Flushing Financial Corporation · NASDAQ:FFIC

Flushing Financial — Alliance Global Partners Investor Presentation (August 2022)

33 slides from Flushing Financial's conference presentation, Aug 2, 2022

  1. Slide 1: Alliance Global Partners Investor Presentation

    Alliance Global Partners Investor Presentation August 2, 2022

  2. Slide 2: Safe Harbor Statement

    Safe Harbor Statement 2 “Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995 : Statements in this Presentation relating to plans, strategies, economic performance and trends, projections of results of specific activities or investments and other statements that are not

  3. Slide 3: Flushing Financial Snapshot

    3 Flushing Financial Snapshot (NASDAQ: FFIC) Competitive Advantages Balance Sheet Assets $ 8.3B Loans, net $ 6.7B Deposits $ 6.4B 1 Equity $ 0.7B Performance GAAP/Core ROAA 1.22%/1.05% 2 GAAP/Core ROAE 15.00%/12.90% 2 Efficiency Ratio 52.3% 2 Tangible Book Value $ 21.71 Dividend Yield 4.0% 3 2Q22 Ke

  4. Slide 4: Key Messages

    4 Key Messages Conservative Underwriting with History of Solid Value Creation ► Leading Community Bank in the Greater NYC Area ► Well Diversified and Low Risk Loan Portfolio ► History of Sound Credit Quality since IPO in 1995 ► Asian Banking Niche ► Beneficiary of a Steepening Yield Curve

  5. Slide 5: Well-positioned to Benefit from Industry Merger Disruption

    5 Well - positioned to Benefit from Industry Merger Disruption • 10 bank mergers have been announced or closed involving Long Island area banks 2 • Out of the $328B of total industry deposits in Nassau, Queens, Kings, and Suffolk Counties, $87B or 27% involve a merger participant 3 • 93% of FFIC’s d

  6. Slide 6: Record Loan Closings; Loan Pipeline Remains At Elevated Levels

    Record Loan Closings; Loan Pipeline Remains At Elevated Levels 6  Closings accelerated in 2Q22 – Closings up 63.0% YoY excluding PPP – Organic growth opportunity remains – Closings could slow with rising interest rates  Pipeline up 34.7% YoY – Second highest level after a record last quarter – Com

  7. Slide 7: Digital Banking Usage Continues to Increase

    Digital Banking Usage Continues to Increase 7 Technology Enhancements Remain a Priority 28% Increase in Monthly Mobile Active Users YoY ~ 25,000 Active Online Banking Users 27% YoY Growth 14% Digital Banking Enrollment YoY Growth Numerated Small Business Lending Platform $10.7MM of Commitments in 1H

  8. Slide 8: Strong Asian Banking Market Focus

    8 Strong Asian Banking Market Focus 15% of Total Deposits 1 $ 34B Deposit Market Potential (~3% Market Share 1 ) 6.9% FFIC 5 Year Asian Market CAGR vs 3.7% 2 for the Comparable Asian Markets Asian Communities – Total Loans $792.5MM and Deposits $959.8M Multilingual Branch Staff Serves Diverse Custom

  9. Slide 9: Our Brand Promise: Rewarding Relationships

    Our Brand Promise: Rewarding Relationships Nurturing Relationships and Rewarding Customers, Employees, and Shareholders 9

  10. Slide 10: Recent Highlights

     Opened New Branch in Elmhurst Expanding Asian Market Footprint – Hired a team from merged institutions; growth has exceeded expectations; strong support from community  Signed Lease for Hauppauge Branch – Expected to open by year end; Hauppauge is a business hub for Long Island  Issued Inaugural

  11. Slide 11: Loan Yields Rising; Deposit Betas Were Low in 2Q22

    2.72% 2.49% 2.87% 3.17% 3.33% 4.38% 4.51% 4.14% 4.05% 4.15% 1.36% 1.76% 0.82% 0.32% 0.29% $168.3 $164.2 $196.9 $243.3 $64.6 -1.00% 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% $0.0 $50.0 $100.0 $150.0 $200.0 $250.0 2018 2019 2020 2021 2Q22 Core NII FTE Core NIM FTE Core Loan Yields Core Deposit Yield Loan Yi

  12. Slide 12: Continued Growth in Noninterest Bearing Deposits

    12 Continued Growth in Noninterest Bearing Deposits Average Deposits Composition ($MM) $4,736 $5,013 $5,163 $6,416 $6,441 1.36% 1.76% 0.82% 0.32% 0.29% 0% 1% 1% 2% 2% 3% 3% 0 1000 2000 3000 4000 5000 6000 7000 2018 2019 2020 2021 2Q22 Noninterest Bearing NOW Accounts Savings Money Market CDs Mortgag

  13. Slide 13: Limited Deposit Rate Increases in 2Q22

    Limited Deposit Rate Increases in 2Q22 13 Weighted Average Deposit Beta of 9% in 1H22; Expect Beta to Accelerate 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 Average Fed Funds Deposit Costs

  14. Slide 14: Diversified Loan Mix; Yields Increase

    $5,536 $5,757 $6,702 $6,634 $6,752 - 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 2018 2019 2020 2021 2Q22 Multifamily Commercial Real Estate Construction 1-4 Family Business Banking Total Gross Loans 14 Diversified Loan Mix; Yields Increase Loan Composition Period End Loans ($MM) Empire Bancorp

  15. Slide 15: Significant Loan Repricing Within a Quarter and Over Time

    Significant Loan Repricing Within a Quarter and Over Time 15  Floating rate loans include any loans (including swaps) tied to an index that reprices within 90 days  Loans to reprice ~120 bps higher over time assuming index values as of June 30, 2022  15% of loans reprice within a q uarter ; while

  16. Slide 16: Well-Secured Multifamily and CRE Portfolios

    Well - Secured Multifamily and CRE Portfolios 16 Underwrite Real Estate Loans with a Cap Rate in Mid - 5s and Stress Test Each Loan Multifamily Geography 16% 31% 19% 17% 17% Bronx Kings Manhattan Queens Other $2. 5 B Portfolio • Average loan size: $1.1MM • Average monthly rent of $1,307 vs $ 2,974 1

  17. Slide 17: Loans Secured by Real Estate Have an Average LTV of <38%

    17 Loans Secured by Real Estate Have an Average LTV of <38% Multifamily  Primarily in market lending  Review net operating income and the collateral plus the financial resources and income level of the borrower (including experience in managing or owning similar properties)  ARMs adjust each 5 -

  18. Slide 18: Well-Diversified Commercial Business Portfolio

    18 Well - Diversified Commercial Business Portfolio Commercial Business  Primarily in market lending  Annual sales up to $250MM  Lines of credit and term loans, including owner occupied mortgages  Loans secured by business assets, including account receivables, inventory, equipment, and real est

  19. Slide 19: Net Charge-offs Significantly Better Than the Industry

     Over two decades and multiple credit cycles, Flushing Financial has a history of better than industry credit quality  Average LTVs on the Real Estate portfolio is <38% 4 – Only $21.7MM of real estate loans (0.3% of gross loans) with an LTV of 75% or more 4 Net Charge - offs Significantly Better T

  20. Slide 20: Continued Strong Credit Quality

    20 Continued Strong Credit Quality NPAs / Assets Criticized and Classified Loans / Gross Loans Reserves / Gross Loans & Reserves / NPLs ACL by Loan Segment (2Q22) 0.96% 0.66% 1.07% 0.87% 0.85% 0.50% 0.60% 0.70% 0.80% 0.90% 1.00% 1.10% 1.20% 1.30% 2018 2019 2020 2021 2Q22 Criticized & Classified Loan

  21. Slide 21: Higher Rates Negatively Impact TCE; ~4.0% Dividend Yield

    Higher Rates Negatively Impact TCE by 19 bps; ~4.0% Dividend Yield 1 21 71% of 1H22 Earnings Returned; 45% in 2021 5.7% Book Value Per Share Growth YoY 5.9% YoY Increase in Tangible Book Value Per Share $19.64 $20.59 $20.11 $22.26 $22.38 10.98% 10.95% 9.88% 10.86% 10.52% 8.74% 8.73% 8.38% 8.98% 8.91

  22. Slide 22: Outlook and Key Takeaways

    22  Benefiting from merger disruption – Since March 31, 2021, added 42 people from announced/recently closed mergers; 18 are revenue producing – Record loan closings in 2Q22 – Record levels of DDA balances in 2Q22  Significant capital return; 4.0% 1 dividend yield – Repurchased 387,689 shares in 2

  23. Slide 23: Appendix

    Appendix [EEUFLUSHING

  24. Slide 24: Experienced Executive Leadership Team

    24 Experienced Executive Leadership Team Executive Compensation and Insider Stock Ownership (6.1% 2 ) Aligned with Shareholder Interests John Buran President and CEO Maria Grasso SEVP, COO, Corporate Secretary Susan Cullen SEVP, CFO, Treasurer Francis Korzekwinski SEVP, Chief of Real Estate Michael

  25. Slide 25: Track Record of Steady Growth

    25 26 Year Track Record of Steady Growth Core EPS ($) Dividends per Share ($) Tangible Book Value per Share ($) Assets ($B) Total Gross Loans ($B) Total Deposits ($B) 1 $ - $0.84 $0.88 1995 2000 2005 2010 2015 2020 2021 1H22 $ - $2.81 $1.30 1995 2000 2005 2010 2015 2020 2021 1H22 $0.6 $6.4 1995 2000

  26. Slide 26: Environmental, Social, and Governance

    26 Environmental, Social, and Governance Environmental – reduction of carbon footprint and assessing climate change through underwriting Social - Building rewarding relationships with communities, customers, and employees See more details in our ESG Report under Investor Relations at FlushingBank.co

  27. Slide 27: Reconciliation of GAAP Earnings and Core Earnings

    Reconciliation of GAAP Earnings and Core Earnings 27 Non - cash Fair Value Adjustments to GAAP Earnings The variance in GAAP and core earnings is partly driven by the impact of non - cash net gains and losses from fair value adjustments .. These fair value adjustments relate primarily to swaps desig

  28. Slide 28: Reconciliation of GAAP Earnings and Core Earnings

    28 Reconciliation of GAAP Earnings and Core Earnings 1 Core diluted earnings per common share may not foot due to rounding 2 Ratios are calculated on an annualized basis (Dollars In thousands, except per share data) GAAP income (loss) before income taxes $ 109,278 $ 45,182 $ 53,331 $ 65,485 $ 66,134

  29. Slide 29: Reconciliation of GAAP Revenue & Pre-Provision Pre-Tax Net Revenue

    29 Reconciliation of GAAP Revenue & Pre - Provision Pre - Tax Net Revenue Efficiency ratio, a non - GAAP measure, was calculated by dividing noninterest expenses (excluding merger expenses, OREO expense, prepayment penalty on borrowings, the net gain/loss from the sale of OREO and net amortization o

  30. Slide 30: Reconciliation of GAAP NII & NIM to Core NII & NIM

    30 Reconciliation of GAAP NII & NIM to CORE NII & NIM 1 Excludes purchase accounting average balances for the years ended 2021 and 2020 and for the six months ended June 30, 2022 and 2021 (Dollars In thousands) GAAP net interest income $ 247,969 $ 195,199 $ 161,940 $ 167,406 $ 173,107 $ 128,209 $ 12

  31. Slide 31: Calculation of Tangible Stockholders' Common Equity to Tangible Assets

    31 Calculation of Tangible Stockholders’ Common Equity to Tangible Assets (Dollars in thousands) Total Equity $ 670,812 $ 679,628 $ 618,997 $ 579,672 $ 549,464 $ 532,608 Less: Goodwill (17,636) (17,636) (17,636) (16,127) (16,127) (16,127) Core deposit Intangibles (2,282) (2,562) (3,172) — — — Intang

  32. Slide 32: Contact Details

    32 Contact Details Susan K. Cullen SEVP, CFO & Treasurer Phone: (718) 961 - 5400 Email: scullen@flushingbank.com Al Savastano, CFA Director of Investor Relations Phone: (516) 820 - 1146 Email: asavastano@flushingbank.com

  33. Slide 33: Flushing Financial Corporation

    [age LUSHING Financial Corporation

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