Slide 1: 1Q24 Investor Presentation
1Q24 Investor Presentation February 27, 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: Flushing Financial Snapshot
Flushing Financial Snapshot (NASDAQ: FFIC) Balance Sheet Assets $8.5B Loans, net $6.9B Total Deposits $6.8B Equity $0.7B Performance GAAP/Core ROAA 0.34%/0.29%1 GAAP/Core ROAE 4.25%/3.69%1 GAAP/Core NIM 2.24%/2.11%1 Book/Tangible Book Value $23.21/$22.54 2023 Key Statistics Footprint Deposits primar
Slide 4: Key Messages
4 Key Messages Small enough to know you. Large enough to help you. ► Leading Community Bank in the Greater NYC Area ► Well Diversified and Low Risk Loan Portfolio with Sound Credit Quality ► Growing Asian Banking Niche ► Beneficiary of a Steepening Yield Curve and Fed Rate Cuts ► Executing on Action
Slide 5: Strong Asian Banking Market Focus
Strong Asian Banking Market Focus 19% 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 $759MM and Deposits $1.3B Multilingual Branch Staff Serves Diverse Customer Base in
Slide 6: Areas of Focus
6 Areas of Focus ► Increase Net Interest Margin and Reduce Volatility ► Maintain Credit Discipline ► Preserve Strong Capital and Liquidity ► Bend the Expense Curve
Slide 7: GAAP & Core NIM Expand QoQ; Closing vs Satisfaction Yields Widen
GAAP & Core NIM Expand QoQ; Closing vs Satisfaction Yields Widen 7 GAAP NIM FTE 2.70% 2.27% 2.18% 2.22% 2.29% 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 6.10% 7.01% 7.14% 7.48%
Slide 8: Loan Repricing
▪ 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 $500MM, $1.7B or ~25% of the loan portfolio is effectively floating rate ▪ Through 2025, loans to reprice ~170-210 bps higher assuming index values
Slide 9: Less NIM Volatility From Changes in Interest Rates
▪ Over the past year, we have largely moved to interest rate neutral to position the Company for any rate movements Less NIM Volatility From Changes in Interest Rates Percentage Change to Net Interest Income from Base Case Based on a 100 bps Shock in Rates 9 -7.31% -5.92% -3.17% -2.97% -2.60% 3.64%
Slide 10: Low Risk Loan Portfolio
Low Risk Loan Portfolio Loans Secured by Real Estate Have an Average LTV of ~36% Data as of December 31, 2023 39% 10% 11% 8 % 8 % 6 % 5 % 3 % 2 %2 % 2 %1 %1 % 1 % 1 % Multifamily: 39.0% Non Real Estate: 11.0% Owner Occupied CRE: 10.0% One-to-four family - Mixed Use: 8.0% General Commercial: 8.0% CRE
Slide 11: Approach to Real Estate Lending: Low Leverage & Shared Philosophy
Approach to Real Estate Lending: Low Leverage & Shared Philosophy 11 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 12: Multifamily Lending: Specialized Focus that Yields Minimal Losses
Multifamily Lending: Specialized Focus that Yields Minimal Losses Our Lending Looks More Like This Generally, Not Like This 12 1 As of December 31, 2023 ▪ $2.7 billion loan portfolio; Average loan size is only $1.2 million ▪ Strong sponsorship with weighted average equity of 56%; Weighted average de
Slide 13: 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 14: Multifamily: Manageable Repricing Risk
Actual Repricing 14 Multifamily: Manageable Repricing Risk ▪ During 2023, $296 million of loans repriced ~196 bps higher to 6.61%; all loans repriced to contractual rate – All loans are current – $0.8 million is classified ▪ In 2024, $310 million of Multifamily loans are forecasted to reprice 198 bp
Slide 15: Multifamily: DCR Risks Are Well Contained
Debt Coverage Ratio Details Multifamily weighted average DCR 1.8x1 Amount of loans with a DCR of 1.0-1.2x $117.5 million2 LTV of loans with a DCR of 1.0-1.2x 49.3% Amount of loans with a DCR <1.0x $13.8 million2 LTV of loans with a DCR <1.0x 37.2% Of the loans with a DCR <1.2x: • None have an LTV >7
Slide 16: Multifamily: Minimal Interest Only; High Quality Performance
16 Multifamily: Minimal Interest Only; High Quality Performance 1 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 are low and will increase
Slide 17: Multifamily: Rent Regulated Portfolio
Key Data Points 17 Multifamily: Rent Regulated Portfolio – Granular and Low Risk Portfolio Data Points 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: 1.9x1 Average Seasoni
Slide 18: Office CRE – Most of the Loans Are Outside of Manhattan
Office CRE – Most of the Loans Are Outside of Manhattan Our Lending Looks More Like This Not Like This 18 50 Hudson Years, Photo by Michael Young ▪ Total office portfolio of $257 million; Average loan size is $3.3 million ▪ Weighted average LTV of 50% and a weighted average debt service coverage rat
Slide 19: Low Office Lending Concentration Versus Peers
▪ Manhattan office buildings exposure is only 0.6% of net loans Low Office Lending Concentration Versus Peers 1 Based on most recent disclosure; Peers include: BKU, DCOM, FLIC, HNVR, NFBK, NYCB, PFS, and VLY 19 Office Loans as a Percent of Total Loans1 2.5% 3.7% 4.0% 4.5% 5.0% 5.6% 7.1% 7.5% 7.6% Pe
Slide 20: Retail CRE: Essential to Local Communities
20 Retail CRE: Essential to Local Communities Our Lending Looks More Like This Generally, Not Like This ▪ $0.9B portfolio with 42% located in Queens, Brooklyn, and the Bronx ▪ We tend to lend to shopping centers and strip malls versus larger malls ▪ Our average retail CRE loan is $2.4MM with average
Slide 21: Low Loan Losses and Noncurrent Loans
▪ 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 $12.6MM of real estate loans (0.2% of gross loans) with an LTV of 75% or more4 Low Loan Losses and Noncurrent Lo
Slide 22: Continued Strong Capital
$22.97 $22.80 $23.14 $23.06 $23.21 10.52% 10.36% 10.36% 10.14% 10.25% 8.61% 8.56% 8.54% 8.51% 8.47% 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 4Q22 1Q23 2Q23 3Q23 4Q23 Book Value Per Share CET1 Ratio Leverage Ratio Continued Strong
Slide 23: Increasing Liquidity and Low Uninsured and Uncollateralized Deposits
Increasing Liquidity and Low Uninsured and Uncollateralized Deposits 23 Preserving Our Strong Liquidity Available Liquidity Increased YoY Low Levels of Uninsured and Uncollateralized Deposits $3.6 $3.7 $3.7 $3.7 $4.1 42.7% 43.9% 43.7% 43.4% 47.9% 40.0% 42.0% 44.0% 46.0% 48.0% 50.0% 52.0% 54.0% 3.3 3
Slide 24: Bending the Expense Curve
▪ Over the past 5 years, Core Expenses have increased at 5.8% compounded annual growth rate ▪ In 2024, we expect to Core Expenses to increase at a low to mid single digit pace ▪ Controlling what we can control and looking to drive operating efficiencies 24 Bending the Expense Curve Efficiencies to I
Slide 25: Key Messages
25 Key Messages Small enough to know you. Large enough to help you. ► Leading Community Bank in the Greater NYC Area ► Well Diversified and Low Risk Loan Portfolio with Sound Credit Quality ► Growing Asian Banking Niche ► Beneficiary of a Steepening Yield Curve and Fed Rate Cuts ► Executing on Actio
Slide 26: Appendix
Appendix [EaEFLUs 26
Slide 27: Well-Secured Multifamily and CRE Portfolios
Well-Secured Multifamily and CRE Portfolios 27 Underwrite Real Estate Loans with a Cap Rate over 6% in 4Q23 (5%+ Historically) and Stress Test Each Loan Multifamily Geography 15% 30% 21% 18% 16% Bronx Kings Manhattan Queens Other $2.7B Portfolio • Average loan size: $1.2MM • Average monthly rent of
Slide 28: Well-Diversified Commercial Business Portfolio
28 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 29: 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 30: Reported 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 $1.94 ROAA 0.29 % 0.92 % 1.09 % 0.68 % 0.68 % 0.85 % ROAE 3.69 11.42 13.
Slide 31: Over a Year Track Record of Steady Growth
Over a 28 Year Track Record of Steady Growth Core EPS ($) Dividends per Share ($) Tangible Book Value per Share ($) Assets ($B) Total Gross Loans ($B) Total Deposits ($B) $- $0.88 1995 2000 2005 2010 2015 2020 2022 2023 $- $0.83 1995 2000 2005 2010 2015 2020 2022 2023 $0.6 $6.8 1995 2000 2005 2010 2
Slide 32: Environmental, Social, and Governance
32 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 33: Reconciliation of GAAP Earnings and Core Earnings
Reconciliation of GAAP Earnings and Core Earnings 33 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 34: Reconciliation of GAAP Earnings and Core Earnings - Years
34 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 35: Reconciliation of GAAP Revenue and Pre-Provision Pre-Tax Net Revenue - Years
35 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 36: Reconciliation of GAAP and Core Net Interest Income and NIM - Years
36 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 37: Calculation of Tangible Stockholders' Common Equity to Tangible Assets - Years
37 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 38: Contact Details
38 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 39: Flushing Financial Corporation
[gc F LUSHING Financial Corporation