Flushing Financial Corporation Reports 4Q24 and 2024 GAAP Loss Per Share of $(1.61) and $(1.05), and Core EPS of $0.14 and $0.73, Respectively; Actions Taken to Improve Profitability and to Strengthen the Balance Sheet

About this update from Flushing Financial Corporation

"Our Company successfully executed meaningful actions in 2024 to position it for enhanced earnings in 2025. First, we raised $70 million of capital to reposition the balance sheet, completed the restructuring of the investment portfolio, transferred loans to held for sale, and repositioned borrowings while reducing the cost. The overall result of this balance sheet restructuring is expected to be a significant improvement performance with 10-15 bps of NIM expansion expected in 1Q25. This restructuring will further propel our baseline NIM expansion, which was 29 and 18 bps, respectively, for GAAP and Core, in 4Q24. Second, our actions to move the balance sheet to a more neutral position have helped position the Company for the current environment. The recent steepening of the yield curve should further aid NIM improvement over time. Lastly, after making progress on our four areas of focus in 2024, we are shifting the priorities in 2025 to 1) Preserving Strong Liquidity and Capital, 2) Maintaining Credit Discipline, and 3) Improving Profitability. While progress occurred in 2024, by shifting our priorities in 2025, we expect further improvement. - John R. Buran , President and CEO UNIONDALE, NY / ACCESS Newswire / January 28, 2025 / Restructuring Largely Complete. The Company reported fourth quarter and full year 2024 GAAP loss per share of $(1.61) and $(1.05) , respectively. Core EPS for the fourth quarter and full year 2024 totaled $0.14 and $0.73 , respectively. During the fourth quarter, the Company took several actions to improve profitability and strengthen the balance sheet, including raising $70 million of common capital, selling approximately $445 million of securities yielding 1.98%, purchasing $384 million of securities yielding 5.67%, terminating $200 million of a related investment securities swap for a $3 million pre-tax gain, prepaying $251 million of FHLB advances at a weighted average rate of 4.82%, replacing this funding at a rate of 4.54%, and moving $74 million of loans with a weighted average coupon of 3.91% to held for sale incurring an 100% interest rate mark of $3.8 million pre-tax. The net result of these transactions and other adjustments totaled $76.0 million (pre-tax) or $(1.74) per share, net of tax in 4Q24 and $(1.77) per share in 2024. Asset Quality Stable, and Capital Improves. Asset quality metrics were stable as NPAs were down 6.5% QoQ, but criticized and classified loans totaled 107 bps of gross loans. Net charge-offs to average loans were 28 bps in 4Q24 primarily relating to loans that were already fully reserved. TCE/TA 1 increased to 7.82% at December 31, 2024 , up 82 bps QoQ. Key Financial Metrics 2 4Q24 3Q24 2Q24 1Q24 4Q23 2024 2023 GAAP: (Loss) Earnings per Share $ (1.61 ) $ 0.30 $ 0.18 $ 0.12 $ 0.27 $ (1.05 ) $ 0.96 ROAA (%) (2.17 ) 0.39 0.24 0.17 0.38 (0.35 ) 0.34 ROAE (%) (29.24 ) 5.30 3.19 2.20 4.84 (4.67 ) 4.25 NIM FTE 3 (%) 2.39 2.10 2.05 2.06 2.29 2.15 2.24 Core: EPS $ 0.14 $ 0.26 $ 0.18 $ 0.14 $ 0.25 $ 0.73 $ 0.83 ROAA (%) 0.19 0.34 0.25 0.20 0.35 0.24 0.29 ROAE (%) 2.54 4.59 3.27 2.58 4.51 3.25 3.69 Core NIM FTE (%) 2.25 2.07 2.03 2.06 2.31 2.10 2.21 Credit Quality: NPAs/Loans & OREO (%) 0.76 0.81 0.82 0.68 0.67 0.76 0.67 ACLs/Loans (%) 0.60 0.59 0.61 0.60 0.58 0.60 0.58 ACLs/NPLs (%) 120.51 117.75 120.58 164.13 159.55 120.51 159.55 NCOs/Avg Loans (%) 0.28 0.18 (0.01 ) - - 0.11 0.16 Balance Sheet: Avg Loans ($B) $ 6.8 $ 6.7 $ 6.7 $ 6.8 $ 6.9 $ 6.8 $ 6.8 Avg Dep ($B) $ 7.4 $ 7.5 $ 7.2 $ 7.1 $ 6.9 $ 7.3 $ 6.9 Book Value/Share $ 21.53 $ 22.94 $ 22.89 $ 23.04 $ 23.21 $ 21.53 $ 23.21 Tangible BV /Share $ 20.97 $ 22.29 $ 22.24 $ 22.39 $ 22.54 $ 20.97 $ 22.54 TCE/TA (%) 7.82 7.00 7.12 7.40 7.64 7.82 7.64 Note: In certain circumstances, reclassifications have been made to prior periods to conform to the current presentation. 1 Tangible Common Equity ("TCE")/Total Assets ("TA"). 2 See "Reconciliation of GAAP (Loss) Earnings and Core Earnings", "Reconciliation of GAAP Revenue and Pre-Provision Pre-Tax Net Revenue", and "Reconciliation of GAAP Net Interest Margin to Core Net Interest Income and Net Interest Margin." 3 Net Interest Margin ("NIM") Fully Taxable Equivalent ("FTE"). 4Q24 Highlights Net interest margin FTE increased 10 bps YoY and 29 bps QoQ to 2.39%; Core net interest margin FTE decreased 6 bps YoY, but increased 18 bps QoQ to 2.25%; Prepayment penalty income, net reversals and recovered interest from nonaccrual and delinquent loans, swap termination fees and income, net gains and losses from fair value adjustments on qualifying hedges, and purchase accounting accretion totaled 17 bps in 4Q24 compared to 15 bps in 4Q23 and 11 bps in 3Q24; The net result of the balance sheet restructuring is expected to increase the NIM by approximately 10-15 bps in 1Q25 Average total deposits increased 8.2% YoY but decreased 0.2% QoQ to $7.4 billion ; Average noninterest bearing (NIB) deposits declined 0.4% YoY but increased 2.9% QoQ and totaled 11.7% of total average deposits compared to 12.7% in 4Q23 and 11.3% in 3Q24. Average CDs were $2.7 billion , up 14.6% YoY and 7.0% QoQ Period end net loans decreased 2.3% YoY and 1.1% QoQ to $6.7 billion ; Loan closings were $225.2 million , down 7.8% YoY, but up 3.7% QoQ; Back-to-back swap loan originations were $58.5 million compared to $38.5 million in 3Q24 and generated $0.9 million and $0.6 million of noninterest income, respectively; Loan pipeline increased 21.9% YoY, but declined 32.1% QoQ to $198.9 million ; Approximately 27% of the loan pipeline consists of back-to-back swap loans NPAs totaled $51.3 million (57 bps of assets) in 4Q24 compared to $46.2 million (54 bps) a year ago and $54.9 million (59 bps) in the prior quarter; A $2.6 million reserve was allocated to the Company's largest NPA based on updated information Noninterest expense growth was 12% YoY in 4Q24 and 7.8% for 2024; Core noninterest expense growth was 6.6% YoY in 4Q24 and 6.1% in 2024, in line with our target of mid-single digit increase for 2024 Provision for credit losses was $6.4 million in 4Q24 compared to $1.0 million in 4Q23 and $1.7 million in 3Q24; Net charge-offs were $4.7 million in 4Q24 compared to $60,000 in 4Q23 and $3.0 million in 3Q24; 4Q24 net charge-offs primarily relate to loans that were previously fully reserved Tangible Common Equity to Tangible Assets was 7.82% at December 31, 2024 , compared to 7.00% at September 30, 2024 ; Tangible book value per share was $20.97 compared to $22.54 a year ago Areas of Focus Increase NIM and Reduce Volatility GAAP and Core NIM increased by 29 bps and 18 bps QoQ, respectively, in 4Q24 Approximately 27% of the loan portfolio consists of floating rate loans (including hedges) Average NIB deposits increased 2.9% QoQ and accounted for 11.7% of average total deposits Maintain Credit Discipline Approximately 90% of the loan portfolio is collateralized by real estate with an average loan to value of less than 35% Weighted average debt service coverage ratio is approximately 1.8x for multifamily and investor commercial real estate loans Criticized and classified loans are 1.07% of gross loans Manhattan office buildings exposure is minimal at 0.5% of gross loans Preserve Strong Liquidity and Capital Maintaining ample liquidity with $3.6 billion of undrawn lines and resources as of December 31, 2024 Uninsured and uncollateralized deposits were 17% of total deposits, while uninsured deposits were 31% of total deposits Total average deposits increased by 8.2% YoY, but declined 0.2% QoQ Tangible Common Equity to Tangible Assets was 7.82% at December 31, 2024 , up 82 bps QoQ Bend the Expense Curve GAAP noninterest expense to average assets was 2.01% in 4Q24 compared to 1.90% in 4Q23 and 1.68% in 3Q24 GAAP and Core noninterest expense growth was 7.8% and 6.1% in 2024, respectively, as investments were made to improve long term profitability Income Statement Highlights YoY QoQ ($000s, except EPS) 4Q24 3Q24 2Q24 1Q24 4Q23 Change Change Net Interest Income $ 51,235 $ 45,603 $ 42,776 $ 42,397 $ 46,085 11.2 % 12.4 % Provision for Credit Losses 6,440 1,727 809 592 998 545.3 272.9 Noninterest Income (Loss) (71,022 ) 6,277 4,216 3,084 7,402 (1,059.5 ) (1,231.5 ) Noninterest Expense 45,630 38,696 39,047 39,892 40,735 12.0 17.9 (Loss) Income Before Income Taxes (71,857 ) 11,457 7,136 4,997 11,754 (711.3 ) (727.2 ) Provision (Benefit) for Income Taxes (22,612 ) 2,551 1,814 1,313 3,655 (718.7 ) (986.4 ) Net (Loss) Income $ (49,245 ) $ 8,906 $ 5,322 $ 3,684 $ 8,099 (708.0 ) (652.9 ) Diluted (Loss) Earnings per Share $ (1.61 ) $ 0.30 $ 0.18 $ 0.12 $ 0.27 (696.3 ) (636.7 ) Avg. Diluted Shares (000s) 30,519 29,742 29,789 29,742 29,650 2.9 2.6 Core Net Income 1 $ 4,209 $ 7,723 $ 5,456 $ 4,312 $ 7,546 (44.2 ) (45.5 ) Core EPS 1 $ 0.14 $ 0.26 $ 0.18 $ 0.14 $ 0.25 (44.0 ) (46.2 ) 1 See Reconciliation of GAAP Earnings and Core Earnings Net interest income increased YoY and QoQ. Net Interest Margin FTE of 2.39% increased 10 bps YoY and 29 bps QoQ; The cost of funds declined 34 bps QoQ partially offset by a 3 bps decrease in the yield on interest earning assets Prepayment penalty income, swap termination fees and income, net reversals and recoveries of interest from nonaccrual and delinquent loans, net gains and losses from fair value adjustments on qualifying hedges, and purchase accounting accretion totaled $3.8 million (17 bps to the NIM) in 4Q24 compared to $2.4 million (11 bps to NIM) in 3Q24, $0.7 million (3 bps to NIM) in 2Q24, $1.0 million (5 bps to NIM) in 1Q24, and $3.0 million (15 bps to NIM) in 4Q23 Excluding the items in the previous bullet, the net interest margin was 2.22% in 4Q24 compared to 1.99% in 3Q24, 2.02% in 2Q24, 2.01% in 1Q24, and 2.14% in 4Q23 The provision for credit losses increased YoY and QoQ. Net charge-offs (recoveries) were $4.7 million (28 bps of average loans) in 4Q24 compared to $3.0 million (18 bps of average loans) in 3Q24, $(92,000) ((1) bp of average loans) in 2Q24, $4,000 (less than 1 bp of average loans) in 1Q24, and $60,000 (less than 1 bp of average loans) in 4Q23; Net charges-offs in 4Q24 primarily relate to loans that were fully reserved Noninterest income (loss) decreased YoY and QoQ. Back-to-back swap loan closings of $58.5 million in 4Q24 (compared to $121.6 million in 4Q23 and $38.5 million in 3Q24) generated $0.9 million of noninterest income (compared to $1.5 million in 4Q23 and $0.6 million in 3Q24) The result of the balance sheet restructuring was a pre-tax loss of $76.4 million from the sale of the investment securities and the transfer of loans to held for sale. Net gains (losses) from fair value adjustments were $(1.1) million ( $(0.03) per share, net of tax) in 4Q24, $1.0 million ( $0.03 per share, net of tax) in 3Q24, $0.1 million (less than $0.01 per share, net of tax) in 2Q24, $(0.8) million ( $(0.02) per share, net of tax) in 1Q24, and $0.9 million ( $0.02 per share, net of tax) in 4Q23 Gain on life insurance proceeds were $0.3 million (about $0.01 per share) in 4Q24, $1,000 (less than $0.01 per share) in 3Q24, and $0.7 million ( $0.02 per share) in 4Q23 Absent the items in the previous three bullets and other immaterial adjustments, core noninterest income was $6.0 million in 4Q24, up 3.1% YoY and 12.8% QoQ Noninterest expense increased YoY and QoQ. The balance sheet restructuring affected FHLB advances by incurring a $2.6 million pre-payment penalty Excluding the effects of the prior bullet and other immaterial adjustments, core noninterest expenses were $42.8 million in 4Q24, up 6.6% YoY and 10.8% QoQ; YoY increases primarily relate to business investments in staff and branches and deposit insurance premiums Provision (benefit) for income taxes was $(22.6) million in 4Q24 compared to $3.7 million in 4Q23 and $2.6 million in 3Q24. The effective tax rate was 31.5% in 4Q24, 22.3% in 3Q24, 25.4% in 2Q24, 26.3% in 1Q24, and 31.1% in 4Q23 The effective tax rate in 4Q24 was primarily related to the increased benefit of permanent differences relative to pre-tax income (loss); The effective tax rate in 3Q24 includes approximately $0.5 million of discrete tax benefits Balance Sheet, Credit Quality, and Capital Highlights YoY QoQ 4Q24 3Q24 2Q24 1Q24 4Q23 Change Change Averages ($MM) Loans $ 6,780 $ 6,737 $ 6,748 $ 6,804 $ 6,868 (1.3 )% 0.6 % Total Deposits 7,450 7,464 7,196 7,081 6,884 8.2 (0.2 ) Credit Quality ($000s) Nonperforming Loans $ 33,318 $ 34,261 $ 34,540 $ 24,829 $ 25,172 32.4 % (2.8 )% Nonperforming Assets 51,318 54,888 55,832 46,254 46,153 11.2 (6.5 ) Criticized and Classified Loans 72,207 68,338 76,485 59,021 76,719 (5.9 ) 5.7 Criticized and Classified Assets 90,207 88,965 97,777 80,446 97,700 (7.7 ) 1.4 Allowance for Credit Losses/Loans (%) 0.60 0.59 0.61 0.60 0.58 2 bps 1 bp Capital Book Value/Share $ 21.53 $ 22.94 $ 22.89 $ 23.04 $ 23.21 (7.2 )% (6.1 )% Tangible Book Value/Share 20.97 22.29 22.24 22.39 22.54 (7.0 ) (5.9 ) Tang. Common Equity/Tang. Assets (%) 7.82 7.00 7.12 7.40 7.64 18 bps 82 bps Leverage Ratio (%) 8.04 7.91 8.18 8.32 8.47 (43 ) 13 Average loans decreased YoY but increased QoQ. Period end net loans totaled $6.7 billion , down 2.3% YoY and 1.1% QoQ; Approximately $74 million of loans were moved to held for sale at the end of the quarter and incurred a $3.8 million interest rate mark; The sales are expected to close in 1Q25 Total loan closings were $225.2 million in 4Q24, $217.1 million in 3Q24, $126.0 million in 2Q24, $130.0 million in 1Q24, and $244.3 million in 4Q23; the loan pipeline was $198.9 million at December 31, 2024 , up 21.9% YoY, but down 32.1% QoQ The diversified loan portfolio is approximately 90% collateralized by real estate with an average loan-to-value ratio of

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