 $ 49,412 4.21 % $ 4,590,429 $ 50,206 4.37 %Other loans, net 1,184,344 10,838 3.66 1,097,335 11,697 4.26 974,628 12,067 4.95 Total loans, net^ (1) 5,946,412 60,557 4.07 5,794,866 61,109 4.22 5,565,057 62,273 4.48 (2)Taxable securities: Mortgage-backed 465,365 2,327 2.00 507,912 3,040 2.39 585,892 4,225 2.88 securitiesOther securities 243,867 1,358 2.23 243,726 1,697 2.79 242,560 2,135 3.52 Total taxable 709,232 3,685 2.08 751,638 4,737 2.52 828,452 6,360 3.07 securitiesTax-exempt securities: ^(3)Other securities 60,280 643 4.27 63,535 676 4.26 56,064 595 4.25 Total tax-exempt 60,280 643 4.27 63,535 676 4.26 56,064 595 4.25 securitiesInterest-earningdeposits and federal 93,911 22 0.09 109,818 290 1.06 90,561 472 2.08 funds soldTotalinterest-earning 6,809,835 64,907 3.81 6,719,857 66,812 3.98 6,540,134 69,700 4.26 assetsOther assets 396,224 387,141 351,407 Total assets $ 7,206,059 $ 7,106,998 $ 6,891,541 Interest-bearing Liabilities:Deposits: Savings accounts $ 188,587 74 0.16 $ 194,026 281 0.58 $ 200,349 348 0.69 NOW accounts 1,440,147 2,099 0.58 1,419,739 4,648 1.31 1,541,956 6,641 1.72 Money market accounts 1,580,652 3,208 0.81 1,697,783 7,042 1.66 1,336,526 6,974 2.09 Certificate of 1,185,842 4,564 1.54 1,267,245 6,767 2.14 1,516,358 8,802 2.32 deposit accountsTotal due to 4,395,228 9,945 0.91 4,578,793 18,738 1.64 4,595,189 22,765 1.98 depositorsMortgagors' escrow 87,058 26 0.12 65,503 40 0.24 83,799 62 0.30 accountsTotalinterest-bearing 4,482,286 9,971 0.89 4,644,296 18,778 1.62 4,678,988 22,827 1.95 depositsBorrowings 1,430,488 6,084 1.70 1,307,629 7,066 2.16 1,146,199 6,739 2.35 Totalinterest-bearing 5,912,774 16,055 1.09 5,951,925 25,844 1.74 5,825,187 29,566 2.03 liabilitiesNon interest-bearing 560,637 449,761 394,642 demand depositsOther liabilities 175,234 128,715 111,088 Total liabilities 6,648,645 6,530,401 6,330,917 Equity 557,414 576,597 560,624 Total liabilities and $ 7,206,059 $ 7,106,998 $ 6,891,541 equity Net interest income /net interest rate $ 48,852 2.72 % $ 40,968 2.24 % $ 40,134 2.23 %spread (taxequivalent) ^(3) Net interest-earningassets / net interest $ 897,061 2.87 % $ 767,932 2.44 % $ 714,947 2.45 %margin (taxequivalent) Ratio ofinterest-earningassets to 1.15 X 1.13 X 1.12 Xinterest-bearingliabilities

_____________________(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, $0.2 million and $0.4 million for the three months ended June 30, 2020, March 31, 2020 and June 30, 2019, respectively.

(2)Loan interest income includes net losses from fair value adjustments on qualifying hedges of $0.4 million, $2.1 million and $0.8 million for the three months ended June 30, 2020, March 31, 2020 and June 30, 2019, respectively.(3)Interest and yields are calculated on the tax equivalent basis using the statutory federal income tax rate of 21% for the periods presented totaling $0.1 million in each period.

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIESNET INTEREST MARGIN(Dollars in thousands)(Unaudited) For the six months ended June30,2020 June30,2019 Average Yield/ Average Yield / Balance Interest Cost Balance Interest Cost Interest-earning Assets:Mortgage loans, $ 4,729,800 $ 99,131 4.19 % $ 4,604,928 $ 101,051 4.39 %netOther loans, net 1,140,840 22,535 3.95 949,991 23,552 4.96 Total loans, net 5,870,640 121,666 4.14 5,554,919 124,603 4.49 ^(1) (2)Taxable securities:Mortgage-backed 486,638 5,367 2.21 579,679 8,473 2.92 securitiesOther securities 243,796 3,055 2.51 242,214 4,346 3.59 Total taxable 730,434 8,422 2.31 821,893 12,819 3.12 securitiesTax-exempt securities: ^(3)Other securities 61,908 1,319 4.26 57,113 1,189 4.16 Total tax-exempt 61,908 1,319 4.26 57,113 1,189 4.16 securitiesInterest-earningdeposits and 101,864 312 0.61 96,767 1,027 2.12 federal fundssoldTotalinterest-earning 6,764,846 131,719 3.89 6,530,692 139,638 4.28 assetsOther assets 391,683 349,213 Total assets $ 7,156,529 $ 6,879,905 Interest-bearing Liabilities:Deposits: Savings accounts $ 191,307 355 0.37 $ 203,047 709 0.70 NOW accounts 1,429,943 6,747 0.94 1,515,554 12,672 1.67 Money market 1,639,217 10,250 1.25 1,358,228 13,795 2.03 accountsCertificate of 1,226,544 11,331 1.85 1,519,909 17,005 2.24 deposit accountsTotal due to 4,487,011 28,683 1.28 4,596,738 44,181 1.92 depositorsMortgagors' 76,281 66 0.17 73,046 115 0.31 escrow accountsTotalinterest-bearing 4,563,292 28,749 1.26 4,669,784 44,296 1.90 depositsBorrowings 1,369,058 13,150 1.92 1,148,479 13,280 2.31 Totalinterest-bearing 5,932,350 41,899 1.41 5,818,263 57,576 1.98 liabilitiesNoninterest-bearing 505,199 396,724 demand depositsOther 151,974 108,273 liabilitiesTotal 6,589,523 6,323,260 liabilitiesEquity 567,006 556,645 Totalliabilities and $ 7,156,529 $ 6,879,905 equity Net interestincome / netinterest rate $ 89,820 2.48 % $ 82,062 2.30 %spread(taxequivalent) ^(3)Netinterest-earningassets / net $ 832,496 2.66 % $ 712,429 2.51 %interest margin(tax equivalent)Ratio ofinterest-earningassets to 1.14 X 1.12 Xinterest-bearingliabilities

_____________________(1) Loan interest income includes loan fee income (which includes net amortization of deferred fees and costs, late charges, and prepayment penalties) of approximately $0.5 million and $0.9 million for the six months ended June 30, 2020 and June 30, 2019, respectively.(2) Loan interest income includes net losses from fair value adjustments on qualifying hedges of $2.4 million and $1.5 million for the six months ended June 30, 2020 and June 30, 2019, respectively.(3) Interest and yields are calculated on the tax equivalent basis using the statutory federal income tax rate of 21% for the periods presented totaling $0.3 million for each of the six month periods ended June 30, 2020 and 2019.

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIESDEPOSIT COMPOSITION(Unaudited)

June2020 vs. June2020 vs. June30, March 31, December 31, December2019 September June30, June2019 30,(Dollars in 2020 2020 2019 % Change 2019 2019 % Changethousands)Deposits Non-interest $ 581,881 $ 489,198 $ 435,072 33.7 % $ 421,786 $ 413,813 40.6 %bearingInterest bearing:Certificate of 1,135,977 1,172,381 1,437,890 (21.0 )% 1,506,376 1,544,117 (26.4 )deposit accounts %Savings accounts 184,895 192,192 191,485 (3.4 )% 193,497 196,820 (6.1 ) %Money market 1,474,880 1,597,109 1,592,011 (7.4 )% 1,329,156 1,302,153 13.3 %accountsNOW accounts 1,672,241 1,377,555 1,365,591 22.5 % 1,461,694 1,368,813 22.2 %Totalinterest-bearing 4,467,993 4,339,237 4,586,977 (2.6 )% 4,490,723 4,411,903 1.3 %deposits Total deposits $ 5,049,874 $ 4,828,435 $ 5,022,049 0.6 % $ 4,912,509 $ 4,825,716 4.6 %

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIESLOANS(Unaudited) Loan Closings For the three months ended For the six months ended June30, March 31, June30, June30, June30,(In thousands) 2020 2020 2019 2020 2019Multi-family $ 59,654 $ 67,318 $ 55,629 $ 126,972 $ 82,843residentialCommercial 8,003 99,571 42,700 107,574 56,641real estateOne-to-fourfamily ? 8,117 13,455 12,885 21,572 29,308mixed-usepropertyOne-to-fourfamily ? 2,674 8,413 7,884 11,087 11,770residentialCo-operative ? 704 300 704 300apartmentsConstruction 2,821 6,749 18,715 9,570 24,616Small BusinessAdministration 93,241 57 2,255 93,298 2,584^ (1)Commercialbusiness and 59,287 102,448 156,029 161,735 286,359otherTotal $ 233,797 $ 298,715 $ 296,397 $ 532,512 $ 494,421

_____________________(1) Includes $93.2 million of PPP closings for the three and six months ended June 30, 2020.

Loan Composition June2020 June2020 vs. vs. June30, March 31, December 31, December September 30, June30, June2019 2019(Dollars in 2020 2020 2019 % Change 2019 2019 % Changethousands)Loans held for investment:Multi-family $ 2,285,555 $ 2,272,343 $ 2,238,591 2.1 % $ 2,232,305 $ 2,263,875 1.0 %residentialCommercial 1,646,085 1,664,934 1,582,008 4.1 % 1,559,581 1,524,693 8.0 %real estateOne-to-fourfamily ? 591,347 592,109 592,471 (0.2 )% 587,100 582,264 1.6 %mixed-usepropertyOne-to-fourfamily ? 184,741 189,774 188,216 (1.8 )% 184,432 184,024 0.4 %residentialCo-operative 8,423 8,493 8,663 (2.8 )% 9,089 8,137 3.5 %apartmentsConstruction 69,433 66,727 67,754 2.5 % 64,234 58,503 18.7 %Small BusinessAdministration 106,813 14,076 14,445 639.4 % 3,982 14,511 636.1 %^ (1)Taxi medallion 3,269 3,281 3,309 (1.2 )% 3,513 3,555 (8.0 )%Commercialbusiness and 1,073,623 1,104,967 1,061,478 1.1 % 1,096,164 983,573 9.2 %otherNetunamortizedpremiums and 13,986 15,384 15,271 (8.4 )% 15,363 15,278 (8.5 )%unearned loanfeesAllowance for (36,710 ) (28,098 ) (21,751 ) 68.8 % (22,035 ) (21,510 ) 70.7 %loan lossesNet loans $ 5,946,565 $ 5,903,990 $ 5,750,455 3.4 % $ 5,743,728 $ 5,616,903 5.9 %

_____________________(1) Includes $93.2 million of PPP loans at June 30, 2020.

Net Loans Activity Three Months Ended June30, March 31, December 31, September June30, 30,(In 2020 2020 2019 2019 2019thousands)Loansoriginated $ 233,797 $ 298,715 $ 269,736 $ 398,143 $ 296,397 andpurchasedPrincipal (180,182 ) (137,189 ) (255,977 ) (266,894 ) (243,263 )reductionsLoans sold ? (498 ) (7,129 ) (3,553 ) (1,970 )Loan (1,030 ) (1,259 ) (95 ) (431 ) (1,114 )charge-offsForeclosures ? ? ? ? (239 )Net changein deferred (1,398 ) 113 (92 ) 85 (144 )fees andcostsNet changein theallowance (8,612 ) (6,347 ) 284 (525 ) (495 )for loanlossesTotal loan $ 42,575 $ 153,535 $ 6,727 $ 126,825 $ 49,172 activity

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

Non-Performing Assets June30, March December September June30, 31, 31, 30,(Dollars in 2020 2020 2019 2019 2019 thousands)Loans 90 Days Or MorePast Due and Still Accruing:Multi-family $ ? $ ? $ 445 $ 445 $ ? residentialCommercial business 150 ? ? ? ? and otherTotal 150 ? 445 445 ? Non-accrual Loans: Multi-family 3,688 2,741 2,296 3,132 2,008 residentialCommercial real 2,671 8 367 872 1,488 estateOne-to-four family - 2,511 607 274 683 1,752 mixed-use propertyOne-to-four family - 6,412 5,158 5,139 5,050 5,411 residentialSmall Business 1,321 1,518 1,151 1,151 1,224 AdministrationTaxi medallion^(1) 1,757 1,761 1,641 1,352 1,361 Commercial business 1,678 4,959 1,945 2,020 2,458 and other^(1)Total 20,038 16,752 12,813 14,260 15,702 Total Non-performing 20,188 16,752 13,258 14,705 15,702 Loans Other Non-performing Assets:Real estate acquired 208 208 239 239 239 through foreclosureOther asset acquired 35 35 35 35 35 through foreclosureTotal 243 243 274 274 274 Total Non-performing $ 20,431 $ 16,995 $ 13,532 $ 14,979 $ 15,976 Assets Non-performing Assets 0.29 % 0.23 % 0.19 % 0.21 % 0.23 %to Total AssetsAllowance For LoanLosses to 181.8 % 167.7 % 164.1 % 149.8 % 137.0 %Non-performing Loans

_____________________(1) Not included in the above analysis are non-accrual performing TDR taxi medallion loans totaling $1.5 million in 2Q20, $1.5 million in 1Q20, $1.7 million in 4Q19, $2.2 million in 3Q19, and $2.2 million in 2Q19 and non-accrual performing TDR commercial business loans totaling $1.0 million in 1Q20, $1.0 million in 1Q20, $0.9 million in 4Q19 and $1.0 million in 3Q19.

Net Charge-Offs (Recoveries) Three Months Ended June30, March 31, December September June30, 31, 30,(In thousands) 2020 2020 2019 2019 2019Multi-family $ (7 ) $ (6 ) $ (14 ) $ 183 $ (10 )residentialCommercial real ? ? (30 ) ? (7 )estateOne-to-four family ? 3 (78 ) 119 (140 ) (2 )mixed-use propertyOne-to-four family ? (3 ) (5 ) (3 ) (3 ) 110 residentialSmall Business 165 (7 ) (8 ) (32 ) (16 )AdministrationTaxi medallion ? ? ? ? (50 )Commercial business 849 1,245 (98 ) 150 954 and otherTotal net loancharge-offs $ 1,007 $ 1,149 $ (34 ) $ 158 $ 979 (recoveries)

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIESFORBEARANCES DETAIL(Dollars in thousands)(Unaudited) Balances by Risk Rating ^(1) Forbearances ^(2) Backed by Mortgages ^(1) Criticized/ % of % of % of Pass Classified Total Total Balance Sector Balance Total LTV LoansHigher Risk SegmentsRestaurantsand Catering $ 67,420 $ 2,196 $ 69,616 1.2 % $ 24,420 35.1 % $ 58,764 84.4 % 38.6 %HallsHotels 172,916 ? 172,916 2.9 114,627 66.3 162,093 93.7 53.8 Travel and 180,138 ? 180,138 3.0 37,670 20.9 74,192 41.2 48.4 LeisureRetail 76,494 ? 76,494 1.3 21,168 27.7 38,760 50.7 61.9 ServicesCRE - Shopping 255,192 ? 255,192 4.3 124,958 49.0 255,192 100.0 44.4 CenterCRE - Single 133,937 337 134,274 2.2 44,311 33.0 134,274 100.0 41.8 TenantCRE - Strip 286,131 2,050 288,181 4.8 139,344 48.4 288,181 100.0 45.1 MallTransportation 107,207 7,800 115,007 1.9 14,756 12.8 26,155 22.7 53.0 Contractors 184,948 1,399 186,347 3.1 16,142 8.7 121,365 65.1 51.9 Schools and 43,674 ? 43,674 0.7 12,441 28.5 35,193 80.6 43.4 Child CareSubtotal $ 1,508,057 $ 13,782 $ 1,521,839 25.5 % $ 549,837 36.1 % $ 1,194,169 78.5 % 46.5 % Lower Risk $ 4,412,763 $ 34,687 $ 4,447,450 74.5 % $ 728,307 16.4 % $ 4,059,435 91.3 % 36.4 %Segments Total $ 5,920,820 $ 48,469 $ 5,969,289 100.0 % $ 1,278,144 21.4 % $ 5,253,604 88.0 % 38.1 %

_____________________(1)At June 30, 2020 (2)Represents dollar amount granted through 07/10/20

FLUSHING FINANCIAL CORPORATION and SUBSIDIARIESRECONCILIATION OF GAAP EARNINGS and CORE EARNINGS

Non-cash Fair Value Adjustments to GAAP Earnings

The variance in GAAP and core earnings is primarily due to the impact of non-cash net gains and losses from fair value adjustments. These fair value adjustments relate primarily to swaps designated to protect against rising rates and borrowing carried at fair value under the fair value option. As the swaps get closer to maturity, the volatility in fair value adjustments will dissipate. 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, Pre-provision Pre-tax Net Revenue, 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 SixMonthsEnded June30, March 31, June30, June30, June30, 2020 2020 2019 2020 2019 GAAP income(loss) $ 24,080 $ (1,596 ) $ 13,828 $ 22,484 $ 23,183 beforeincome taxes Net (gain)loss from (10,205 ) 5,993 1,956 (4,212 ) 4,036 fair valueadjustmentsNet loss onsale of 54 37 15 91 15 securitiesLifeinsurance (659 ) ? ? (659 ) (43 )proceedsNet gain onsale of ? ? (770 ) ? (770 )assetsNet lossfrom fairvalueadjustments 365 2,073 818 2,438 1,455 onqualifyinghedgesAcceleratedemployeebenefits ? ? ? ? 455 uponOfficer'sdeathMerger 194 929 ? 1,123 ? expense Core income 13,829 7,436 15,847 21,265 28,331 before taxes Provisionfor income 3,532 1,936 3,771 5,468 6,804 taxes forcore income Core net $ 10,297 $ 5,500 $ 12,076 $ 15,797 $ 21,527 income GAAP dilutedearnings $ 0.63 $ (0.05 ) $ 0.37 $ 0.58 $ 0.61 (loss) percommon share Net (gain)loss fromfair value (0.27 ) 0.15 0.05 (0.11 ) 0.10 adjustments,net of taxNet loss onsale of ? ? ? ? ? securities,net of taxLifeinsurance (0.02 ) ? ? (0.02 ) ? proceedsNet gain onsale of ? ? (0.02 ) ? (0.02 )assets, netof taxNet lossfrom fairvalueadjustments 0.01 0.05 0.02 0.06 0.04 onqualifyinghedges, netof taxAcceleratedemployeebenefitsupon ? ? ? ? 0.01 Officer'sdeath, netof taxMergerexpense, net 0.01 0.02 ? 0.03 ? of tax Core dilutedearnings per $ 0.36 $ 0.19 $ 0.42 $ 0.55 $ 0.75 common share^(1) Core netincome, as $ 10,297 $ 5,500 $ 12,076 $ 15,797 $ 21,527 calculatedaboveAverage 7,206,059 7,106,998 6,891,541 7,156,529 6,879,905 assetsAverage 557,414 576,597 560,624 567,006 556,645 equityCore returnon average 0.57 % 0.31 % 0.70 % 0.44 % 0.63 %assets^(2)Core returnon average 7.39 % 3.82 % 8.62 % 5.57 % 7.73 %equity^(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 REVENUE and PRE-PROVISIONPRE-TAX NET REVENUE(Dollars in thousands)(Unaudited) Three Months Ended SixMonthsEnded June30, March 31, June30, June30, June30, 2020 2020 2019 2020 2019 Net interest $ 48,717 $ 40,826 $ 40,009 $ 89,543 $ 81,812 income Non-interest 13,737 (2,864 ) 2,451 10,873 3,394 income (loss)Non-interest (28,755 ) (32,380 ) (27,158 ) (61,135 ) (59,577 )expense Pre-provisionpre-tax net $ 33,699 $ 5,582 $ 15,302 $ 39,281 $ 25,629 revenue^(1)

_____________________(1) Includes non-cash net gains and (losses) from fair value adjustments totaling $9.8 million, ($8.1) million and ($2.8) million for the three months ended June 30, 2020, March 31, 2020 and June 30, 2019, respectively and $1.8 million and ($5.5) million for the six months ended June 30, 2020 and 2019, respectively.

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 SixMonthsEnded June30, March 31, June30, June30, June30, 2020 2020 2019 2020 2019GAAP net $ 48,717 $ 40,826 $ 40,009 $ 89,543 $ 81,812 interest incomeNet loss fromfair valueadjustments on 365 2,073 818 2,438 1,455 qualifyinghedgesCore net $ 49,082 $ 42,899 $ 40,827 $ 91,981 $ 83,267 interest income GAAP interestincome on total $ 60,557 $ 61,109 $ 62,273 $ 121,666 $ 124,603 loans, netNet loss fromfair valueadjustments on 365 2,073 818 2,438 1,455 qualifyinghedgesPrepaymentpenalties (702 ) (753 ) (1,120 ) (1,455 ) (1,925 )received onloansNet recoveriesof interest from (74 ) (436 ) (519 ) (510 ) (1,233 )non-accrualloansCore interestincome on total $ 60,146 $ 61,993 $ 61,452 $ 122,139 $ 122,900 loans, netAverage total $ 5,946,412 $ 5,794,866 $ 5,565,057 $ 5,870,640 $ 5,554,919 loans, netCore yield on 4.05 % 4.28 % 4.42 % 4.16 % 4.42 %total loans Net interestincome tax $ 48,852 $ 40,968 $ 40,134 $ 89,820 $ 82,062 equivalentNet loss fromfair valueadjustments on 365 2,073 818 2,438 1,455 qualifyinghedgesPrepaymentpenaltiesreceived on (702 ) (753 ) (1,120 ) (1,455 ) (1,925 )loans andsecuritiesNet recoveriesof interest from (74 ) (436 ) (519 ) (510 ) (1,233 )non-accrualloansNet interestincome used incalculation of $ 48,441 $ 41,852 $ 39,313 $ 90,293 $ 80,359 Core netinterest marginTotal averageinterest-earning $ 6,809,835 $ 6,719,857 $ 6,540,134 $ 6,764,846 $ 6,530,692 assetsCore net 2.85 % 2.49 % 2.40 % 2.67 % 2.46 %interest margin

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

June30, December31, June30,(Dollars in thousands) 2020 2020 2019Total Equity $ 571,921 $ 579,672 $ 565,390 Less: Goodwill (16,127 ) (16,127 ) (16,127 )Intangible deferred tax 292 292 286 liabilitiesTangible Stockholders' Common $ 556,086 $ 563,837 $ 549,549 Equity Total Assets $ 7,162,659 $ 7,017,776 $ 6,945,634 Less: Goodwill (16,127 ) (16,127 ) (16,127 )Intangible deferred tax 292 292 286 liabilitiesTangible Assets $ 7,146,824 $ 7,001,941 $ 6,929,793 Tangible Stockholders' Common 7.78 % 8.05 % 7.93 %Equity to Tangible Assets

_____________________

1See 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