Slide 1: 1Q24 Earnings Conference Call
1Q24 Earnings Conference Call April 24, 2024
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: 1Q24 Financial Highlights
▪ Net Interest Margin impacted by high cash balances, slow loan closings, and CD repricing ▪ Episodic items2 totaled $1 million in 1Q24, $3 million in 4Q23, and $1 million in 1Q23 ▪ Noninterest income in 4Q23 includes net realized gains on the sale of assets and other dividends from nonqualified pla
Slide 4: Continued Strong Credit Quality
▪ Conservative Underwriting Leads to Excellent Asset Quality – $4,000 or less than 1 basis point of quarterly net charge offs – 24 bps of 30-89 day delinquencies – Criticized and classified loans down 23% QoQ and were only 87 basis points of loans – NPAs flat QoQ and are only 53 basis points of asse
Slide 5: Net Charge-offs Significantly Better Than the Industry; Strong DCR
▪ 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 less than 36%4 – Only $38.2 million of real estate loans (0.6% of gross loans) with an LTV of 75% or more4 ; $9.2 million have mortgag
Slide 6: Low Risk Credit Profile Results
0.50% 0.47% 0.45% 0.54% 0.53% 0.32% 0.34% 0.40% 0.39% 0 .0 0% 0 .1 0% 0 .2 0% 0 .3 0% 0 .4 0% 0 .5 0% 0 .6 0% 0 .7 0% 0 .8 0% 0 .9 0% 1 .0 0% 1Q23 2Q23 3Q23 4Q23 1Q24 FFIC Peer Median* 6 Low Risk Credit Profile Results NPAs / Assets Criticized and Classified Loans / Gross Loans 30-89 Day Delinquenci
Slide 7: Excellent Credit Quality In Key Portfolios
7 Excellent Credit Quality In Key Portfolios Portfolio Data Points Multifamily Investor CRE Office NPLs/Loans 0.18% 0% 0% Criticized and Classified Loans/Loans 54 bps 5 bp 6 bps Weighted Average DCR: 1.8x 1.9x 2.0x Portfolio Size: $2.6 billion $1.9 billion $234 million Average Loan Size: $1.2 millio
Slide 8: Low Risk Multifamily Loan Portfolio
8 Low Risk Multifamily Loan Portfolio • We employ a quantitative model to determine loan risk rates for real estate loans • The model consists of four factors: property condition, current DCR, current LTV, and loan payment history with DCR and LTV combining for 70% of the weight • The model output c
Slide 9: Compression of GAAP & Core NIM and Closing vs Satisfaction Yields Spreads QoQ
Compression of GAAP & Core NIM and Closing vs Satisfaction Yields Spreads QoQ 9 GAAP NIM FTE 2.27% 2.18% 2.22% 2.29% 2.06% See Appendix for definitions of Core NII FTE, Core NIM, and Core Loan Yields 1 Closings and Satisfactions Yields exclude PPP loans Closings vs Satisfaction Yields1 7.01% 7.14% 7
Slide 10: Average Total Deposits Expand YoY and QoQ
13.2% 12.3% 12.5% 12.7% 11.8% 28.9% 29.4% 28.0% 26.8% 27.3% 2.0% 1.8% 1.7% 1.6% 1.5% 30.3% 25.4% 23.2% 23.6% 24.4% 24.7% 29.7% 33.6% 34.0% 34.0% 1.0% 1.4% 1.0% 1.3% $6,810 1.0% $6,900 $6,819 $6,884 $7,081 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 1Q23 2Q23 3Q23 4Q23 1Q24 Noninterest
Slide 11: CDs Continue to Reprice
11 CDs Continue to Reprice ▪ CDs have a weighted average rate of 4.56%1 as of March 31, 2024 ▪ Current CD rates are approximately 3.75%-4.25% ▪ Approximately 95%1 of the CD portfolio will mature within one year – $449.7 million in 2Q24 at 4.15%1 – $579.4 million in 3Q24 at 4.89% – $495.4 million in
Slide 12: Floating Rate Loans Are ~25% of the Loan Portfolio; Significant Repricing Through 2026
▪ Floating rate loans include any loans (including back-to-back swaps) tied to an index that reprices within 90 days; Including interest rate hedges of $500 million, $1.7 billion or ~25% of the loan portfolio is effectively floating rate ▪ Through 2026, loans to reprice ~212-225 bps higher assuming
Slide 13: Interest Rate Hedges Provide Income and Reduce Rate Sensitivity
13 Interest Rate Hedges Provide Income and Reduce Rate Sensitivity Swap Type Notional ($ Million) 1Q24 Avg Bal ($ Million) 1Q24 Yield with Swaps 1Q24 Yield Without Swaps Net Benefit Investments $200.0 $1,119.1 4.53% 4.25% +0.28% Loans $700.8 $6,804.1 5.46% 5.23% +0.23% Funding $776.8 $7,849.1 3.42%
Slide 14: Book Value and Tangible Book Value Per Share Growth YoY
$22.80 $23.14 $23.06 $23.21 $23.04 10.36% 10.36% 10.14% 10.25% 10.32% 8.56% 8.54% 8.51% 8.47% 8.32% 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% $17. 00 $18. 00 $19. 00 $20. 00 $21. 00 $22. 00 $23. 00 $24. 00 1Q23 2Q23 3Q23 4Q23 1Q24 Book Value Per Share CET1 Ratio Leverage Ratio Book Value and Ta
Slide 15: Strong Asian Banking Market Focus
Strong Asian Banking Market Focus 18% of Total Deposits $41B Deposit Market Potential (~3% Market Share1 ) 9.8% FFIC 5 Year Asian Market CAGR vs 3.3%1 for the Comparable Asian Markets Asian Communities – Total Loans $746 million and Deposits $1.3 billion Multilingual Branch Staff Serves Diverse Cust
Slide 16: Key Community Events During 1Q24
▪ Lunar New Year Parade in Flushing ▪ Tangram Mall Lunar New Year with Tote Bag 16 Key Community Events During 1Q24
Slide 17: Outlook
▪ Balance Sheet – Expect stable loans – Focused on improving funding mix; expect normal seasonal funding patterns ▪ Net Interest Income – Expecting NIM is close to a bottom (assuming stable Fed rates) • Will depend primarily on the loan closings and CD repricing • $1.7 billion of retail CDs to matur
Slide 18: Drivers to Improve Profitability Profile
Drivers to Improve Profitability Profile 18 These Actions Should Improve Profitability to a Double Digit ROAE Over Time ▪ Profitability is pressured due to the impact of higher rates on net interest margin – Net interest margin improvement can come from: • Areas We Control – Improving lending spread
Slide 19: Key Takeaways – Staying Disciplined in a Challenging Environment
19 ▪ Areas of Focus – Increase NIM and Reduce Volatility • Loan and CD repricing • Focusing on noninterest bearing deposits – Maintain Credit Discipline • Low risk profile • Conservative loan underwriting • History of low credit losses • Minimal exposure to Manhattan office buildings – Preserve Stro
Slide 20: Appendix
Appendix TIGFLUSHING 20
Slide 21: Digital Banking Usage Continues to Increase
Digital Banking Usage Continues to Increase 21 Technology Enhancements Remain a Priority to Grow Customer Base and Increase Engagement 18% Increase in Monthly Mobile Deposit Active Users March 2024 YoY ~30,000 Users with Active Online Banking Status 1% March 2024 YoY Growth 18% Digital Banking Enrol
Slide 22: Reported and Core Results
Reported Results EPS $0.96 $2.50 $2.59 $1.18 $1.44 $1.92 ROAA 0.34 % 0.93 % 1.00 % 0.48 % 0.59 % 0.85 % ROAE 4.25 11.44 12.60 5.98 7.35 10.30 NIM FTE 2.24 3.11 3.24 2.85 2.47 2.70 Core1 Results EPS $0.83 $2.49 $2.81 $1.70 $1.65 $1.94 ROAA 0.29 % 0.92 % 1.09 % 0.68 % 0.68 % 0.85 % ROAE 3.69 11.42 13.
Slide 23: Over a Year Track Record of Steady Growth
Over a 28 Year Track Record of Steady Growth Core EPS ($) 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 2023 1Q24 $- $0.14 1995 2000 2005 2010 2015 2020 2023 1Q24 $0.6 $7.3 1995 2000 2005 2010
Slide 24: Approach to Real Estate Lending: Low Leverage & Shared Philosophy
Approach to Real Estate Lending: Low Leverage & Shared Philosophy 24 Our Conservative Lending Profile Has Served Us Well Over Many Cycles ▪ Since 1929, we have a long history of lending in metro New York City – Historically, credit quality has outperformed the industry and peers • From 2001-2023, me
Slide 25: Loans Secured by Real Estate Have an Average LTV of ~36%
Loans Secured by Real Estate Have an Average LTV of ~36% Manhattan Office Buildings are Approximately 0.5% of Net Loans and All Are Performing Data as of March 31, 2024 38% 11% 10% 8% 8% 6% 5% 4% 2% 2% 2%1%1% 1% 1% Multifamily: 38.0% Non Real Estate: 11.0% Owner Occupied CRE: 10.0% One-to-four famil
Slide 26: Multifamily: Conservative Underwriting Standards
▪ All loans underwritten with a 250-300 bps increase in rates at origination; especially when rates were low ▪ Debt coverage ratios (DCR) based on current rents; not projected cash flows ▪ Underwritten Net Operating Income (NOI) at origination includes forecasted increases in expenses and potential
Slide 27: Multifamily: Manageable Repricing Risk
Actual Repricing 27 Multifamily: Manageable Repricing Risk ▪ During 2023, $296 million of loans repriced ~196 bps higher to 6.61%; all loans repriced to contractual rate ▪ For the remained of 2024, $245.9 million of loans are forecasted to reprice 237 bps higher to a weighted average rate of 6.73%1
Slide 28: Multifamily: DCR Risks Are Well Contained
Debt Coverage Ratio Details1 Multifamily weighted average DCR 1.8x2 Amount of loans with a DCR of 1.0-1.2x $126.7 million3 LTV of loans with a DCR of 1.0-1.2x 49.5% Amount of loans with a DCR <1.0x $22.9 million3 LTV of loans with a DCR <1.0x 38.9% Of the loans with a DCR <1.2x: • None have an LTV >
Slide 29: Multifamily: Minimal Interest Only; High Quality Performance
29 Multifamily: Minimal Interest Only; High Quality Performance 1 As of December 31, 2023 2 Excludes co-ops ▪ Interest only loans are typically only offered to relationship customers who have a prior history with the Bank ▪ A client requests an interest only loan when cash flows early in the project
Slide 30: Multifamily: Rent Regulated Portfolio – Granular and Low Risk
Key Data Points 30 Multifamily: Rent Regulated Portfolio – Granular and Low Risk Portfolio Data Points1 Portfolio Size: $1.6 billion Average Loan Size: $1.3 million Current Weighted Average Coupon: 4.75% Weighted Average LTV: 48% % of Loans with LTV >75% 0% Weighted Average DCR: 1.8x2 Average Season
Slide 31: Investor CRE: Conservative Underwriting Standards
▪ All loans underwritten with a 250-300 bps increase in rates at origination; especially when rates were low ▪ Debt coverage ratios (DCR) based on current rents; not projected cash flows ▪ Underwritten Net Operating Income (NOI) at origination includes forecasted increases in expenses and potential
Slide 32: Geographically Diverse Multifamily and CRE Portfolios
15% 30% 21% 18% 16% Bronx Kings Manhattan Queens Other 10% 17% 18% 19% 7% 6% 9% 3% 11% Bronx Kings Manhattan Queens Other NY Nassau Suffolk NJ CT/Other Multifamily Geography Geographically Diverse Multifamily and CRE Portfolios 32 Underwrite Real Estate Loans with a Cap Rates over 6% in 1Q24 (5%+ Hi
Slide 33: Well-Diversified Commercial Business Portfolio
33 Well-Diversified Commercial Business Portfolio Commercial Business ▪ Primarily in market lending ▪ Annual sales up to $250 million ▪ Lines of credit and term loans, including owner occupied mortgages ▪ Loans secured by business assets, including account receivables, inventory, equipment, and real
Slide 34: Reconciliation of GAAP Earnings and Core Earnings
Reconciliation of GAAP Earnings and Core Earnings 34 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 borrowings carrie
Slide 35: Reconciliation of GAAP to Core Earnings - Quarters
35 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 $ 4,997 $ 11,754 $ 10,752 $ 11,872 $ 5,455 Net (gai
Slide 36: Reconciliation of GAAP Revenue and Pre-provision Pre-tax Net Revenue - Quarters
36 Reconciliation of GAAP Revenue and Pre-provision Pre-tax Net Revenue - Quarters Efficiency ratio, a non-GAAP measure, was calculated by dividing core noninterest expense (excluding OREO expense and the net gain/loss from the sale of OREO) by the total of core net interest income and core noninter
Slide 37: Reconciliation of GAAP to Core Net Interest Income and NIM - Quarters
37 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 $ 42,397 $ 46,085 $ 44,427 $ 43,378 $ 45,262 Net (gain) loss from fair value adjustments on qualifying he
Slide 38: Tangible Stockholders' Common Equity to Tangible Assets - Quarters
38 Calculation of Tangible Stockholders’ Common Equity to Tangible Assets - Quarters (Dollars in thousands) Total Equity $ 669,827 $ 669,837 $ 666,521 $ 670,247 $ 672,345 Less: Goodwill (17,636) (17,636) (17,636) (17,636) (17,636) Core deposit intangibles (1,428) (1,537) (1,651) (1,769) (1,891) Tang
Slide 39: Reconciliation of GAAP Earnings and Core Earnings - Years
39 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 December 31, December 31, December 31, December 31, (Dollars In thousands, except per share data) 2021 2020 2019 2018 GAAP
Slide 40: Reconciliation of GAAP Revenue and Pre-Provision Pre-Tax Net Revenue - Years
40 Reconciliation of GAAP Revenue and Pre-Provision Pre-Tax Net Revenue - Years Efficiency ratio, a non-GAAP measure, was calculated by dividing core noninterest expense (excluding OREO expense and the net gain/loss from the sale of OREO) by the total of core net interest income and core noninterest
Slide 41: Reconciliation of GAAP and Core Net Interest Income and NIM - Years
41 Reconciliation of GAAP and Core Net Interest Income and NIM - Years 1 Excludes purchase accounting average balances for the years ended 2023, 2022, 2021, and 2020 (Dollars In thousands) GAAP net interest income $ 179,152 $ 243,616 $ 247,969 $ 195,199 $ 161,940 $ 167,406 Net (gain) loss from fair
Slide 42: Tangible Stockholders' Common Equity to Tangible Assets - Years
42 Calculation of Tangible Stockholders’ Common Equity to Tangible Assets - Years (Dollars in thousands) Total Equity $ 669,837 $ 677,157 $ 679,628 $ 618,997 $ 579,672 $ 549,464 Less: Goodwill (17,636) (17,636) (17,636) (17,636) (16,127) (16,127) Core deposit intangibles (1,537) (2,017) (2,562) (3,1
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
Slide 44: Flushing Financial Corporation
[ate FLUSHING Financia 1 Corporation