Slide 1: 1Q23 Earnings Conference Call April 25, 2023
1Q23 Earnings Conference Call April 25, 2023
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 d
Slide 3: Action Plan Implemented to Improve Performance in 1Q23
Steps Actions/Results 1) Move more towards interest rate neutral • The Company has a goal of reaching neutral interest rate risk position in the shorter term • Achieved 40% of our 2023 goal by adding $200MM of hedges on investments, $50MM net of fundings swaps, increasing floating rate securities, a
Slide 4: Areas of Focus for Long-term Success
4 Areas of Focus for Long-term Success Credit Quality • Midtown Manhattan office exposure is 0.1% of net loans • The Company is a conservatively managed institution with a history of low and below industry levels of credit losses • Over 88% of the loan portfolio is collateralized by real estate with
Slide 5: Grow Funding Sources, Maintain Loan Portfolio, Asset Quality, Technology
3 4 1 Grow Funding Sources 2 Maintain Loan Portfolio ▪ Average total deposits increased 6.2% YoY and 2.0% QoQ; Core deposits are 75.3% of average total deposits ▪ Uninsured and uncollateralized deposits are a low 16.2% of total deposits ▪ Deposit yields increased 66 bps QoQ to 2.29%; Overall cost of
Slide 6: $3.7 Billion of Available Liquidity
6 $3.7 Billion of Available Liquidity ($ in millions) Total Available Amount Used Net Availability Internal Sources: Unpledged Securities and Other $470.8 $- $470.8 Interest Earnings Deposits $99.4 $- $99.4 External Sources: Federal Home Loan Bank $3,789.8 $1,952.8 $1,837.0 Federal Reserve Bank $110
Slide 7: Loans Secured by Real Estate Have an Average LTV of <37%
Loans Secured by Real Estate Have an Average LTV of <37% Midtown Manhattan Office Exposure is 0.1% of Net Loans Data as of March 31, 2023 38% 12% 11% 8% 8% 6% 5% 3% 2% 2%2%2% 1% 1% 1% Multifamily: 37.6% Non Real Estate: 11.6% Owner Occupied CRE: 10.8% One-to-four family - Mixed Use: 8.1% General Com
Slide 8: Strong Asian Banking Market Focus
Strong Asian Banking Market Focus 18% of Total Deposits $36B Deposit Market Potential (~3% Market Share1 ) 7.6% FFIC 5 Year Asian Market CAGR vs 3.7%1 for the Comparable Asian Markets Asian Communities – Total Loans $810MM and Deposits $1.2B Multilingual Branch Staff Serves Diverse Customer Base in
Slide 9: Digital Banking Usage Continues to Increase
Digital Banking Usage Continues to Increase 9 Technology Enhancements Remain a Priority to Grow Customer Base and Increase Engagement 23% Increase in Monthly Mobile Deposit Active Users March 2023 YoY ~30,000 Users with Active Online Banking Status 22% March 2023 YoY Growth 12% Digital Banking Enrol
Slide 10: Key Community Events During 1Q23
▪ Announces Community Scholarship for NYC Kids Rise at P.S. 22Q ▪ Attends Manhattan Neighborhood Network Ribbon Cutting ▪ Opened Hauppauge Branch; Bensonhurst to open in 2023 10 Key Community Events During 1Q23
Slide 11: Average Total Deposits Increase; Higher CD Percentage
15.6% 16.2% 16.7% 14.7% 13.2% 31.8% 32.4% 28.8% 29.5% 28.9% 2.4% 2.4% 2.5% 2.2% 2.0% 35.2% 34.8% 34.0% 32.2% 30.2% 13.9% 12.7% 16.9% 20.2% 24.7% 1.1% 1.5% 1.1% 1.2% $6,410 $6,441 1.0% $6,277 $6,678 $6,810 0 1 00 0 2 00 0 3 00 0 4 00 0 5 00 0 6 00 0 7 00 0 8 00 0 1Q22 2Q22 3Q22 4Q22 1Q23 Noninterest
Slide 12: Core Loan Yields Improve; Balances Flat Up YoY
38.0% 37.5% 37.5% 37.6% 37.7% 26.7% 27.6% 27.6% 27.6% 27.6% 1.0% 1.1% 0.9% 1.0% 0.9% 12.4% 12.0% 11.5% 11.5% 11.4% 21.9% 21.8% 22.5% 22.3% 22.4% $6,601 $6,752 $6,948 $6,926 $6,895 - 1,0 00 2,0 00 3,0 00 4,0 00 5,0 00 6,0 00 7,0 00 8,0 00 1Q22 2Q22 3Q22 4Q22 1Q23 Multifamily Commercial Real Estate Co
Slide 13: 47% of the Loan Portfolio Reprices Through 2025
$1,092 $660 $765 $754 6.82% 4.42% 4.40% 4.08% 6.98% 6.26% 6.15% 6.15% - 20 0 40 0 60 0 80 0 1,0 00 1,2 00 Floating 2023 2024 2025 Adjustable Loan Repricing Maturing Fixed Rate Total Loan Repicing Current Rate Repricing Rate ▪ Floating rate loans include any loans (including swaps) tied to an index t
Slide 14: NIM Under Pressure Until Fed Stops
$62.7 $64.6 $60.5 $53.0 $45.0 3.31% 3.33% 3.03% 2.63% 2.25% 4.04% 4.15% 4.35% 4.63% 4.80% 0.22% 0.29% 0.76% 1.63% 2.30% 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% $10. 0 $20. 0 $30. 0 $40. 0 $50. 0 $60. 0 $70. 0 1Q22 2Q22 3Q22 4Q22 1Q23 Core NII FTE Core NIM FTE Core Loan Yields Core Deposit Yi
Slide 15: Over $1.5B of Swap Notional Helps Reduce Rate Sensitivity
15 Over $1.5B of Swap Notional Helps Reduce Rate Sensitivity Swap Type Current Notional ($MM) Weighted Average Duration (Years) Underlying Asset / Liability Rate Net Effective Rate Asset Hedges Used to Convert Fixed into Floating FV Hedge on Investments $200.0 4.0 1.90% 3.42% FV Hedge on Loans $271.
Slide 16: Swaps Have Provided Capital Protection As Rates Rise
16 Swaps Have Provided Capital Protection As Rates Rise Fair Value of Swaps Partially Offsets Fair Market Value Changes in AFS Securities ($ in 000s) 1Q23 4Q22 3Q22 2Q22 1Q22 Unrealized Gain/(Loss) On Investment Securities ($59,973) ($63,106) ($72,930) ($50,133) ($29,699) Unrealized Gain/(Loss) On H
Slide 17: High Quality and Liquid Investment Securities Portfolio
17 High Quality and Liquid Investment Securities Portfolio ▪ Investment securities are used for liquidity and collateral for certain deposits ▪ Investment securities are 10.4% of total assets; duration approximates 3.5 years ▪ Approximately 92% of the portfolio is classified as AFS and 8% HTM ▪ The
Slide 18: Net Charge-offs Significantly Better Than the Industry; Strong DSR
▪ 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 <37%4 – Only $22.2MM of real estate loans (0.3% of gross loans) with an LTV of 75% or more4 Net Charge-offs Significantly Better Than
Slide 19: Continued Strong Credit Quality
19 Continued Strong Credit Quality NPAs / Assets Criticized and Classified Loans / Gross Loans ACL / Gross Loans & ACL / NPLs ACL by Loan Segment (1Q23) $2,601 $1,904 $550 $232 $6 $60 $23 $1,519 0.35% 0.40% 0.31% 0.31% 0.00% 0.25% 9.49% 1.14% -7 0. 00% -6 0. 00% -5 0. 00% -4 0. 00% -3 0. 00% -2 0. 0
Slide 20: Book Value and Tangible Book Value Per Share Grow YoY
Book Value and Tangible Book Value Per Share Grow YoY 20 159,516 Shares Repurchased in 1Q23 at an Average Price of $19.14 3% YoY Book Value Per Share Growth 3% YoY Increase in Tangible Book Value Per Share $21.61 $21.71 $21.81 $22.31 $22.18 8.05% 7.82% 7.62% 7.82% 7.73% 6.90% 7.10% 7.30% 7.50% 7.70%
Slide 21: Key Takeaways
21 ▪ The Company took significant actions to move to a more interest rate risk neutral position – After a lag, NIM should begin to recover once the Fed is done raising rates ▪ Solid deposit growth with additional market opportunities ▪ Uninsured and uncollateralized deposits are low and liquidity le
Slide 22: Appendix
Appendix [EaEFLUs 22
Slide 23: Flushing Financial Snapshot
Flushing Financial Snapshot (NASDAQ: FFIC) Key Messages Balance Sheet Assets $8.5B Loans, net $6.9B Total Deposits $6.7B Equity $0.7B Performance GAAP/Core ROAA 0.24%/0.14%1 GAAP/Core ROAE 3.02%/1.76%1 GAAP/Core Exp/Avg Assets 1.78%/1.78%1 Tangible Book Value $22.18 Dividend Yield 6.6%2 1Q23 Key Sta
Slide 24: Experienced Executive Leadership Team
Experienced Executive Leadership Team Executive Compensation and Insider Stock Ownership (5.8%2 ) Aligned with Shareholder Interests John Buran President and CEO Maria Grasso SEVP, COO, Corporate Secretary Susan Cullen SEVP, CFO, Treasurer Francis Korzekwinski SEVP, Chief of Real Estate Michael Bing
Slide 25: Over a Year Track Record of Steady Growth
Over a 27 Year Track Record of Steady Growth Core EPS ($) Dividends per Share ($)2 Tangible Book Value per Share ($) Assets ($B) Total Gross Loans ($B) Total Deposits ($B) $- $0.88 1995 2000 2005 2010 2015 2020 2022 1Q23 $- $2.49 $0.10 1995 2000 2005 2010 2015 2020 2022 1Q23 $0.6 $6.7 1995 2000 2005
Slide 26: Annual Financial Highlights
26 Annual Financial Highlights Reported Results EPS $2.50 $2.59 $1.18 $1.44 $1.92 $1.41 ROAA 0.93 % 1.00 % 0.48 % 0.59 % 0.85 % 0.66 % ROAE 11.44 12.60 5.98 7.35 10.30 7.74 NIM FTE 3.11 3.24 2.85 2.47 2.70 2.93 Core1 Results EPS $2.49 $2.81 $1.70 $1.65 $1.94 $1.57 ROAA 0.92 % 1.09 % 0.68 % 0.68 % 0.
Slide 27: 5 year Loan Mix – Shifting Towards Commercial Business
41.0% 38.9% 37.8% 37.9% 37.6% 27.9% 27.5% 26.2% 26.8% 27.6% 0.9% 1.2% 1.2% 0.9% 1.0% 14.0% 13.7% 12.8% 12.8% 16.2% 11.5% 18.7% 22.0% 21.6% 22.3% $5,536 $5,757 $6,702 $6,634 $6,926 - 1,0 00 2,0 00 3,0 00 4,0 00 5,0 00 6,0 00 7,0 00 8,0 00 2018 2019 2020 2021 2022 Multifamily Commercial Real Estate Co
Slide 28: Well-Secured Multifamily and CRE Portfolios
Well-Secured Multifamily and CRE Portfolios 28 Underwrite Real Estate Loans with a Cap Rate in High 5s and Stress Test Each Loan Multifamily Geography 15% 31% 21% 17% 16% Bronx Kings Manhattan Queens Other $2.6B Portfolio • Average loan size: $1.1MM • Average monthly rent of $1,447 vs $2,9881 for th
Slide 29: Well-Diversified Commercial Business Portfolio
29 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 estat
Slide 30: Continued Strong Credit Quality
30 Continued Strong Credit Quality NPAs / Assets Criticized and Classified Loans / Gross Loans Reserves / Gross Loans & Reserves / NPLs ACL by Loan Segment (1Q23) $2,601 $1,904 $550 $232 $6 $60 $23 $1,519 0.35% 0.40% 0.31% 0.31% 0.00% 0.25% 9.49% 1.14% -7 0. 00% -6 0. 00% -5 0. 00% -4 0. 00% -3 0. 0
Slide 31: Deposit Mix Shift
31 Deposit Mix Shift Average Deposits Composition ($MM) 8.0% 8.1% 11.3% 14.4% 15.8% 29.7% 28.6% 31.1% 33.8% 30.6% 4.9% 4.0% 3.4% 2.5% 2.4% 24.7% 27.3% 30.2% 32.0% 34.0% 31.3% 30.6% 22.6% 16.1% 16.0% 1.4% 1.4% 1.4% 1.2% 1.2% $4,736 $5,013 $5,163 $6,416 $6,452 0 1 00 0 2 00 0 3 00 0 4 00 0 5 00 0 6 00
Slide 32: Following NIM Expansion in 2020 and 2021, Compression in 2022
$168.3 $164.2 $196.9 $243.3 $240.8 2.72% 2.49% 2.87% 3.17% 3.07% 4.38% 4.51% 4.14% 4.05% 4.30% 1.36% 1.76% 0.82% 0.32% 0.74% -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 2022 Core NII FTE Core NIM FTE Core Loan Yields Core Deposit Yield Follow
Slide 33: 71% of Earnings Returned in 2022; 45% in 2021
71% of Earnings Returned in 2022; 45% in 2021 Book Value and Tangible Book Value Per Share Grow in 2022 33 Book Value Per Share CAGR of 4% 2018-2022 Tangible Book Value Per Share 4% 2018-2022 $19.64 $20.59 $20.11 $22.26 $22.97 10.98% 10.95% 9.88% 10.86% 10.52% 8.74% 8.73% 8.38% 8.98% 8.61% 0.00% 5.0
Slide 34: Environmental, Social, and Governance
34 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
Slide 35: Reconciliation of GAAP Earnings and Core Earnings
Reconciliation of GAAP Earnings and Core Earnings 35 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 borrowing carried
Slide 36: Reconciliation of GAAP to Core Earnings - Quarters
36 1 Core diluted earnings per common share may not foot due to rounding 2 Ratios are calculated on an annualized basis Reconciliation of GAAP to CORE Earnings - Quarters (Dollars in thousands, except per share data) GAAP income before income taxes $ 6,959 $ 12,819 $ 32,422 $ 34,971 $ 24,640 Net (ga
Slide 37: Reconciliation of GAAP Revenue and Pre-provision Pre-tax Net Revenue - Quarters
37 Reconciliation of GAAP Revenue and Pre-provision Pre-tax Net Revenue - Quarters (Dollars in thousands) GAAP Net interest income $ 45,262 $ 54,201 $ 61,206 $ 64,730 $ 63,479 Net (gain) loss from fair value adjustments on qualifying hedges (100) (936) (28) 60 129 Net amortization of purchase accoun
Slide 38: Reconciliation of GAAP to Core Net Interest Income and NIM - Quarters
38 1 Excludes purchase accounting average balances for all periods presented Reconciliation of GAAP to Core Net Interest Income and NIM - Quarters (Dollars in thousands) GAAP net interest income $ 45,262 $ 54,201 $ 61,206 $ 64,730 $ 63,479 Net (gain) loss from fair value adjustments on qualifying he
Slide 39: Calculation of Tangible Stockholders' Common Equity to Tangible Assets
39 Calculation of Tangible Stockholders’ Common Equity to Tangible Assets (Dollars in thousands) Total Equity $ 677,157 $ 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 (2,017) (2,562) (3,172) — — — Intang
Slide 40: Reconciliation of GAAP Earnings and Core Earnings - Years
40 Reconciliation of GAAP Earnings and Core Earnings - Years 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 $ 104,852 $ 109,278 $ 45,182 $ 53,331
Slide 41: Reconciliation of GAAP Revenue & Pre-Provision Pre-Tax Net Revenue
41 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 of purc
Slide 42: Reconciliation of GAAP and Core Net Interest Income and NIM
42 Reconciliation of GAAP and Core Net Interest Income and NIM 1 Excludes purchase accounting average balances for the years ended 2022, 2021, and 2020 (Dollars In thousands) GAAP net interest income $ 243,616 $ 247,969 $ 195,199 $ 161,940 $ 167,406 $ 173,107 Net (gain) loss from fair value adjustme
Slide 43: Contact Details
43 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
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